Council approves $3.5 million for Strobel House provider amid questions over expired contract and invoice handling

The Metropolitan Council on Aug. 19 appropriated $3,500,000 to DePaul USA Inc. to fund property management, on-site support and case management services at Strobel House permanent supportive housing, approving Resolution RS2025-1436 by a vote of 30–4–2.

The item drew unusually lengthy debate for a grant appropriation after public comments and committee discussion raised concerns that the Office of Homeless Services had continued paying invoices after the provider’s contract had expired. “I want to tell you tonight that a previous finance director, based on allegations of misconduct and financial mismanagement, actually seized the assets and the accounts receivable, accounts payable of the department until they could clear up problems,” said Steve Ryder, a public commenter who urged the council to investigate how the Office of Homeless Services had managed the files.

Councilmembers pressed finance staff for details during council debate. Metro Finance representative Miss Wiggins said the payments were processed because the department used direct vouchers rather than purchase orders tied to a contract: “They were using a direct voucher, which is not something under the purview of finance. Direct vouchers are approved at the department level, and it does not directly connect to that contract.” She told the council that converting future payments to a purchase order will allow finance to track invoices against the contract amount and expiration date.

Opponents on the floor said the facts indicated deeper oversight problems. “This is not at all a unique situation with OHS,” Councilmember Welsh said, citing prior contract errors, a lack of cameras at Strobel House after a reported stabbing and the department’s delayed recognition of the expired contract. Welsh said she would vote no. Councilmember Suara, who had pressed questions in committee, said the payment schedule had been clarified: finance confirmed the next payment would be processed in early September and that work was underway to ensure payments are tracked against a PO going forward.

Michael Lacey, a public commenter, said he had sought records and raised transparency concerns about Metro’s ability to produce transaction histories. He urged the council to consider stronger oversight steps. Finance officials told the council some of the bookkeeping confusion stemmed from template account types and journal entries that identified service months rather than contract months; Wiggins said the underlying fund used was American Rescue Plan funds (fund 30216) and was correct for the invoices charged.

Councilmember Vo moved a one-meeting deferral to gather additional documents; the motion failed. After further debate the council voted to approve the appropriation. The resolution passed 30 in favor, 4 against and 2 abstentions. Council discussion and committee reports indicate finance will seek to move the vendor onto a purchase-order payment method and that departments and budget staff will tighten controls to prevent recurrence.

Actions recorded on the floor do not retroactively change past payments; council members opposed to the appropriation said they would seek additional oversight and written follow-up from the Office of Homeless Services and Finance. The administration and council staff indicated they will provide documentation and answers to outstanding questions before the next meeting.