Angry Massachusetts homeowners left in the lurch by the state program that’s supposed to help them! Here’s what happens when Hank Phillippi Ryan confronts state officials with the question dozens of families are asking – where’s our money?

“He left it with nothing in the kitchen,” said homeowner Frederick Pollini.

Unfinished floors, stacks of lumber, exposed wires and half a deck, the Pollinis live in a mess.

“For two years I’ve had to live like this!” said Pollini.

Their contractor tore up their Rockland home and then took off.

Look at Dan and Pat Romanello’s home in Stockbridge his contractor left it like this, then vanished.

“He simply disappeared and left this project in disarray,” said Dan Romanello.

Both families hired “state-registered” contractors and that should be a good thing-because that made them eligible to get up to ten thousand dollars from the Massachusetts Office of Consumer Affairs’ Home Improvement Guaranty Fund, a program supported by contractor registration fees and penalty payments.

But our investigation found the fund that’s supposed to protect homeowners from contractor disaster– is a disaster itself.

“It’s a nightmare, a bureaucratic nightmare,” said Pat Romanello.

We obtained the state’s official records and they show since April 2011, not one victim who applied to the state’s fund has gotten a penny. Zero. Nothing.

We found all these claims from angry homeowners, some from more than two years ago, are still waiting for fund administrator approval!

“No homeowner can get money unless you say yes,” Hank said to Diane Lawton of the Office of Consumer Affairs and Business Regulation.

“That’s correct,” said Lawton. Lawton is the fund administrator.

“These people applied two years ago and they still don’t have their money. Why is that?” Hank asked.

“Because there’s a cash flow issue related to the fund,” said Diane Lawton, Fund Administrator, Office of Consumer Affairs and Business Regulation.

A cash flow issue? Big time.

Here’s the math: Since 1995, the state’s paid more than $8 million to homeowners ripped off by contractors. Those contractors are supposed to reimburse the fund, and there’s the “issue.” Out of $8 million Lawton admits bad contractors have only paid back $199,000 dollars.

“This program has lost 7.8 million dollars that you haven’t been reimbursed by the contractors who owe it?”

Diane Lawton, Fund Administrator, Office of Consumer Affairs and Business Regulation

“I don’t consider it lost. I consider it unreimbursed, it’s not the same thing,” said Diane Lawton, Fund Administrator, Office of Consumer Affairs and Business Regulation.

Lawton explained that some contractors go bankrupt, or leave the state. But some… don’t.

“How many contractors owe the fund money?”

“We do not know how many contractors owe the fund,” said Lawton.

She doesn’t know? These state regulations require the fund administrator prepare a semi-annual financial report on the funds financial health. The regs say that report “shall be made available to the general public upon request,” so we requested it.

“Where are those reports?”

“There haven’t been any reports filed in this office since 2003,” said Lawton.

“Why aren’t you doing that?”

“I deal on a monthly basis with the undersecretary. We update her on everything regularly,” said Lawton.

The Undersecretary of Consumer Affairs is Barbara Anthony, her office oversees the fund.

But she didn’t want to do an interview. Problem is we’re not the only one with questions. These records show 117 angry homeowners are still waiting, and more applying every month.

“This program is a failure.”

Diane Lawton, Fund Administrator, Office of Consumer Affairs and Business Regulation

“I’m concerned and I’m frustrated, am I angry? I’m angry on behalf of the consumers we can’t reimburse immediately, sure. I’m absolutely not happy with that, but, you know, I can only do so much,” said Lawton.

Lawton insisted every approved homeowner will get paid. As for the families, one now has a check after two years. The other family is still waiting.

Days after the interview with fund administrator Diane Lawton, we received an email with this statement from Undersecretary Barbara Anthony:

“Thousands of consumers have been helped and over $8 million has been paid out to consumers through our Home Improvement Contractor Guarantee Fund since 1992. I have complete confidence that the fund has been administered in the best interests of consumers by my administrator and staff especially during recent difficult economic circumstances. The fund is not broken. As we have pointed out in conversations and interviews with Ch. 7, it is a fund of last resort for consumers who have obtained court judgments against contractors, who are often in bankruptcy, for not completing work or for performing shoddy work. While the payment process may not work as quickly as we would like, not a single consumer has gone unpaid due to lack of funds. In addition, this Fund continues to be replenished by the contractor industry and does not use taxpayer dollars.”

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