City Agency Misspent Funds, Audit Finds

March 17, 2006
By OSHRAT CARMIEL, Courant Staff Writer

Federal auditors have found that the Hartford Housing Authority misspent millions of federal housing dollars, using the money, among other things, to outsource a pricy inspection contract and to pay private landlords for apartments infested with cockroaches and rats.

The audit said that the authority also improperly used money from the Section 8 voucher program to pay staff salaries, auto insurance and "unreasonable rents'" that were above fair market value.

Overall, a recent Housing and Urban Development audit says that the Housing Authority's imprudence has already wasted or was on a course to misspend up to $2.6 million. The $2.6 million represents part actual misspending by the authority between 2002 and 2005, and part calculation of money that could be saved and "put to better use" in the future, according to the audit of the Section 8 voucher program by the HUD Inspector General's office.

The inspector general is recommending the authority repay about $1.7 million worth of unreasonable costs to the voucher program, which subsidizes private apartment rentals for more than 2,000 families in the city.

Housing authority officials say the audit is exaggerated, in that it lumps money that was allegedly misspent with money that could be theoretically misspent in the future, should the housing authority continue its current practices.

"The headline is very misleading on this one," said Courtney Anderson, chairman of the housing authority board.

Take the $594,270 worth of "unreasonable rents" cited in the audit, for example.

HUD deduced that number by looking at the files of 35 tenants who receive Section 8 voucher funds. Of those, 10 were found to live in apartments with rent that exceeds fair market value. Using that sample, auditors calculated that the agency is on course to spend more than a half-million dollars in excessive rents.

"They took all those projections and put them in this report," said Miriam Roane, director of the housing choice voucher program for the Hartford Housing Authority.

But some of the audit numbers are not theoretical.

The $614,000 of voucher money spent on staff salaries is an example. That money went toward the salaries of administrators and employees, such as Lancelot Gordon, the housing authority's executive director, who devote time to various housing authority programs, and therefore draw their salaries from portions of each of those program's funds.

It's an accounting practice "that's been done for over 20-something years but HUD has never questioned it," said Allan Russell, the authority's finance director.

The same formula accounts for the $100,085 in "ineligible" auto insurance payments from the Section 8 voucher fund. That money, Anderson said, was used to cover auto insurance on cars that are dedicated to several housing authority programs, including Section 8.

In other findings, the housing authority awarded a contract for housing inspections to Imagineers, a private company that also administers the Section 8 voucher program in Hartford. Imagineers was not the lowest bidder for the contract, the HUD audit found. While the authority paid Imagineers $235,000 annually to conduct inspections, it had on its staff two full-time inspectors with little to do.

Overall, the audit determined that the housing authority paid $158,492 more than it should have for inspection services. The authority ended its contract with Imagineers, and now uses its in-house inspectors to do all inspections of apartments covered by Section 8 funds.

Also, the authority failed to conduct required "quality control" inspections to ensure the reliability of their hired inspectors' conclusions. When the housing authority did do such follow-up inspections, it found substandard conditions -broken smoke detectors, rodents and a cockroach infestation, broken windows - in some apartments receiving Section 8 funds.

Still, the authority continued payments of $11,604 in Section 8 funds to landlords of those substandard apartments.

Among other HUD findings:

The housing authority, because of inaccurate data collection, over-reported the number of units it subsidizes under the voucher program. As a result, the agency "improperly received" $841,245 more voucher money from HUD than it was rightfully owed.

Anderson said officials will meet with HUD in the coming month to negotiate proper remedies to the problems.