Housing Authority Problems Trigger Investigation

Ongoing problems in the Gainesville Housing Authority are threatening landlord payments and have led to a federal investigation of mismanagement.

The federal Department of Housing and Urban Development has cited numerous issues about the way the GHA has operated, including:

  • Signing contracts to remodel two housing projects although the authority had budgeted $1.2million less than was needed for the work.
  • Over-committing to the number of people for whom it could provide housing under the Section 8 program, leading to a $1.8 million shortfall.

Because of the shortfall, the housing authority is cutting payments to landlords, reducing utility allowances for tenants and requiring tenants to double up on bedrooms.

Although the changes may force some Section 8 tenants to move into smaller units, the housing authority is working hard to make sure all renters who play by the rules have a place to live, says Interim GHA Executive Director Bernadette Woody.

“It’s a hard pill to swallow. We don’t want anyone to go homeless, but we have to balance our budget, ” says Woody, who adds she has responded to HUD’s concerns and is working to correct them.

On top of the funding problems, the GHA’s former accountant has charged that Gail Monahan violated federal law regarding budgeting checks and balances while serving as executive director.

Monahan, in turn, says that the accountant, David Cornwell, refused to cooperate with her and that she operated within the law.

Longtime board member Andrew Mickle, who is currently vice chair, welcomes HUD’s intervention.

“They have all kinds of business expertise, and they will tell us exactly what to do to get out of our predicament,” he says.

“You’ve got to go to Daddy for help, and Daddy is HUD,” he says.

A Contentious Transition

The Gainesville Housing Authority has been in a state of flux for the last several years.

In October 2009, then-Executive Director John Cherry retired under pressure from the board. Although Cherry had been recognized statewide for his expertise in public housing, the board had lost confidence in him for several reasons, including the fact that HUD had imposed penalties on GHA for late reports, Mickle says.

Some of the management problems HUD wanted the GHA to resolve go back to an audit that included the last part of Cherry’s tenure.

To replace Cherry, the GHA board reached an agreement with the Alachua County Housing Authority for Monahan, the longtime ACHA executive director, to head both agencies.

Monahan had a stellar reputation, and both boards hoped she would make needed improvements at GHA, Mickle says.

But from the standpoint of some GHA employees, Monahan was dictatorial, according to an October 21 letter a group of employees sent to Ed Jennings Jr., HUD’s southeast regional director, and Mayor Craig Lowe. None of the employees signed individually for fear of retaliation, the letter stated.

The letter also accused Monahan of hiring some contractors without using proper procurement procedures, sharing personal information about board members with staff and being disrespectful of GHA clients.

Monahan says she is a strong, but fair, manager, as her rapport with the ACHA staff illustrates. Much of the GHA staff resisted change, she says, adding “they refused to do what I told them to do.”

Cornwell and Monahan also clashed from the beginning. As a result of their differences, Cornwell quit, effective January 28. In an April 10 letter, he accused Monahan of violating board policy and federal law.

“In over 25 years of specializing in management, consulting and accounting for public housing authorities, I have never seen such gross negligence and blatant, voluntary, willful and wanton desire to carry out harm to both the organization and individuals,” he wrote.

Among Cornwell’s accusations were that Monahan:

  • Refused to provide forecasts of capital spending that Cornwell needed to prepare the GHA budget.
  • Bought vehicles worth $125,000 without board approval.
  • Hired a local company for $116,000 to rehab a burned housing unit without bidding the work.

Cornwell also claimed that Monahan told him she had offered Police Chief Tony Jones additional funds from the GHA budget if he would “help her get rid of Anthony Gordon,” the chairman of the GHA board’s Finance Committee.

Monahan countered that Cornwell didn’t provide her financial information she needed. She acknowledges she didn’t give Cornwell a full set of capital needs but says that was because she was still determining those needs.

Monahan also says she obtained board approval for spending when needed, but she and Cornwell disagreed about what items needed board approval.

Monahan acknowledges that she wanted Gordon removed from the board. She says she saw him as an obstructionist in providing GHA community affairs funds to the Gainesville Police Department to support the Reichert House.

“I’ve never done that [try to influence a board appointment] before,” she says. Gordon left the board when his term expired in August 2010.

Finally, this spring problems between GHA and Monahan came to a head. In March, the GHA board elected Evelyn Foxx, who had recently joined the board, as chair.

According to Monahan, Foxx took it upon herself to tell Monahan she was fired and had the locks changed to prevent Monahan from getting into her office.

Foxx says she had concerns about Monahan but denies telling her she was terminated or having the locks changed.

As a result of the conflict, the Alachua County Housing Authority voted to end its arrangement with GHA. The GHA board then appointed Woody, who had been deputy director, to replace Monahan.

HUD Investigation

Beyond the local issues are HUD’s concerns about the way the GHA has been operating. Victoria Main, director of HUD’s Jacksonville Office of Public Housing, detailed the findings of HUD investigators in an April 25 letter to Foxx.

The investigation included a review of the use of federal Stimulus funds, which uncovered the contracts GHA signed without budgeting enough money, Main said in her report.

One contract was with Anglin Construction for $1,555,800 to renovate the Oak Park housing complex at 100 NE Eighth Ave. GHA had only $797,000 budgeted for the project, according to Main’s letter.

The second contract was with J.A. Standridge Construction for $551,200 to renovate the Sunshine Park building, 1901 NW Second Ave. GHA had only $105,000 budgeted to that project, the letter said.

Monahan says that GHA had enough money to cover the two remodeling contracts from the $3 million in reserves she inherited and the work was completed.

In fact, HUD frowns on excessive reserves, Monahan says.

In trying to investigate GHA, Main wrote, HUD inspectors were rebuffed. “It should be noted that obtaining information from GHA was difficult as several staff members indicated that they were told they could not speak with the HUD team,” she wrote. “It took months and repeated requests to obtain follow up information and often it was incomplete or inadequate.”

Monahan responds that Cornwell was the main impediment to getting information HUD requested.

Main’s letter also noted that inspectors had checked on GHA’s progress on correcting 11 findings from an audit through March 2010. “We are concerned that these operational and procurement areas show no apparent sign of recovery,” Main said.

The audit findings included:

  • Miscalculating rents
  • Failing to update GHA’s administrative plan
  • Using outdated rent rates
  • Losing data from a waiting list of potential tenants while the GHA was converting to a new software program

Monahan says she inherited the problems and had been trying to correct them.

Woody says she has provided a thorough response to Main’s letter.

Changes Now Underway

Woody says the main reason for the Section 8 shortfall is that Monahan added renters even though HUD had not at that point increased its funding.

Monahan says she added tenants in the last quarter of 2010 because HUD would use the end-of-year rental numbers to determine funding for 2011.                  The shortfall could straighten itself out, she says, through supplemental HUD funding and tighter controls over tenants.

As part of those tighter controls, GHA is working to get clients to pay more of their rent or to get landlords to cut their rates.

Landlord Jay Cooper says he can live with the cutbacks. “Everybody has to take a hit in these times,” he says. “I just want it to be reasonable, and, from what I’ve seen, it will be.

The GHA also is cutting the utility allowances it pays clients and requiring that tenants have two people, regardless of sex, in each bedroom of their units.

“Our goal is to pay 80 percent of what’s allowable, when possible,” Woody says.

GHA also is becoming stricter with tenants who violate regulations, including those who let unauthorized people stay with them, Woody says. “We want people who play by the rules,” she says.

Woody is applying for supplemental HUD funds to help with the shortfall, but there’s no way to know how much additional money will become available, she says.

GHA held a series of meeting for tenants and a separate set of meetings for landlords to discuss the Section 8 cutbacks.

Most tenants and landlords were willing to make the best of the cutbacks, Woody says.

“I want to keep the good Section 8 tenants I have,” says Diana Moss, manager of the In the Pines apartment complex. Moss has 15 Section 8 tenants in her 242 units.

All but one or two of the Section 8 tenants treat their apartments well and abide by the housing authority’s guidelines, Moss says. She plans to warn tenants who are violating the guidelines and to evict them if they don’t heed the warning, she says.

The GHA’s problems are far from over, but Woody says she’s doing her best to resolve them with as little impact as possible on the tenants and landlords.

And while Foxx says she believes Monahan overstepped her authority, she also says she believes the former director was well-meaning.

“I think she has a huge heart and wants to save the world, but there are limitations on what you can do,” she says.

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