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Pittsburgh Housing Authority numbers raise red flags

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Thursday, April 4, 2013, 12:01 a.m.
 

The Pittsburgh Housing Authority gave city auditors and the IRS conflicting information on how much money an authority-run nonprofit raised and spent.

The Housing Authority told auditors that Clean Slate E3 Inc. raised $101,841 and spent $40,371 in 2010, but the agency reported $227,255 in revenue and $12,718 in expenses on its tax return.

In 2011, the nonprofit raised $82,261 and spent $64,342, according to an audit released on Wednesday by city Controller Michael Lamb. On its 2011 tax return the nonprofit reported $57,256 in revenue and $39,338 in expenses.

“Clean Slate, I think, raises a lot of red flags,” Lamb said, adding that the authority refused to answer many of the auditor's questions. “My mandate is to audit all of the city's component agencies. The fact that they've been so uncooperative in this situation is a real problem.”

Authority officials did not return repeated calls for comment.

Lamb said the authority blamed the revenue conflict in 2010 to a transfer of funds from another nonprofit with a similar name, Clean Slate.

The authority had not filed 2011 tax returns before the audit was complete and Lamb was unaware of that year's discrepancy.

Auditors also found problems with an annual golf outing Clean Slate E3 used to raise 78 percent of its revenue in 2010 and 86 percent in 2011.

The authority refused to give auditors the names of outing participants. Lamb said the fundraiser represents a potential conflict of interest for authority officials, who sit on the nonprofit's board.

“When you are having personnel from the housing authority soliciting contributions from people who are hoping to get contracts from the housing authority, that's a conflict,” Lamb said. “We think it's important for them to have an independent third party operating that organization.”

Clean Slate board members include Chief Financial Officer Edward Mauk, authority spokeswoman Michelle Jackson and authority board Chairman Ricky Burgess, a city councilman.

Burgess said he was not involved in the fundraiser and referred all other questions about the audit to authority Executive Director Caster Binion.

“I have not participated in the outing, nor have I solicited any money for the outing,” said Burgess of North Point Breeze. “I oversee the budget (for Clean Slate E3).”

Binion said in a written response attached to the audit that the authority would consider creating a separate entity to oversee the nonprofit.

Lamb also said Clean Slate E3 was not fulfilling its mission of awarding scholarships to needy kids. The agency recorded a $232,422 surplus at the end of 2011, but awarded only $19,000 in scholarships for 2010 and 2011.

“When they're raising that much money to support that kind of program, they should be awarding more money,” he said.

In his response letter, Binion said the authority would consider partnering with the Pittsburgh Promise, which offers college scholarships to qualifying students in city schools.

Bob Bauder is a staff writer for Trib Total Media. He can be reached at 412-765-2312 or bbauder@tribweb.com.

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