Modesto auditor off SCAP probe

MODESTO -- The Modesto City Council's watchdog apparently won't dig any deeper into the controversy over the Stanislaus Community Assistance Project.

City Manager Greg Nyhoff wanted the Moss Adams auditing firm to investigate how SCAP spent tax dollars to purchase and renovate foreclosed homes through the Neighborhood Stabilization Program. But Nyhoff has pulled Moss Adams, the council's independent auditor, from the agenda of today's council meeting.

City officials said they want a more thorough audit of how the federal funding was spent in the first two phases of the program. Mayor Jim Ridenour is expected to ask federal regulators from the Department of Housing and Urban Development to handle the expanded review.

The investigation would encompass the 21 residential projects developed by SCAP, as well as the work of other nonprofit and for-profit developers. "The request is for the (Office of Inspector General) to review all transactions," Nyhoff said in a statement Tuesday.

Modesto received $33.1 million from the first two phases of the federal program, designed to assist communities that were clobbered by the foreclosure crisis. But questions have arisen about how the money was spent by SCAP and other developers and the city's oversight.

The council tonight is scheduled to consider Garrad Marsh's proposal to ask the civil grand jury and the state attorney general to assist with investigations.

In June, the city demanded that SCAP cooperate with an audit, after the nonprofit provided inconsistent information about the tenants living in NSP homes.

Moss Adams began preliminary work on the audit. SCAP was supposed to foot the bill, but as of last week the parties had not agreed on the scope of the work.

The Modesto City Council will meet at 5:30 today in the basement chamber of Tenth Street Place, at 1010 10th St.

Bee staff writer Ken Carlson can be reached at kcarlson@modbee.com or (209) 578-2321.