HUD revises bill, tells city to repay $654,959 Amount being sought over no-bid repairs is reduced by 10%


After a year and a half of wrangling with the federal government, Baltimore got a new bill for misspent tax money in its much-criticized no-bid housing repair program: Refund $654,959.

Even though Baltimore housing chief Daniel P. Henson III claimed he would not owe "diddly," the federal government has stuck to its demand that the city repay money because of shoddy work and inflated costs in the program that doled out $25.6 million without competitive bids.

The Housing Authority, by documenting work properly done, reduced its original bill of $725,759 by $70,800, roughly 10 percent, according to the latest notice from the U.S. Department of Housing and Urban Development.

Besides owing money for inflated prices, the agency must repay $73,480 in bogus charges, said the notice obtained by The Sun. Some contractors later refunded money or completed undone work, reducing HUD's initial claim of $175,068.

Begun in 1991 as a modest effort to renovate run-down homes for the poor, the program escalated in scale and controversy.

Federal auditors found that money had been squandered, and a corruption probe has resulted in six convictions tied to the no-bid program. A series in The Sun detailed problems from botched repairs to contracts that went to relatives of agency officials.

Mr. Henson said he believes the city doesn't owe HUD anything.

"We don't believe in any circumstances did we overpay anybody, nor did we pay for work that was not done," he said.

But William Tamburrino, director of public housing for HUD in Maryland, said the bill would be reduced only "if sufficient evidence is provided" of properly done work. A meeting is set for later this month to work out a repayment plan, he said, and the city agency will have to come up with nonfederal funds to pay off the debt in its federal account.

City Councilman Martin O'Malley, a critic who plans to question Mr. Henson closely at his reconfirmation hearing this evening, said the amount the agency owes "confirms that the no-bid program was a disaster and that there are management problems."

Virtually all other criticisms raised in a September 1994 audit have been resolved.

In the past year and a half, the agency and HUD have settled 20 of the 28 audit findings and are on the verge of closing out six others. And the agency has taken a number of steps to deal with problems cited by HUD's inspector general, from revamping its maintenance operation to closely monitoring lead paint test results.

It also has submitted monthly reports to HUD, which has been monitoring the waiting list for public housing, and has set up a computerized accounting system to keep better track of inventory.

By June, the authority will reinspect 65 of the more than 1,100 properties renovated through the program to determine whether more work should be done. That represents the same sample used in the HUD audit, which Mr. Henson dismissed as flawed.

The federal government also has ordered the city to repay funds from its contract with the Nation of Islam Security Agency. In November, HUD forced the city to revoke the contract and hire another company, which had offered to do the job for $1.1 million less.

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