The U.S. Department of Housing and Urban Development wants the La Joya Housing Authority to fix a myriad of financial and management problems.
HUD sent the housing authority a letter on Halloween, asking the housing authority to take “corrective action” within 30 days — and provide HUD with proof.
The letter summarized problems identified during a 2018 audit, which revealed the housing authority improperly transferred funds between accounts, allowed people to skip the waiting list as “political favors,” and couldn’t find minutes from board meetings.
The housing authority board may hold a meeting next week to discuss the letter and approve resolutions that HUD requested.
“It’s not comfortable. It’s not easy,” said Executive Director Ruben Villarreal. “But it needs to get done.”
Two sources provided the Progress Times with copies of the letter, which is dated Oct. 31 and signed by HUD Office of Public Housing Director David Pohler, on the condition of anonymity.
The letter summarized audit findings from 2018, when Interim Executive Director Frances A. Salinas, the daughter of Mayor Jose A. “Fito” Salinas, supervised day-to-day operations.
The housing authority board fired Frances Salinas in October 2018. She denied any wrongdoing.
Cristi LaJeunesse, a consultant who serves as executive director of several South Texas housing authorities, served as executive director for the last three months of 2018.
The housing authority board approved the audit, which noted a laundry list of financial and management problems, in May.
Auditors determined the housing authority improperly transferred $7,500 from the Section 8 account and $12,000 from a public housing account to the housing authority’s non-profit account.
HUD asked the housing authority to “provide evidence showing $7,500 of Section 8 program funds and $12,000 of Public Housing program funds transferred to the Nonprofit Corporation are restored back to their respective program accounts,” according to the letter. “Please provide a copy of the Board’s Resolution which documents the action the Board will take to address this Finding.”
Villarreal, however, said the housing authority can’t transfer the money.
“The money doesn’t exist,” Villarreal said, explaining that the non-profit account is empty. “It’s just that simple.”
HUD also asked the housing authority to address concerns about political interference.
“During the course of the audit, we were informed of fraudulent activity that involved several Public Housing Tenants who were selected from the wait list out of order as ‘political favors’ and the employees were instructed by the previous Executive Director to select tenants that did not comply with the criteria listed above,” according to the letter, which summarized the audit findings. “The above condition resulted in the Authority being out of compliance with federal regulations. The condition was caused by an ineffective control environment led by management override of control processes. The staff we spoke to indicated they feared for their job security and knowingly violated federal regulations.”
The letter asked the housing authority to pass a resolution addressing the situation.
“There’s really no excuse for that happening,” Villarreal said, adding that people shouldn’t skip the waiting list. “It’s not the way the system is supposed to work.”
While the housing authority will comply with HUD’s request, Villarreal said that actually fixing the problem will require the housing authority to foster an environment that promotes honesty.
“A lot of that goes straight to the integrity of the organization,” Villarreal said, adding that no written policy will prevent someone with bad intentions from bypassing the system.
Perhaps the most serious problem addressed in the letter involves housing authority board meetings.
Auditors couldn’t find any minutes from board meetings after Dec. 31, 2017.
“Within 30 days from the date of this letter, please provide copies of the Board Minutes for the last six months of the PHA’s current fiscal year end,” according to the letter, which uses the acronym PHA for Public Housing Authority. “Provide evidence showing the Board Minutes are also being retained and backed-up in electronic format. Also, please provide a copy of the Board’s Resolution which documents the action the Board will take to address this Finding.”
Villarreal said he couldn’t find meeting minutes from before he accepted the job in September but would keep proper minutes going forward.
This article originally appeared in the Friday Nov. 15, 2019 issue of the Progress Times.