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MaineHousing Audit Cites Lax Management of Section 8 Program
10/02/2012   Reported By: A.J. Higgins

A federal audit has found that past management was lax at the Maine State Housing Authority, and that as a result, dozens of landlords received money for subsidized housing that did not meet approved standards. The audit was released on the same day that a new director takes over at MaineHousing.

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MaineHousing Audit Cites Lax Management of Section Listen

Last December, Maine Sen. Susan Collins personally requested a review by the Housing and Urban Development Inspector General into the Maine State Housing Authority's oversight of its Section 8 program. Section 8 is the federal program that provides rental housing assistance to private landlords through MaineHousing. Collins says the results are unacceptable.

"Regardless of who was doing the inspection, the IG found significant deficiencies - and in some cases serious, life-threatening deficiencies," Collins says.

The IG report concluded that MaineHousing was lax in its oversight of sub-contractors who were hired to ensure that the subsidized units met state and federal housing standards. The reports also concluded that MaineHousing had failed to provide an effective quality control system for its own inspectors, resulting in nearly $200,000 dollars worth of housing payments that should not have been made.

Now the IG is recommending that MaineHousing reimburse HUD for those improper payments. The deficiencies were indentified during the tenure of former MaineHousing Director Dale McCormick, who resigned in March after a stormy 15-month relationship with majority Republicans at the State House and a new board of directors.

John Gallagher started work yesterday as MaineHousing's new executive director, and Collins says the agency is back on track.

"I'm confident that this change in leadership will allow the authority to put an end to the mismanagement of the program, and ensure that low-income families receive safe, healthy and decent housing, and that the taxpayers are not paying for housing that we would all be embarassed to have families live in," Collins says.

"I hope I can help lead the organization into the foreseeable future," says John Gallagher, who's only been on the job for two days. He says he's still trying to gauge many of the finer details involved in the IG's report and find out who was involved.

He said MaineHousing does not dispute the overwhelming conclusions of the audit, but does question some aspects of its methodology, particularly in the process used to determine the $200,000 reimbursement suggestion. Gallagher, the former director of the Westbrook Housing Authority, hopes to negotiate that figure with HUD.

He says his agency has already ended dealings with the independent contractors it once relied on for compliance reports and is now retraining staff to perform those duties to HUD specifications. He wants to know more about how widespread the problems are in Maine's Section 8 housing.

"I'd like to say they got the 53 worst that we have in the syetem, but I think the reality is that the inspectors that are brought in scrutinize things at a higher level than what we had anticipated," Gallagher says.

Much of the IG report blamed poor leadership at MaineHousing for the noncompliance issues. Maine Senate Majority Leader Jon Courtney, now the Republican candidate for the the state's 1st Congressional District, sponsored the bill this year that makes it easier for the governor to review, remove and set compensation for the MaineHousing director.

Courtney says the IG report underscores his argument that the agency needed to be more accountable to the governor. "You know it's never been about an individual," he says. "It's always been about bringing accountability to the authority."

Reached later in the afternoon for comment, former Maine State Housing Authority Executive Director Dale McCormick said her only response to today's Maine State Housing developments was:  "There they go again."

The board of directors for MaineHousing plans to hold a news conference tomorrow to discuss the IG's report.


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