Audit says PHA misspent stimulus funds

A federal audit has found the troubled Philadelphia Housing Authority failed to properly oversee the use of federal stimulus funds and overpaid for poor workmanship in housing renovations.

The audit of a sampling of scattered-site housing, prompted by a citizen's complaint, was released yesterday by John Buck, Department of Housing and Urban Development's regional inspector general.

The audit said PHA should have to repay HUD for undocumented spending, which could amount to millions of dollars.

In a statement to the auditors, PHA said it "disagreed with many of the findings in the report" but would do as HUD said. A PHA spokeswoman could not be reached late yesterday for further comment.

The audit was another blow for the PHA, whose director, Carl Greene, was fired last September after sexual-harassment allegations surfaced against him.

HUD later asked for the resignations of the entire PHA board, including its chairman, former Mayor John Street.

The audit covered the rehabilitation of 10 scattered-site housing units, at a cost of almost $1 million in stimulus funds, between March 2009 and June 2010, the report said.

It found that costs were not properly itemized on invoices, that permits were not always obtained and that poor workmanship subjected tenants to "health-and safety-related hazards."

Among those were ungrounded electrical outlets in six of the 10 properties and improperly vented flues on water heaters at two of the properties.

The audit noted that some of the problems had been corrected.

The $957,742 in HUD money used for work on the 10 homes was part of $31.5 million in 2009 federal Recovery Act funds that PHA received to rehabilitate 340 of the authority's 7,300 scattered-site units.

PHA received $126.5 million in Recovery Act funds.

In several of the rehabs, an inspector found that PHA had spent "up to $20,000 more than it should have,"the report said.

The HUD auditors said PHA should provide documentation for the entire $26.4 million in federal funds for scattered-site rehabilitation or reimburse the government from nonfederal funds for any costs it can't document.

The report also said the PHA had paid two law firms $1.1 million from December 2008 to August 2010, "which was unreasonable and unnecessary because it obstructed the progress" not only of this audit, but of two other recent audits.