Burning Down the House

After the closing of an apartment building for AIDS victims in Fort Lauderdale, the city's ability to oversee a multimillion-dollar, federally funded program is called into question

"Unless we were able to get relief from the federal government on the repayment issue, I'd have a very, very difficult time recommending that to the city commission," says Pete Witschen, assistant city manager. "That would be a tough financial position to take."

Harry Garte, a Miami-based HUD official who is intimately involved with Fort Lauderdale's HOPWA program, declined to comment for this story. But a spokesman for the agency says this: "We are always concerned when funds that are intended to provide an essential service to the community are expended and the purpose is not achieved. We will continue to work with Fort Lauderdale to be certain deficiencies in their delivery systems are corrected and that everything possible is done to insure that programs are run successfully."


Sitting in an Italian restaurant on Oakland Park Boulevard on a recent weekday afternoon, Kathryn Malie is evidently weary of the whole bureaucratic quagmire. She sighs often as she discusses both Sunshine and the HOPWA program. Her hair is the color of copper wire, and she's wearing a blazer and a pink sweatshirt. She is short, just a few inches over five feet, and acne scars are evident on her face. She speaks softly -- as if someone might overhear -- in the near-empty restaurant.

Malie is not naive enough to believe that Sunshine is innocent. She understands that the organization failed to maintain its buildings, but she also believes the city should have continued to work with, not against, Sunshine. Most of all, she absolutely insists that she is not to blame for the three empty government-purchased buildings.

To understand her defense, it's necessary to know a little history about HOPWA funding. According to the program's guidelines, the largest city in any given county is responsible for disbursing HOPWA funds throughout the county. In Broward County the job goes to Fort Lauderdale. But during the first three years of the program, from 1993 until 1996, the city actually handed off these duties to the county. The thinking was this: Because the county doles out most federal dollars for AIDS services, it would be better equipped to distribute the HOPWA grants as well.

But such was not the case. Under the county's watch, HOPWA was plagued with problems. Chief among them was that many grant dollars were simply not being spent. In the summer of 1996, according to city records, the county had disbursed just $3.2 million of the $7.7 million made available by the federal government. AIDS organizations were spending money on housing services but not being reimbursed in a timely manner, which put the shoestring-budgeted charities at financial risk.

Out of frustration the city decided, in early 1997, to distribute the funds itself. At about this time, Malie, who was then serving as a community-economic development planner, was named interim director of the housing and community-development office. One of the key accusations in the audit that forced Malie into an eight-month leave is that Sunshine Health Center received money for services, such as mental-health counseling and substance-abuse treatment, that were never provided.

During her hearing in February, Malie pointed out that the auditor, Allyson Love, had misread the HOPWA contract. Although Sunshine Health Center had applied for various types of funds for the 1996-97 fiscal year, it received money only for rental assistance. Sunshine requested $26,000 for outreach services, $125,000 to provide transitional housing, $80,000 for substance-abuse treatment programs, $70,000 for mental-health and family counseling, and $97,668 for renovations to existing facilities. But all of these grant requests were rejected by the city. The only allocation that Sunshine received for the 1996-97 fiscal year was $210,000 to provide rental assistance for tenants at the existing properties.

Holding Malie accountable for Sunshine's housing woes is problematic for other reasons. The bulk of the expenditures questioned in the audit took place before the city took control of the HOPWA program in 1997. The funds for Sunshine's purchase of the SW 15th Avenue property and the two single-family homes in Pompano Beach and Hollywood, for example, were allocated by the county, not the city.

In her audit Love also concludes that Sunshine's deficiencies are reflective of the entire HOPWA program. A total of 11 nonprofit groups have received HOPWA funds since 1993, according to city records, but Sunshine is the only group mentioned in the audit. No evidence is presented to suggest that any other group experienced problems similar to Sunshine's.

Love says that she has only "flipped through" Malie's rebuttal and cannot respond to specific criticisms. But she says she stands by her audit entirely. "I think the findings and the subsequent management response to it speak for themselves," she adds.

Witschen says he sees no reason for changes to the audit either. "I don't believe the audit has fatal mistakes, but I know that's [Malie's] assertion," he says. Malie's interpretation of HUD guidelines is wrong, he adds, and the correct disciplinary action was taken against her.

He cannot account, however, for the city's decision to saddle Malie with two jobs over an 18-month period. While Malie served as interim director of the community development office from January 1997 to June 1998, nobody was hired to fill her old position of community-economic development planner. In other words she was essentially performing the duties of two employees but getting paid for only one job.

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