HUD alleges Albemarle misuse of funding; agency recommends Public Housing separate from City
Published 4:06 pm Friday, August 12, 2022
Following a compliance monitoring review of the City of Albemarle’s Public Housing department, conducted by staff from the Department of Housing and Urban Development’s Greensboro field office, it is recommended that the Albemarle department “look at separating itself from the city” and operate as a standalone public housing agency, according to a report submitted to the city last month.
“We highly encourage the ADPH (Albemarle Department Public Housing) to examine the benefits of separating itself from the City or ensure the appropriate oversight and uses of federal dollars,” the report concluded.
The report was made public Friday morning in an agenda packet prior to the city council’s meeting at 6:30 p.m. Monday. The HUD review was requested by Albemarle Public Housing Director Dr. Kim Scott, who has been employed by the city since January.
In the report, HUD staff mentioned Scott is not always included in making decisions about how to use federal HUD funds and that the finance department is staffed with a full-time accountant paid for almost exclusively by HUD funds, yet the accountant reports directly to the finance director and has no accountability to Scott.
“The Housing Director’s ability to obtain resources, tools, or reports to administer the LIPH (low income public housing) program in an efficient manner are subservient to the desires of the Finance Department,” the report said.
The nine-page report alleges a number of additional issues within the department, including irresponsibly managing HUD funds, not completing sufficient inventory counts, using CARES Act funding for non-eligible items and not following proper procedures for evictions and terminations.
“The City of Albemarle Department Public Housing internal control system is failing,” the report said, noting the focus seems to be on making sure spending is authorized by public housing’s Board of Commissioners “and not on administering and providing oversight of the program resources in accordance with existing rules and regulations.”
In a letter dated Aug. 15 to Shelia Hester, director of the North Carolina Office of Public Housing in Greensboro, Albemarle Mayor Ronnie Michael said while the city appreciates “the opportunity for substantive and constructive feedback on the ADPH’s operations,” it believes the HUD office “has a fundamental misunderstanding about the founding structure of our Public Housing Department.”
Since the review was “founded on this misunderstanding,” Michael wrote, some of the findings and observations detailed in the report were “erroneously included.”
Albemarle’s public housing department has issued a written response to the compliance report, which is scheduled to be presented before Council Monday, during which time it will be considered for approval. The department’s response will then be delivered to the HUD office in Greensboro.
In regards to the suggestion that the department should become its own independent organization, it once was a standalone agency, the city wrote, but it was decided the community would be better served if it was “absorbed by the City to allow for better oversight and additional resources.” Being under the jurisdiction of the City, the department receives “a plethora of benefits” it would otherwise not be able to afford, the city wrote.
Among the biggest concerns the review highlighted was what it viewed to be public housing’s suspect spending habits. The department in recent years purchased a bed bug machine for about $9,200, aluminum fencing for $28,000 and galvanized chains and posts for $8,000.
The report revealed that no housing staff is certified to operate the bed bug machine and so the department recently outsourced bed bug eradication services for $6,000. Additionally, the aluminum fencing and chains and posts will each soon be removed as the first does not meet commercial residence standards and the second has been deemed a “tripping hazard.”
The report also found the housing department purchased several doors totaling about $1.3 million yet they were not identifiable in the procurement file.
In a written response to the spending allegations, the City said it “refutes claims” that it has engaged in “irresponsible spending,” noting that the items spent for public housing “were determined to be eligible and necessary expenses.”
In reference to keeping up with supplies, the HUD staff learned that no inventory count had been performed in more than eight years and that maintenance staff generally purchases items in bulk and places them into stock until the items are needed for a maintenance repair.
One of the public housing warehouses that was inspected contained seven central air conditioners, a refrigerator, doors and flooring, yet none of the items were accounted for on any inventory list.
In response, the City wrote that public housing recently completed an inventory of its materials, including those used by the maintenance staff, to ensure it is aware of available items. It added that the department will conduct an inventory check “on an annual basis” and the current inventory has been documented on a spreadsheet by Scott.
Public housing has also utilized HUD funds for items that have not been used by the department, per the report. One example was that the department helped pay for a 2014 Chevy Silverado, which has been used exclusively by the public works department.
The City said public housing contributed a “nominal amount” to the purchase of the truck. “This contribution from the ADPH to the fleet maintenance operations is minimal in exchange for the resources the ADPH receives,” it wrote.
In talking with public housing staff, the HUD officials conducting the review were informed that previous housing directors did not follow proper policy for evictions and terminations. Not all tenants have been held to their lease agreements regarding keeping up with house cleaning duties and paying rent on time.
City Council recently approved public housing’s revised Admissions and Continued Occupancy policy, the City wrote, which will enhance the enforcement of tenant lease provisions.