The Housing Authority secured a Hope VI grant five years ago to help revitalize a 96-block area of downtown Durham.
The federally funded revitalization project is tangled in a mess of alleged mismanagement.
"We've run into some problems, but we're working on them," DHA interim director Larry Jones said.
The project is plagued with problems. Among them: missed construction deadlines and not being able to account for displaced public housing residents -- a HUD requirement.
"About 40 to 45 percent of the few garden residents, we don't know where they are," board member Rashanne Woods said.
Project director Gwenn Simpson is now accused of providing HUD with inaccurate reports.
She did not return calls from WRAL, but told Jones she is not to blame.
"HUD disagrees, and we agree with HUD and are working hard to correct it," Jones said.
The Housing Authority approved a plan Tuesday to reorganize the agency.
As part of that plan, all 14 members of the Hope VI division must re-apply for their jobs. Then, at the end of May, the board will decide if they should keep their jobs.
Penalties for problems with the project include stiff fines, and although a long shot, loss of funding.
HUD meets with the Durham Housing Authority in two weeks to review the project's finances and progress. It has been under scrutiny in the past. In 2003, DHA's executive director resigned after billing the agency for thousands of dollars of personal items. In 2004, the federal government found DHA misspent millions of dollars.
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