GroWest report faults agency, city's GOP leaders

The Utica OD reported that the newly released summary of a months-long investigation into nonprofit agency GroWest Inc. paints a strikingly dysfunctional portrait of the agency and details a system of steering jobs toward certain contractors, purchasing materials seemingly unrelated to specific jobs, falsifying time sheets and even intimidating homeowners into signing forms saying work had been completed when it had not.

The report, which will cost Utica taxpayers more than $100,000, says GroWest’s financial director and deputy financial director were employees of the agency’s chosen auditor, Dermody, Burke & Brown, before they joined GroWest.

It also lays out yearly audits as a comprehensive failure that did not even note the organization was moving toward insolvency in 2005.

Officials for Dermody, Burke & Brown could not be reached for comment Wednesday evening.

Former city Mayor Timothy Julian and current city Comptroller Michael Cerminaro also are subjects of sharp criticism in local attorney J.K. Hage III’s executive summary of his probe into financial concerns involving GroWest, a housing rehabilitation agency that relied in large part on federal grants administered by City Hall.

Specifically, the report says Julian violated the city’s charter when he reorganized the city Urban and Economic Development office in 2003, creating a position that circumvented the department chief and reported directly to the mayor.

The move “encouraged, if not caused, interdepartmental rivalries, poor communication, lack of accountability ... and potentially fraudulent behavior,” Hage’s report says. And Cerminaro’s office has “failed to protect the integrity of the grant deployment process by failing to audit grant vouchers effectively before vouchers are paid,” the report concludes.

Cerminaro disputes those findings, however.

The findings are the result of roughly three months of work from Hage and Hage LLC in trying to figure out what went wrong with GroWest.

The FBI also is investigating allegations of fraud and bid-rigging concerning the agency’s work in neighborhoods including West Utica. And the U.S. Department of Housing and Urban Development is conducting an audit of the GroWest situation.

The 21-page summary delivered Wednesday is considerably shorter than the roughly 120-page full report prepared by the law firm and given to the administration of Mayor David Roefaro on Aug. 2.

It was condensed for public dissemination partly because of sensitive legal issues in the full report, which Hage said he hopes will lead to even further legal action.

Hage points out in the report that the city’s Urban and Economic Development office is understaffed and incapable of administering the city’s federal grant funds. The department runs on roughly $4.2 million of federal Community Development Block Grant funds per year.

The report recommends sweeping changes to the department’s structure and processes in selecting and overseeing grants. Those changes, it says, could take something positive from a situation that has endangered the city’s federal funding.

“We’ve got a lot of time to make up,” Roefaro said after the report summary was made public. “We’re the ones that have to make sure this never happens again.” Read more here.