HUD’s inspector general visits Kenner Housing Authority

The Department of Housing and Urban Development’s Office of Inspector General visited the Kenner Housing Authority this week as part of the continuing fallout from a scathing state audit that found financial mismanagement and other problems at the agency.

Interim Executive Director Richard Murray on Wednesday informed the authority’s Board of Commissioners of the visit. Murray has been at the authority’s helm since former Director Claudette Raphael resigned in March.

Raphael’s resignation, which commissioners say she attributed to stress, came just prior to the release of the state’s audit.

Murray did not provide many details on the visit, but told commissioners that the Inspector General’s Office was interested in the authority’s financial records and operations. He also said that given the agency’s troubled past, a visit from the inspector general could have far-reaching consequences.

“That can result in criminal charges,” Murray told commissioners.

At issue is an audit released last month that found long-standing financial chaos and possible wrongdoing at the authority dating back to 2004. Murray, who is the executive director of the East Baton Rouge Parish housing authority, said his review of the agency’s books shows that an accountant has not examined the agency’s financial records since mid-2011. Murray said that failure could result in the agency losing federal capital improvements it was awarded in 2009 and 2010.

Among the most explosive findings in the audit was the revelation that the authority paid former Executive Director Lawson Harvey more than $143,000 when he retired in 2004 based on his accrued leave, despite a policy that would have capped that payment between $8,500 and $8,800. In addition, the larger payment was made despite the fact that the authority had no records of how much leave Harvey had actually accrued.

Murray told commissioners that although the audit suggested the authority seek to recoup any funds Harvey wasn’t entitled to receive, it will be difficult because Murray doesn’t believe records from Harvey’s tenure still exist. He said federal records’ retention policies may have led to destruction of important documents, but he is still investigating the issue.

“I don’t know if we can actually reconstruct it,” said Murray, who is working to create a formal, financial policies and procedures. “I can assure you I’ll try to keep my nose on the grind with that situation.”

Commissioner Al Morella was irate at the possibility that money might be lost, adding that he wants to make certain that anyone who misused authority funds is held accountable. Morella said that if the authority isn’t aggressive in going after wrongdoers, it’s only inviting the same problems in the future.

“I want people exposed and I want them held accountable,” Morella said. “I want to see this agency recover ... I want to see it serve the people it was supposed to serve.”

However, in addition to the issues with Harvey, the inspector general is likely to examine Raphael’s tenure, including some questionable actions she took before leaving the agency. Commissioners learned that a promotion and raise Raphael granted one employee ran afoul of Louisiana State Civil Service guidelines. Commissioner Evelyn Dufrene said it seems like Raphael was handing out favors to friends.

“I felt that Ms. Raphael, before she left, did her own buddy system,” Dufrene said.

Attorney Mark Falcon said Raphael promoted Arlene King and more than doubled her salary as Raphael left the authority. Those moves were violations because Raphael never publicly posted King’s job and civil service rules limit any raise to 14 percent, Falcon said.

In addition, King was not eligible for a promotion because she was still a probationary employee when Raphael left the authority, he said.

Falcon advised commissioners that they will have to demote King and reduce her pay back to its former level.

Commissioners discussed the possibility of attempting to recoup the money King was ineligible to receive, but Falcon argued that based on King’s work and the fact that legal proceedings would be expensive, it was best to let the matter die.

“We basically put her back to status quo,” he said.

Ultimately, commissioners decided to accept the audit’s findings and directed Murray to address the remaining problems the document found, including excessive vacancies. Chairman Donnie Smalls said many of the problems the audit found predated the existing commissioners. Now they are just trying to get the authority on the right path, Smalls said.

“As you can see, we do have a game plan,” Smalls said. “It is our responsibility now to make a decision.”