By Kevin Aldridge
Enquirer staff writer

A federal review of the Cincinnati Empowerment Corp. has cleared the nonprofit agency of claims that it misspent grants and failed to produce results in key anti-poverty programs.

The Office of the Inspector General and the U.S. Department of Housing and Urban Development have officially closed an audit of the agency. The audit began in the fall of 2002.

The audit, mandated by Congress, questioned whether the Cincinnati Empowerment Corp. misspent $15,364 in federal money on salaries and expenses not related to the empowerment zone.

The 148-page audit report stated the agency failed to provide documentation for another $311,346 in federal money and misstated the progress of 10 programs reviewed by the housing department. It also claimed the Cincinnati Empowerment Corp. spent $594,462 on programs that weren't benefiting residents of the neighborhoods in the zone.

But after a closer look at thousands of pages of documentation, the inspector general's office and HUD now agree that there was no wrongdoing and consider the matter closed. Only $1,066 spent by the city on an arts program needed to be repaid, according to the review.

Harold L. Cleveland II, the agency's executive director, said he feels vindicated by the latest findings. Cleveland had protested the audit report, saying auditors had ignored more than 2,000 pages of documentation because of time constraints.

"Any questions that there might have been have been laid to rest," Cleveland said.

"We pride ourselves in personal integrity, professionalism and running a tight ship.

"We knew the documentation was there all along," he said. "We feel exonerated."

The nonprofit agency was formed in 1998 to revitalize the poorest city neighborhoods by providing jobs, job training, housing and neighborhood development. In Cincinnati, those neighborhoods are Avondale, Clifton-Fairview, Corryville, Evanston, Mount Auburn, Over-the-Rhine, Queensgate, Walnut Hills and the West End.

The Cincinnati Empowerment Corp. financed 27 grants and contracts totaling more than $7.3 million between October and March. The agency has committed nearly $18 million in projects to create jobs and reduce poverty, officials said.

E-mail kaldridge@enquirer.com