FRANKFORT — A scathing audit released Tuesday by state officials showed gross mismanagement and incompetence at the Louisville Housing and Family Services Department — an agency that has been in trouble with auditors in the past.
State Auditor Crit Luallen's office found more than $456,000 in questionable costs in the department that oversees housing and other social service programs. The agency's books were in such disarray auditors could not confirm their accuracy, the audit said.
Luallen has referred the audit to several law enforcement officials, including Louisville Metro Police and several federal agencies.
The housing agency has more than 200 employees, a budget of $35 million and oversees millions of dollars in federal grants. The 115-page audit outlines fiscal mismanagement that resulted in a backlog of more than 400 homes in need of repair and a one-year delay in a $1 million grant to abate lead-based paint in homes.
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Luallen said Tuesday that the department fostered a "culture of a lack of accountability" where cronyism and nepotism became the norm and morale was "abysmal." The audit found that many employees did not know to whom they reported, and they were not competent to do their jobs.
"There are deep-seated problems that go back a number of years," Luallen said. "The situation certainly deteriorated under the former executive director."
Former director Kimberly Bunton resigned in August after questions arose about her management of the agency. Luallen said her agency started the audit after media reports questioned many of the agency's expenditures. Luallen's office had also found problems with federal grant oversight in the past.
The audit found that money from a non-profit for needy children was used to pay part of a mortgage for Bunton's mother. Some of a grant that was supposed to be used to revitalize low-income communities was used to pay Bunton's cell phone bills and legal association dues, the audit found.
Housing employees also signed and processed their own applications to receive benefits under a low-income energy assistance program.
"It is unacceptable for any government agency to have such a severe level of mismanagement and poor oversight," Luallen said.
The city, in its response to the audit, said it has already made changes at the agency that will help strengthen oversight. Mayor Jerry Abramson, in a news release, said the city has revamped the department and has fired and reassigned key staff members.