An audit aimed at reviewing Augusta’s Housing and Community Development Department is moving forward, with the Augusta Commission expected to vote Tuesday on awarding the project to Cherry Bekaert Advisory LLC.
According to the agenda, the audit award is considered “urgent” and is being “fast-tracked” for commission approval. Cherry Bekaert, one of five firms to bid, has worked with the department for several years.
The firm estimated the audit will take five to six months and cost no more than $63,160.
The audit follows the April 2 suspension of Housing and Community Development Director Hawthorne Welcher, which centered around concerns about a $6.5 million emergency rental assistance grant which the city had to refund. However, the scope of the audit is broader.
What is the audit looking for?
The desired audit is called a “grant compliance” audit and is intended to cover all of approximately nine grant programs for the years 2023 and 2024, including a U.S. Treasury rental assistance program.
The request calls for a look at whether controls within the department were adequate to ensure grants are being spent and managed appropriately, including how much is being spent and on what.
The request doesn’t mention a change in leadership or any suspicions about what happened. City leaders have said little about the matter since voting April 1 to refund approximately $6.5 million to the Treasury due to the funds being unspent by a required deadline.
Director on leave pending audit outcome
The next day, Administrator Tameka Allen put Welcher on leave with pay “until the conclusion of an internal audit regarding the use of these funds,” according to a letter obtained by The Augusta Press. Welcher was expected to respond to inquiries but have no access to city systems or email, the letter said.
Welcher had been notified Nov. 8 about Treasury’s demand for a refund, but didn’t notify city administration until March 21, it said.
“Based on preliminary information, these funds were apparently utilized by your department to fund other functions within the department,” it said.
In an April 29 post, Commissioner Jordan Johnson claimed the department had run out of time.
“We distributed over $10 million in rental assistance funds,” he said. “We had 6 months to spend $6 million additional funds that the state gave us because they couldn’t spend it on time.”
How much is owed?
The city refunded $6.5 million to the U.S. Treasury on April 1, but on April 11, the Treasury demanded an additional $2.03 million in interest and penalties, according to records obtained by The Augusta Press. Finance Director Tim Schroer responded by asking the city’s legal team to begin the appeal process.
Prior to the refund, Welcher had instructed an employee on March 21 to repay about $4.9 million — 75% of the required amount — from the department’s operating account. The city ultimately paid the refund from its general fund.
Prior monitoring
The city’s bid request for the audit includes references to several past reviews by the U.S. Department of Housing and Urban Development. A November HUD report found no compliance issues with the department’s management of its Continuum of Care program.
However, an April 2024 report found the department used the wrong affordability period for homes assisted through a new homebuyer program. A 2022 report cited a lack of written policies related to the HOME Investment Partnership program, though HUD deemed those issues resolved.
