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Audit Blasts Metropolitan Development Housing Agency


By Ben Hall

NASHVILLE, Tenn. - A new audit reveals MDHA mishandled some of the early contracts associated with the proposed convention center. Metro leaders are demanding answers. 

City leaders asked for the audit after a NewsChannel 5 investigation revealed major overspending on a public relations contract. 

The audit showed MDHA ignored its own policies in dealing with convention center contracts. Metro's Law Director wants to know why that happened. 

The public relations contract was not supposed to exceed $75,000, but it rose to more than $400,000. 

Metro immediately suspended the contract and asked for a review of all convention center contracts. 

The review was released Wednesday, and according to a letter signed by Law Director Sue Cain and Finance Director Rich Reibling "the report indicates serious flaws in contracting practices by MDHA."  

Their letter to MDHA's Executive Director Phil Ryan said "the errors made were in violation of MDHA's own policies." 

The audit found four contracts that did not have spending limits. It also discovered one violation in which a commitment for more than $104,000 was not presented to MDHA's board for approval.

It found four instances in which changes to a contract in excess of $50,000 were not approved by the board. 

Cain asked Ryan to explain what happened and said "Your response to these questions will allow us to determine whether it is of the Metropolitan Governments best interests to continue working with MDHA on this project."  

Wednesday afternoon Ryan defended his agency. 

"We followed the rules and regulations. The reviewer had some different interpretations of our board's authorizations," said Ryan. 

Ryan said the board told him to move forward with the project and he believed the policies were followed. He said he's ready to answers all questions from Metro officials. 

Also in the report, public relations firm, McNeely Pigott and Fox, will be asked to return more than $15,000. 

Ryan said it appears the company made a clerical mistake and overcharged MDHA.


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