November 23, 2010; Source: News Tribune | Washington state released an audit this week that confirms an accountant’s findings from last year that a Tacoma nonprofit spent $1.8 million in public funds to pay off loans and offset other operational costs instead of using the money to help construct a business center that has yet to materialize.
According to the News Tribune, despite many millions spent since 2007, the planned center stands as “little more than a fenced-off vacant lot.” While the audit faults the Martin Luther King Housing Development Association for improper use of the money, the newspaper, which has been digging into this story since 2009, reports that the state’s Commerce Department also was slammed for “for failing to adequately monitor the nonprofit’s spending.”
In addition to detailing how the $1.8 million was improperly used, the audit revealed that in one instance the nonprofit billed the state for work it claimed it paid a subsidiary, although there are no supporting records. On other occasions, it failed to forward reimbursements collected from the state for work it had contracted from vendors. The audit also found that the development association submitted the same bills to the state and federal government, collecting duplicate payments. The News Tribune reports that since 2007 more than $4 million in state and federal grants have been awarded for the business center, and after all that the only thing to show is a very detailed record of poor financial management, lack of oversight, and wasted money.—Bruce Trachtenberg