Housing agency censured
By Jim Dooley
Advertiser Staff Writer
The U.S. government this week imposed tight new restrictions on the state's public housing agency, saying "serious management deficiencies" require federal approval before Hawai'i's Housing and Community Development Corp. can award contracts of more than $25,000 or hire new managers.
In addition, the state agency must hire an outside contractor to conduct an independent assessment "to assist in identifying improvements" at the agency, which oversees more than 10,000 state and federally subsidized housing and rental units. It is the first time in five years that HUD has posted a housing official here.
In May, the U.S. Department of Housing and Urban Development cited a number of problems at the Housing and Community Development Corp., including its failure to collect rent payments, maintain and refurbish empty housing units and certify that lead had been removed from dozens of its housing units.
At the time, Michael Liu, HUD's assistant secretary and a former state legislator, ordered the state agency to spend $2 million of its federal grant money to hire an outside contractor.
Liu outlined the new restrictions in a letter sent Tuesday to Sharyn Miyashiro, the state agency's executive director. Miyashiro did not return calls for comment.
Yesterday, Liu met with agency board member Ron Lim and chairman Wesley Segawa, who presented him with a plan to address concerns HUD had raised in audits in each of the last three years.
The plan, developed by Davis Yogi, director of the state Department of Human Resources Development, calls for reorganization of the HCDCH, including hiring a chief financial officer, giving public housing managers more authority, and making sure local procurement procedures mesh with HUD requirements.
HUD is "working cooperatively with HCDCH management to address all the issues," Liu said after the meeting. "We hope to have a very positive outcome. There's a lot of work to be done."
The new restrictions will be in effect "until HCDCH has made acceptable performance improvements as determined by HUD," said Liu, who is attending the First Native Hawaiian Conference this week.
Lim, Gov. Ben Cayetano's special assistant for housing, said the meeting went well.
"We've got problems and we're addressing them," he said, adding that the move would help HCDCH, which has had "tremendous communication problems with HUD" for years.
HCDCH has assets valued at more than $1.5 billion. According to 2000 data, it administers more than 5,000 units of federally subsidized housing and 1,170 state public housing units, as well as 4,363 units of federally subsidized rental units.
The new HUD restrictions stem from the state agency's failure to address problems recently identified by federal auditors. In the last two reviews, HUD officials concluded: "We suspect that poor communications due to a burdensome organization structure may be a significant part of the problem."
Liu noted in May that HCDCH had shown improvement in recent years, but stressed that the reviews "show a pattern of weakness in the (the state agency's) administration of the program."
For example, he said, it has had problems spending all the federal grant money received annually since 1995 for building or improving public housing, and consistently has had to ask for extensions.
Other problems cited by federal auditors: HCDCH has lost nearly $1 million a year because of inadequate rent collection procedures; chronic failure to certify that public housing facilities are free of lead-based paint; and repeated failure to fix problems related to how the agency awards construction and consulting contracts.
Unrelated to the audits, Liu also has accused Miyashiro of violating federal conflict-of-interest regulations in awarding a $768,000 non-bid contract to a company founded and partly owned by her ex-husband, Dennis Mitsunaga, in September 2000.
On Monday, board chairman Segawa defended the award, saying it did not appear to violate federal regulations. Liu responded in another letter sent Tuesday informing Segawa that HUD was conducting an audit of the contract and its award to make a final determination on the conflict question.
