A Philadelphia City Controller audit found significant accounting and reporting problems with former Mayor John Street’s anti-blight effort, the Neighborhood Transformation Initiative. The 15-month audit determined that millions in bond funds were mismanaged because of a lack of accountability within NTI.

The audit found that NTI, as of June 30, 2008, had failed to make nearly $13 million in payments on nearly 1,500 condemned properties awaiting settlement in court.

Last year, current Mayor Nutter suspended NTI after discovering serious accounting lapses in its management. The stated purpose of the NTI program was to reduce blight by demolishing 14,000 buildings and constructing 16,000 new homes with $296 million in bond proceeds. However, the program fell far short of those goals. The city controller’s report said that the Nutter administration, upon taking office, discovered that it "lacked information about the funding sources used to acquire the properties, where the properties were located, and the extent of dollars required to fund committed projects."

The Nutter administration contained in the audit report said the city intended "to fully implement the recommendations in this report to ensure any future use of these funds meets requirements of state and federal laws."



The report recommended that the city improve oversight and accountability over land-assembly activity, develop accurate and timely accounting reports, and investigate discrepancies in NTI transactions. Terry Gillen, executive director of the Philadelphia Redevelopment Authority, which oversees much of NTI, said that the administration would follow the recommendations in the audit.