Board members: More scrutiny for MaineHousing

PORTLAND, Maine -- Maine State Housing Authority board members said Wednesday that a federal audit that found the agency failed to provide adequate oversight of its low-income housing program is further confirmation for them that the agency was mismanaged and is falling short of its mission.

Chairman Peter Anastos and fellow board members Peter Merrill and Bruce Poliquin held a press conference in the State House in Augusta to discuss the audit. Afterward, Poliquin said in a phone interview that MaineHousing will face more scrutiny down the road.

The board has approved hiring a firm to conduct a forensic audit looking at how the agency awarded more than $7 million in contracts for the agency's computer systems, said Poliquin, who is also the state treasurer.

The forensic audit will also look at carbon credits that were collected from Maine houses that were weatherized and signed over to MaineHousing, which then sold the credits to use for additional weatherization programs, he said. The agency could have lost $1 million or more in developing the program, he said.

"The board is refocusing MaineHousing's mission on helping the most vulnerable Maine families with their housing needs and not wasting tax dollars in doing that," Poliquin said.

The quasi-independent agency has been taking heat for more than a year for its spending, payroll costs and expenses deemed excessive by critics. The agency has an annual budget of about $14 million and more than 160 employees.

Former Director Dale McCormack resigned in March, citing a "systematic attack" on the agency by critics on the board.

MaineHousing's new director, John Gallagher, started the job Monday. Rather than a political appointee, he was hired following a search for an affordable housing professional, Anastos said.

Anastos said MaineHousing has been made progress in the past year. Pricing is now part of the formula when procuring new housing and rules for awarding contracts are followed, he said.

But he questioned why the agency delved into something like carbon credits, which he called a "venture capital idea."

"Why were we doing that, getting away from the central mission of providing safe, decent, affordable housing?" he said in a phone interview.

The HUD audit was requested by U.S. Sen. Susan Collins after a weekly newspaper last year exposed substandard Section 8 housing units. The audit found that 53 of 61 housing units that were inspected did not meet federal standards. It concluded that MaineHousing had inadequate management of third parties that oversaw the properties.

As a result, some tenants lived in apartments that didn't meet HUD's standards for "decent, safe and sanitary housing," and MaineHousing officials made at least $194,956 in housing assistance payments for units that didn't meet housing quality standards. The report recommends that MaineHousing repay HUD the money.

MaineHousing agreed that many of the units had substandard living conditions, and said it has since instituted training programs for inspectors and improved communications with local code inspectors and with landlords and tenants.

All units have been repaired, the rent abated or the tenants have moved out, MaineHousing said.