CHARLESTON, W.Va. — State officials have been seeking to assure the U.S. Department of Housing and Urban Development that they can move forward with multi-million dollar contracts for long-term flood relief that originally may have been executed unlawfully.
And Congressman Evan Jenkins says he met with the U.S. Department of Housing and Urban Development to seek assurances that the agency would not take back $149 million in flood relief funds over a series of missteps in West Virginia.
“The HUD issue is of serious concern to me,” Jenkins said on MetroNews’ “Talkline.”
The original contracts to conduct flood relief efforts expired over the weekend, but the general counsel in the Governor’s Office says they were renewed late last week by the Department of Commerce. A big question is whether such renewals would be legal if the original contracts were deemed not to be.
Brian Abraham, general counsel for Gov. Jim Justice, told reporters on Monday that state officials have presented a plan to the U.S. Department of Housing and Urban Development, the administrator of $149 million in disaster relief grants.
“We were on the phone with HUD, describing some negotiations we had to get their feedback,” Abraham said during a Monday news conference. “They’re going to have an internal conference and hopefully call us back.”
That was the extent of Abraham’s elaboration on what could be a very complicated situation.
West Virginia entered into millions of dollars worth of contracts with companies meant to carry out long-term relief after the devastating 2016 floods.
A contract with Horne LLP, worth up to $17 million, has been in dispute for months.
An initial scope valued at $900,000 was appropriately approved by the state Division of Purchasing. But additional task orders valued at $17,817,108 created red flags with the purchasing division and the Governor’s Office, which paused the work this spring.
That contract actually expired last December. The administration has been working to renew it while dropping some of its scope. Its current status is unclear.
Then a legislative audit examined larger contracts with construction contractors, valued at $71,430,000.
Those are seven contracts with Thompson Construction Group of South Carolina ($49 million), Danhill Construction Company ($15 million), Appalachia Service Project ($3.18 million) and River Valley Remodeling ($4.25 million).
A legislative audit released last Sunday concluded that the contracts were awarded unlawfully.
They actually were executed prior to this winter’s official release of funding from U.S. Housing and Urban Development.
And the West Virginia Development Office did not comply with the Purchasing Division statutes, the audit concluded.
“As a result, the Legislative Auditor recommends that the Development Office cease all payments under these invalid contracts,” according to the report.
“Further, the Legislative Auditor recommends that the Development Office immediately terminate all contracts which commit the expenditure of Disaster Recovery Funds that were executed prior to receiving HUD’s Authority to Use Grant Funds form.”
One potential solution might be to point toward a section of state purchasing rules exempting grants that do not have a direct benefit to the governing agency like the Development Office.
Housing and Urban Development already has been keeping a watchful eye on West Virginia’s activities. HUD sent a letter in late March, wanting answers to some aspects of West Virginia’s approach.
Congressman Evan Jenkins, a Republican who represents the state’s Third District, said on Monday he has been in touch with HUD over its concerns. Jenkins says he met a week ago in Washington with HUD officials.
“I was very concerned about would this be jeopardizing the funds that have not been allocated at this point? Can we be sure there’s not going to be a claw-back?” Jenkins said.
At the time, Jenkins said, he came away feeling better.
“I was reassured that we are not in danger of having HUD take back the funding,” he said.
Jenkins says he has also asked the state Auditor about the contracts dealing with long-term flood relief.
“There is no question, this program was not administered, not carried out in the way it should have,” he said. “Hopefully it is headed in the right direction now.”