HOT SPRINGS - A probe by the U.S. Department of Housing and Urban Development has revealed a pattern of noncompliance with federal regulations by the Hot Springs Housing Authority, including accusations of improper credit card charges for carwashes and trips to liquor stores, officials say.
Credit card expenses found by a HUD sampling of a limited number of statements include charges to two liquor stores totaling $130.02 in 2012 and 2013, a movie charge at Rio All Suites Hotel and Casino on Feb. 14, a charge at Tobacco Town on Feb. 10, four purchases from Apple iTunes, more than two dozen purchases at carwashes, and 51 purchases at local restaurants, according to an April 10 letter from Johnny Wooley, director of the Little Rock HUD office to Al Carney, chairman of the housing authority’s board of commissioners.
Wooley also said that $175,000 in Disaster Housing Assistance Payments can’t be accounted for and were apparently commingled with other housing authority accounts.
Federal agents executed a search warrant on the housing authority offices in late March and removed several boxes of documents.
Wooley said in the letter that HUD has “serious concerns about the leadership and management” of the Hot Springs Housing Authority and has received numerous complaints in the last two years.
“Research into these complaints reveals a pattern of noncompliance with federal regulations,” Wooley said in the letter.
“The evidence we have received indicated the HSHA Board of Commissioners has failed to fulfill its fiduciary role under the Annual Contributions Contract, Section 4 - Mission of the HA by its demonstrated lack of oversight and monitoring of the HSHA’s executive director’s management of operation and finances,” the letter states.
Carney said Section 4 is a two-sentence paragraph that says the housing authority must keep all conditions clean and sanitary and look out for the social welfare and stability of all tenants.
“It doesn’t have any reference to fiduciary matters, so I’m a little puzzled by that and will tell Mr. Wooley that in my response,” Carney said.
Wooley also notes in the letter that the Hot Springs Housing Authority’s executive director, Barbara Baer, “apparently has failed to adequately exercise her role and responsibility to ensure compliance with federal regulations,” and despite significant training attended by the executive director, along with staff and board members at times, “we continue to find deficiencies.”
Carney said HUD doesn’t have a handbook for the board of commissioners, and since there is no HUD-specific guidance on the role of commissioners, it is a “little shortsighted to say we aren’t providing oversight.”
“We have a standard report format we look at every month that goes through the financials of the housing authority in detail. We do provide oversight, we set policy, which is all public record, and those policies are enforced,” he said.
Wooley’s letter states that training received by Hot Springs Housing Authority board members require that all costs charged to federal programs must be reasonable and necessary, and in addition to the charges noted, there are others that require further explanation and justification for how they are reasonable and necessary for the operation of public housing and Housing Choice Voucher programs.
Other allegations contained in Wooley’s letter state that the executive director recently took a cruise without using any of the 645 hours of accrued leave time, which is valued at more than $31,662, and charging maintenance and numerous carwashes for her personal vehicle that she uses in conjunction with her work without following proper IRS guidelines.
According to Baer’s employment contract, she is entitled to reimbursement for food, gas, personal vehicle maintenance, repairs, replacement of tires and other services required to maintain her vehicle in safe working order with any reimbursements to be paid only upon presentation of receipts or other proper support documentation of the expenses.
Wooley also said the Hot Springs Housing Authority received Disaster Housing Assistance Payments associated with assistance to families affected by various hurricane disasters and that a review of the records indicate that tracking of those funds ended in March 2011, $175,000 of the funds can’t be accounted for and the money was apparently commingled with other accounts.
Carney said the $175,000 was split among other housing authority line items by the fee accountant, who told the executive director that it was proper to do that.
Baer said Wooley’s letter was not sent to her, but she had received an emailed copy and was in the process of gathering documentation to disprove the allegations, which she says are unsubstantiated.
“They took most of our documentation when they came in and raided the agency, so it will take some time. All the allegations are unsubstantiated, and we will prove it,” Baer said.
“I probably need to get an attorney,” Baer added.
Baer said the liquor store purchases were “absolutely a mistake.”
“I carry several credit cards, and I provide receipts for everything I put on that credit card. My accountant and my CPA missed those charges. In the past, if I had anything like that, whether it was for postage to send gifts to my grandchildren at Christmas, or whatever, I simply reimbursed it and it wasn’t a problem. It was not intentionally done,” she said.
As for taking a cruise without taking leave time, Baer said she didn’t have to take leave because she was in contact with the agency all but two days when she didn’t have cellphone connectivity.
Arkansas, Pages 10 on 04/18/2014