City of Austin Auditor finds big problems in 'Matched Savings Account Program'

More than an hour of discussion during Wednesday's Audit and Finance Committee meeting was dedicated to some serious issues the City Auditor found in the Neighborhood Housing and Community Development Department.

The auditor's investigation determined the department didn't do a good job overseeing the "Matched Savings Account Program." The program uses a combination of federal and city dollars to help low-income Austinites save money for a home, go to college, or invest in a small business..

"People can get an 8 to 1 match so if you save $500 and tell the city you're going to start a small business they'll give you $4,000 in with which to do it and they'll deposit it in your personal bank account with really no accountability of how that money is spent," said Council Member Ellen Troxclair, chair of the Committee.

Troxclair says that's unacceptable and really worrisome.

Since the program started in Austin in 2013, it's given out at least $298,000 to 82 participants.

The auditor found the department used the money for "questionable transactions and potentially ineligible participants."

Council members on the committee questioned the purchase of a $2,100 gaming computer.

"Which is under the education savings goal and it's reasonable that someone might need a computer, now why that expensive of a computer? There may be a very good reason for that, maybe they're pursuing something in school that requires a high-powered computer. However that's not in the documentation so it looks questionable to us on paper," said Mary Dory with the City Auditor's office.

"When the request came through for a high-powered machine, it was determined to be related to their education. We had communication with a professor saying that, confirming the student was an engineering student," said Rosie Truelove Director of the Neighborhood Housing and Community Development Department.

Council Member Alison Alter said the problems here point to a broader issue.

"We have programs and we have no idea if they're making a result and we're just throwing money at a wall and hoping that we hit some target that we've set," Alter said.

Alter says if there is nothing built into programs like these to make sure recipients report back about how the money was used, she says we might as well be throwing that money away.

"And this is happening over and over again in housing, in cultural arts, in work force development. We have got to get a handle on this, we have limited funds," Alter said.

"We have so many needs in this city and simply giving people blank checks for $4,000 is not an appropriate use of hard-earned taxpayer dollars," Troxclair said.

The Federal government is doing away with this program so now it's up to the city to decide if it should continue using just city funds.

Troxclair says she is recommending it not continue another day.