Newspaper article The Florida Times Union

Charity for Aged, Disabled Still under Federal Scrutiny; Cathedral Foundation Contests $2 Million Penalty HUD Says It Owes for Misusing Loans

Newspaper article The Florida Times Union

Charity for Aged, Disabled Still under Federal Scrutiny; Cathedral Foundation Contests $2 Million Penalty HUD Says It Owes for Misusing Loans

Article excerpt

Byline: DEIRDRE CONNER

One year after federal auditors demanded it account for $2.65 million in grants, a local charity is still trying to resolve questions of financial mismanagement.

Depending on who you ask, the negotiations between The Cathedral Foundation of Jacksonville and the federal government could take money away from valuable programs and needlessly punish a vital social service agency, or it could restore much-needed funding to the foundation's four senior housing complexes. The review -- ongoing for the last year and perhaps soon to come to a conclusion -- is so delicate and so crucial to the organization that neither side will say much about it.

On one side: The Inspector General of the U.S. Department of Housing and Urban Development, who says the foundation improperly used millions in federal loans in the administration of the Cathedral Residences, a group of four downtown apartment complexes -- more than 600 units -- for the elderly that the foundation owns.

On the other: The foundation, a long-standing charity that caters to the aged and disabled that has come under HUD scrutiny. In their official response to the audit, the foundation's leaders have called the investigation flawed and excessively harsh -- and have said that the penalty demanded would compromise the safety net it offers seniors. In addition to the housing, the foundation administers programs for thousands of elderly citizens, programs such as Meals on Wheels, in-home care for frail seniors, caregiver respite and support, and counseling elderly individuals who are in financial crisis, the disabled and the frail, among many other initiatives.

The August 2007 audit accused the foundation of wrongly repaying itself advances to the four Cathedral housing projects in downtown Jacksonville, using project funds to pay foundation costs -- such as salaries -- that should have been paid from the management fees it already collected, and contracting with itself instead of awarding work to low bidders. It asked the Cathedral Foundation to reimburse the projects more than $2 million.

In its official response, the foundation's board chairman at the time, John Q. …

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