6/4/12

Setting Record Straight about Maine State Housing Authority

Office of the State Treasurer <statetreasurer@subscriptions.maine.gov> Reply-To: Office of the State Treasurer <statetreasurer@subscriptions.maine.gov> Mon, Jun 4, 2012 at 9:03 AM

Dear Friend, As State Treasurer, and a Commissioner of Maine State Housing Authority (MSHA), I was relieved last week when the limited review by the Office of Program Evaluation and Government Accountability (OPEGA) found no indications of fraud in its narrow assessment of the 2007-11 MSHA expenditures for sponsorships, donations, memberships, conferences, and travel/meal expenses. As stated on Page 1, the rapid response review was not intended to be a comprehensive review of all MaineHousing expenditures, but rather a focused review of the specific expense areas identified as concerning by the GOC (the Legislatures Government Oversight Committee). Unfortunately, the OPEGA report also confirmed a pattern of wastefully spending taxpayer dollars at MSHA. A recent newspaper editorial and statements by a some state legislators accused the new (MSHA) board of conducting a witch hunt to remove the former executive director. Nothing could be farther from the truth. Its never been about politics or personalities, or anything of the sort. Its always been about helping the most number of vulnerable Maine families by stretching every precious taxpayer dollar. Within its narrow five-year 2007-11 data sample, the OPEGA review confirmed that $458,411 was spent on sponsorships and donations to 73 organizations, some of which did not appear to have a direct or clear connection to MaineHousings mission. $50,000 was spent on business travel by the former executive director covering 40 out-of-state and 2 international trips, with some that might be questioned as to their necessity. $115,069 was spent on conference registration, travel, and meals for 62 employees attending 89 mostly out-of-state events, with some conferences seemed only indirectly related to the (MSHA) mission. $309,409 was spent on all-day team building events, diversity training, holidayretirement-birthday celebrations, and other professional development activities, with OPEGA questioning if some expenses were necessary uses of MaineHousing funds. I reject the argument that such spending should be measured against the MSHA $14 million annual operating budget. Any amount of wastefully spending someone elses money is just what it is -- wasteful spending. This is Maine; every dollar counts. Plus, the money doesnt belong to government. It belongs to the Maine taxpayers, and they work darn hard for it. Beyond the demonstrated pattern of wasteful spending at MSHA, theres an important question not asked in the OPEGA report: Has MSHA lost its focus to use shrinking taxpayer dollars to help as many of Maines most vulnerable families as possible with their critical housing needs?
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One year ago at a board meeting, I asked two straightforward questions: What is the cost of each 1,100-square-foot affordable apartment paid in great part by taxpayer dollars flowing through MSHA? Are there any needy Maine families waiting for those apartments? The answers stunned me. The units cost up to $292,000 each. (Some new budgeted apartments were to cost $314,000 each.) There are roughly 6,500 vulnerable Maine families on waiting lists to receive low-income apartments. Another 800 fellow Mainers sleep in homeless shelters on any given night. The new MSHA board is acutely aware of this growing problem, and is addressing it. The board has been working quickly and diligently with the staff to rewrite the building standards to drive down the cost to construct low-income housing in Maine, so more desperately needed units can be built. Expensive solar hot water heaters are no longer required. Costly and unnecessary green building standards have been eliminated. Extra consideration is given for projects located within roughly one quarter mile of a bus stop, instead of more expensive in-town locations. Bonus points are awarded to projects that include financial incentives to reduce the cost to build the low-income apartments. Cost over-runs are no longer regularly approved. We expect the impact of these changes to be lasting: Help more at-risk Maine families while treating the taxpayers fairly. The new board is closely examining all MSHA programs to ensure they advance the long-held mission of using limited taxpayer dollars to help the most disadvantaged Maine families secure safe places to call home. Were assessing the viability of the speculative carbon trading scheme developed over the past few years, which hopes to generate funds to weatherize Maine homes. Was more than a million dollars already spent on computer systems and carbon consultants worth the cost and distraction from our core mission? What about the ongoing cost and staffing for this futuristic program? The new MSHA board is working with the staff to refocus on the critically important Section 8 housing program. These apartments are targeted to help provide safe and livable housing for the most vulnerable among us, many one step away from homeless shelters. The rent for these units is subsidized by taxpayer dollars. MSHA is paid by the federal government to inspect these 3,200 apartments across the state. Six months ago, newspaper articles and photographs documented horrid living conditions at some Section 8 units in Oxford County. Holes in roofs, exposed electrical wires, inoperative plumbing, collapsed fire escapes, and the presence of bats and rats. Recently, the board learned that management has known about these problems for roughly four years. The federal Department of Housing and Urban Development (HUD) is now inspecting all 3,200 apartments. Its possible that MSHA could be required to repay HUD for past monies received to inspect the apartments. Its also possible that MSHA will be restricted from performing such inspections going forward. During the past few years, the Authority took its eye of the ball and failed miserably in the implementation of this key program to help some of our most vulnerable citizens. Last week, the new MSHA Audit Committee discovered that a computer system designed to administer the home heating oil distribution program for the needy (LIHEAP) might not be secure enough to protect confidential personal information. The Social Security Administration could shut down the multi-million dollar system installed during the past few years. The work at Maine State Housing Authority is important and serious business. The Authority is often the last buffer between our most vulnerable families and homelessness. The new board is being truthful about the Authoritys problems, and is helping to fix them. In doing so, it is also holding our public officials accountable to the taxpayers who foot the bills. Thank goodness the narrow OPEGA review last week showed no illegal activity at MSHA. It did, however, confirm wasteful spending of limited taxpayer dollars. And, sadly, MSHA itself has shown how disadvantaged Maine families can be overlooked when an organ of state government loses its focus. We can do better, and we are.
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Best wishes, Bruce Poliquin Maine State Treasurer

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