Lansing — State officials spent more than $330,000 on free parking from a federal fund meant for tearing down blighted buildings and mortgage relief, according to a federal audit released Friday.

Officials from the Michigan State Housing and Development Authority used the federal Hardest Hit Fund money to offer free parking to employees working in a program meant to stabilize housing markets after the subprime mortgage meltdown crisis of 2007-08.

The fund is supposed to be used to set up a temporary safety net for working-class Americans who lost their jobs or can’t find enough work to stay afloat, according to the Office of the Special Inspector General for the Troubled Asset Relief Program.

But the agency’s audit found about $3 million in wasteful spending across the nation and slammed Michigan and other states for spending money on everything from barbecues to cars and employee bonuses.

“Congress did not authorize TARP dollars for barbeques, steak and seafood dinners, gift cards, flowers, gym memberships, employee bonuses, litigation, celebrations, cars, and other unnecessary expenses of state housing agencies, but those are some of the charges SIGTARP’s forensic analysis uncovered,” Christy Goldsmith Romero special inspector general for the Troubled Asset Relief Program, said in a Friday statement.

“TARP is not a source to fund state agency’s general operations, boost state employees’ morale, or throw catered barbeques when Treasury employees visit,” she continued.

Housing and Development Authority spokeswoman Katie Bach said the department needed to provide parking when it decided to locate Hardest Hit Fund workers in downtown Lansing.

“While we appreciate SIGTARP’s opinion on this matter, (we are) confident it has been consistent with all program guidelines,” she said in an email. “Details of these expenses have been provided to U.S. Treasury, which has annually audited Michigan’s program and had no findings related to this or any other expenses.”

Bach said officials will review the audit and figure out what to do next under U.S. Department of Treasury guidance.

In Michigan, employees from MSHDA charged the federal fund $5,941 for free employee food and beverages, according to the audit. It includes $5,321 to Clark Coffee Service and First Choice Coffee, $450 for treats and pizza on an “employee appreciation day” and $251 for an open house “meet and greet.”

The state agency also spent $55 for employee Bed Bath & Beyond gifts, among other small expenses not related to the stated purpose of TARP funds.

“Some of these charges by agencies in North Carolina and other states were low in dollar amount,” the audit said. “However, every taxpayer dollar matters. Spending decisions on small purchases set the tone for spending decisions on larger ticket items.”

The audit said Michigan misused money specifically from the Hardest Hit Fund, a fund formed in 2010 under the Troubled Asset Relief Fund. The money is meant to offer relief to states like Michigan that were hit hardest by the housing market collapse.

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