WASHINGTON — A Wahiawa senior center remains in violation of federal grants rules, according to a Jan. 12 letter to Honolulu Mayor Peter Carlisle from the U.S. Department of Housing and Urban Development (HUD).

Federal officials are giving the city until the end of June 2012 to bring ORI into compliance with Community Development Block Grants requirements, or the city will have to repay a portion of the $7.9 million in federal funds that it gave to ORI over the course of a decade.

HUD is also giving the city until the end of January to report how much ORI charges for use of its facilities. The city was required to provide this information in October 2011, but missed the deadline, HUD says. The federal agency wants to know ORI’s fee structures to determine whether the low-income clients that ORI’s facilities were built to serve are being precluded from using it.

While HUD did say it “notes that the City and County of Honolulu (City) and its subrecipients are making progress in addressing the CDBG findings and concerns,” it said it continued to have concerns.

One of the major unresolved issues at ORI’s sprawling 40-acre complex is the number of clients it serves. HUD emphasized that city officials need to monitor use of ORI’s Wellness Center to be sure it is serving at least 50 elderly or disabled adults during all hours of normal operation. HUD previously has said that it found only five adults being served, as did a Civil Beat visit.

HUD also established usage requirements for a cluster of cabins for rent to low-income families on the site, and is requiring the city to submit quarterly reports about ORI’s progress in meeting those goals.

In its letter to Carlisle, HUD said that if ORI doesn’t meet that utilization target by June 30, 2012, the city “will need to develop a repayment plan.” The amount of repayment would be prorated based on how close ORI comes to meeting its goal. An alternative to repayment would be finding a different nonprofit to operate the Wellness Center.

The federal government’s directive comes about 10 weeks after the city submitted a final compliance plan designed to avoid returning $7.9 million, and seven months after a routine federal investigation uncovered the compliance problems at ORI.

ORI repeatedly denied the legitimacy of HUD’s findings, but agreed to cooperate with the “immediate corrective action” that the federal government required.

HUD says that the city and ORI have resolved some issues uncovered by the investigation, such as providing financial records and preventing conflicts of interest in the city’s process for administering CDBG grants. The federal agency is “of the opinion that the goals proposed (to avoid repaying $7.9 million) can be accomplished,” a spokeswoman told Civil Beat.

HUD provided the letter to Civil Beat over the weekend, and officials with the city and ORI could not immediately be reached for comment.

Here’s a copy of the Jan. 12 letter from HUD to Carlisle:

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