Tuesday, August 26, 2003

Internal auditors to review city's questionable deals

By Gregory Korte
The Cincinnati Enquirer

The city of Cincinnati's internal auditors will conduct a review of the Department of Community Development and Planning after a series of embarrassing development debacles.

City Manager Valerie Lemmie said Monday that a recent WCPO-TV (Channel 9) investigation of the Glengate Apartments in Pleasant Ridge led her to support "a more thorough review of all programs" in the department.

Lemmie reported this month that she would overhaul the Rental Rehabilitation Program after the Glengate Apartments went into foreclosure. The city put $548,000 into the property in 1993.

"We want to, of course, learn from our past mistakes," said Assistant City Manager Deborah C. Holston. "But some of the deals we make have to be a little risky, so we want to make sure our internal controls are in place."

The list of questionable deals include: Genesis Redevelopment, the West End agency where investigators found conflicts of interest; Huntington Meadows, a Bond Hill complex that went bankrupt despite millions in public subsidies; the now-collapsed Empire Theater in Over-the-Rhine, whose developer is wanted by the FBI after leaving town with $184,172 in city subsidies.

At the same time, the scope of the department's duties has increased, encompassing what were once three different departments: Planning, Neighborhood Services and Economic Development. A task force led by Lemmie and Fifth Third Bank CEO George A. Schaefer Jr. criticized what it called "mission creep" by the department.

"It seems to point out some weaknesses in the organization over there," said Councilman David C. Crowley, a member of the city's Internal Audit Committee, which recommended the audit last week. "I hope that we'll get very clear policies, well written and implemented, that will guide our future decision making, loans, grants, reporting and controls, so we won't have these embarrassments in the future."

Lemmie said the audit would be complete by Nov. 21.


E-mail gkorte@enquirer.com

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