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Councilman calls for review of city's Redevelopment Commission

Jason Arp
Jason Arp
Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.The Associated Press

Tuesday, February 21, 2017 1:07 PM
A Fort Wayne city councilman has asked the state to review the finances of Fort Wayne's Redevelopment Department after an internal audit reported several bookkeeping and management concerns — including a $1.85 million real estate purchase that was not properly listed in city records.

In a Feb. 20 letter to the Indiana State Board of Accounts, Jason Arp, R-4th and a recent addition to the Redevelopment Commission, said a recent limited review of the department by the city's Internal Audit Department "yielded enough items for review that an expansion of the scope and scale would be warranted . . . In light of the findings of the Internal Audit staff, and given the potential growth in the size and scope of the operations of the Redevelopment Commission, it would be prudent to perform an expanded audit."

In addition to the real estate deal, the internal audit reported the department "does not maintain a listing of owned real estate or any other department-owned assets . . . (resulting) in an inability to verify the land acquired, disposed of or currently owned by Redevelopment."

The audit also stated the department has not always provided sufficient oversight of grants and some contracts and agreements, including some related to city-owned parking garages and Parkview Field. That lack of oversight, the audit said, resulted in an overpayment to one grant recipient of nearly $20,000. Another $40,000 grant was approved but never paid because the recipient did not submit an invoice for payment. "The department was unaware that the funds had not been claimed until the Internal Audit reviewed the file six months after the grant should have been closed. The $40,000 was not used by the grantee and was not re-allocated to the department for other uses.

The audit did not suggest any funds were misappropriated.

In his letter Arp also said the Redevelopment Commission has failed to provide council with timely information about the $2.5 million in Legacy funds for the $32 million Landing project council approved in January. "As of this writing there are no details available to City Council for this $2.5 million transaction after repeated requests over a month's time. This shows a demonstrative lack of adherence to policies and procedures as well as internal controls," Arp wrote.

Arp, a frequent critic of city economic development efforts, noted the Redevelopment Commission received $26.5 million in funding last year and disbursed $27.8 million, much of it collected through Tax Increment Financing (TIF) districts. With the commission's importance expected to grow through its involvement in such projects as The Landing, General Electric campus development, a proposed downtown arena and other projects, proper oversight is needed now more than ever, he suggested.

City spokesman John Perlich said that despite the audit's identification of four issues, it "found no major concerns (and) the Redevelopment Department has already identified and is implementing the needed adjustments to internal controls to improve processes and procedures . . . We appreciate his interest in assuring that the city's Redevelopment Department and Redevelopment Commission continue to have a significant role in facilitating the current and future economic investments that are being made in our thriving community." The Redevelopment Commission has not yet taken action on financing for The Landing, he added.

As for the property transaction that was not recorded, Perlich called it a "procedural error" that has been corrected and said the land along U.S. 30 will be used to attract businesses and jobs.

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