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BUFFALO, NY - The executive director of the city's Office of Strategic Planning confirms that Buffalo spent tens of thousands of dollars on inappropriate activity, for years, while using community development block grant funding.

The money should have gone to the community for projects to help residents.

The confirmation from Brendan Mehaffy, a city official, is in response to an exclusive report 2 On Your Side told you about Tuesday.

In a federal report, dated this past spring that 2 On Your Side has been investigating for months, HUD claims the city spent more than $1.6 million on "prohibited or illegal activities."

The federal report details that the city spent money on inappropriate expenses, such as payroll and travel costs, as well as, insurance payments and contracts for lobbyists. Payments to lobbyists are strictly prohibited under federal law.

The report is from the U.S. Department of Housing and Urban Development, Office of Inspector General. HUD says Buffalo made the payments from 2005 to 2010.

For the past two weeks, 2 On Your Side has been seeking an interview from the city regarding the federal report. On Wednesday, we were finally granted an interview.

"At this point and time, all those issues have been resolved in the City of Buffalo," said Mehaffy.

REPORTER: How have they been resolved?

"Simply, the money doesn't go to any of those activities anymore," said Mehaffy.

REPORTER: So you concede that the money did go to those activities?

"Yes, the money went to those activities and we've been working with HUD on that specific detail over the past four years," Mehaffy said.

The city says the illegal payments were made by Tim Wanamaker, who in 2011 was convicted of using federal funds for travel expenses. Wanamaker is the former director of the Buffalo Economic Renaissance Corporation (BERC), which has been disbanded.

City officials reveal that federal funds were misused under Wanamaker, to a wider scale than previously thought. City officials say he used HUD dollars on far more than just travel.

REPORTER: Is this activity still going on?

"No."

REPORTER: When did it end?

"It ended, most of the information identified in there, it ceased a long time ago," Mehaffy said.

But, the report claims the city, "exercised reckless disregard and/or deliberate ignorance," in the handling of federal funds.

REPORTER: Isn't there some serious responsibility that the city needs to accept, now that you're conceding that this report is accurate, on the notion of knowledge?

"In terms of knowledge, I'm not aware of anybody that had knowledge, but that's something that the HUD OIG might have an opinion for themselves," Mehaffy said. "I'm not aware of any misappropriation or misuse of any paperwork or statements since I've been here that I can say."

Mehaffy has been with the city since 2010.

He couldn't confirm whether the city still employs lobbying firms -- Capitol Partners, American Continental Group and Patton Boggs, which we named Tuesday.

All of the firms are based in Washington, D.C.

Mehaffy says that HUD hasn't asked for the $1.6 million back. This could be money the city holds onto or the city could be looking at fines. 2 On Your Side will continue to follow up on our investigation, with the city comptroller's office and the U.S. Attorney's office this week.

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