A federal investigation of a Mississippi County housing agency found mismanaged money and demanded the funds be repaid, but the agency director disputes the government's claims.
The Mississippi County Public Facilities Board in Osceola provides housing vouchers, known as Section 8, for 468 families. The board is locally operated, but funded through the U.S. Department of Housing and Urban Development.
David Hamilton, the facilities board's executive director, fears that, after nearly a decade of dispute with HUD, the local agency may have to close.
The power to close the agency rests with a county-appointed board, said Patricia Campbell, the regional public affairs director for HUD.
The board chairman said the board of commissioners that oversees the facilities board isn't ready to take any action.
Even if the agency closes, no one receiving housing assistance will have to leave the area or be forced out of their homes, Campbell said.
"They remain taken care of, and they will not have to move," Campbell said.
The trouble began in 2009, when the Mississippi County Public Facilities Board absorbed the Blytheville Housing Authority's Section 8 program and Hamilton contacted then-U.S. Sen. Mark Pryor, D-Ark., to say that his agency had not received enough money to support both programs.
Hamilton said he'd started a "massive lease-up project" before the merger and reserved too many units because he wasn't aware that Blytheville had already rented some of the spaces for which it had vouchers.
Blytheville had 150 units, and Hamilton set out on a mission to fill them, not realizing that 70 had already been filled, he said.
The number of units the Mississippi County agency was leasing increased from 408 in October 2009 to 620 in July 2010, according to a schedule of fee disbursements.
The over-leasing came at the same time as federal cuts to Section 8 programs -- Congress passed an act in 2009 that limited the amount of money local housing authorities received.
The cuts and taking on more vouchers started a financial spiral for the Mississippi County board that has been difficult to control, Hamilton said. Once the money was spent, it was hard to get back on track, he added.
"We started running out of money," he said.
Pryor wasn't the only public official to get a letter from Hamilton. In 2014, he sent a letter to U.S. Rep. Rick Crawford, R-Ark., saying he was "being railroaded by HUD."
After these letters, HUD ordered a review of the facilities board by its Quality Assurance Division to investigate the claims that Mississippi County had not been properly equipped to fund the Blytheville constituency.
The subsequent report, released in 2015, found that the funds had been calculated correctly and that the Osceola-based agency was in breach of its contract to administer the Housing Choice Voucher program and that there were "significant financial management weaknesses."
The report said the Housing Facilities Board had used money set aside for housing programs for administrative costs instead. HUD demanded that money be repaid to the government.
The report also cited the "questionable" use of the funds, but did not ask for that money back.
In an interview with the Arkansas Democrat-Gazette, Hamilton disputed every claim made in the report, and the board that oversees the agency has not made a decision about what to do about the report's findings.
The total amount spent on "disallowed, unsupported and additional potentially disallowed costs," was $210,276, according to the report.
Hamilton said such costs are expected for a housing agency -- flowers for residents whose family members died, taking interns to lunch and buying toilet paper in bulk at Walmart.
The agency also had travel expenses of $196,590. That's 143 percent higher than the four housing authorities in its peer group, which consists of the Northwest Regional Housing Authority, the West Memphis Housing Authority, the St. Francis County Housing Authority and the Texarkana Housing Authority, according to HUD.
Hamilton said the travel money was spent to send residents to programs to teach self-sufficiency and for staff training.
The audit also said the facilities board incorrectly reported expenses, reimbursements and funds received from HUD.
Hamilton said he never got any training on how to fill out the forms.
"It was one box that wasn't checked," he said. "In my haze of filling it out, it was the box up at the top where you check, and I missed that box."
The 2015 report outlined six broad areas of mismanaged money since late 2008. Soon after receiving the report, the entire board of commissioners resigned. The county judge in charge of appointing commissioners died two years later.
That's why it took three years for HUD to send a second letter of demand to the agency, asking for repayment of $184,595, Campbell said. The second letter was sent in February.
The deadline for repayment has since passed. Hamilton still disputes that the agency owes HUD anything.
HUD's accusations of misspending and mismanagement are unfair, he said, adding that federal officials didn't take in all the information necessary to understand the situation.
"There are many indications the QAD [HUD's Quality Assurance Division] based their conclusion on inadequate or partial evidence, especially by focusing on information that favored QAD's preferred position," Hamilton wrote in a Feb. 23 letter to the federal agency's Little Rock field office.
Hamilton said the accounting firm that audits the board's budget has not noticed any shortage of funds since 2005.
"They're professional auditors. They would have spotted $185,000" in improperly spent funds, he said.
In his Feb. 23 letter to HUD, Hamilton said he thinks his agency is getting more negative attention because he is black.
"I have been working here since July 1979, and I have never witnessed agencies that are run by non-people of color being shut down or being required to pay back large amounts of money for what seem to be calculation errors or overspending. I have even witnessed agencies going in the hole and being allowed to work themselves out. Yet, I am not being given the same opportunity," he wrote.
HUD's Campbell denied that Hamilton or his agency are being singled out because of race. Everything the federal agency has done has been to ensure that the taxpayers' money is being spent efficiently, she said.
She added that no hearing to discuss the matter further has been scheduled and that HUD will not close down the Mississippi County agency -- only the local board of commissioners has the authority to do that.
"We're not going to disband, not going to dissolve, and we're not taking actions against any personnel," Facilities Board chairman Cliff Chitwood said.
He wants to wait to make a decision until the accounting firm that audits the agency's finances completes a review.
Metro on 04/01/2018