By Seth Daniel
The Chelsea Housing Authority (CHA) has had a tough run over the last four years.
There has even been federal legislation adopted in its name – and not for a positive reason.
But all of that is likely in the rear-view mirror now, officials at the CHA said last week, announcing that they have corrected all but two problems that came out of the scandal that rocked the CHA and the entire state four years ago when former Director Michael McLaughlin was at the helm.
Now with McLaughlin in jail for crimes committed while running the CHA, the organization has worked hard, Director Al Ewing said, to recover from that and move on.
“Over the last four years we’ve been dealing on a daily basis with the major audits with HUD (Housing and Urban Development) and the Inspector General’s audit,” said Ewing. “All of the concerns have been addressed and cleared out now with the exception of two that are being followed up on…We haven’t really been tooting our own horn on this because we’ve been too busy.”
The only two outstanding issue out of scores of issues identified by the state, federal and independent auditors in the wake of the scandal are the exorbitant pay of McLaughlin and his pension, as well as the outstanding Capital Funds that were misused by the former regime.
The latter was perhaps the biggest piece of the scandal once things were uncovered. Millions of dollars were alleged to have been spent inappropriately from federal housing funds provided by HUD. Things were so murky at the time that no one could really pinpoint how much was used incorrectly and where it was used.
It took years to figure that out, and now even though it hasn’t been fully resolved, that has been a good piece of news. That’s because HUD has reduced the overall payment from $7 million to $2.2 million.
“Originally HUD had stated that $7 million was spent on ineligible things,” said Ewing. “The Board here did vote for an independent auditor to come in and look at that. It turned out that instead of $7 million, it was $2.2 million. HUD has now agreed that is the number and we’re dealing with that now. We certainly don’t want out residents to be victimized by giving that money back to the government and them not benefitting from it. So, we’re working to try to make sure that money goes back to the ongoing programs for our residents and they can benefit from it.”
The second outstanding issue, with McLaughlin’s pay, cannot be resolved until he is released from jail and he can appear before the Chelsea Retirement Board in person.
Board Chair Tom Standish was one of the new Board members brought in to replace the former Board – which was also charged with wrongdoing. He said it has been a much longer process in unpeeling the onion of the CHA than he ever thought.
“I’m glad to see the resolution of this episode of the CHA,” he said. “It’s been long in coming and a lot of hard work by the CHA staff. We did get a big boost by having the independent audit done. They were able to identify where the money came from in the $7 million and help us prove it needed to be down at $2.2 million. I can’t wait to get moving forward. When I came on this Board, it was my intention to be moving forward. I remember talking with Al at the beginning and saying I wanted to get it resolved by that first Christmas.”
The independent audit referred to above was a real turning point in the story of the CHA. The financial books were such a crisscrossed mess that it wasn’t easy to figure out what money was allocated where, if money was missing and how it was that McLaughlin engineered his exorbitant salary.
In order to make sense of it all, the CHA Board voted to bring in an outside professional to compare the state and federal audits.
“It’s been a challenging and long process,” he said. “They key was when the Board of Commissioners voted to for an independent auditor to come in and look through all of that. HUD was looking for us to do it and we didn’t have the staff to do it…It was overwhelming, but we got through it. We were able to go back and clear out the things we could so we could go forward with a clean slate. That’s what we’re exciting to be doing now.”
In fact, Deputy Director Diane Cohen said things have gotten so much better at the CHA that HUD actually calls them up to advise and consult agencies that have fallen into the “troubled” category. After being in the “troubled” category uniformly, the CHA has been an “high performer” over the last three years.
“We actually are called to help other agencies and offer advice,” she said. “it’s a great compliment that HUD would call us – the Chelsea Housing Authority – to go help and consult with troubled housing authorities. That’s an extreme turnaround.”