Glen Cove Housing Authority loan, spending prompt HUD audit

An audit by the U.S. Department of Housing and Urban Development Office of Inspector General says more than $100,000 from the sale of Glen Cove Housing Authority property cannot be accounted for, and the inspector general criticized the authority for a loan of more than $900,000 “for activities that did not benefit its residents.”

The audit stemmed from how the housing authority used more than $900,000 of about $3 million it received from the sale of 19 properties. HUD had approved spending the money on upgrades of remaining housing units, a child care center and an indoor playground. Instead, the authority loaned the money to its nonprofit entity to buy and pay the operating expenses for three New Jersey properties — one of which it sold later — and another property “approximately 11 miles from the Authority.”

“The Authority did not properly record the loans in its books and records,” said a Jan. 19 inspector general report on the audit.

The authority, a nonprofit public benefit corporation under HUD’s jurisdiction, owns and operates 212 housing units in Glen Cove.

In a Dec. 19 response to the findings, housing authority executive director Eric Wingate said plans for the day care center and playground fell through because of increased land prices, a lack of government funding for the projects and a dispute with a developer.

Wingate wrote that he had discussed the change in the use of the funds with HUD officials verbally, but acknowledged not sending the correct written forms to HUD.

In an evaluation of Wingate’s response, the inspector general said the authority did not provide evidence of verbal meetings with HUD.

The inspector general’s office said in an email that it cannot speculate what action HUD would take as a result of the audit.

HUD issued a statement Friday that the agency “is working with the Glen Cove Housing Authority to implement internal controls and policies that ensure taxpayer dollars are used for their intended purpose.”

Wingate declined to comment beyond what is in the 10-paragraph letter, except to say he has been meeting with HUD officials and “we’re taking care of everything they want.”

He declined to say why the authority has a nonprofit entity and what it is used for. When asked why the nonprofit entity purchased property in New Jersey, Wingate ended the phone call.

Wingate said in his written response that he would provide HUD with documentation on how the $108,061 unaccounted for was used. He also said he would formally request retroactive approval for more than $815,000 in outstanding unauthorized loans to the nonprofit, as the audit report recommends, and retroactive approval for spending.

The authority sold the 19 two-unit properties on Lee Gray Court in Glen Cove between 2011 and 2013, documents show.

Some of the proceeds were used properly for upgrades in remaining units, an outdoor playground and “other uses that would benefit the Authority’s residents,” the audit said.

The inspector general said the authority used $61,545 in property-sale proceeds for a HUD program aimed at expediting repairs to public housing without the agency’s approval, and that it used more than $11,000 for “ineligible costs,” such as charitable donations, holiday parties, nonprofit work and a summer camp. Wingate said he would seek retroactive approval for the $61,545 and a HUD waiver for the other expenditures.