Editorial: Where were checks and balances?

Wednesday, June 9, 2004 | 9:08 a.m.

In 2001 and extending through last year, the Economic Opportunity Board received a total of nearly half a million dollars from the federal government to run a program assisting homeless people. Now the Housing and Urban Development Department, the federal agency that provided the money, says it can find little evidence of anyone being helped, although most of the money has been spent.

This is the latest in a pattern of problems affecting finances and programs that have been uncovered in recent months at the EOB, which is Nevada's largest nonprofit agency. The purpose of the EOB is to receive federal and state funds appropriated to fight poverty, and either spend the money directly on programs benefiting the poor or pass it along to appropriate social agencies. In March the Sun reported that the EOB could not account for $2.1 million it received from the state. Since then the agency has been in the news because of other missing money, resignations by its top staff and problems associated with the area Head Start program, which is funded through the EOB.

The homeless assistance program is the latest example of an EOB operating without standard financial controls. In exchange for $368,358 received in 2001, and $104,556 received in 2003, the EOB agreed to provide homeless people with housing, counseling and assistance in finding jobs and permanent housing. But it turns out, according to a HUD audit, that the only real tangible evidence of a program is nine rundown, EOB-owned apartments. These are where the EOB says, but cannot document, that homeless people were assisted. The audit found that the EOB was charging $4,700 a month in office space to the program, and that it was paying employees out of the grant money -- but could find no valid documentation of any actual assistance. The audit cast doubt on whether people who had been staying in the apartments were even homeless.

We have pointed out previously that the EOB board of directors shares much of the blame for the agency's disarray. The HUD audit made the same point, saying, "... it was clear that EOB's board did not conduct due diligence in regard to its oversight responsibilities ... The board left most decisions regarding the operation of EOB to the executive director and program managers."

The board and staff of the EOB are not alone at fault. The Housing and Urban Development Department is equally culpable for failing to provide oversight. For years the Las Vegas Valley has been estimated to have between 7,000 and 10,000 homeless people. A program to help them, featuring nine unkempt apartments, should have been HUD's first clue that something was amiss. As the probes into EOB continue, we believe HUD should take a good look at its own organization, and the competency of its own "due diligence."