San Antonio Misused HUD Funds Under Julian Castro

Image: San Antonio Misused HUD Funds Under Julian Castro

Tuesday, 20 May 2014 07:19 AM

By Elliot Jager

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The City of San Antonio, Texas, failed to properly administer federal Housing and Urban Development grants worth millions of dollars under the stewardship of Mayor Julián Castro, President Barack Obama's nominee for Secretary of the Department of Housing and Urban Development, Politico reports.

Castro and his twin brother, Rep. Joaquin Castro, are considered rising Latino stars of the Democratic Party. Julián Castro's handling of HUD money could be a topic in his confirmation hearings. Now 39, he became mayor in May 2009.

According to the 2012 report from the HUD Inspector General, San Antonio was awarded $8.6 million in 2008 as part of the Neighborhood Stabilization Program. The funds were used to purchase, renovate, and resell vacant dwellings, as well as to provide rental apartments to low-income residents.

The funds were misused between 2009 and 2011 when San Antonio officials awarded $2.5 million in repair contracts without competitive bidding. Another $1.1 million was spent without adhering to HUD income specifications because authorities were "apparently unaware" of criteria rules.

San Antonio has since taken measures to correct the deficiencies and no follow-up action by the HUD IG was warranted, the report said.

The mayor's name does not come up in the report, which includes a response from San Antonio Office of Management and Budget Director Maria Villagomez. "The City of San Antonio places a high priority in ensuring federally sourced funding is utilized in a manner consistent with achieving the programmatic goals of its grant programs while complying with federal, state, and local law," Villagomez wrote.

San Antonio officials have argued that federal help in response to a flood of foreclosures came late and that they had already obligated their funds. "We could have designed a better program from scratch versus learning as we went. So it would have been helpful if we didn't have such a short deadline," the officials wrote in a December 2011 report on the Neighborhood Stabilization Program, according to Politico.

The HUD IG found other municipalities had similar problems implementing the criteria of the federal agency within the 18 months allotted, Politico reported.

Julián Castro is slated to replace Shaun Donovan as HUD Secretary. Donovan will become head of the White House Office of Management and Budget, Politico reported.

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