Problems Persist at Mexico Housing Authority

5 years 10 months 4 days ago Thursday, December 13 2012 Dec 13, 2012 Thursday, December 13, 2012 2:53:00 PM CST December 13, 2012 in News
By: Mary McGuire

MEXICO- When controversial executive director John Afoun left his position in 2010, it seemed a fresh start was possible for the Mexico Housing Authority.

But a Target 8 Investigation reveals that things at the Housing Authority are still far from problem-free, riddled with substandard ratings, financial irregularities and yet another executive director with a questionable past.

Mismanagement in Mexico

In 2010, a KOMU-8 News Investigation raised questions about John Afoun, the former executive director at the Mexico Housing Authority. KOMU-8 uncovered Afoun misused a cell phone issued by the city of Mexico, costing taxpayers thousands of dollars. 

During his time in Mexico, Afoun purchased a plot of land without the proper authorization.

According to the Housing Authority's 2011 audit, the parcel of land Afoun purchased is valued at $86,776.09. The land is currently for sale.

Afoun left his position in Mexico in October 2010 to take a similar spot in Moline, Ill.

After Afoun's departure, Edmund Carrera took the spot of executive director.

New Executive Director Hired

According to  Homestead Housing Authority Office Coordinator Brandy Ramirez, Carrera served as the executive director of Homestead Housing Authority in Homestead, Fla from 1996-2010. 

KOMU-8 obtained a copy of an investigation by the USDA that found beginning in 2007, tenants were overcharged $58,000 in utilities. 

In addition, the investigation revealed the Homestead Housing Authority deferred maintenance, allowed illegal aliens to reside in their properties, and consistently assigned rental assistance incorrectly and did not consider the most "overburdened" tenants.

The investigation also found Homestead's administrative expenses to be unreasonable; "contributing 13% to all employees 401K accounts, employee annual bonuses up to 25% of annual salary, paying 100% of health benefits for some employees, providing personal loans to employees from operating account."

The report also classified some Homestead residences "filthy" and "dirty". 

When KOMU-8 attempted to review Carrera's personnel files from his time in Florida, the Homestead Housing Authority said the files were stolen by a former employee and were currently in the hands of the Miami-Dade Police Department. KOMU-8 obtained a copy of that police report regarding the stolen files.

Carrera refused KOMU-8's request for an interview.

Financial Missteps

KOMU-8 obtained a record of a June 18, 2012 visit to the Housing Authority by a financial analyst from HUD's St. Louis field office.

Notes from the visit reveal that the Mexico Housing Authority transferred $26,659 from the HCV (Housing Choice Vouchers) program to the Mexico Housing Development Corporation, a non-government entity.

Notes from the visit also reveal there was a great deal of confusion regarding who transferred this money and exactly how the funds were used.

In response to the inquiry, finance clerk for the Mexico Housing Authority Lorette Smith told the HUD representative the funds were used to pay for Afoun's salary, a dinner for the development corporation, and possibly a public announcement about the development corporation.

"Lorette added that she is not 100% sure if that is how the funds were used and suggested that I talk to Rita Jackson (Board Chairperson for the Mexico Housing Authority)," the notes read.

Jackson told the HUD official she believed a portion of the funds were used for Afoun's salary and to pay closing costs to purchase the land Mr. Afoun bought.

"Ms. Jackson attempted to locate some documentation providing a breakdown of the expenses paid with the funds, but I have not yet received the document(s)," notes from the visit read. Jackson refused KOMU-8's request for an interview.

HUD then asked Section 8 Director Colette Cooper how the funds were used.

She stated that a portion may have been used to pay Mr. Afoun's salary and to add "Mexico Housing Development Corporation" to the signage affixed to the Mexico Housing Authority.

In light of the confusion, the Housing Authority was not authorized to transfer that amount of money in the first place.

"The Housing Authority's year-end settlement for the 2003 fiscal year indicated that it had $16,380 in reserves in its earned administrative fee account...this was the maximum amount that could be used to pay Mr. Afoun's salary for the Mexico Housing Development Corporation. We (HUD) would like to determine how the Housing Authority plans to handle the $26,659 receivable and how long the receivable will be carried on its financial statements," notes from the visit reveal.

When questioned about the funds, HUD officials said there are still questions to be answered.

"We are still trying to get that figured out with the Housing Authority, exactly how those funds were dispersed and allocated. That's why we made a note of it and we are still waiting on some clarification," said Field Office Director James Heard.

The financial irregularities don't stop there.

The Housing Authority's 2012 operating budget lists Carrera's salary at $68,900. But his salary is listed at $75,000 on a list of the Mexico Housing Authority's employee's total 2012 compensation.

The Mexico Housing Authority's 2011 audit also revealed a significant deficiency in the Housing Authority's financial reporting.

The audit reads:

"We believe the Authority did not have controls over the preparation of the financial statements...to prevent or detect a misstatement in the financial statements. As a result, potential misstatements in the financial statements may go unnoticed."

Substandard Performance

In a letter from HUD's St. Louis field office addressed to Carrera, the Mexico Housing Authority was rated as a "MASS (Management Assessment Subsystem) Substandard Performer" in February 2012.

The reason for the low rating?

"The Housing Authority became substandard because it failed to maintain an acceptable occupancy level in its developments, as well as the Housing Authority had a high level of tenants accounts receivables," the letter reads.

Almost 360 defects were found in Mexico Housing Authority dwellings.

The most prevalent defects were rust/corrosion on hot water heaters (69), damaged hardware and locks (34), and damaged door surfaces (17).

9 defects relating to mold/mildew were also observed, as well as 9 insect infestations.

According to its phone directory, Afoun is still employed with the Moline Housing Authority.

 

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