Feds come down on Knox County HUD grants

Knoxville (WVLT) -- Auditors say the Knox County government has broken some conflict of interest rules for spending federal funds.

In November, Mayor Mike Ragsdale's office requested that the Department of Housing and Urban Development has reviewed how Knox County awarded hundreds of thousands of dollars in grants.

The review concluded that some of that money went to people and groups directly or indirectly connected to those who doled it out, in particular, Community Services Director Cynthia Finch.

Finch founded TennCorp volunteer services.

Investigators say that the money from the grant given for health education actually went to TennCorp.

Now, HUD wants Knox County to pay back more than $33,000.

Federal investigators are also questioning more than $800,000 worth of other grants.

There has been no official response yet from the Knox County mayor's office.

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