Watchdog agency finds no wrongdoing at MaineHousing after months of furor

By Matthew Stone, BDN Staff
Posted May 25, 2012, at 1:13 p.m.

AUGUSTA, Maine — A review by the Legislature’s watchdog agency,

the Office of Program Evaluation and Government Accountability, has found no indication of fraud or wrongdoing at the Maine State Housing Authority, but has turned up a number of expenditures that had no clear connection to the authority’s mission.

The OPEGA review presented to the Legislature’s Government Oversight Committee on Friday examined a sample of MaineHousing expenditures over a five-year period totaling $4.3 million.

While the analysis called a number of expenditures into question, “we judged substantially all of the $4.3 million sampled by us to be generally consistent with MaineHousing’s mission and primary activities,” OPEGA Director Beth Ashcroft told lawmakers.

“We found no indications of fraud,” she said.

The review focused on authority spending on sponsorships, travel and meals, organization memberships and contributions to outside groups from 2007 through 2011. It also included an examination of all expense reimbursements paid to Dale McCormick, the authority’s executive director who resigned in March, and statements from the agency’s two corporate credit cards.

MaineHousing’s current annual operating budget is about $14 million, which is funded through investment revenue, interest fees on mortgages and fees the authority collects for administering federal programs.

The OPEGA review called on MaineHousing to examine the amount of money it spends on out-of-state conferences, organizational memberships, business meals for authority employees when they’re not traveling and food and refreshment purchases for staff members at meetings and events.

“They go and get a sandwich or they go down to a restaurant and they have their lunch and business discussion there,” Ashcroft said of the nontravel meal spending. “Do you have to have the meeting over lunch? We’re questioning it because state agencies don’t typically pay for it.”

The Government Oversight Committee requested OPEGA’s “rapid response” review of MaineHousing expenditures in January amid a firestorm of criticism directed at the quasi-public agency by State Treasurer Bruce Poliquin, authority board members and the Maine Heritage Policy Center alleging inappropriate and wasteful spending.

The authority’s expenditures came into question following the release of documents obtained by the Maine Heritage Policy Center showing authority expenditures at high-end hotels for conferences and contributions to outside advocacy organizations.

While its review doesn’t point to a pattern of lavish spending, OPEGA did say that the housing authority should require more detail from employees seeking expense reimbursements, cut back on employees using personal credit cards for business expenses and better document all expenses and make sure they directly relate to its mission.

The OPEGA review found at least four instances, totaling almost $2,800, in which MaineHousing unintentionally reimbursed McCormick for the same expense twice.

In the two largest instances of duplicate reimbursements, totaling more than $2,600, according to OPEGA, McCormick noticed and repaid MaineHousing.

Lawmakers on the Government Oversight Committee said they were relieved to hear no evidence of wrongdoing, though Democrats and Republicans disagreed on the extent to which MaineHousing should change its spending practices.

“I don’t see anything here that alarms me. There’s a few housekeeping issues,” said Rep. Donald Pilon, D-Saco. “I feel confident everything will be taken care of. We can move on here.”

Rep. David Burns, R-Whiting, said the OPEGA review pointed to a “laissez-faire attitude” on spending “somebody else’s money.”

“Things really needed to be brought to light and some procedures needed to be changed,” he said.

MaineHousing staff and board members say the agency is already working to rein in its spending and travel practices and implement OPEGA’s recommendations, partially in response to newly passed legislation that more closely regulates the practices of quasi-public agencies like the housing authority.

“They’re easy to do,” said MaineHousing’s interim executive director, Peter Merrill. “They’re appropriate.”

While MaineHousing’s spending practices didn’t amount to wrongdoing, Merrill said the housing authority’s staff and managers got into certain spending habits, and the OPEGA review helped to bring them to light.

McCormick couldn’t be reached for comment Friday afternoon.

The presentation of OPEGA’s findings on Friday came less than a day after Maine’s Majority, a Portland-based nonprofit organization, published several emails among Poliquin, MaineHousing Board Chairman Peter Anastos, Maine Heritage Policy Center staff and others that the group said pointed to collusion among government officials and the conservative center to force out McCormick for political reasons.

In the emails, Poliquin and a Department of Economic and Community Development staffer discuss publicizing MaineHousing in the national media in order to “help boot Dale out,” and Maine Heritage Policy Center staff members discuss vendor records and other MaineHousing documents they’ve obtained with Poliquin and Anastos.

McCormick was the last appointee of Gov. John Baldacci serving as the head of a state agency.

http://bangordailynews.com/2012/05/25/politics/mainehousing-report-finds-no-wrongdoing-some-questionable-expenditures/ printed on September 21, 2014