Pam Kennedy, director of the Goshen/Warsaw Housing Authority, announced Tuesday that HUD is reducing voucher assistance for Goshen because of more than $500,000 in unaccounted money.
That was the warning from Pam Kennedy, executive director of the Goshen/Warsaw Housing Authority, who outlined the crisis scenario to board members of the Goshen Housing Authority Tuesday.
The housing authority staff was expected to begin informing about 29 families who were in the midst of seeking federal housing assistance - including some who have already paid a down payment on apartments that their chances for assistance is close to nil.
But that is only the first step.
The agency must identify and remove 100 more families over the next nine months, Kennedy
On top of that, the federal government is advising the agency to identify three more families per month for the next year to be removed from the program.
All of that is the result of a new federal effort to crackdown on agencies with large reserves built up over the past 10 years.
But Goshen's agency, which has been wracked with financial mismanagement in recent years, apparently was supposed to have about $714,000 in its reserves, according to Kennedy
, but only has a current balance of $151,836.
And the government wants its money back.
Payments to be reduced
said the agency learned two weeks ago from representatives of HUD
that the federal government is seeking the return of $571,050 and demands that it be achieved by reducing monthly payments to the agency, thus forcing the agency to reduce services by eliminating rental-assistance vouchers.
The agency is also facing another constraint since federal support of administrative costs for local agencies is based on the number of vouchers it administers.
As a result, Kennedy
anticipates the consortium will lose funding for up to two office workers - a cut she
says would make it impossible to oversee the program effectively.
If the agency is somehow able to come up with the money, it could stave off almost all of the mandates being handed down by HUD
"We know bits and pieces," Kennedy
The new federal directive that led to the crisis came in part because HUD
knew some local agencies had built up huge reserves, some of which exceeded $1 million, Kennedy