Morgan City Housing Authority audit to be discussed
MORGAN CITY, La. — Audit revelations of excessive “reward and recognition” compensation to office personnel at the Morgan City Housing Authority are to be discussed at a special meeting Monday.
Victory Ho, board of commissioners’ chairman, called the meeting for 5 p.m. to receive the 2012 fiscal year audit conducted by Kolder, Champagne, Slaven & Company LLC. The legislative auditor released the report on Monday. The audit also revealed several other negative findings regarding record keeping and income verification.
Details of the audit report were published by the Morgan City Daily Review on Tuesday.
“I am upset to find out about all of this by reading it in the paper,” Victory Ho, commission chairman said, as he explained the reason for the special meeting.
Charles Spann, the housing authority executive director, said that the auditor’s report is typically submitted and discussed at the June meeting.
The Department of Housing and Urban Development rates public housing agencies on a scale of 0 to 100 with anything below a score of 60 classified as troubled.
In fiscal year 2011, the Morgan City Housing Authority was listed as troubled with a score of 50, according to Patricia Campbell, a Housing and Urban Development spokeswoman. The 2012 fiscal year score dipped to 49, she said.
“We have been working with them for a while to try to get them going in the right direction,” Campbell said.
Spann said on Thursday he does not know how much overpayment of “reward and recognition,” or bonuses, was given and is looking for direction from the legislative auditor on the amounts overpaid, which he said will be recovered through payroll deductions.
The same auditing company has audited the housing authority for about eight years and this is the first finding of overpayment of reward and recognition, according to auditor Gerald Thibodaux. His report has questioned $93,733.51 in allowable costs. It is unclear how that sum was distributed.
State civil service rules allow the authority to “implement a program of rewards and recognition for individual employees … for significant achievement.” Spann said office workers’ quarterly bonuses were approved by him based on their exceeding performance expectations.
Civil service rules state “such rewards shall not exceed a total of 10 percent of the employee’s base salary within a fiscal year.” Spann said a manager’s misinterpretation of the regulation was the cause of the overpayments.
Spann said he thought the bonuses were appropriate as long as they did not exceed 10 percent at the time they are awarded. But he said any overpayment would not be anywhere near the amount the auditor has questioned.
In addition to Spann, the housing authority employed three civil service office workers. One of those employees recently resigned.
Spann said any bonuses for the director would have to be approved by the board. Ho confirmed Spann’s assertion that he did not request any bonuses.
The Morgan City Daily Review submitted a written public records request on Thursday for the records of payments to office personnel including any financial rewards and recognitions these employees may have received in the 2012 fiscal year.
The Morgan City Housing Authority received a little under $1.4 million from HUD in fiscal year 2012 in operating subsidy, capital funds and housing choice vouchers, Campbell said
In addition to Ho, there are four board commissioners appointed by the mayor. Each serves as an unpaid volunteer which sets policies and hires the director. The director controls the day to day activities of the housing authority. Former Mayor Tim Matte appointed the commissioners now serving, according to Ho.
“I am not here to accuse anybody, but I want everything to be done to find out what is going on and I want it done thoroughly,” Ho said.
Mayor Frank Grizzaffi said the mayor and council have no control over the housing authority budget or spending. He intends to recommend to the City Council that it not waive the “payment in lieu of taxes” funds that are due. The payments are due from the housing authority every two years.
The previous fund remittance of nearly $46,000 was waived on the recommendation of Matte “to help ease the financial burden” for the housing authority, according to the resolution adopted on May 24, 2011.
Grizzaffi will ask the council at the May 28 meeting to collect a full payment, which will be for $55,102.56.
“We are in the same financial constraints as everybody else,” the mayor said, in explaining why he will recommend the council not continue to waive the collection of those funds.
The authority meets at 336 Wren St., Morgan City.