Program that helps low-income people save for homes, education scrutinized


AUSTIN (KXAN) – The city of Austin auditor’s office said a program that gave away hundreds of thousands of your tax dollars was not overseen properly and the “lax monitoring” may have allowed participants to take advantage of the program.

The Neighborhood Housing and Community Development Department is in charge of handing out money as part of the Matched Savings Account (MSA) Program, which was started by the federal government in 2011. The department has doled out $300,000 in city and $300,000 in federal funding to low-income residents. The goal of the program is to help with education expenses, buying a home or create a small business.

Since the program began, 82 participants have received $298,000 in cash. Twenty-two additional applicants are awaiting funding.

The MSA Program first handed out a 4 to 1 match, but that was increased to 8 to 1, after a low amount of applicants. That means if someone saved $500, the city would match with $4,000.

According to the city audit, 72 percent of the funding handed out had issues, including missing supporting documents to evidence that applicants violated the written program. In several instances, supporting documents were found in other locations rather than the authorization packets, but very little was done to follow up.

In one instance, a group of 20 artists received $20,000 from the program to create an album, but the audit determined there was never any follow-up to determine if an album was ever completed, according to the audit.

During a committee hearing Wednesday, several members addressed their concerns on the lack of oversight. “We have limited funds,” said District 10 Council Member Alison Alter. “We have to figure out how we are spending that money, wisely.” District 8 Council Member Ellen Troxclair said, “The potential for fraud is extreme in this program. And when you are talking about that amount of money, it is completely unacceptable.”

The federal government has decided to end the program in March. Right now the city isn’t taking any more applicants. It is deciding if the program will continue past March, and if so, in what capacity.

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