CHA wants to get off HUD's list of troubled agencies

A year after the Chattanooga Housing Authority was listed as a troubled agency, officials say they have improved its financial position and paid back mismanaged funds.

CHA officials say they look forward to getting off the troubled list within a year if the agency is able to negotiate its debt with Fannie Mae.

"I'm very proud of where we are right now," said Betsy McCright, CHA's executive director. "We recently finished making the repayments required by the Office of Inspector General audit report."

McCright said the agency has repaid $1.4 million to its Housing Choice Voucher, Low Income Housing and other CHA programs after money was pulled from them illegally to make payroll in previous years.

And the housing agency is in negotiations to settle a $3.6 million debt to Fannie Mae after CHA also admitted making payroll with money that Fannie Mae intended to fund a condominium project.

On Thursday, McCright said she sent a letter to the U.S. Department of Housing and Urban Development requesting that, since the debt is repaid, HUD no longer require CHA to submit monthly reports for the Housing Choice Voucher Program, Low Income Public Housing and Central Office Cost Center to the HUD office in Nashville.

HUD also requires CHA to account for all expenses related to non-HUD activities separately and prove that those expenses are not paid with HUD funds. CHA said it has done that and is asking that those requirements be lifted, too.

HUD Program Center Coordinator Charles Barnett, to whom McCright's letter was addressed, could not be reached for comment last week.

McCright sent the letter on the same day that The Associated Press reported that Chattanooga was one of 149 housing agencies nationwide deemed troubled by HUD. Among problems uncovered at agencies across the country were lack of a budget, untrained staff, shoddy record-keeping and more, the AP said.

CHA was put on the troubled list in 2009 after a HUD Inspector General report found that money intended for other uses was diverted by former CHA administrators to pay daily operating expenses.

Expenses were out of control largely because of "excessive" raises and severance packages for CHA administration staff members, according to the report.

Most of the monetary diversions, which occurred between Oct. 1, 2004, and Sept. 30, 2008, appear to have been made without the knowledge of CHA's board of directors, the report said.

It was board member James Sattler's public questioning of CHA's previous administration that began to unravel the housing authority's money management problems.

Sattler said he's satisfied with the steps that CHA officials have taken to correct the problems and that he's not going to request any more investigations into previous CHA boards.

"I'm not going to try to look back to the evaluation of the previous board," he said Thursday. "I'm just going to say that this board has been very active in what they're doing. And there is forthrightness from the executive level of the housing authority."

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