Nearly a year later after results were released, the forensic audit for the city of Port Arthur is still making waves.

BKD LLP, the full service accounting firm handling the forensic audit, started their work in 2015 and made the results public in spring 2017. However, recent discussions on social media aired some concerns about the city’s payments to a business named Tender Loving Care Center for Children, which is not actually a daycare center, but assists in providing housing for qualified persons, according to their mission statement.

“Our procedures identified Tender Loving Care Center for Children (TLC) as the beneficiary of City housing department funds,” according to the forensic audit. “A concern of the City being involved in the sale of residential real estate was voiced in our initial interviews.”

 

Not a daycare

 

Under findings, BKD expected the city had funded the building of a nonprofit daycare center for at-risk children.

“However, inquiries with the State of Texas licensing board determined TLC is not licensed to provide child care services,” it read and further stated, “Our physical inspection identified a newly constructed home located in a residential area that did not appear to be for commercial use.”

BKD further identified two private homes being constructed during this timeframe through TLC.

City monies were paid to TLC by year as the following:

• 2010: $1,500
• 2011: $2,212
• 2012: $26,487
• 2013: $246,631
• 2014: $47,771
• 2015: $109,050
• 2016: $600
• Total: $434,252

Concerned citizens in February 2015 pushed to have the city conduct a forensic audit of the city of Port Arthur financial records, according to a prior News article. Claims of improper handling over city finances and fraud were at the core of these concerns. The petition signed by more than 1,400 citizens forced the Port Arthur City Council to conduct the forensic audit, which began in May 2015.

Over the past two years, BKD LLP conducted the audit of all financial records for the city of Port Arthur, including, but not limited to, Parks and Recreation, Public Works, Human Resources and City Yards. They also looked at allegations of misuse of travel expense policies, P-Card misuse, expenses for Pleasure Island, water collections and police department vehicle misuse.

 

No legal action

 

Todd Burchett and Anthony DeBenedictis with BKD stated during their presentation that they exhausted all leads throughout the audit and could find nothing that would allow them to recommend direct legal action on any current or former employee, city council member or management at the city level.

“BKD was able to obtain TLC’s Tax Form 990 for 2013 operations,” it read. “In 2013, TLC received a total of $683,015 in contributions and grants, of which the City contributed $246,631 or 36 percent.

“The executive director of TLC paid herself a salary of $145,000 representing 59 percent of the City’s contribution and 21 percent of the total.”

Rhonda S. Dixon is listed as president of TLC.

Their recommendation to the city was to implement a legal evaluation and determine whether the expenses reimbursed were eligible per contract terms.

 

Affordable housing OK’d

 

In May 2016, Port Arthur residents approved an affordable housing ballot proposition that allows the Port Arthur Economic Development Corp. funds to implement an affordable housing program in the area of Fifth Street to Eighth Street from Atlanta Avenue to Nashville Avenue. Legacy is doing the program in conjunction with the PAEDC and the city of Port Arthur, according to a prior News article.

Vivian Ballou, executive director of Legacy, said in 2016 that 30 houses would be built in downtown Port Arthur under the program. She said she believed the homes would add value to the now dormant area. Two have been completed; plans are to build five more soon.

Legacy is a non-profit organization that specializes in the development of affordable housing and the provision of financial counseling, according to its website.

Prospective homeowners are put through a rigorous process, Ballou said.

Former City Councilman Bob Williamson said he couldn’t remember too many details about TLC, but he does remember having questions about the start-up money for the Community Development Housing organizations.

“We don’t normally do that,” he said. “I had serious doubts about that.”

Floyd Batiste, executive director of the PAEDC, said TLC is the corporation while Legacy is a subset of the corporation.

Legacy manages low-priced to moderately affordable housing for cities. Batiste said they even managed the Beaumont Housing Authority for a time.

Risa Carpenter, public information officer for the city of Port Arthur, said HUD gives money to the city to create housing. In turn, the city contracts with a third party contractor, such as Tender Loving Care, doing business as Legacy CDC, which manages the program.

“The HUD fund pays the provider. It’s no different than a contract with Arceneaux, Wilson & Cole (an engineering company). HUD monitors and regulates the providers. It’s no different with what the city does with others.”

Vivian Ballou, executive director with Legacy, could not be reached for comment.