Federal investigators directed Baltimore's Housing Authority yesterday to repay hundreds of thousands of dollars misspent in the city's no-bid repair program for the poor and to ensure the safety of residents thought to be exposed to dangerous levels of lead dust and paint.
In its final audit, the U.S. Department of Housing and Urban Development (HUD) further instructed city officials to stop circumventing standard bidding procedures and to require disclosure of possible conflicts of interest by Housing Authority managers.
HUD's directives were contained in the final report of a seven-month investigation that uncovered serious deficiencies in virtually every area of the authority's operation.
Mayor Kurt L. Schmoke and authority Executive Director Daniel P. Henson III both claimed this week that the final report would differ substantially from a scathing draft copy that formed the basis for a story in The Sun on Thursday.
But the two documents are virtually the same both in their overall findings and supporting details.
Both said the authority paid for work that was overpriced and incomplete; moved families into more than 200 newly renovated apartments before testing the units for lead; and gave millions of dollars in no-bid contracts to relatives of an authority board member and employee.
Authority managers are scheduled to meet Monday with HUD's Baltimore-based officials. The authority has 60 days to develop a plan to implement the directives or to make a case that the action is unneeded.
Mr. Henson said yesterday that the authority already has begun reinspecting all 1,136 units renovated under the $25 million pTC no-bid repair program -- another of the directives issued by HUD's regional Office of the Inspector General.
The authority also is working to get the 10 contractors cited in the audit to fix incomplete and shoddy work.
Henson takes issue
But he disputed that the authority needs to return the $725,759 HUD investigators claimed was misspent or that the local agency needs to stop similar no-bid contracting.
He also continued to insist that the authority acted properly in dealing with lead contamination in public housing units.
"We have not endangered anybody," he said. "I take lead-based paint and the problems they pose to kids very, very seriously."
Mr. Henson sharply disagreed with many of the audit's findings and said he would appeal the disputed directives to HUD's local office.
William D. Tamburrino, director of HUD's Baltimore field office, said the authority could offer alternatives to the directives issued by federal investigators.
But he added, "From my point of view, it appears to be in the Housing Authority's best interest to implement as many of the recommendations as possible within 60 days."
Ultimately, if no agreement is reached and the problems remain unresolved, HUD could strip the city's authority of some of its funding.
Yesterday's final report says it took into consideration a 39-page response prepared by Mr. Henson, as well as comments by HUD officials here and in Washington.
Initial findings intact
The new report differs at times in tone and language from the draft version that was completed in July, but does not change substantially any of its seven principal findings.
For example, the draft report said, "The authority has not adequately protected residents from lead poisoning."
The final report said, "The authority needs to improve efforts to protect residents from lead poisoning."
But both documents said the authority knowingly housed children showing elevated levels of lead in the blood in units that had lead hazards. And both said the authority placed residents in more than 200 newly renovated units without testing for lead.
The final report also included comments by the assistant HUD secretary for public housing, who complained that the draft had not recognized the efforts that the authority had made in abating lead paint.
The authors of the report said that they did not verify the comments by Assistant Secretary Joseph Shuldiner, but included them for balance.
The report said that the authority is "making efforts to improve its public housing activities," but concluded those efforts "have not
One new assertion was that the absence of competitive bidding, coupled with excessive control by a single supervisor, left the no-bid program vulnerable to fraud. The supervisor, Charles Morris, pleaded guilty to bribery in federal court last month.
Mr. Henson said yesterday that he would make some changes in the program but that he wouldn't scrap it.
"Would I do it again? Yeah. I'd change a few things," he said. "I'd probably manage the program personally a little closer. I may fire a few people as a result of this. But there's nothing wrong with the concept at all."
HUD auditors directed the Baltimore Housing Authority to take these steps:
* Stop bypassing standard bidding procedures as in the no-bid program.
* Repay HUD $725,759 for overpriced or incompleted repairs.
* Reinspect 1,136 homes renovated in the program.
* Remove families from homes with unsafe lead paint and dust. Notify families in two weeks if there are hazards.
* Require staff and board members to disclose real or potential conflicts of interest.
* End preferential selection of people on waiting lists for homes.
Make sure the list is accurate and up to date.