HUD report casts more doubt on county housing agency

• Reprints

Updated: August 4, 2011 4:20PM

The DuPage Housing Authority had another federal audit come back this week, this one possibly painting the most unflattering picture yet of the beleaguered low-income assistance agency.

The latest U.S. Housing and Urban Development assessment of the authority’s books proves no less damning than the two that recently came to light, triggering a call for increased oversight muscle at the county level.

The last of three audits completed by the federal agency, issued Wednesday, found continued mishandling by the DHA of the federal Section 8 voucher program through fiscal 2010.

Early last month, federal authorities notified DuPage County officials who oversee the housing assistance organization of two reviews done in the past two years that uncovered numerous instances of poor bookkeeping and insufficient documentation that, at that point, had accrued some $10.7 million in undue payments to a variety of entities that allocate the housing funds.

The third audit similarly concluded that the agency neglected to keep up records demonstrating that its projects were eligible to participate in the housing-subsidy program, charged the program’s patrons improper sums and “disregarded HUD’s requirement and directives, lacked an understanding of program regulations, and failed to implement adequate procedures and controls.”

The new audit also found the agency misspent some $2.3 million in program money on purchases that are not permitted, including cocktails and holiday gifts and laptop computers for DHA board members.

The audit report, passed along by acting regional inspector general for audit Ronald Farrell, reinforced the earlier reviews, which were released in September 2009 and June 2010 but didn’t come to County Board Chairman Dan Cronin’s attention until Feb. 10.

“As a result, HUD had no assurance that the authority’s resources were used to benefit low- and moderate-income individuals,” Farrell wrote.

According to board secretary/treasurer and 20-year commission member Edward Merkel, there were no overt misdeeds done.

“There’s nothing illegal, just procedural problems,” the Elmhurst resident and former four-term DuPage County Board member said Friday. “We’ve helped an awful lot of people. Apparently that help was not given in the proper way.”

In an email sent to Cronin this week, Illinois public housing director Steven Meiss said he believes the six-member commission is willing to comply with the recommendation last month from HUD that it be restructured.

“That’s up the chairman of the County Board to facilitate that,” Meiss said Friday morning. “(Cronin’s office has) just provided tremendous cooperation over there, in terms of getting some of this sorted out.”

Imminent resignation plans were news to Merkel, whose current term expires at the end of 2013.

“Not to my knowledge,” he said. “That’s not true. We’ve all got terms, and we’re working on things.”

The remaining board members could not be reached for comment, but DHA attorney Mary Dickson said the commissioners have the agency’s best interests in mind.

“To the extent Chairman Cronin has indicated a desire to have the resignation of any of the board members, the board members would reluctantly agree to resign,” Dickson said. “They believe that their service on the board has been unimpeachable. They are taking the results of the audit very seriously and are working diligently with HUD to address the audit comments.”

Merkel said he expects the matter will be worked out agreeably. It is not the commission’s responsibility, he said, to keep close tabs on the many details of the housing voucher program.

“The board does not micromanage,” he said. “That’s why you hire a president and a financial officer.”

In the wake of last month’s audit revelations, longtime DHA executive director John Day and chief financial officer Robert Hess were forced out of their jobs. Cathy Ficker Terrill, recently retired president and CEO of the Ray Graham Association, is filling Day’s position for 90 days, while a permanent replacement is sought.

Terrill said she and her staff next week will begin putting together an action plan for addressing some of the recommendations that came out of the new audit.

Working with an interim comptroller, Terrill has reconciled the recent months’ financials, updated the signatures on the accounts and reorganized the staff, laying off one “very, very part-time” clerical person last week.

She also is looking over the employees’ policies and procedures, making updates as needed, and contracted with an assistant who is helping supervise the staff of the Kendall County Housing Authority, which the DHA manages through an intergovernmental agreement.

Terrill sends an internal update weekly to the authority’s board, HUD and Tom Cuculich, the county’s chief of staff.

“I just create one weekly update, so that there’s open lines of communication ... to keep them informed of some of the changes I’m making,” she said.

Cronin also was unavailable for comment Friday, but his spokeswoman Julie Kelly said the new report did not catch him by surprise.

“A previous report from ’08 outlined similar charges,” Kelly said. “While he expected more bad news, I think it’s safe to say that these findings came as a shock and an insult to taxpayers.”

Several days after the top staff resignations at the DHA, Cronin announced he had initiated work on a state bill, now in committee, designed to provide the county with new oversight authority of the boards and commissions appointed by the County Board.

Merkel said the agency has functioned well for many years, and he wants people to be mindful of that.

“The thing is, people who needed housing got housing,” he said. “You don’t hear anybody talking about that.”