Audit Unveiled This Year Claimed All Was Well

A Chelsea Housing Authority (CHA) audit released earlier this year by State Auditor Suzanne Bump should have – under its own listed parameters – uncovered the excessive salary payments given to former CHA Executive Director Michael McLaughlin.

Apparently though, it did not, and the Auditor’s Office is not commenting on the matter.

Shortly after taking office in January, Bump sent out a press release indicating that there were several audits that had not been completed by her predecessor, former State Auditor Joe DeNucci. She indicated that her office had picked up those uncompleted audits, finished them and was making them available to the public.

The Record received a copy of that completed audit at that time, and according to that audit certified by Bump’s office and signed by her – everything was A-Ok.

That was trumpeted in a cover letter sent on January 31 to former Board Director Henry Cordero and cc’d to McLaughlin.

“Our tests in the above-mentioned areas disclosed no material weaknesses,” read the audit cover letter. “Based on our review we have concluded that – during the 30-month period ended June 30, 2010, the Authority maintained adequate management controls and complied with applicable laws, rules and regulations for the areas tested.”

On Tuesday, Bump’s office said that they hadn’t been contacted about the audit, but that they were taking a second look at it.

However, they said they could make no comment on it for the record as the audit is now part of the official McLaughlin investigation by Attorney General Martha Coakley.

“Unfortunately, our ability to comment is fairly limited at this time as the full report and full audit have been forwarded to the Attorney General’s Office and made part of her investigation,” said spokesman Chris Thompson. “Due to the ongoing investigation we are unable to speak about the audit of the CHA.”

The areas that were tested in the audit and were listed in the cover letter were perhaps the most jaw-dropping, given what is known now. One particular area involved checking the approved budget with the actual expenditures.

“We reviewed DHCD (Department of Housing and Community Development) approved operating budgets for fiscal years in comparison with actual expenditures to determine whether line item and total amounts by housing program were within budgetary limits and whether required fiscal reports were submitted to DHCD in a complete, accurate and timely manner,” read the audit cover letter.

Of the 14 areas examined and outlined in the letter, the above area and two others appeared as if they would have easily uncovered McLaughlin’s practices.

The other two notable areas were:

•We reviewed Authority expenditures to determine whether they were reasonable, allowable and applicable to the Authority’s operations and were adequately documented and properly authorized in accordance with established criteria.

•We reviewed procedures for making payments for payroll, travel and fringe benefits to verify compliance with established rules and regulations.

One stipulation in the audit listed by Bump, though, is that the audit was mostly done by DeNucci. However, her office did complete the audit and she did certify it shortly upon taking office.

Housing authorities statewide are required to be audited by the State Auditor every two years. The above audit covered the years 2008 to 2010.

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