Federal review criticizes county housing authority

Pinellas County Housing Authority officials say the audit, which questions the agency's handling of about $4.5-million, is a matter of interpretation.

By EDIE GROSS

© St. Petersburg Times, published April 4, 2000

CLEARWATER -- About $4.5-million may have been mishandled by the Pinellas County Housing Authority over the last decade, according to a recent audit by the U.S. Office of the Inspector General.

Authority officials stress that most of the audit's criticisms focus only on poor bookkeeping at the agency, and all of the money discussed appears to be accounted for. Auditors from the Inspector General's office in Atlanta have recommended that the authority shape up its accounting practices.

The audit generally covers the period between Jan. 1, 1998, and May 31, 1999, although some of the criticisms date to transactions that took place in the late 1980s.

Among the auditors' concerns:

The housing authority should not have given $1.3-million to a nonprofit organization to help rebuild an affordable housing apartment complex. Instead, that money should have been used to operate public housing.

The authority should assume control of another $3.2-million in the nonprofit organization's accounts because the money belongs to the authority.

The authority should reimburse the department of Housing and Urban Development $143,834 in overpayments.

The authority should improve the way it receives and evaluates bids to prevent an appearance of favoritism and reduce the agency's chances of being sued.

"If you look at it (the audit) as a whole, this is bureaucracy," said Angel Tua, the authority's assistant executive director for housing assistance. "Nothing indicates that so-and-so stole anything. It's all interpretation. The housing authority interpreted one way, and HUD interpreted another."

The housing authority gave $1.3-million to the nonprofit Palm Lake Village Housing Corp. in 1994 when the corporation agreed to take ownership of Crystal Lakes Manor in Pinellas Park. The money was left over from a defunct housing authority program, and the authority said it thought HUD approved of the transfer.

Palm Lake Village Housing used the money to help rebuild Crystal Lakes, which re-opened its 236 apartments in July.

The Inspector General's office now says that while HUD approved of Palm Lake's takeover of the apartment complex and its assets, it did not specifically approve the transfer of that money from the authority to the nonprofit organization.

HUD officials in Miami will have to decide if that money should be refunded to the authority.

HUD pays the authority to administer the Section 8 program, which provides rental assistance to families who choose where they want to live. Money left over at the end of each year was given to Palm Lake Village Housing Corp., a total of $6.8-million between 1988 and 1997, according to the audit.

Some of that money was used to rebuild Crystal Lakes. The authority should take control of the remaining $3.2-million and dole it out to the nonprofit organization as needed, auditors recommend.

Auditors also claim that the authority overcharged HUD in 1998 to look after the Section 8 program. The authority says its accounting is correct and that it does not owe HUD any money.

Lastly, auditors recommended that the authority revamp its bidding process. A random sample of bids showed sloppy record keeping, negotiating that went on after bids were opened and an appearance of favoritism.

"The PCHA obtained services and equipment in a manner that created an environment conducive to fraud, waste and abuse," the audit said. "Although we did not detect such occurrences, the PCHA's procurement activities cannot continue to rely solely on integrity of its staff."

The authority has since streamlined the process and hired an employee to coordinate it.

HUD officials in the Miami office have until late May to respond to the audit's findings.

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