Last year, the Capitol Hill Housing Improvement Program (CHHIP), a quasi-governmental arm of the city that develops and manages low- and moderate-income housing, held a party for its outgoing executive director that included a $700 tab for hot dogs and chips, $559 for chocolate truffles and alcohol, and nearly $400 for furniture rental.
Problem is, they used public funds to pay for it.
One of Seattle’s eight public development authorities, CHHIP is a public corporation whose board is appointed in part by the mayor and is beholden to state and municipal ethics laws governing the use of public dollars. (Though most of CHHIP’s $5.2 million operating budget comes from the rental income of its 42 buildings, located primarily on Capitol Hill, the organization also receives city funds and private donations, which can only be used for public purposes.) In a report released last month, the state auditor’s office said the fete, which totaled $3,144, was not a valid public use. Making matters worse, the auditor concluded that CHHIP asked for donations from current and past vendors to pay for the party—something the auditor says had the appearance of a conflict of interest.
“Public officials should not be out there soliciting money for parties from people they do business with,” says Mindy Chambers, a spokesperson for State Auditor Brian Sonntag. “You’re also not supposed to spend public dollars on alcoholic beverages. Plus, it was a private party; they didn’t invite the public.”
CHHIP actually could’ve thrown a much more lavish affair, as its fundraising effort yielded $14,712. Chris Persons, CHHIP’s executive director, says the remainder of the money went to the organization’s general operating budget. “We find it very curious that an event that raised essentially four times what our costs were can be found to be non-compliant,” Persons says.
In its official response to the audit, CHHIP argues that the event was modest—220 attendees at a cost of $14.29 per person—and that it was a valid use of public money to celebrate the organization’s accomplishments during the former executive director’s tenure. On the conflict-of-interest charge, Persons defers to the organization’s written response: “Contributions were solicited from businesses that work in the affordable housing community and are known to be supportive of affordable housing. No benefit was offered in writing or verbally to any contributor other than the personal tax benefit that might apply.”
This isn’t the first time CHHIP has been in hot water with the state auditor. In 2005 the organization was found to lack internal controls over key financial systems, a basic audit requirement. Furthermore, in 2004 the state reported CHHIP failed to complete annual inspections on its buildings in time to comply with quality standards for federal grant funds. And in 2003, a volunteer finance coordinator was charged with not only cooking the books, but destroying them.
Though CHHIP strongly disputes the auditor’s findings, Chambers says the public may beg to differ. “At a time when every penny counts,” she says, “is it important for them to provide housing and housing services—or throw parties?”