In an executive session two weeks ago, Housing and Community Development Department Director Hawthorne Welcher was placed on paid administrative leave without a public explanation.
The decision to place Welcher on leave happened during the same meeting where the city agreed to use general fund monies to reimburse the federal government $6.5 million for seemingly unused Covid funding from the U.S. Treasury Department.
The city also has to pay $211,734.73 in interest and penalties because the refund request was ignored for at least a year, according to paperwork from the Treasury Department.
The federal money was earmarked to help people pay their rent during the worst of the Covid pandemic; however, it appears that the money never made it to its intended targets.
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According to sources close to the matter who wish not to be identified, Welcher was not able to account for the money and therefore, the funds were reimbursed to the Treasury Department from the city’s general fund.
Augusta Mayor Garnett Johnson confirmed Welcher is on leave, but declined to comment further.
“That is really all I can say, and all I know at the moment. I really can’t comment since this is an ongoing personnel matter,” Johnson said.
An internet search for Covid rental assistance turns up no announcements or press releases during the pandemic that would have alerted the public that such funding was available or showed the steps one needed to take to access that money.
According to Derek Dugan, director of development for the Salvation Army, his organization declined to take part in any rental assistance programs.
“I know that we declined to work with them on any of that, but I believe the United Way may have taken part,” Dugan said.
However, if the United Way was the recipient of the funding, then Welcher could have disclosed that information, eliminating the need for a reimbursement. The United Way did not return a message for comment.
In response to an Open Records request, the city released several documents that appear to be bank spreadsheets from 2020 through 2025, with the year 2024 not included.
Each of the bank statements contains an “organization key.” Usually, the key is the identification number of what banking account, or ledger within a bank account from which funding is received or spent. In this case, the organization key on the logs does not correspond to a known bank account managed by the Housing and Community Development, or any other department for that matter.
The years 2020, 2021 and 2025 are blank, showing no funds received or spent. The years 2022 and 2023, contain expenditures that are not clear.
According to the statements, the housing department took on some new employees, listing $57,432.52 for regular employees, $113,840.52 for contract labor, $105,605.15 for temp workers, and a further expense of $206,689.98 that is listed as “contract services.”
The ledger also shows “administration fees” in the amount of $29,194.06 and general supplies of $56,578.86, a stormwater fee of $1,996.04 and a combined $9,525.11 for furniture.
The department spent another $693.37 on garbage bags, according to the spreadsheets.
The ledger also claims the department spent $1,109.97 on “elections,” something that, if true, would be an illegal expenditure.
When all of the expenditures are added up, it appears that the bank account is in the red for $299,231.31.
Welcher, who has not been accused of losing or mismanaging the money, confirmed that he is on leave, but says he cannot comment further, except to say that he has done nothing wrong, and he can’t wait for the commission’s investigation to conclude, so that he and his staff can get back to work.
According to emails obtained by an Open Records Request, Welcher and his staff were notified by the Treasury Department on Nov. 8, 2024 that the emergency rental assistance funding needed to be returned, as there was no record on file of how the money was spent.
The emails show that Welcher tried to stall in remitting the payment, and he did not request any form of review or reconsideration.
“We are in receipt per this email and call today and working to return here soon where appropriate,” Welsher wrote in a response email to the Treasury Department on Jan. 14.
The Treasury Department sent several emails throughout January and February, reminding the Housing Department that the money was owed, warned the department of more penalties that could be added if the money was not returned and then sent another email on Feb. 18 referring the matter to the Disbursing and Debt Management Office where it is stated that an additional 32% of administrative costs has been added to the amount owed.
The last communication shows Welcher asking to be granted an extension until March 3, just weeks before commissioners learned of the missing money.
Scott Hudson is the Senior Investigative Reporter, Editorial Page Editor and weekly columnist for The Augusta Press. Reach him at scott@theaugustapress.com
