You are here:

TX LIHEAP Finds Fraud, Appoints New Local Agency

July 21, 2011 -- A new local LIHEAP agency has been chosen to serve low-income residents in some parts of West Texas after another agency accused of fraud voluntarily relinquished its contract to operate LIHEAP and other low-income programs.

The state LIHEAP office, the Texas Department of Housing and Community Affairs (TDHCA), announced this week it has contracted with Lamesa-based West Texas Opportunities (WTO) to provide utility bill payment assistance to low-income residents of Loving, Reeves, Ward, and Winkler counties.

WTO takes over from the former provider, Community Council of Reeves County (CCRC), based in Pecos, after audits conducted in April and May cited the agency for possible fraudulent activities and financial mismanagement. The audits included 27 findings regarding program operations, questioned costs of more than $6,000 and cited disallowed costs of more than $186,000. The agency had served low-income households with LIHEAP, weatherization and a variety of other programs since 1966.

Last week the agency turned over to TDHCA a total of $1.6 million in contracts from the Community Services Block Grant, which pays for salaries and operating costs; along with LIHEAP and weatherization funds. It is expected that it will shut down. 

TDHCA’s contract with WTO ensured that the area’s low income households would continue to receive assistance with utility bills, replacing inefficient energy equipment and energy-consumption education, TDHCA officials stated in a news release.

The TDHCA, which distributes funding to the local agencies, reviews their annual financial records, contracts, client files, and contacts. In a letter from TDHCA dated June 24, Division Director Michael DeYoung said the agency identified 27 findings of “significant issues regarding program operations and the use of program funds…” The report claims that some of the expenses were fraudulent.

“Our review found an unacceptable lack of management and executive oversight which the department believes led to an environment susceptible to opportunities for waste, abuse, and possible fraud in the administration of the TDHCA programs without adequate internal controls to mitigate those risks,” DeYoung wrote.

Mary Jane Rios, executive director of the CCHC, claimed the agency has not operated improperly.

“Assistance was provided to the clients,” Rios said. “It is just that in the eyes of the department it was not done appropriately.”

Source:  TDHCA, newspapers