HUD audits will go ahead

By Pat Litowitz
New Castle News

HUD may not like it, but the Lawrence County Housing Authority board will have an extensive review of its operations.

The authority’s comptroller, Holly Girdwood, raised concerns about the expenses involved with three board-sanctioned audits: forensic financial, inventory and building units. As of July, the authority showed a surplus of approximately $80,000.

“The inclusion of this cost may result in a deficit budget,” Girdwood told the board earlier this month.

The U.S. Department of Housing and Urban Development rated the nonprofit agency a troubled performer based on its 2005 fiscal performance. Former executive director Robert Evanick learned of the designation on Nov, 18, 2006. The board was not told of the authority’s status until January 2007.

Evanick’s inaction and the board’s resulting lack of confidence in him led the longtime administrator to retire.

Later, board members called for the audits in order to provide the incoming executive director with a thorough review of operations.

Girdwood said she contacted HUD officials in Pittsburgh to discuss the financial effects of the audits on the authority’s budget.

“They have informed me that a deficit budget will not be approved,” she said. “They are not comfortable with approving the cost of a forensic audit for the reason that was specified, and (they stated) that if you feel that there has been any wrongdoing, the HUD Inspector General’s office … is available at no cost for a review.”

Board member Michael Mancuso said Girdwood is premature in her predictions of a deficit.

“That’s putting the cart before the horse,” he said. “We don’t know how much the audit is going to cost us. Until we have all the figures, it would be difficult (to believe) that this would put us in a deficit situation.”

Girdwood said that from 2002 through 2007, approximately 30 audits have been performed. An independent audit of 2006 operations is under way. From Aug. 6 to Aug. 10, a HUD contractor will review the authority’s financial structure and the troubled status.

Mancuso said prior efforts do not go far enough.

“A forensic audit is extremely specialized,” he said. “We want everything. We want the whole ball of wax.”

HUD spokeswoman Maria Bynum said it is the board’s responsibility to maintain a balanced budget.

“HUD is working with the Lawrence County Housing Authority to assess the authority’s operations and to identify the actions needed to improve its performance,” she said.

“The authority is aware that HUD cannot approve a deficit budget. It’s up to the authority to decide how to budget its resources.

“It’s a management decision, and we’re confident that the authority will work it out and provide Lawrence County residents with quality housing services.”

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