PITTSBURGH — An attorney who was hired to investigate Butler County Housing and Redevelopment Authority executive director Perry O’Malley continued to testify at O’Malley’s appeal hearing on Thursday.

Neva Stotler of the Sewickley firm Cafardi, Ferguson, Wyrick, Weis & Stotler testified that O’Malley gave out loans to outside entities that could not be collected.

O’Malley was fired two months after he was placed on leave. During his leave, Stotler investigated O’Malley for the authority’s board. O’Malley was fired in March, with the board accusing him of abusing travel and sick time, neglecting his duties and using authority resources for private business endeavors. O’Malley later appealed, claiming he was fired for his age and political affiliations.

Some of the loans Stotler testified about included $237,300 to the City of Butler Redevelopment Authority related to a Pillow Street project, which she said could not be collected; $100,502 to the city redevelopment authority related to the Centre City project, which she said was the remaining balance of what has not been paid back; and $87,150 to the group that runs Pullman Park, which she also said could not be paid back.

Paul Mazeski, O’Malley’s attorney, objected, asking if Stotler was in a position to say the loans were uncollectible. Odelfa Smith Preston, the commissioner hearing the case, said that was a conclusion that Stotler drew in her report.

Stotler said, based on a report by a CPA in her office, that the loans were unable to be collected. She said that the money for these loans appeared to come from a $1 million line of credit with NexTier bank, and said that the terms of the credit line only allow that money to be used for authority projects.

Stotler detailed a pre-disciplinary meeting with O’Malley in March before he was terminated.

When she asked about his travel schedule, she said O’Malley said the authority should have been reimbursed for extra travel days outside of conferences. Stotler said documents showed that the authority never was reimbursed for extra days.

When she asked about using a credit card for HARIE — an insurance organization that O’Malley was involved in — during authority trips, Stotler said O’Malley said it was none of her business. She also asked about a cabana rental at the Bellagio in Las Vegas during a conference — which she testified about last month. She said O’Malley said he saw both authority and HARIE clients in the cabana.

When she asked him about giving loans to outside organizations, she said he told her that he was working to renegotiate the terms of the authority’s credit line.

Andrew Menchyk, the authority’s solicitor, asked Stotler if O’Malley discussed responsibility of the financial issues Stotler brought up in her report to the authority’s board. Stotler said he blamed those on David Schnur, the authority’s former controller who resigned early this year and made the initial complaint against O’Malley that caused the board to hire Stotler.

Stotler said she deemed O’Malley’s blaming of Schnur to not be credible, because during the meeting, O’Malley said he ran the authority and had control over every issue.

Some of her testimony discussed a project at the Terrace Apartments. She said that the actual budget for the project exceeded the projected budget and said HUD was unhappy with how the project was going, saying that some milestones were missed.

During Mazeski’s cross examination, Stotler told him that the project was an “unholy mess,” and led to elevated stress among employees.

Mazeski asked if Stotler interviewed O’Malley during the investigation. She said she did not.

“He didn’t make himself available,” Stotler said, saying she contacted his attorney at the time to no avail.

Stotler previously testified that O’Malley would use his authority e-mail address for his private company, the Pennsylvania Affordable Housing Corp. When asked by Mazeski, she said that O’Malley sometimes would refer people who e-mailed about PAHC business on his authority e-mail to his PAHC address, but said he did not do it consistently.

Mazeski went over the authority’s employee policy on cell phone usage, since Stotler testified that O’Malley used his authority-issued phone for running PAHC.

The policy says that the phone should be used primarily for authority business. Stotler says this anticipates phone usage for non-authority purposes — such as calling a family member sometimes — but said that is different from using it to run a private business.

Mazeski asked her who the supervisor of the executive director is. She said it is the board. Mazeski noted that the employee policy said that employees’ performance could be reviewed. Stotler said she believes O’Malley may have been reviewed by the board, but did not think it was an unfavorable review.

When asked about the travel budget, Stotler said it is a line item in the general budget, so no specific trips are outlined for the board.

Mazeski asked if O’Malley — before being put under investigation — was told by the board his travel, sick time use or vacation time use was inappropriate. Stotler said he was not.

He asked Stotler if O’Malley’s travel and expenses ever were not approved by the board. She said the board never told him to stop traveling or that any trips were inappropriate.

Preston said that the commission’s position is, if it is a board’s job to approve financial statements, then it is accepting responsibility for them when it approves those statements.

Menchyk then called Karen Druschel — the executive secretary of the authority for 21 years — to the stand.

In her position, she had access to O’Malley’s calendar, time sheets and e-mail, and had her desk positioned just outside his office. She said he was out of the office “frequently.”

She testified that O’Malley made all of the decisions in the office, and employees would have to wait until he returned before any decisions could be made. She also said he would get phone calls related to PAHC a few times per week in his office.

Druschel said O’Malley would get in the office at around 10 or 10:30 a.m. and leave by 3 or 3:30 p.m. She said O’Malley would instruct her to mark down seven hours of regular time for him each day, unless he told her to mark down vacation or sick time.

When Menchyk asked about travel related to HARIE, Druschel said O’Malley would go on trips related to that group a few times a year, and they would last four to five days. During these trips, she said O’Malley told her to mark seven hours each day of regular time, saying they were authority-related trips.

She testified that his time sheets never went to the board and the board never saw them.

An additional date for the hearing is scheduled for Nov. 5.