It will likely be three to four years before the troubled Housing Authority of New Orleans (HANO) is returned to local control, according to federal housing officials, who report ongoing problems at the local agency.
A new 90-day assessment of HANO found severe management and operational problems, said the Department of Housing and Urban Development (HUD).
“The report’s findings are serious but are not unexpected,” said Sandra B. Henriquez, HUD assistant secretary for public and Indian housing.
HUD hired consultant Gilmore Kean, LLC, to assess the housing authority last October.
The review found that HANO is operating its public housing and Housing Choice Voucher programs without accurate data on the programs’ financial conditions.
It also found that the housing agency has little or no internal audit functions, leading to fraud, waste, and abuse.
A contractor was charged with embezzling more than $900,000 from the agency just last year.
In addition, the review found that HANO is under and inappropriately staffed across most departments and is overly reliant on contractors.
The assessment also found major trouble in the agency’s development activities. HANO is involved in four big mixed-income projects. “Lafitte and B.W. Cooper risk not moving forward as planned if Congress does not pass a placed-in-service extender bill in the immediate future,” said the report.
The projects are at risk of stalling because the Gulf Opportunity Zone extender for placed-in-service date has not been acted on by Congress. If this is not passed soon, HANO will need to work with developers on alternative plans that do not rely on the GO Zone credits and set back the timeline for redeveloping the projects, according to the assessment.
Groundbreaking ceremonies were held for B.W. Cooper and Lafitte last year.
The two other high-profile projects, C.J. Peete and St. Bernard, are under construction.
Gilmore Kean will continue to manage HANO operations through July. HUD is searching for a long-term consultant to implement a new recovery plan, according to Henriquez.
HUD estimates that it will be several years before the housing authority will be under local control. The blistering 74-page report notes that the agency has had a long reputation for mismanagement.