The Board of Directors of Southside Neighborhood Housing Services (SNHS) has agreed to dissolve the agency after a recent NRP-requested special contract compliance review conducted by the Office of State Auditor Patricia Awada revealed several disturbing business practices. SNHS has administered home loan and grant programs for several south Minneapolis neighborhoods participating in the NRP.

The review found numerous problems within SNHS. Funds were used for ineligible purposes and recipients, numerous files lacked required documentation and financial management practices were questionable at best.

In response to the dissolution of SNHS, Northside Neighborhood Housing Services (NNHS), which has been an exemplary housing program administrator, and like SNHS is a subsidiary of the Neighborhood Reinvestment Corporation (NRC), has indicated a willingness to expand its service area to cover the entire City of Minneapolis so that those neighborhoods affected by SNHS's problems can do business with a responsible fiduciary intermediary.

The NRC has hired a consultant to assist with the process of determining the way SNHS's assets will be distributed following its dissolution. As one of SNHS's major creditors, the NRP has requested significant financial repayment on behalf of the Minneapolis neighborhoods that were injured as a result of SNHS's negligent business practices.

"NRP also deserves a lot of credit for stepping forward and asking for help when it suspected there may be a problem at Southside," said Minnesota State Auditor Patricia Awada. "Minneapolis neighborhood associations and residents will be better served and taxpayer dollars better spent as a result of this review. We are pleased the Office of the State Auditor has been able to assist NRP, and the neighborhood organizations, to ensure that the public funds are better spent."

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