Federal auditors report inadequate accounting at social services charity

Date Published: 
June 6, 2017
News Type: 
Program Area(s): 
Community Planning and Development

(Source: sandiegouniontribune.com) Mental Health Systems, the San Diego charity that last year was the subject of allegations of misconduct and lavish spending on luxury hotels and limousines, failed to properly account for more than $140,000 in federal housing funds, a new audit states.

“MHS did not allocate its payroll costs to Continuum of Care and Supportive Housing Program grants in accordance with program requirements,” U.S. Housing and Urban Development auditors said. “As a result, HUD had no assurance that $142,181 spent on salaries and benefits was appropriately charged to the grants.”

Charity officials said all of the spending on federal housing programs was appropriate but they improved their bookkeeping practices nonetheless.

“MHS has already developed, and in February 2017, implemented a revised policy for employee time allocation to its HUD grant programs,” chief executive James Callaghan wrote to auditors last month...