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Wilmington City Council calls for forensic audit of Wilmington Housing Partnership

Sophia Schmidt
/
Delaware Public Media

Wilmington City Council wants more answers about a loan the defunct Wilmington Housing Partnership failed to repay. 

 

The City of Wilmington took control of the public-private Wilmington Housing Partnership (WHP) this year after a City audit revealed misuse of financial assistance from the City, hundreds of thousands of dollars in accounting records errors and a “weakened financial condition.”

Wilmington recently paid back a $3.4 million loan from JPMorgan Chase for the Partnership. City officials have called the loan “uncollectable."

City Council passed a resolution Thursday requesting the City Auditor initiate a forensic audit of the WHP’s use of the loan. 

Councilman Trippi Congo, who sponsored the resolution, says he wants an independent accounting firm to examine what the partnership did with the loan, “line item by line item.”

“It just doesn’t pass the smell test,” he said. “We just want to know what happened. And it’s not on Council. People have showed up to meetings wanting to know where the money is and what did they do with the money. So I think it’s just our duty to request a forensic audit.”

Councilman Ciro Adams, Council's lone Republican, disagreed, questioning whether a forensic audit — which is often used when financial crimes are suspected— is appropriate. Others worried about the potential cost to taxpayers.

“Forensic audits start at, I believe, like $300 an hour, and we don’t quite know how long this audit would take,” said Councilwoman Michelle Harlee. “However … I think we should consider at least an independent audit.”

Councilwoman Linda Gray wants to know more about the Partnership’s assets. 

“I hope the forensic audit gives us information on the value of the houses that were in the Wilmington Housing Partnership— where they’ve gone, who has them, if that entity is disposing of them, and are they making a profit on it?”

City Auditor Terence Williams says he does not think a forensic financial audit is the best approach for the Housing Partnership at this time. But he says a forensic audit could be considered later based on the outcome of an upcoming audit of the Partnership’s last two years, noting this approach might help keep audit fees down. "The hourly rate for a forensic financial audit is very expensive compared to financial audit," he said in an email.

City Treasurer Velda Jones-Potter has also raised questions about WHP’s assets and whether the loan is truly “uncollectable.”

This story has been updated to include comment from City Auditor Terence Williams.

Sophia Schmidt is a Delaware native. She comes to Delaware Public Media from NPR’s Weekend Edition in Washington, DC, where she produced arts, politics, science and culture interviews. She previously wrote about education and environment for The Berkshire Eagle in Pittsfield, MA. She graduated from Williams College, where she studied environmental policy and biology, and covered environmental events and local renewable energy for the college paper.
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