Federal officials are at odds over whether the city of Chicago should reimburse the government for $1.6 million in misappropriated Empowerment Zone funds, The Chicago Reporter has learned. In an audit released Oct. 15, the U.S. Department of Housing and Urban Development’s Midwest District Inspector General found that Chicago inappropriately spent $1.6 million on nine projects and did not properly document whether an additional $241,602 had benefited zone residents. But another HUD official takes a different view. The audit “overstated the problems that exist within the zone,” said Dennis Kane, coordinator of the Empowerment Zone/Enterprise Community Initiative at HUD’s Office of Community Planning and Development, which oversees zones nationwide.
Nearly four years after awarding Chicago $100 million in Empowerment Zone funds, a federal agency is auditing the city’s program for irregularities, The Chicago Reporter has learned. The audit, by the Office of the Inspector General of the U.S. Department of Housing and Urban Development in Washington, D.C., was launched last spring and will be completed in early October, said officials from the Chicago Department of Planning and Development. “We do not know what the audit will likely show, but we will be ready to respond to the recommendations that it gives to the department,” said Susan G. Connelly, a deputy planning commissioner. One possible finding: the Empowerment Zones/Enterprise Communities Coordinating Council–”an advisory board appointed by Mayor Richard M. Daley and confirmed by the Chicago City Council–”failed to separate the federal funds from a $35 million state Empowerment Zone grant. The monies were combined in the council’s August 1997 progress report to HUD, Connelly said.