{"id":26483,"date":"2011-02-24T09:25:38","date_gmt":"2011-02-24T16:25:38","guid":{"rendered":"http:\/\/www.nmpolitics.net\/index\/?p=26483"},"modified":"2011-02-24T22:11:36","modified_gmt":"2011-02-25T05:11:36","slug":"audit-reveals-more-housing-authority-problems","status":"publish","type":"post","link":"https:\/\/nmpolitics.net\/index\/2011\/02\/audit-reveals-more-housing-authority-problems\/","title":{"rendered":"Audit reveals more housing authority problems"},"content":{"rendered":"
\"\"<\/a>

State Auditor Hector Balderas<\/p><\/div>\n

Balderas says board members, employees were using agency money \u2018as their own private ATM cash machine;\u2019 King says he\u2019s still reviewing January 2009 report<\/h4>\n

State Auditor Hector Balderas<\/a> has made public a January 2009 special audit<\/a> of the Region III Housing Authority that identified \u201cconsiderable violations\u201d of the state per diem law and other problems.<\/p>\n

Those violations by Region III and a related entity, Housing Enterprises, Inc. (HEI), include board members collecting per diem \u201cwhen official meetings did not take place,\u201d collecting per diem beyond what is allowed by law and collecting it twice for attending meetings held on the same day and in the same place.<\/p>\n

Other questionable expenses include Region III paying for the wives of two former employees currently under indictment to travel with their husbands to Las Vegas, Nevada, even though auditors found \u201cno evidence\u201d that the trip benefited or was \u201crelated to the mission of\u201d Region III.<\/p>\n

It\u2019s difficult to calculate exactly how much misused money is identified in the audit, which looked at expenses from 2005 and 2006, but it appears to be in the range of tens of thousands of dollars.<\/p>\n

\u201cMembers were using these funds as their own private ATM cash machine,\u201d State Auditor Hector Balderas told NMPolitics.net. He called that \u201cthe final insult\u201d in a scandal that already includes indictments against four people.<\/p>\n

You can read the full audit here<\/a>.<\/p>\n

AG is \u2018reviewing the document\u2019<\/h3>\n
\"\"<\/a>

Gary King<\/p><\/div>\n

Many of the issues identified in the newly released audit haven\u2019t been made public before and aren\u2019t part of the criminal case Attorney General Gary King<\/a> has brought against former employees accused of fraud, money laundering and other felonies.<\/p>\n

The issues that led to King\u2019s indictments of former employees of the Albuquerque-based Region III authority \u2013 Director Vincent \u201cSmiley\u201d Gallegos, accountant Dennis M. Kennedy, bond attorney Robert Strumor and attorney David N. Hernandez \u2013 led to the collapse of much of the state\u2019s affordable housing system in 2006 and reform to try to clean up the mess.<\/p>\n

Gallegos, Strumor and Kennedy are facing the fraud and money laundering charges. Hernandez faces a felony charge of tampering with evidence. All have pleaded not guilty. (Read a primer on the housing authority scandal here<\/a>.)<\/p>\n

But the AG has yet to attempt to seek recovery of the lost funds identified in the special audit, even though his office has had the report for 25 months \u2013 since January 2009. King spokesman Phil Sisneros said his office is \u201creviewing the document,\u201d but said he can\u2019t comment further about the housing authority case because it\u2019s pending.<\/p>\n

\u2018New Mexicans deserve accountability\u2019<\/h3>\n
\"\"<\/a>

Joseph Cervantes<\/p><\/div>\n

In the meantime, Rep. Joseph Cervantes<\/a>, D-Las Cruces, is sponsoring legislation<\/a> that would allow the state auditor to contract with outside counsel to try to recover misused funds identified in this and other audit reports.<\/p>\n

\u201cStealing money intended to help shelter lower income families deserves our strongest condemnation, and an aggressive effort to recover those public funds,\u201d Cervantes said. \u201cThis theft was pervasive.\u00a0 Now that we have this accounting, New Mexicans deserve accountability.\u201d<\/p>\n

\u201cI am working to provide the auditor with tools to recover the misappropriated public funds, and to restore public trust and confidence in our state government,\u201d Cervantes said.<\/p>\n

The audit findings<\/h3>\n

Several of the state\u2019s regional housing authorities collapsed in 2006 after Region III defaulted on $5 million on bonds it owed the state. At the time, the Legislature and governor charged Balderas\u2019 office with compiling an accounting of the financial status of the housing authorities.<\/p>\n

To get a full picture, Balderas\u2019 office had to perform a number of annual audits several of the regional housing authorities had failed to complete in the years leading up to the collapse. Those audits were released to the public<\/a> in January 2009.<\/p>\n

The special audit was completed at the same time, but it was kept secret in accordance with state law because Balderas referred it to the AG and FBI.<\/p>\n

More than two years later, in response to a records request from an agency that was given oversight over Region III, the auditor\u2019s office decided enough time had passed to consider the audit a public record, said Evan Blackstone, the state auditor\u2019s general counsel.<\/p>\n

Most of the findings contained in the audit have never before been made public. Among them:<\/p>\n