Federal official says findings are troubling

Additional reviews are being done by federal officials.
By LAURE CIOFFI
VINDICATOR PENNSYLVANIA BUREAU
NEW CASTLE, Pa. -- A federal official calls "deeply troubling" the findings about the Lawrence County Housing Authority's affairs.
Guy Ciarrocchi, regional director for the U.S. Department of Housing and Urban Development, said a two-page review received by the county housing authority this week is part of an ongoing review of housing authority operations.
"Therefore, we will generally refrain from commenting on any one transaction or individual. When our reviews are concluded, we will be able to comment on those results," Ciarrocchi said after calling the initial report "deeply troubling."
Robert Evanick, housing authority executive director, received the report earlier this week but refused to release it to the press until Monday. A copy of the report was obtained by The Vindicator on Friday from another source.
The two-page document outlines two findings by HUD investigator Joe Piller. It looked at financial transactions from 2003 to the present.
Fund transfers
The report stated that the authority made ineligible transfers of Section 8 reserve funds totaling $200,500 to Affordable Housing of Lawrence County. Affordable Housing was a nonprofit spin-off created in 2003 to build new housing for the disabled in Union Township.
The group took out a $250,000 bank loan last December to buy seven rental properties in New Castle. Shortly after that transaction, four of Affordable Housing's six board members resigned.
Evanick was chairman of that board until his resignation in December 2005.
According to the HUD review, the authority transferred $200,000 to Affordable Housing on Nov. 5, 2003, and an additional $500 on Oct. 28, 2003.
"The authority has no documentation detailing the purpose of the transfers, nor is there any documented restriction on the use or application of the funds by the recipient, AHLC," the report stated.
There were no contracts or loan agreements securing the repayment of the funds, and the authority did not monitor the expenditure of the money, HUD said.
Lending the money was a violation of the housing authority's Section 8 Annual Contributions Contract with HUD.
The housing authority is required to immediately take action to recover the $200,500 from Affordable Housing, according to the review.
Equipment matter
The HUD review also states that the authority improperly disposed of equipment when it agreed to transfer ownership and control of 20 laundry washers and 19 clothes dryers to Affordable Housing.
The housing authority received $6,850 for the machines and 20 percent of the gross revenues collected from the coin machines, under the contract. But no controls were put in place to safeguard or confirm laundry income, HUD said.
A subsequent comparative analysis, performed by the authority, disclosed that the income reported by Affordable Housing was, on average, $470 per month less than income recorded before the transfer.
In 2003, the authority collected $17,480 in laundry revenue. That number decreased to $11,830 for the 12-month period from September 2004 to August 2005.
The HUD review ordered the housing authority to take control of the machines by April 10. That action was taken last month by the housing authority's board of directors.
As part of the review, an investigator interviewed Evanick, finance department staff and the AHLC board members.
The investigator also reviewed property deeds, financing instruments, appraisals, bank statements and reconciliations.
cioffi@vindy.com