A struggling economy has increased the need for home repairs provided by the nonprofit Cape Coral Housing Rehabilitation and Development Corporation, but a damaging audit of the organization’s processes and procedures threatens to shut down its operations.
The corporation, which has been providing no-interest loans for home repairs since 1992, was labeled a “high risk agency” by the auditor, Lee H. Combs Consulting. Its audit found the organization’s files “contained missing, incomplete, or incorrect documentation” regarding its income certification, cost estimates, and contractor selection process, according to a memo from Mike Struve, planning and growth manager, to City Manager Terry Stewart dated Nov. 18.
The findings place about $1 million in state and federal funds for the corporation in jeopardy.
The organization’s bank also failed to renew its line of credit, a total of $50,000, earlier this year, leading city staff to recommend stopping payments to the agency.
“We’ve suspended any reimbursements or provisions of funds because there are some irregularities that need to be corrected,” city spokesperson Connie Barron said. “If they don’t have a line of credit, we can’t reimburse them until the funds are expanded,” she added.
The corporation pays for the home repairs up front after qualifying applicants, and is then reimbursed by through state and federal grants administered by the city.
Louise “Weezer” Murphy, executive director of the corporation, said she is working with city staff to resolve the situation, and also soliciting corporate grants for funding in order to stay afloat.
“That is the only funding source we have and if we don’t find some funding we’ll have to close our doors,” she said.
If the city council takes staff’s recommendation, it would dry up $136,000 in federal community development grant block funds.
Murphy said $933,000 in State Housing Initiatives Partnership funds is contingent on the federal grant.
“If the CDGB funds collapse, the SHIP funds will surely follow,” Murphy said.
Barron maintained the city is still working with the corporation to resolve the issue, but may have to find a different organization to provide home repairs if an agreement cannot be met.
“We have not completely cut ties with the organization,” Barron said.