Audit finds excessive bonuses at Morgan City Housing Authority
MORGAN CITY, La. -- Morgan City Housing Authority office personnel apparently “were paid more than allowed by Civil Service,” according to a report by the Louisiana Legislative Auditor released Monday.
The overpayment went to three office employees in the form of quarterly bonuses, Charles Spann, executive director, said this morning in a telephone interview.
State civil service rules stipulate that reward and recognition “shall not exceed a total of 10 percent of the employee’s base salary within a fiscal year.”
In the management corrective action plan, the housing authority said that it “is reviewing recommendation for overpayment of rewards and recognition. The MCHA will provide further training to staff and will maintain compliance with requirements of Louisiana Civil Service.”
Spann said the housing authority misinterpreted the civil service regulation when office workers were overpaid quarterly bonuses for exceeding certain expectations.
Twice those bonuses were equivalent to 10 percent of the three workers’ annual base pay and twice the bonuses were around 7 percent he said. Once the overpayment amount is determined, the three employees will have payments deducted from their paychecks until everything more than 10 percent is paid back, Spann said.
The legislative auditor’s report said that this and other issues disclosed in the report were “material weaknesses.” The auditor defines material weaknesses as a deficiency, or combination of deficiencies, which cannot be prevented, detected or corrected, on a timely basis.
Some of the findings of material weakness could affect “future funding from the state and federal agencies” and others could increase “the risks that errors … including fraud … may occur and not be prevented and/or detected.”
The Code of Federal Regulations requires the housing authority to re-examine family income annually for eligibility of public housing and housing assistance vouchers in the Section 8 program. Third party verification should be put in the file or documentation must be provided as to why third party verification is unavailable. A written lease must also be signed by the landlord and tenant.
The audit found:
—Six of the 25 files examined “had incorrect income used for rent computation.”
—Of the 25 tenant files examined by the auditor, four did not have a lease agreement between landlord and tenant, one had a two-bedroom lease but the tenant had moved into a three-bedroom without a new lease, one lease addendum had a housing authority employee signature in the blank for landlord and there were multiple instances of files that were missing signatures and dates.
—Six of the 25 files examined failed to adequately meet the annual re-examination requirements; four failed to have annual re-examinations done and two had issues with the third-party verification.
Spann said that most of these findings were because of a failure to complete forms with proper signatures and dates and these issues are being addressed. The tenants that had not had their incomes re-examined have been notified and he expects those verifications to be completed by July.
Another finding said that more than 30 percent (11 of 35) of the “units tested in low rent had annual inspection that had errors or problems causing them not to pass the inspection.” The report added that five of the inspected units with problems had some of the work done, the other six had work orders issued but no work had been done to fix problems as of the last day of the audit fieldwork.
The housing authority said in its written response to the report that the portion of the work “not completed dealt with the sidewalks, exteriors and damages beyond turnaround of unit. These have been listed to be put under rehab as soon as funding is released by” the U.S. Housing and Urban Development. The housing authority is examining how best to address major problems with sidewalks and erosion and is “working with HUD on additional building(s) being put under demolition,” according to the response.
Spann said that there is work that needs to be done at several locations but “we don’t have the funds” to do any more work until the new budget begins on Oct. 1.
Damage done by Hurricane Gustav still needs to be repaired, but the housing authority is waiting for about $250,000 from insurance settlements before that work can begin, according to Spann.
Spann said that he is expecting a meeting with HUD officials on June 6. He anticipates a walk-around tour at some of the public housing units. He said the housing authority wants permission and funding to demolish many of the units, including all 29 units of the Joe Ruffin Apartments, also known as Dixie Homes, on Railroad Avenue.
He said 13 of those units are currently occupied but it would be best to raze all the buildings and “start with a clean slate.”