FORT WAYNE – Two years ago, the federal government slammed the Fort Wayne Housing Authority for failing to spend millions of dollars it received to help the city’s poor afford housing – while thousands of families languished on a waiting list.

Today, the size of the waiting list has doubled, but the agency is still struggling with the same problem. And a Journal Gazette analysis of Fort Wayne Housing Authority records shows FWHA could have helped an average of 400 more families a month.

Before the agency opened the waiting list to new applicants last fall, there were close to 2,000 names on it, officials said. When the list was reopened Oct. 12, almost 4,000 people applied for help in just 15 days.

The agency issued an average of 2,400 vouchers a month last year but is authorized to issue up to 2,870.

Formerly known as “Section 8,” the vouchers allow low-income families to rent apartments at a rate they can afford, while the landlord is paid the full rate.

The reason for the agency’s failure to deliver that help, meanwhile, seems to depend on who’s asking:

•The agency’s outside auditor was told repeatedly that problems in the voucher program are the fault of untrained staff.

•The U.S. Department of Housing and Urban Development, which pays for the vouchers, was told in the 2008 audit the failures were because of a flood in 2002.

•Board members who oversee the agency were told there may not be enough money to pay for more vouchers.

In fact, experts say, the opposite of what board members have been told is true: HUD now bases voucher funding on how many vouchers were issued the year before. That means that the fewer vouchers officials in Fort Wayne issue, the fewer they will be able to issue in the future.

The result could be a downward spiral in which fewer families are helped each year, leaving more without affordable places to live.

“Next year’s voucher money is based on this year’s voucher use,” said Linda Couch, vice president for policy at the National Low Income Housing Coalition, a Washington group that pushes for more affordable housing. “Housing authorities that don’t issue vouchers work themselves into a hole.”

They will also have fewer resources to handle vouchers.

“If they don’t run their program in a way to maximize the number of people utilizing voucher assistance, it’s not only a downward spiral of funding, but their administration fees go down, making it hard to have the people on staff to issue those vouchers,” said Barbara Sard, president for housing policy at the Center on Budget and Policy Priorities in Washington, another advocacy group, one that advocates for policies and programs that aid the poor.

Despite what they were told, board members should know how the program works: FWHA has spent thousands of dollars on travel for board members in the last four years, sending them to training conferences in San Diego, San Antonio, Washington, Reno and Las Vegas, agency documents show.

One of the conferences they attended in Las Vegas billed itself as “dedicated to learning … but we sure have a fun time doing it!” and featured a Beatles tribute band.

Housing Authority Executive Director Maynard Scales said the agency has vastly improved the number of vouchers issued.

“We certainly have made progress,” Scales said. “We feel at this point that significant progress has been made. Because of the cumbersomeness of the process, that progress is slow, but the trend is very positive.”

Funding questions

A Fort Wayne Housing Authority employee, speaking on condition of anonymity because of fear of retribution, said the waiting list was reopened because FWHA was trying to distribute 400 vouchers as fast as possible to look better to federal officials who pay for the program.

The employee, who provided other information that was independently verified through agency records, said the housing authority had issued almost no new vouchers in years. That changed in September, when it appeared HUD was auditing FWHA again, the employee said, and employees were ordered to issue hundreds of vouchers as quickly as possible.

“They were told to lease up four or five hundred in three weeks,” the employee said. “We were told to do the background checks later.”

Scales denied the charge.

“I don’t think that’s true,” Scales said. “No, not at all.”

But agency numbers show that in the two years previous to that alleged push, the number of vouchers FWHA issued fell by 224 – a 9 percent drop. The waiting list was last opened in 2008.

From September – when the employee says HUD began its audit – to January, the agency added 154 vouchers to its rolls, and Scales says the housing authority has added an additional 140 since then.

Even then, the agency would be almost 200 vouchers short of the 2,870 HUD says FWHA is authorized to issue – that’s 200 families paying more than they can afford for housing, living with relatives or in a shelter.

“What the voucher program needs to do is lease up the maximum amount of vouchers that it can,” said Couch of the housing coalition. “Funding is not based on how many they could have leased up but on how many are actually in use.”

But Scales said he has been repeatedly warned by HUD not to issue too many vouchers.

“What if Congress locks up and there’s a government shutdown?” Scales said. “Housing authorities across the country are worried about the funding stream drying up. We don’t know what our funding will be beyond the current year, and HUD has sent signals telling us to be very cautious about committing funding.”

A HUD spokesman said that is not the message being sent.

“I don’t think anybody’s saying there’s going to be a cut or anything,” said Laura J. Feldman, a spokesperson in HUD’s Chicago office, which oversees Fort Wayne. In fact, she said, her agency’s last communication with Scales was that FWHA could add at least 116 more vouchers.

And experts say that, whatever the atmosphere in Washington, vouchers appear to be safe from congressional cuts. Despite proposals and promises to lower government spending, there have been no proposals to cut voucher funding.

“What we have today is we have a HUD that is actively advocating for the renewing of every single voucher and a Congress that for the last several years sees the value of a voucher and how a voucher is worthless if a landlord can’t count on it,” Couch said.

Sard said funding may actually increase.

“It is uncertain what the funding will be, but both the House version and the Senate Democrat alternative (budget proposals) increase funding for voucher renewals,” she said. “It really does look like agencies will get fully funded for vouchers they used last year.”

The one silver lining in FWHA’s failures is that it issued too few vouchers in the past – at its low point it issued only 76 percent of the amount authorized – so it accumulated millions of dollars in reserves.

That lets the agency issue more vouchers than it is currently reimbursed for. The more vouchers it issues this year, the more funding for vouchers next year.

In the 2008 audit, HUD slammed the agency for having $6.2 million in unspent funds that could have paid for vouchers – an estimated 1,024 vouchers in 2006 and 2007. But now that FWHA’s funding has dropped to match the lower number of vouchers it was issuing, the agency is spending down that reserve to prompt an increase in the number of vouchers.

At the end of fiscal year 2009, that reserve was down to $2.3 million, but Scales said he will not let it get too low.

“There is a little cushion we have to have, and HUD recognizes that,” he said.

‘Hurting people’

Documents obtained under the Freedom of Information Act show that in 2008, the same year it was blasted in the HUD audit for not spending the voucher money it had been given, FWHA sent board members to conferences in Chicago, San Antonio and San Diego, spending more than $10,000 on their travel. The expenses did not include the conference costs, which start about $500 a person.

In 2009, documents show, FWHA spent almost $2,000 on travel, sending two board members to a conference in Washington, D.C., and in 2010 it spent more than $5,000 to send two board members to Las Vegas and Reno and one to Indianapolis.

Scales said the conferences make better board members. Since 2007, the Housing Authority has spent $18,021 on travel for board members.

“Just like training for our staff is helpful, … board members have an oversight responsibility that’s only enhanced by training,” Scales said.

Money for the trips came from administrative funds, not the voucher program, but Sard said the travel would look better if the board was active and involved in improving the agency.

In the past four months, not a single question has been raised by board members about the number of vouchers the agency has issued. A review of board meeting minutes shows the issue has not been discussed by the board in the last three years.

“To be fair to them, if the association holds their conference there in Reno or Vegas, it’s not as if (board members) are picking the location,” Sard said. “But there are, unfortunately, a lot of agencies that don’t consider their voucher program all that important because they have a monopoly and they don’t care about serving people, and newspapers don’t embarrass them and the board doesn’t do its job.”

Board Chairwoman Judy Macon said the board cares deeply about the agency’s mission and the voucher program; she believes the training conferences have been a great investment.

“I do,” Macon said. “I truly do.”

Macon said she was not familiar with how the voucher program is funded but said the agency sends employees who handle funding to training sessions that focus on those issues, while she attends sessions dealing with policies and working together.

“It helps,” she said. “It really does help.”

Macon said her agency has struggled to issue vouchers because clients are unable to get their paperwork together, have debts or criminal convictions in their backgrounds that preclude them from the program or they simply can’t be found once their name is called off the waiting list.

But FWHA’s outside auditor, which performs an annual audit, has pointed out problems in the voucher program in each of the last three audits. Each time, the agency’s response – repeated word for word in 2008, 2009 and 2010 – was that “The Section 8 Department has undergone many staffing changes during the past several months” and that the agency had decided to do more training.

When HUD’s Office of the Inspector General audited in 2008, the agency said the “root cause” of the problems “are directly related to the flood disaster of 2002 where FWHA lost essentially all operating ability.”

Whatever the reason for the problems, the housing authority’s monopoly over vouchers may not be forever: Sard said HUD has terminated contracts with housing authorities across the country for mismanagement, and the 2008 HUD audit threatened sanctions as well.

“This is hurting people with housing needs in the community,” Sard said. “Here we are so tight for money, and Congress has appropriated the money, and they’re not using it, which is outrageous.”

There also are hundreds of landlords who could be getting stable rent payments from full apartments rather than seeing vacant units.

“Here you’ve got a fragile real estate market and landlords that could really use the money,” Sard said. “It would help prevent foreclosures.”

Couch cited federal statistics showing that there are almost 12,000 extremely low-income households in northeast Indiana, with about half of those paying more than half of their income toward rent.

“Now think about those 400 families” that could have had vouchers, Couch said. “Think of any one of those families and the stability a voucher would bring.”

dstockman@jg.net