As published in the Record Journal on Friday March 16, 2012
By Dan Ivers
WALLINGFORD – Despite another audit finding significant issues with the Wallingford Housing Authority’s management and accounting practices, the agency’s most vocal critic is finally ready to focus on its future rather than its questionable past.
On Wednesday night, Michael Guyder, of Quincy, Mass.-based auditing firm Hurley, O’Neill & Company, P.C., presented his findings to the Housing Authority’s Board of Commissioners. An annual audit of the agency’s finances and procedures is required because it receives more than $500,000 annually from the federal Department of Housing and Urban Development.
Guyder found that the Housing Authority’s records exposed it to significant risk, but he attributed most of the errors to a lack of understanding of state laws and accounting principles, rather than any calculated attempts to mislead or cover up wrongdoing.
“There was no reason to believe there was any misappropriation of funds, or theft,” he said. “This is an accounting issue and a control issue, and not necessarily something that where there’s malicious intent.”
Among the issues pointed out by Guyder was a pair of bank accounts maintained “off the books.” Records were found indicating balances for the accounts — one for administrative expenses related to the federal Section 8 program and another for proceeds from the sale of the former Ridgeland property — but no related accounting records.
The agency also lacked property records for its Housing Choice Voucher Program (it had been presenting auditors with records provided by Hamden’s housing authority, which administers the program), as well as a system for tracking inventory. Several accounting errors were also uncovered, including $4,400 in security deposit collections that could not be traced to Housing Authority bank accounts and a lack of any record keeping track of extra deposits from tenants who have pets.
The most recent look at the agency’s finances and recordkeeping only adds to a litany of questionable agreements and practices it engaged in under the leadership of former Executive Director Stephen Nere, whose 26-year tenure ended after he accepted a $130,000 buyout in December.
He has admitted that mistakes were made during his time as executive director, but Nere has strongly denied allegations that he intentionally averted state or federal laws and regulations.
Town Councilor Nicholas Economopoulos, who initiated calls to look into the Housing Authority’s practices in 2007, said the audit was not surprising given the various gaps in accounting and questionable procedures uncovered by past probes. All previous audits, including one designed to detect signs of potential embezzlement or theft, have not uncovered any evidence of criminal wrongdoing.
After previous audits, Economopoulos has suggested the board should delve deeper into the agency’s books to uncover the full extent of any potential wrongdoing. However, after Wednesday’s meeting, he said he was ready to join various commissioners in their commitment to focusing on the agency’s future.
“I’m just vindicated. I said that at the least, it would be shoddy record-keeping and bad management. We don’t have the at most, we have the at least,” he said. “The bottom line is we have it, and that’s it. I feel good about what we’ve accomplished.”
Commissioners recently opted not to replace Nere with another full-time director, and hired a full-time property management firm, DeMarco Management Corp., to oversee its finances and 317 units across town. The company has begun reforming many of the agency’s records and procedures, including compiling a master waiting list and implementing specific purchasing policies in line with state and federal laws.
“They instilled a little bit of faith in me, with the way they were running things,” said Economopoulos. “I feel like we’re going in the right direction.”