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Government, Politics & Issues

St. Louis County agency tapped to replace Human Development Corp. temporarily

This article first appeared in the St. Louis Beacon, Oct. 3, 2011 - The Missouri Department of Social Services has selected two new partners to administer anti-poverty programs in St. Louis and Wellston following the financial collapse of the Human Development Corp.

But the transition apparently hasn't been as seamless as the state had hoped. HDC has spurned the state's request to sign a document saying it was relinquishing its designation as the city's community action agency. This is the official designation that the federal government gives to the local organization receiving that federal money to administer anti-poverty programs.

At the moment, state officials have responded to the standoff with HDC's board by allowing St. Louis County's community action agency to take over all anti-poverty programs, except heating aid, temporarily. This means federal dollars that used to go to HDC to run food, clothing, shelter and job-training programs in St. Louis will now be handled temporarily by the St. Louis County agency until a new community action agency can be set up in St. Louis.

The state also announced that the Urban League would now run the low-income home-energy assistance program, called LIHEAP. It served about 17,000 households in St. Louis and Wellston last year. HDC's annual budget of roughly $12 million included about $4 million to process LIHEAP grants.

The changes came after HDC apparently misspent or mismanaged thousands of dollars in federal anti-poverty funds, failing to pay some vendors for services to the needy and causing some residents to lose assistance.

Among other other problems, state officials say, HDC put at risk thousands of households promised about $650,000 in heating aid. The LIHEAP problem arose after HDC certified thousands of poor residents to receive help but failed to give the federal aid to utilities to cover the cost. Laclede Gas and Ameren have promised not to cut of service for those affected because they say the problem was caused by HDC, not the needy.

The state says it is "reviewing every option to ensure that all taxpayer dollars are accounted for." The HDC board has said all dollars can be accounted for. It says the agency overspent because it tried to serve more people than it had money to cover.

Along with administering LIHEAP and other programs, HDC held a city contract to prevent homelessness by helping poor tenants cover their rent and avoid eviction. City officials said they acted as soon as they learned about problems with HDC. But they said city intervention came too late to prevent some families from being evicted because HDC had failed to pay landlords. The city has since turned to Grace Hill Settlement House to run the rent program.

HDC was designated a community action agency as part of the 1964 Economic Opportunity Act, also known as the War on Poverty. That act set up a system of community action agencies. Being designated a community action agency made local groups, such as HDC, eligible for millions of dollars annually to run social and economic development programs that are supposed to help the poor become self-sufficient.

DSS officials note that community action agencies are the only entities allowed under federal law to administer the federal Community Services Block Grant programs. As of late Friday, HDC had refused to relinquish its designation. Whether that refusal would thwart the state from setting up a replacement agency for HDC was unclear. DSS said it was "reviewing our options" on how to resolve the issue.

Other than that problem, DSS officials say they expect a smooth transition from HDC to its new service providers. DSS interim director, Brian Kinkade, said in a statement that his agency had "worked swiftly to find new organizations that could carry on this work efficiently and responsibly" after learning that HDC could no longer provide the services.

The state contracts with the Urban League and the county agency were for the 2012 federal fiscal year, which began on Oct. 1.

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