LITTLE ROCK, Ark. — A new report sent to Little Rock's public housing authority by the U.S. Department of Housing and Urban Development (HUD) highlights financial and management issues that have persisted for several years.
In the report that was sent on Sept. 1, HUD found that the Metropolitan Housing Alliance had "degradation of internal controls, financial management and reporting practices."
This report, which was conducted by HUD's Office of Housing and Voucher Programs, was designed to make sure Housing Choice Voucher program funds were used properly and to examine the effectiveness of the management and operations.
Based on information of staff who worked at the housing authority in Little Rock, it has been plagued with financial discrepancies that "appear to be prevalent, pervasive, and systemic."
Nearly $30 million of "questioned and potentially disallowed costs" was listed by HUD in the report. Around $20 million in payments for housing assistance were among the amounts flagged.
MHA also appears to be in substantial default of its Annual Contributions Contract which could potentially mean enforcement actions by HUD.
This report comes out after HUD labeled the city's housing authority as "troubled" in August 2023.
Among the financial problems are multiple bank accounts across several banking institutions, including accounts with Simmons Banks that current staff does not have access to. The report noted that it could not find any information on the accounts or their respective funding purposes.
These bank accounts have also led to "no discernable differentiation between the programmatic sources of funding," which looks to have allowed "comingling" of funds that would not be compliant with restrictions across the different programs MHA is in control of.
Financial records between MHA and the Central Arkansas Housing Corporation were also mixed together and HUD noted that there should be "no one at the CAHC instrumentality with authority to withdraw funds from any [MHA] account." The CAHC finance director reportedly was listed on all MHA bank accounts except for one and made transfers between accounts "with no valid reason for doing so."
The CAHC is a nonprofit that was created in October 2006 by the housing authority, which works to develop and construct residential housing in Little Rock.
From March through April 2023, a total of $288,500 was transferred from an MHA bank account into a CAHC bank account. The HUD report also noted that three cash transfers of roughly $105,000 have no information regarding "where these funds were transferred."
A review of credit card charges revealed over $33,000 in "questionable" and "disallowed" costs between Jan. 2022 and Jan. 2023.
The report listed seven findings in total as well as a corrective action plan that must be sent to HUD. The Metropolitan Housing Alliance may submit any sufficient documents if they disagree with the findings within 30 days of the report.