Audit Finds Loan Delinquency, Mismanagement, and Nepotism with City Housing Agency

Audit Finds Loan Delinquency, Mismanagement, and Nepotism with City Housing Agency

A City of Tallahassee audit of the the Big Bend Community Development Corporation (BBCDC) has found that as of September 2016 the organization had failed to make any payments on city of Tallahassee loans totaling $1,275,000. Some of the loans were first originated in 2002.

Also, the audit documented instances of mismanagement and nepotism.

The BBCDC is a 501(c)(3) non-profit organization established in November 2000 with a mission to develop affordable housing, foster neighborhood economic development and job creation, preserve historic community assets, provide youth and senior services, and deliver educational programs.

PublicHousing2The major source of revenue for the group comes from the City of Tallahassee’s annual Community Development Block Grant (CDBG) award which is provided by the United States Department of Housing and Urban Development.

The City’s Community Housing and Human Services Department is responsible for administering the City’s affordable housing and human services programs.

The Loans

The audit reported on three delinquent loans made by the City of Tallahassee. The first loan consisted of the balance owed on a $250,000 line of credit provided in 2002 for use in constructing infill homes in the Frenchtown Community.

The second loan was a $750,000 line of credit provided in 2008 for use in constructing residential units in a planned mixed-use project referred to as the Frenchtown Village Marketplace.

And the third loan was a $250,000 loan provided in 2004 for use in acquiring the Ashmore Property, a Frenchtown site of historic significance.

The audit reports that no payments had been received as of September 2016 on the loans. However, in November 2016, corrective actions were taken.

More specifically, on November 10, 2016, in connection with the closing of the financing for the Casanas Village development, the City received a total of $752,237, consisting of the $682,237 balance due on the $750,000 line of credit and $70,000 of the $250,000 due on the $250,000 line of credit.

The loan maturity dates for the special project loan balances for the $250,000 line of credit and the Ashmore Property Loan were extended to January 1, 2019, and November 1, 2018, respectively.


In addition to the lack of repayment of the loans, the audit found that the use of the loan proceeds by the BBCDC were not consistent with City authorizations.

For example, with the $750,000 line of credit made for the Frenchtown Village Marketplace, the audit found the terms of the contract authorized the use of approximately $500,000 of the loan proceeds to pay off an outstanding BBCDC debt owed to the Florida Housing Finance Corporation.

However, the City Commission authorization for the $750,000 line of credit specified that the loan should be used by the BBCDC to construct residential units in the Frenchtown Village Marketplace.

The auditors also found neither the $250,000 line of credit contract for constructing infill homes nor the $750,000 line of credit contract for the Frenchtown Village Marketplace included terms and conditions establishing a mechanism that would facilitate the City’s ability to obtain documentation showing that the loans had been used only for the purposes authorized.

The audit determined there was some use of the City CCBG funds for non-allowable or inappropriate purposes and that adequate support was not always available to substantiate some uses of those funds.

The audit also determined that the BBCDC was not successful in providing many of the contracted services.


The audit found that the Executive Director of the BBCDC hired his daughter to help administer BBCDC activities funded by City CDBG funds. For the current and prior year contracts, the BBCDC requested and received reimbursements to date for $2,400 paid to the daughter of the Executive Director for services rendered to the BBCDC.

The audit findings show the Executive Director executed a contract between the BBCDC and his daughter that provided for $500 monthly payments in return for her assistance in implementing and administration of the contract with the City for the specified services.

The audit stated that hiring of a close relative results in an appearance of a conflict of interests, and is contrary to both the contractual provisions addressing conflicts of interests and the provisions prohibiting nepotism.

Audit Recommendations

The audit concluded by providing ten recommendations. These recommendations included providing additional oversight over the status of outstanding special project loans and the related projects.

Specifically, the audit recommended that reimbursement requests should be reviewed in a manner to ensure BBCDC claimed costs are allowable, that periodic performance reports should be reviewed for completeness and clarity, and more frequent site-visits should be conducted.

With regards to the allocation of funds and possible nepotism, the audit recommended that the BBCDC consult with the City Attorney’s Office to determine correct action.

The full audit can found here.

12 Responses to "Audit Finds Loan Delinquency, Mismanagement, and Nepotism with City Housing Agency"

  1. First of all the report is incorrect..the Agency first appeared in Frenchtown as the Frenchtown CDC and later changed its name to Big Bend CDC somewhere between 2011 and 2013.
    Second some questions still remain about the funds used (in order to benefit the Front Front Porch community) to purchase the Purple House and Ashmore properties.
    Third these properties should be released from this agency and given to the Frenchtown community since the people have been once again duped by the developers who come in to help the poor people of Frenchtown and leave them with nothing.
    Last but not least..the City should release the names of these carpetbaggers and treat them like the crooks they are…

  2. In my view, the only real surprise here is that the City performed the audit. Over the past decade and a half, is the first such audit? If so, are those available to the public and press?

    There may not be enough information here to warrant a firing, but there ARE enough matters exposed to suggest audits semi-annually or annually, with monthly reporting in the interim.

  3. Same oh, same, oh—-give these types an inch and they will take a mile. We (taxpayers) have rebuilt Frenchtown 5 times since I moved here in 1962 and we get the same results every time. The BBCDC is simply a conduit for more hanky panky and irresponsible conduct by the administrators who are not held accountable by anyone. Enough already ! I have contemplated moving out of this area several times in the past 5 years and this is just one more justification.

  4. If Tallahassee Reports was not watching none of this would be known! The name of the administrator should be exposed, publically humiliated, and fired!

  5. Tallahassee is Washington D.C. Jr.
    This is not surprising at all – this is just one of MANY such “mismanagement” going on in our fair city. We need our own Mr. Trump!

  6. So you owe $1,275,000 on loans beginning 14 years ago and you had not made the first payment? REALLY? Does it take 14 years for some oversight? This is why government programs are rife with fraud and abuse. It takes 25 people to provide oversight to one person that gets assistance…if it doesn’t fall through the cracks.
    But heck after 14 years you may start thinking everyone has forgot about your loan balance. Even squatters can be given title to abandoned property after 7 years under the adverse possession statute, so after 14 years…I may start thinking it’s a “gift”.

  7. I would like to know who hired and approved the Executive Director and what are the consequences of this poor management.

      1. The director lives in Quincy. Sort of like commissioners and Mayors living in their district limits.

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