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Miami Herald - July 8, 2006

Audit takes to task Model City Trust for mismanagement

A city audit cites allegations of mismanagement and improper spending at the Model City Trust, charged with creating affordable housing.


A city trust created to bring quality affordable housing to Miami's struggling Model City neighborhood has spent $8.5 million since 2002 but has achieved few results with reported mismanagement and questionable spending, a city audit released Friday said.

The office of Auditor General Victor Igwe found the quasi-independent Model City Trust agency routinely overpaid for land and consulting services. By May of this year, only eight houses had been built or rehabilitated since 2002.

And when the trust sold four of those houses, it failed to make sure the buyers were low-income, the audit states.

Former trust president and chief executive Marva Wiley disputed many of the audit's findings. For example, the audit said the trust repeatedly would negotiate to buy land, in writing, at a certain price, but then pay more. Wiley said the extra money spent never went to the seller but to closing costs and other fees that come with any land transaction.

Although the trust didn't verify whether its home buyers were low-income, Wiley said the agency knew they were because Miami's Community Development department had qualified them for mortgage assistance programs. Wiley's own conduct was questioned by auditors. They wanted an explanation for Wiley's unusual financial relationship with a construction company her agency awarded a $120,000 no-bid contract to.

According to the audit, Wiley tapped Mega Construction Team Inc. to build a single-family home in Model City. Then Wiley opened up a joint bank account with the company. Wiley supplied her home address, not the trust's, and provided other details such as her Social Security number to open the account.

The president of Mega Construction is Tifphanie Tucker, a high school classmate of Wiley's, though Wiley said the two are not friends. Tucker could not be reached for comment.

The audit criticizes Wiley for having such close ties with a company while simultaneously lobbying trust board members to increase its contract because of rising building costs. Although initially promised only $120,000 from the trust, Mega Construction Team ended up earning $141,821.

Wiley insisted the joint account had only been opened to speed up getting the necessary construction money to the builder. The account also allowed the trust to make sure the dollars were being spent properly, Wiley insisted. Still, the account never was disclosed to the trust's board of directors.

''To look at it superficially is unfair,'' Wiley said, adding that none of the money from the account ever went to her and that it was clearly documented in agency files for auditors to see.

Wiley left the trust late last year, in part due to a feud with Miami City Manager Joe Arriola.

''Clearly, the Model City Trust failed the taxpayers,'' Commissioner Joe Sanchez said in an e-mail statement. ``This scathing audit has proven that we need to fix a lot of things there before we can move forward.''

Among other audit findings:

• The trust started a youth summer-employment program for local kids -- but failed to check that teenagers hired actually lived in the area. The trust couldn't find any employment applications on file for most of the hires.

• The trust entered into contracts and spent money in ways that apparently violate federal regulations.

Fallout from the audit began months before it was even released. In May, City Commissioner Michelle Spence-Jones, whose district includes Model City, sponsored an emergency measure that stripped the trust of authority to enter into contracts or to file lawsuits.

Spence-Jones said news of the audit was no surprise.

''I was not shocked by what I found out,'' she said.