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Fresh off the heels of an $8 million scandal four years ago, the county's public housing agency misspent or mislabeled the spending of more than $700,000, according to a federal audit.
The San Joaquin Housing Authority illegally spent public housing money to remodel its Stockton headquarters and pay for new computers and software, concluded federal investigators in a report issued last week after a four-month probe that also uncovered shoddy bookkeeping and a little lost grant money.
Out of $4.6 million in grants, the agency misspent nearly $370,000 set aside for modernizing public housing. Another $350,000 in grant money expenditures was improperly documented.
It seems like a pittance compared to the agency’s $47 million annual operating budget, and it looks like pocket change compared to the $8.8 million the Office of Inspector General found the agency misspent four years ago during an audit triggered by inside complaints of financial mismanagement. But it’s money that should have been spent on some of the agency’s 6,500 housing units throughout the county, possibly ones in Tracy.
Instead, the agency’s headquarters got some new hardware, software and a little in-office spruce-up, the report found. A few other expenses were left unaccounted for.
So the U.S. Department of Housing and Urban Development, which ordered the audit in August, expects the authority to do a little backtracking to find out where the money went.
HUD also demanded the authority to pay back the money by September.
The housing authority was informed of the results last month.
Investigators went in for a routine review in part to make sure the agency properly spent $4.6 million in HUD grants that were awarded 2003 and 2004, the report states. The Authority’s history of shady bookkeeping and a letter sent to HUD in 2006 by "several concerned employees" alleging mismanagement caught the attention of HUD higher-ups, who asked for the audit.
Through what Housing Authority officials ascribe to shaky leadership, "the public housing program was deprived of scarce HUD funds," the report states.
Unstable direction because of a slew of resignations and early retirements led to the documented disarray of the agency’s finances, said Clifford Hatanaka, the authority’s director of finance.
Executive Director Ed Sido resigned in the middle of the audit late last year, following the lead of the director before him, who resigned in the midst of a federal probe in 2004.
Since Sido’s exit, a handful of the agency’s top staffers have filled in for him.
After a period of stability in the finance department, several key accountants also left and were replaced by staffers with less experience, Hatanaka defensively wrote to HUD in February in response to the audit.
Last month, the agency created a new position, capital fund coordinator. Hatanaka expects that officer will build a more cohesive finance department, although no one has yet been appointed.
HUD asked the Housing Authority to supply hardcopy proof that the agency will keep a closer eye on balancing the books.
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