Housing agency could lose $25 million in HUD money
By Jim Dooley
Advertiser Staff Writer
The state public housing agency's refusal to refund $771,000 to the federal government could mean a shutoff of more than $25 million in annual federal money to the agency, U.S. Department of Housing and Urban Development official Michael Liu warned yesterday.
Liu demanded a return of the money on Nov. 1, saying an audit of the Housing and Community Development Corp. of Hawaii found that the money was improperly spent on a non-bid contract awarded 2 1/2 years ago by HCDCH executive director Sharyn Miyashiro.
Liu wanted the money refunded by Nov. 15, but HCDCH board chairman Wesley Segawa told Liu the board did not believe the money was misspent and that the state housing agency intended to conduct an independent cost analysis of the contract before issuing any refunds.
However, Liu pointed out that federal officials who reviewed the contract and noted its discrepancies "are experts in their field. Their findings stand."
Continued failure to refund the money "will serve to disqualify HCDCH from other HUD programs," Liu told Segawa. "I strongly urge HCDCH to reconsider its response to this issue."
HUD money account for more than 75 percent of HCDCH's yearly net income, according to the agency's financial statements, and the state agency has assets valued at more than $1.5 billion.
Board chairman Segawa said yesterday through HCDCH spokesman Darrell Young that Liu's letter "appears to address the same comments and concerns" he previously raised and that the board has already responded.
The board held a special meeting yesterday to discuss a series of issues related to federal criticism of the agency, including promotion of HCDCH executive assistant Robert Hall to the executive director's job.
Federal auditors recommended that HCDCH board members, executive director Miyashiro and Hall resign or be removed by the end of the year and Liu said in his Nov. 1 letter that he concurred with that recommendation.
Miyashiro has resigned effective at the end of this week. Hall has not responded to Liu on the resignation issue.
All board members except public housing residents' representative Aipopo Aipopo Jr. have said they will resign by Dec. 31.
Aipopo told Liu he wants to continue serving, but Liu said in his letter yesterday that HUD would be "contacting this board member directly to urge him to comply with our request voluntarily."
Liu sent a copy of yesterday's letter to governor-elect Linda Lingle, who takes office next week.
Lingle said yesterday she wants to speak directly to Liu before taking any formal actions as governor involving HCDCH.
Reach Jim Dooley at jdooley@honoluluadvertiser.com or 535-2447.
