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December 10, 2000,

Miami-Dade County Audits of CDCs Contain Erroneous Statements Which the County Refuses to Correct

Web Posted 12/10/00 at 6 p.m.

MIAMI, FL - The County Manager's office has ordered its Audit and Management Services Department to conduct audits of all community based development corporations (CDC) doing business with the County. A number of them have already been concluded and in several cases the audits have contained erroneous information.

Covenant CDC, for example, has documented that its Audit Report contained erroneous statements that the auditors appear to have known were false at the time that they were made. During the audit process Covenant had gone to great lengths to document its full cooperation. Despite this the Audit Report contained significant prejudicial errors. Covenant CDC had their attorney make a formal request to the County's auditors that their Audit Report be amended to eliminate the errors. Cathy Jackson, the Audit Department's director, flatly refused to make any such amendments stating that once an Audit Report had become final it could not be changed even if it contains errors.

Several of the errors in Covenant's Audit Report were glaring, prejudicial and obvious. The Audit Report, for example, stated that an alleged Office of Community and Economic Development (OCED) monitoring report had documented an improper use of a credit card. The auditors refused to give Covenant CDC a copy of the alleged monitoring report. Covenant was forced to submit a Public Records Act request to OCED asking for copies of all monitoring reports. OCED complied with the request and, as it turned out, the there was no reference whatsoever in any of the monitoring reports concerning the alleged improper use of the credit card. When confronted with this Ms. Jackson refused to make any amendments whatsoever to the Audit Report (as a result, the final Audit Report continues to rely heavily on statements made in a nonexistent OCED monitoring report).

A number of the Audit Reports have severely criticized CDCs for delays in their affordable housing development projects in cases where the delay had been caused solely by OCED's notoriously slow environmental clearance process. Under federal regulations CDBG money can not be spent for real estate development activities until local government has given an environmental clearance. The standard procedure is for the CDC to submit a "Phase I" environmental assessment and then wait for OCED to give clearance. OCED has been widely criticized for the length of time that it takes it to provide the clearances. In some cases OCED has taken up to two years.

Ms. Jackson's Audit Department has refused to offer any criticism of OCED's poor performance. Instead the auditors have blamed the CDC for the delay and recommend a cut off of funding.

There appears to be a pattern of including false and misleading information in the Audit Reports. In many cases the reports are poorly written and contain unsupported prejudicial conclusory statements (e.g. saying something like "this appears suspicious" without offering any explaination of why it might appear suspicious).

In fact, the Audit Department appears to be biased towards CDCs. About a year ago, for example, Covenant CDCs attorney, during a short break in the audit process, was having a casual conversation with Maria Reyes, one of the chief auditors. Ms. Reyes told the attorney that "all of the CDC's are a waste of time and all of them should be defunded. This conversation took place at that point in time when the Audit Department had just begun auditing CDCs and, therefore, Ms. Reyes would have had little, if any, information to support such a broadly biased statement.

The Audit Department's zeal has not stopped merely by including inaccurate information in its reports. Ms. Jackson, the Audit Department's director, has appeared to push the limits of ethics. Ms. Jackson sent an early draft of Covenant CDCs Audit Report (which contained even more prejudicial errors than the final Audit Report) to its other funding sources in an apparent effort to try and get all of Covenant's non County funding cut off. Copies were also sent to the Metro Dade Police Department's anti corruption unit triggering an investigation. When questioned about this at a recent open meeting, Ms. Jackson flatly denied that she had ever sent the Audit Report to the anti corruption unit. Subsequently the Coalition learned that contrary to what she claimed the Audit Report had, in fact, been sent to the anti corruption unit (they had been included in list of recipients that was contained on the Audit Report's last page). The Coalition sent an e-mail to Ms. Jackson pointing out the error of her statement but, so far, she has refused to offer a correction. In addition, it was learned that Ms. Jackson had given a verbal summary of some of the false information regarding Covenant CDC to a County Commissioner over the telephone prior to the exit interview with Covenant and prior to the release of the Report. Some have felt that this telephone conversation was an attemept to create a prejudicial impression with a key Commissioner who would be voting on the future of Covenant CDCs. Commissioners have no direct supervisory role over County contracts (that is the job of the County Manager). When confronted with evidency of this conversation Ms. Jackson said she had indeed called the County Commissioner but it was merely to "get Covenant CDC's telephone number" (she did not explain why she simply could not have gotten this information from the phone book).