The dispute between the City of El Paso and the food bank is resolved.

Officials announced in a joint press conference Thursday afternoon that both parties have settled the dispute over record keeping practices by the food bank, which the city said violated federal requirements.

Earlier this month, the Fort Worth office of the U.S. Department of Housing and Urban Development said the city lacked the proper documentation to ensure El Pasoans Fighting Hunger Food Bank was meeting goals of serving low-to moderate-income families. Federal officials added that the city might have to return its line of credit to the federal government.

The HUD office issued a new letter Thursday, rescinding that finding and accepting the city analysis as sufficient documentation for the food bank’s use of $3.7 million of coronavirus relief funds.

Stuart Schwartz, the president of the food bank board of directors said the letter shows the food bank is in compliance with federal standards.

“This letter exonerates the food bank,” he said.

Watch the press conference, courtesy of KVIA-ABC 7

City officials submitted a proxy analysis and demographic breakdown to HUD in September to try to prove compliance with federal requirements for tracking grants.

Nicole Ferrini, the city’s chief resilience officer, said it was the joint efforts by the food bank and city during recent talks that led the federal government to overturn its  previous decision.

“We spent 11 months working through the issues,” Ferrini said. “It is the proxy analysis that was generated by our team and the work that we did with HUD that ultimately brought this issue to a close.”

It’s a different tone from last week, when the City of El Paso and El Pasoans Fighting Hunger Food Bank battled publicly over allegations the food bank failed to keep proper documentation.

In March 2020, the City of El Paso received $119 million in Coronavirus Aid, Relief, and Economic Security, or CARES, Act funds to pay for unexpected costs during the coronavirus pandemic. The city contracted with nonprofits and businesses to provide medical care, payroll relief and other services during the pandemic. In August, the city signed three contracts with the food bank for $3.7 million in federal coronavirus aid.

The food bank agreed to provide a certain number of food boxes to people in the lower-to-moderate income levels. The contract required the food bank to also track the address, race, income level and family size of clients, which are standard federal requirements. The food bank and city agreed that could be done on paper, and that the food bank would keep copies available to the city on site.

In the contract, the food bank agreed to document “unduplicated” clients, or making sure the same person isn’t tracked for multiple benefits. That’s a standard ask for federal dollars, said Bill Schute, who leads the Washington Center for the LBJ School of Public Affairs at the University of Texas at Austin.

The food bank said it documented on paper all of its transactions for the estimated 2 million distributions.

The food bank and the city said discussions on how to fix the problem began in January, with a recommendation from the city that the food bank digitize the documentation. El Pasoans Fighting Hunger CEO Susan Goodell said about 30,000 records were digitized by AmeriCorps volunteers, calling it a “Herculean effort” that the food bank’s limited staff could not keep up with.

There was no requirement to digitize the records in the contract with the city.

Goodell told reporters Thursday that the food bank was making efforts to digitize its intake system, and  asked the U.S. Department of Agriculture for permission to move away from paper forms back in November 2020.

“Digitizing client records is a relatively new process for food banks,” Goodell said. “It is certainly not the standard practice.”

She said using digital intake at the 121 shelters, soup kitchens and food pantries will take more time.

An internal audit by the city found the food bank failed to submit required reports and client data for three separate relief grants totaling $3.7 million. Without that documentation, the auditors could not verify that the food bank held up its end of the contract to provide a certain amount of food to a certain number of people.

The city told the auditors the problem was being addressed by the proxy analysis.

In early October, the HUD Fort Worth office sent a letter saying the city’s analysis of the food bank’s activities still failed to meet federal requirements.

“The City’s continued failure to demonstrate compliance with a national objective for its food bank activities may result in the HUD requiring the City to reimburse its line of credit,” wrote Shirley Henley, HUD’s regional community planning and development director. 

A few weeks after receiving the letter, the El Paso City Council voted unanimously to declare the food bank in default, and enter into a “settlement agreement.” 

Schwartz, the food bank board president, said he felt the entire incident was preventable hadcity officials been more cooperative.

“None of this should have happened this way,” Schwartz said. “It should have been resolved, it could have been resolved if the parties had been able to speak together about it. That didn’t happen.”

Cover photo: Susan Goodell, CEO of El Pasoans Fighting Hunger Food Bank, answers questions during a joint press conference with the City of El Paso on Thursday. (Corrie Boudreaux/El Paso Matters)

Disclaimer: El Paso Matters CEO Robert Moore is a board member for El Pasoans Fighting Hunger Food Bank. Moore was not involved in the reporting or editing of this story.