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Housing agency's spending lapses point to bigger issues

News from Philadelphia is not always of interest to people in Western Pennsylvania. But the latest political scandal involves the alleged misspending of millions of federal taxpayer dollars. That should be of interest here and around the country.

The scandals surrounding the Philadelphia Housing Authority are yet another example of the problems that can arise when governmental agencies are spending “other people’s money,” or OPM. Too often, government officials spend taxpayers’ money like Monopoly money. After all, it’s not their money, so why should they worry about how it’s spent?

The latest report involving OPM, released earlier this week, said that almost none of about $1 million in renovation work done on 10 houses was supported by receipts. The audit, by the federal Department of Housing and Urban Development, said the lack of receipts and questionable spending of $1 million in renovation work raises questions about how the PHA spent $127 million in federal economic stimulus funds.

The fiscal clouds over the PHA’s spending first appeared last year when it was learned that the agency spent $900,000 in public money to settle sexual harassment lawsuits filed against then-director Carl Greene.

Since then, Greene is gone and the PHA board, headed by former Mayor John Street, has resigned. The program is now being controlled by HUD.

A third federal audit of the PHA has raised questions about conflict of interest in awarding contracts.

The reports of financial mismanagement, conflicts of interest and lack of accountability in spending taxpayers’ dollars has attracted attention in Washington, D.C., where Sen. Chuck Grassley, R-Iowa, to his credit, is putting pressure on the PHA and other housing agencies regarding mismanagement of taxpayer dollars.

The Philadelphia housing agency, like most around the country, is dependent on federal tax dollars for its funding. The PHA is due to receive $371 million from HUD this year.

Beyond Greene using PHA money to settle sexual harassment suits, it was revealed that under Greene, the PHA paid more than $33 million to well-connected law firms in the city over a three-year period.

Greene also attracted attention for spending lavishly on gifts and entertainment for PHA employees, including $300 luxury tote bags.

It’s also been revealed that the PHA spent $9.6 million to settle the lawsuit over a 12-year-old child who nearly died of an asthma attack alleged to have been triggered by mold in a PHA home that was given a passing grade by inspectors.

Given the questionable spending, outrageous legal expenses and lack of receipts for renovation work done by the PHA, auditors from HUD say the Philadelphia agency should reimburse the federal government millions of dollars.

And the fraud and waste at public housing agencies is not just a waste of money. The mismanagement hurts the people these agencies were designed to help, the urban poor.

Federal officials can and should be criticized for a failure to impose reasonable financial oversight to monitor spending at federal housing agencies. Philadelphia might be among the worst, but there are reportedly major problems in other cities.

At least now, with three federal audits pointing out shocking waste and financial mismanagement, there is a chance to clean up and reform these programs. Making PHA and other housing authorities repay money that was not properly documented, or cutting budgets for agencies where spending is suspect, would be a good motivator for change.

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