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October 16, 2002Housing Commission hires own auditor- Agency's financial records are already being reviewed by another firmBy BILL O'BRIENRecord-Eagle staff writer TRAVERSE CITY - The city Housing Commission will hire its own auditor to review its financial condition - the second audit ordered for the public housing agency in the wake of claims of widespread financial mismanagement. The Housing Commission agreed Tuesday to hire Shane Ellison, an accountant with the Anderson Tackman accounting firm in Iron Mountain, to assess the agency's financial standing in the wake of several financial concerns raised by the Housing Commission's accountant. The accountant's comments have produced a storm of controversy for the commission and longtime executive director Lorri Burtt. Housing Commission Chairman Peter Marinoff said that Ellison specializes in accounting for agencies affiliated with the federal Housing and Urban Development. Ellison is expected to meet with members of the Housing Commission and staff before the end of the month and follow up on the work being done by the city's auditing firm, Rehmann Robson. Rehmann Robson started a separate review of the agency's financial documents late last week at the direction of city manager Richard Lewis. The independent audits follow a Sept. 13 letter to the Housing Commission from its longtime accounting firm, Housing Authority Accounting Specialists Inc. of Onalaska, Wis. In the letter, accountant Ryan Vieth said the commission has been operating with "precariously low" fund balance reserves in various accounts, has incurred thousands of dollars in bounced check fees over the past few years because of poor cash management, and has excessive salary and benefit costs for its employees. The commission's problems also extend beyond financial matters raised by Vieth. At least three employees of the agency have written letters to the Housing Commission in recent weeks complaining of a "hostile work environment." The accountant's claims also have drawn a strong response from Burtt. She has told the commission that the bulk of the financial problems raised by Vieth were the result of her medical leave earlier this summer. Her attorney, C. Enrico Schaefer, contacted Vieth following his Sept. 13 letter and demanded that he retract his statements to the Housing Commission and comments Vieth made in a Record-Eagle news story last month about the financial matters involving the agency. An attorney for Vieth's company responded to Burtt's attorney last week and called his claims "meritless" and said the accountant was standing by his information. "The retraction called for in your Sept. 26 letter is unwarranted and would require my client to make knowingly false statements," Vieth's attorney replied. "Therefore, it will not be forthcoming." Schaefer said this week that a lawsuit by Burtt was still a possibility, but added that her "first priority" is to assist the two accounting firms that are reviewing Housing Commission records in any way she can. "Our first priority is to get the facts," Schaefer said. "But we do have concerns about some of the allegations made that we believe are false." The city commission discussed the Housing Commission situation at a study session Monday night. According to a packet of documents compiled by Lewis going back some 10 years, the Housing Commission has had a spotty financial record during that period. Previous city audits noted budget deficits in the early '90s, but the agency received high financial ratings from HUD as recently as 1998. Still, commissioners are concerned about the recent accounting revelations and called on both city staff and the Housing Commission for more direct oversight of the housing agency. The public housing agency operates the Riverview Terrace high-rise along Pine Street and the Orchardview housing complex along Carter Road in Elmwood Township. "(Vieth) talks about the cash management (problems) over a nine-year period," city Commissioner Ann Rogers said. "There's so much here I don't know where you start in assessing the huge responsibility that the Housing Commission has not assumed." Other officials preached patience, noting that the Housing Commission has undergone significant turnover in recent years and that not all of the problems rest with the present board. "There is a huge effort being undertaken right now by this Housing Commission," city Commissioner Linda Smyka said. "They're trying to do the right thing." Bill O'Brien is the reporter for Grand Traverse County. He can be reached at (231) 933-1477 or bobrien@record-eagle.com |
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