Modesto mayor gets clarification on housing program audit

It took more than three weeks and a trip to Washington, D.C., to get it, but Modesto Mayor Jim Ridenour said he received written confirmation Thursday about what auditors found during their review of Modesto's housing program.

Ridenour and members of the city's staff had sought clarification about what was covered in an audit by the U.S. Department of Housing and Urban Development Office of Inspector General.

A phrase in the audit stated that inspectors "made no attestation" about various aspects of Modesto's $25 million Neighborhood Stabilization Program 2. A HUD official later told The Bee that phrase meant that those program areas were "not within the scope of this audit."

But city officials insisted the audit was a comprehensive program review and that it only found three problems. They took that to mean no other problems existed.

When the mayor and staff members tried to get HUD to publicly confirm that, however, they couldn't get anyone from the Office of Inspector General to respond.

Face-to-face meeting

Ridenour already was scheduled to be in Washington last week, so he requested a face-to-face meeting with one of the agency's deputy directors and a staff lawyer.

In response to that meeting, Inspector General David A. Montoya sent the mayor a two-page letter, which arrived Thursday.

That letter mostly recaps the purpose of the audit, the procedures auditors used, what they looked at and the three problems they found.

Montoya's letter also states: "(T)hat based on our sampling of files and transactions the three findings called out in the OIG audit report were the only material violations found during our audit."

None of those findings concerned how the Stanislaus Community Assistance Project had spent its $8 million share of Neighborhood Stabilization Program funds.

While Modesto city's staff has found various problems with SCAP's part of the program, HUD inspectors apparently did not find any "material violations" of program rules.

The FBI, nevertheless, reportedly is investigating SCAP's ousted leaders, Denise and Joe Gibbs.

According to Montoya, the only problems HUD inspectors found were:

• Modesto approved ineligible and unsupported costs during rehabilitation that resulted in the overpayment of $56,130 to developer Trinity Ventures RE II.

• Trinity and City Councilman Joe Muratore "violated conflict of interest requirements" regarding the purchase of a Tully Road apartment complex. Muratore's real estate company wrongly was paid a $62,500 commission for that deal.

• Modesto approved $51,936 in ineligible real estate commissions to those involved in the purchase of properties for the Mission Housing Development Corp. of San Francisco.

Ridenour said the main purpose of his trip to Washington last week was to attend a conference with leaders from other cities, but he also met with HUD officials while he was there.

Bee staff writer J.N. Sbranti can be reached at jnsbranti@modbee.com or (209) 578-2196.