Audit Uncovers 'Significant and Severe' Issues in Medford Housing Authority

The Medford Housing Authority distributed nearly $8 million in aid in 2010 and 2011 without properly following federal guidelines, according to the Department of Housing and Urban Development.

The federal agency has instructed the housing authority to recoup any over-payments it made to landlords, or else pay back the $8 million, according to a letter from Housing and Urban Development Deputy Director Robert P. Cwieka to the housing authority dated April 4.

It also calls for the authority to review $1.3 million in expenditures connected to procurements, and to repay $37,000 to a federal voucher program that it used improperly.

The issues came to light in an audit conducted by the Department of Housing and Urban Development earlier this year. A report was issued March 21 and made public by the City of Medford April 12.

Along with the procedural issues, the audit report also sites a lack of oversite in the use of credit cards issued in the authority's name to five employees, and "a concern regarding the excessive subsistence allowance for ovenight travel."

In a letter to the housing authority, Mayor Michael McGlynn said the issues raised by the audit were "significant and severe." The housing authority is autonomous from the city's municipal government.

"To say that these issues must be addressed is an understatement," McGlynn wrote. "Better put, the Audit indicates an urgency to implement comprehensive changes at the MHA to insure that, at a systemic level, all appropriate laws and regulations are followed and that all persons employed by the MHA are aware of their duties under the law and that these duties are fully carried out."

The housing authority did not always follow federal regulations in its public housing programs and in distributing housing vouchers, according to the audit, conducted by John Dvorak, audit inspector for the department of Housing and Urban Development.

The authority also approved rents rates for residents receiving assistance without conducting a "rent reasonableness study," which is intended to make sure those receiving assistance are paying rates in line with those that do not, according a report written by Dvorak.

As result, about $7.9 million in housing assistance was doled out without properly following federal guidelines, according to the report.

The Department of Housing and Urban Development has instructed the housing authority to re-examine units that received assistance between July 2010 and September 2011 and recoup any overpayments to landlords, or else pay back $7,876,534 to the housing assistance payment reserve.

The audit also found the housing authority did not follow proper procurement procedures, and calls for it to review $1.3 million in expenditures charged to federal programs.

In a letter to Dvorak last month, Robert Covelle, the housing authority's executive director, admitted that authority did not always re-inspect units that were part of the Housing Choice Voucher Program, which is funding with federal money.

The authority did do some fact-checking when it came to rent reasonableness through a website, but did not follow all federal procedures, according to the letter. Covelle also admitted the authority did not always follow procurement procedures by failing to prepare cost estimates for smaller jobs, the letter said. But "large jobs" always included a cost estimate, the letter said.

"We will adhere to HUD's policies in the future," Covelle wrote.

The Medford Housing Authority offices close at 4:30 p.m. and Covelle could not be reached for comment this afternoon.