HUD criticizes housing agency
By Jim Dooley
Advertiser Staff Writer
There's a new administration in charge of the state's public housing agency, but allegations of improper spending at the massive department persist.
Federal housing official Michael Liu, who was harshly critical last year of how the Housing and Community Development Corp. of Hawai'i was run under Gov. Ben Cayetano's administration, now has demanded that the agency reimburse the federal government $97,448 that the agency "improperly disbursed" this year.
In a May 14 letter to Charles Sted, whom Gov. Linda Lingle appointed agency board chairman in January, Liu said the agency spent the federal grant money after the spending deadline of March 31 had expired.
Liu ordered that HCDCH reimburse the money by June 14.
HCDCH chairman Sted and acting executive director Robert Hall could not be reached for comment Friday. Attempts to obtain comment from Lingle spokesman Russell Pang and from Lingle chief of staff Bob Awana, who's on the HCDCH board, were unsuccessful.
Liu said in the letter that U.S. Department of Housing and Urban Development personnel also reviewed additional spending by HCDCH this year of some $213,000 in federal drug elimination grant money. Included in that total was about $22,000 spent on four copier and fax machines. Liu noted that use of the machines must be limited to the drug elimination program, but HCDCH's "own justification seems to indicate that this equipment will also be used for other program use."
If that is the case, Liu said, the drug grant program must be reimbursed by "the other programs that will use the copiers and fax machines."
Liu, a former Hawai'i Republican state senator who is now Assistant Secretary of HUD, also warned HCDCH that it has until Sept. 30 to spend an additional $879,115 in drug elimination grant money.
If the money is not spent by the deadline, it must be returned to HUD.
"This large balance indicates significant delays in executing crime prevention programs," Liu wrote in his May 14 letter.
"I advise and expect that the HCDCH will responsibly review and properly justify the expenditure of the remaining grant funds," Liu told Sted.
The housing agency has chronically failed to spend drug elimination grant money in a timely manner, even after receiving deadline extensions from HUD, and has had to give back nearly $750,000 over the past two years.
HCDCH controls more than 10,000 state and federal public housing units. It has been the subject since 1997 of increasingly sharp federal criticisms about its management and fiscal policies, culminating in a demand last year from Liu that the entire HCDCH board, as well as executive director Sharyn Miyashiro, step down.
Miyashiro retired from state service and the HCDCH board of directors resigned en masse, replaced by a new board named by Gov. Linda Lingle in January.
Liu also directed last year that the agency recover $771,000 spent on a housing repair contract awarded by Miyashiro in a way that Liu said violated federal conflict-of-interest regulations.
Reach Jim Dooley at jdooley@honoluluadvertiser.com or 535-2447.
