CHA Officials Contest HUD Letter Indicate They Were Serious and Cooperative

January 24, 2013
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One week after letters surfaced from the regional Housing and Urban Development (HUD) office detailing an indifferent attitude from the Chelsea Housing Authority (CHA) about helping with a review of the Capital Fund, local administrators at CHA say they dispute the letters and were “extremely surprised” upon receiving them early this year.

Executive Director Al Ewing said he did not agree at all with the summation of events included in one of the letters – a letter that detailed lax cooperation and indifference by Ewing during last October’s review.

“That’s just clearly not accurate,” said Ewing in an interview last Friday. “I personally cared deeply. We are working tirelessly to gain the public’s trust. You can’t look at all the things we’ve done in this agency over the last year and think we don’t care. We’ve done a number of things to get on track. Believe me, I absolutely care and I’ve met with residents in an ongoing basis to express that. This Board is very committed to turning things around at the housing authority – to be open, active, transparent and good stewards.”

Board Chair Tom Standish also said he didn’t agree with the summation that the CHA didn’t cooperate in the review.

“The (former Executive Director Michael) McLaughlin Administration is in the past,” he said. “The new Board stands for transparency, accountability, responsibility for its actions and – from top to bottom – transformation of the Authority so that we can achieve the highest standards of the industry for the Authority. We also stand for maximum cooperation with HUD and DHCD (state Department of Housing and Community Development) because we recognize the importance of a clear relationship between those entities and our Authority.”

That was in stark contrast to HUD’s recitation of events that unfolded last October when HUD staffers came to Chelsea to review records for Capital Fund expenditures between 2002 and 2011. Due to the missteps uncovered over the last two years about that time period under McLaughlin, everyone expected them to find some major problems. But no one expected to get a scathing tongue lashing from HUD Regional Director Marilyn O’Sullivan about lack of cooperation and indifferent attitudes.

“The CHA failed to offer any documentation to support any expenditures charged to the CFA (Capital Fund Program) for the subject years (2002 to 2011),” read the letter from O’Sullivan. “When I offered an additional 30 days for your agency to review records to see if documentation could be produced to support these expenditures I at first received no response from you or your staff, and then when pushed, was informed by you that you did not think it was worth your time to review the records. Quite frankly, I was astounded by the lack of knowledge, interest, responsibility and ownership displayed by both you and your senior staff members at this meeting – particularly given the extreme financial impacts the recapture of these funds have on the CHA.”

She continued, “The CHA did not comply with the administrative requirements for the grants and did not retain and make accessible records documenting the use of grant funds. The consequences for these egregious actions are severe.”

That letter also indicated the CHA might have to pay back $7 million worth of federal grants.

Ewing said when he first read the letter, he was surprised and found it to not be accurate – as well as it being a personal affront.

“To say we didn’t have any paperwork or we didn’t have any documents and only gave them 100 pages of documents is not accurate,” said Ewing.

Added Standish, “We are not able to create answers as to what went on in the McLaughlin Administration and for all inquiries that have been made. Definitely we’ll do our best to provide whatever info and we have done our best to provide info that HUD has asked for. We’ll continue in a positive vein to achieve their goals as well as ours.”

He added that in many cases the records that are being requested simply don’t exist, “Keep in mind, six boxes went out the door with McLaughlin on the day he left here.”

Add to that the fact that virtually everyone in the financial operations of the CHA is new to the job, and it makes it all the more difficult to make guesses at what went wrong and where it went wrong – at least when it comes to the financial balance sheets.

“It’s difficult to answer why things were done a certain way in the past and, in some cases, how certain things were done in the past when you weren’t involved in the details of those things,” said Ewing.

Both Ewing and Standish said virtually every federal and state agency has turned the Authority upside down over the past year and investigated every corner – and any records that exist are available and probably already in the hands of government officials of every stripe. Many of those agencies have balked at the fact that certain records don’t exist, and it has been widely reported that McLaughlin destroyed many records before, and as, he left the CHA in October 2011.

That being said, there is some question locally why it is that HUD has chosen to come full force into the CHA right now – especially since there is an ongoing criminal investigation and Grand Jury that is looking to sort out many of these very same issues.

There has been some suggestions by sources outside the CHA that HUD might be trying to deflect their own lax oversight in the past by attacking the new leaders.

Late on Wednesday, a HUD spokesperson refuted those claims vigorously – and like the CHA leaders – indicated that they did not want to get into that kind of battle in the press. In fact, despite their differences, both sides did tell the Record that they want to work together and move forward.

“We have a professional staff that is very experienced, very knowledgable, and very familiar with Chelsea,” said Rhonda Siciliano of HUD. “Unfortunately when they met with the Housing Authority last October, what they needed was not there and they worked with the staff to request it over and over. We’re not going to go down that road. We are interesting in working with them to make sure Chelsea gets back on the road to recovery…and proper funding is being used to best serve the residents of the Chelsea Housing Authority. We’re not concerned in getting in a battle in the press…We’re not interested in making this into headlines.”

Siciliano said HUD moved to investigate last October – despite the ongoing criminal investigation – because of troubling findings in an audit of 2011 that was finished last September. She said HUD felt the findings necessitated a review immediately.

“We’re managing our public housing,” she said. “Looking at that audit, we decided we needed to go there and do a more thorough review of their progress and that’s what we tried to do in October. We’re aware of what went on in the past and all that is being considered, but we’re concerned more with what is happening there now and that their plans are in place and taxpayer money is spent appropriately.”

Meanwhile, Standish said most of what was discussed in the letter – and the newly minted HUD designation of the CHA being a ‘Troubled’ authority – had little to do with the present.

“If you look at the difference between what was going on before the new Board and after, there’s already been a major transformation in the way we do business,” he said. “That letter is not based on the performance of this Authority since the new Board came on. That ‘Troubled’ designation is not of our doing.”


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