Feds investigating cash-strapped Harris County Housing Authority over missing funds

April 18, 2012 4:43:22 PM PDT
A housing agency that helps thousands in our area is coming up short on cash. Millions of dollars have been misplaced in an organization already under fire for mismanagement, and now the feds want to know where it went.

The biggest problem is the nearly $4 million the authority owes the feds. It's money the Harris County Housing Authority (HCHA) was given to help the needy rent homes and apartments in the county, but somehow it got spent on who knows what. Now the feds are looking for it and the authority is being honest about how serious their cash problems are.

Just behind the speaker's podium at the Housing Authority is a sign that reads, "Excellence Without Excuse."

"We do not have any unrestricted funds in our cash accounts," said Tom McCasland, Interim Housing Authority CEO.

But Wednesday, after the agency's new interim CEO opened the books revealing an ugly view of the authority's finances, it's unclear if there is either excellence or a good excuse for the millions of dollars in now missing funds from authority's accounts.

On Wednesday morning, the feds started a criminal investigation and the U.S. Department of Housing and Urban Development, or HUD, has been in the authority's business for weeks.

"The financial condition of the Housing Authority is very serious," said Dan Rodriguez with HUD.

Last month, the Housing Authority fired its longtime CEO Guy Rankin and gave him $137,000 in severance pay. Just days later, the authority realized they don't even have the cash to pay that bill, and discovered $200,000 more in consultants' bills that can't be paid either.

"It was sticker shock. There is frustration," said Beto Cardenas, HCHA Board Chairman.

The new CEO said repeatedly there is no set of books he can rely on. Among the past problems he cited were $6 million in money supposedly owed to the authority, but no one to collect from. And one million dollars in improvements that were made to an office building the authority is no longer leasing; that money "vanished," in the words of the board.

HCHA spent $6 million on a Hurricane Ike damage survey that no one asked for and now no one will pay for. And it spent $80,000 developing a project near the University of Houston that the board never knew about.

When we asked the board chairman if it sounds like they were lied to, Cardenas replied, "It sounds exactly like that, but we're going to do our work, we'll let HUD do their work and we'll meet our obligations."

There's another sign in the board room we should pay attention to, which reads, "It is what it is." And now, it's a mess.

The authority says renters and landlords aren't in danger; that money is now safe. But without selling assets, the cash for other things like payroll may run out in six months. First on the block are six cars and trucks they bought, including a controversial and pricey pickup they bought for the last board chairman.


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