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Report raps housing authority over money

Millions of dollars have been improperly managed at the city's housing agency, a HUD audit says.


© St. Petersburg Times, published April 12, 2000

ST. PETERSBURG -- The St. Petersburg Housing Authority misused nearly a half-million dollars over two years and failed to properly manage millions more, according to a preliminary federal audit.

Finances in one department were so poorly organized that the authority lost the opportunity to house an additional 181 families and had to return $857,585 to the federal government. At the same time, the authority's waiting list of needy families was so long that the list had to be closed.

Darrell J. Irions, the authority's executive director since 1995, disputes some of the auditors' preliminary findings and predicted Tuesday that some of their language will be toned down. His staff will meet with the auditors on Monday. A final report will come after that.

But officials from the Inspector General's Office of the U.S. Department of Housing and Urban Development said they found "significant weaknesses" in the management of every area they looked at.

One problem, they said, was high employee turnover. Under Irions, for example, the agency has had five finance directors in less than five years.

The auditors' findings also raise questions about the authority's ability to manage its most ambitious project ever: the pending $50-million demolition and rebuilding of Jordan Park, the city's oldest and largest housing complex for the poor.

Among the auditors' findings:

Favoritism in awarding contracts. Auditors gave four examples of the authority appearing to manipulate the bidding process in order to favor certain contractors, including the private firm that now manages all but one of the authority's public housing complexes.

Failure to monitor contractors' performance. Auditors cited several cases where contractors were paid without any documentation that the right work was performed. In one case, the authority overpaid one contractor $45,000 between August and November 1998 because no invoices were required and the contract administrator did not oversee the payments. The authority was unaware of the overpayments until federal auditors pointed it out.

In all, auditors looked at a sample of 12 contracts totaling $3.5-million. Each one had something wrong with it, they said.

Improper mixing of funds. In 1992, the HUD inspector general criticized the authority's use of a "master fund," which "did not provide a clear accounting for cash transactions and allowed improper use of funds." The authority agreed to stop using a master fund.

"Despite such agreement," the current auditors wrote, "the fund was still in use and transfers of public housing funds continued to be made for another seven years with virtually no accountability. At Sept. 30, 1999, the authority had misused at least $410,000 that we could identify."

Failure to keep track of money earned by refinancing Rogall Congregate, a 150-unit wing of Graham Park built in 1977. The bonds used to build Rogall were refinanced in 1994. But the authority failed to establish adequate controls for spending the proceeds. "As a result, the authority did not fully document how it spent $558,262 of $670,880 received from the refinancing transaction, and lacked controls to insure an additional $400,000 to $900,000 it will realize over the next several years will be spent as approved by (the authority's) board."

Mismanagement of the authority's rental voucher program, known as Section 8. "The authority had not effectively managed its Section 8 program for many years," auditors wrote. "The problems appeared to stem, at least in part, from a lack of coordination between the finance and program staff." As a result, the authority has failed to match its available money with the optimum number of needy families, and typically either overspends its budget or has to return money to HUD.

In an interview Tuesday, Irions sought to downplay the seriousness of the audit, especially its finding of significant management weaknesses.

"We don't see it the same way," he said, as seven of his top assistants sat nearby. Auditors "looked at everything with a microscope," he said. "They went back to 1970, and if this is all (they found) for being down here five months. . . . We don't see significant weaknesses at all."

The auditors actually were in town seven months, from April through October 1999, after planning to stay only a few weeks. The audit was prompted, they said, by a complaint to HUD about irregular procurement practices.

Irions delayed releasing the report for more than a week, despite a formal public records request from the St. Petersburg Times in December that was renewed several times since then. Irions received the report a week ago Monday.

The next day, his spokeswoman, Julie Williamson, said she was not aware that any report had been received. Pressed further, Williamson later said Irions had the report but did not consider it a public document. The authority took until Thursday to give its reasons in writing, as Florida law requires.

On Friday, a Times attorney convinced J. Frazier Carraway, a partner of authority general counsel Ricardo L. Gilmore, that their legal claim was incorrect, and Carraway promised to release it. Not until Tuesday afternoon, when the paper threatened legal action, did the authority finally produce the report.

"I want you to know, I was not trying to keep it from you," Irions said Tuesday. "I didn't think it was a bad report at all."

Irions said he felt constrained by instructions from HUD, which considers draft reports confidential.

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