The good news emerging from the most recent audit of the troubled $1 billion-a-year department responsible for overseeing affordable housing in Los Angeles is a lack of any significant illegal shenanigans.

The bad news, according to City Controller Wendy Greuel’s audit, is that it’s hard to track anything in a department  “fraught with inadequate internal controls and beleaguered by managers who did not prioritize the organization’s finances.”

The Housing Authority of the City of Los Angeles (HACLA), supported largely by state and federal funds, oversees 75,400 affordable housing units and leads the effort to add 30,000 units within the next 10 years.

But it hasn’t done an extensive audit of its extensive inventory of fixed assets for seven years, while becoming embroiled in a series of controversies over spending and management.

Last year, the HACLA board voted to settle a wrongful-termination/whistleblower retaliation claim and paid ousted chief executive Rudy Monteil $1.2 million, including a $540,000 severance package, to go away. Monteil, who had been in the job since 2004, came under fire from the city council last year after unhappy public housing tenants protesting outside his home were later served eviction notices. 

Monteil claimed he was fired after giving HACLA board members notice that they should return thousands of dollars in travel and other reimbursements they obtained without receipts. An audit at the time by Greuel, who is a candidate for mayor,  “revealed that Agency officials were reckless with taxpayer dollars and spent lavishly during the worst recession since the Great Depression.”  

In June, former housing authority official Victor Taracena was caught in Guatemala and returned home to face federal bribery and conspiracy charges related to the steering of $527,000 in contracts to his brothers. HACLA had already won, but not collected, $605,000 in a 2010 civil suit against the family.

In her latest audit, Greuel expressed displeasure with the tone at the top of the department and its lack of a functioning audit committee. The audit said the department doesn’t know how to manage a budget and has lousy financial policies and procedures.

“All of this suggests an agency that is out of control,” she told the Los Angeles Times.

Stephen Box at LA Progressive sort of agrees and has a theory about why it happened. “It’s a familiar pattern of abuse that occurs because oversight and accountability can’t find a place in departments that get their marching orders from the Mayor, implemented by General Managers who serve at his pleasure and condoned by Kabuki Theater Commissions armed with rubber stamps.”

But Box predicted a year ago that the authority’s problems would eventually fade.

“The Housing Authority of the City of Los Angeles (HACLA) is the latest department to fall victim to the oversight and accountability scrum that starts when the media shines a spotlight and concludes when the public gets bored,” he wrote.

–Ken Broder

To Learn More:

L.A. Housing Authority Rife with Fiscal Mismanagement, Audit Finds (by Jessica Garrison, Los Angeles Times)

Audit of the Financial Operations of the Housing Authority of the City of Los Angeles (Los Angeles City Controller) (pdf)

FBI Arrests Former L.A. Housing Authority Official (by David Zahniser, Los Angeles Times)

Ousted L.A. Housing Authority Chief Leaves with $1.2 Million (by David Zahniser and Jessica Garrison, Los Angeles Times)

LA’s Scandalous Housing Authority: For Better or For Worse (by Stephen Box, LA Progressive)