State has just weeks to use or lose $7.6 million

By Jeremy Redmon and Rhonda Cook

The Atlanta Journal-Constitution

Georgia officials didn’t apply for federal stimulus funding to help struggling low-income families keep their homes until more than a year after Congress made the money available through the Recovery Act.

Now they are scrambling to distribute about $7.6 million of this aid before a federal Sept. 30 deadline. Any stimulus money left unspent by that deadline is supposed to go back to the federal Temporary Assistance for Needy Families fund.

Citizens Against Government Waste says spending so much federal taxpayer money that quickly in Georgia is a recipe for fraud. And an official from a nonprofit agency working with the program said officials have caught applicants colluding with landlords and submitting fake invoices for the aid.

Under the state’s Fresh Start program, low-income families can receive up to $3,000 in aid to help pay for past-due mortgage, rent and utility bills. To qualify, applicants must be U.S. citizens living in Georgia, have at least one child and meet certain salary requirements. For example, a family of four must have a household income of $66,168 or less to qualify. Aid payments are made directly to landlords, mortgage companies or utilities.

As of Aug. 9, the statewide Fresh Start program had issued $2.4 million to 1,835 families and had amassed a backlog of 1,386 applications that still need to be reviewed, according to state and United Way of Metropolitan Atlanta officials.

Eighty-eight organizations are working with the United Way and processing applications at 113 sites across the state. Officials from at least three of these organizations say they have been overwhelmed by demand and have stopped taking applications or are considering stopping soon. Angry applicants have been lining up outside their doors and overloading their phone systems, officials said.

Among the nonprofits that have stopped taking applications is the Sullivan Center in southwest Atlanta. A few weeks ago, a sign on the front door told clients the center was not taking any more applications and that it was closed for processing the ones already filed.

Grace Carlton, a mother of four who lost her job at a fast-food restaurant in April, said she was among the first to apply for aid at the center in June. Her application moved ahead in mid-July after she submitted more documentation, according to the United Way. But she said her landlord didn’t receive a check for her past-due rent until just recently.

“I’m frustrated right now,” she said this month before her rent had been paid. “It’s backed up because there’s a lot of chaos.”

Congress approved the $787 billion federal stimulus program on Feb. 13, 2009. President Barack Obama signed it into law the same month. The bill includes $5 billion in Temporary Assistance for Needy Families funding that can be spent on a variety of items, including jobs and shelter.

Georgia is eligible for $165.3 million of that money but has received approval for only $65.9 million of it so far, federal records show. Still, that is more than what most other states have received. As of Thursday, $4.1 billion had been approved for the states in all.

Dena Smith, a Georgia Human Services Department spokeswoman, said the state has been spending its TANF stimulus funds on several other priorities, including jobs, food and child care for needy families.

She said federal guidance on how the money could be spent on the Fresh Start program was not made available until December. State officials created the Fresh Start concept two months later, tested the program in May and applied for stimulus funding for it that month. The state received approval from the federal government and started the $11.4 million program statewide in June, she said. To prevent fraud, she added, officials are verifying records and reviewing each application more than once.

“Stimulus dollars allocated to Georgia is not free money, but taxpayers’ hard earned money,” DHS Commissioner B.J. Walker said in a statement. “And especially during these challenging economic times, our focus is to spend their money in the worthiest way.

“That’s why we invested stimulus dollars on core needs and services: rent and mortgage relief and for subsidized jobs for teens and adults. We also know how important it is to validate eligibility for those who apply for those core services. Sometimes validation takes time, but it’s a necessary process.”

The U.S. Health and Human Services Department issued general guidance on how the stimulus money could be spent in April 2009. But a spokesman for the department said it was answering questions from state officials about that guidance through the remaining months of 2009. Some states started applying for the aid in April and May of last year, said the spokesman, Jesse Moore. He said his department has worked hard to make states aware of the funding and to help them apply for it.

Meanwhile, officials from some of the nonprofits working with the Fresh Start program in Georgia say they have been overwhelmed by demand.

“Everybody out there wants their money yesterday,” said Terry Tucker, the Sullivan Center’s executive director.

Tucker noted that while most of the applicants need help, there have been attempts at fraud. He said his agency did not report those claims to police but did reject them.

Judith Montier, a spokeswoman for United Way of Metropolitan Atlanta, said any cases that have been suspected of fraud have been rejected and reported to DHS, which notifies its Fraud Unit.

Georgia officials have experienced other trouble spending federal stimulus dollars quickly. For example, The Atlanta Journal-Constitution reported in January that months after stimulus dollars started pouring into Georgia to weatherize the homes of low-income people, state contractors had done little of the work.

As of Nov. 30, contractors had completed work on about 430 houses, or 3 percent of the 13,617 homes the state wants to weatherize by March 2012. The state has made progress since then. As of June 30, that number is up to 3,009 homes completed, or 22 percent of the state’s goal, state records show.

Regarding the state’s Fresh Start program, at least one critic said she is concerned the tight time frame agencies have in spending the money from that program could lead to waste, fraud and abuse.

“It’s a collapse of fiduciary responsibility,” said Leslie Paige, spokeswoman for Citizens Against Government Waste, a nonpartisan watchdog group based in Washington.

Georgia entered into an $11.4 million contract with United Way of Metropolitan Atlanta to operate the Fresh Start program. Eighty percent of that amount is coming from federal stimulus funds, while the rest is made up of other federal money. The program’s budget includes $1.4 million to pay for operating costs, subcontractor fees and other expenses, according to the contract.

United Way officials say they have hired additional people to process applications. They said officials also could hold one-day events to accept more applications, if more organizations end their involvement in the process.

“United Way is working with agencies across the state to address the need and make sure agencies are in adherence with the policies for the Fresh Start program,” said Montier. “We anticipate that all monies will be committed by the Sept. 30 deadline — meaning applications may be in queue at the Sept. 30 deadline. As long as applications are completed by Sept. 30, they will be processed.”