Federal housing officials have launched a probe of the Harris County Housing Authority (HCAC) amid allegations that the Texas agency spent lavishly on executive salaries and questionable expenses.
Four developments that are in the planning stages, including one that HCHA board members say they had not heard of, have been put on hold, according to interim CEO Tom McCasland, who took over the housing authority after the board ousted Guy Rankin IV in March.
“The most immediate concern is that I get a set of books that I can trust,” McCasland told Affordable Housing Finance.
The federal Department of Housing and Urban Development has dispatched a team armed with a subpoena to review the housing authority’s financial records.
Meanwhile, the housing authority is closely monitoring and cutting expenses that do not affect residents, according to McCasland.
“The only cash on hand right now is in restricted accounts,” he said, meaning that the funds are designated for the housing choice voucher program.
McCasland recently presented financial statements to the board projecting that HCHA will run a nearly $300,000 deficit during the next 90 days. However, the embattled agency is able to make payroll as well as continue to pay the rent for residents in the rental voucher program.
The housing authority bought out Rankin’s contract for $137,000 but hasn’t been able to make the payment. The Houston Chronicle has reported that HCHA increased executive salaries and paid large bonuses in recent years. Rankin, who led the agency for eight years, was receiving about $242,000.
The agency has also come under fire for allegedly hiring friends and family members of employees.
Officials will also look into HCHA’s development deals, including Patriots by the Lake, a large master-planned development that included veterans housing. According to the Chronicle, the housing authority has put about $8.4 million into the large deal, which has been criticized, especially since it seems to lack commitments from Veterans Affairs.
The Chronicle reported that HCHA spent about $18,000 on letters said to be written by Abraham Lincoln.
HCHA also appears to have spent money planning another development that board members had not heard about until recently.