BRADENTON -- Clean audits for the Bradenton Housing Authority are nothing new -- even when then-executive director and projects manager Wenston DeSue and Stephany West were sending the agency into an $800,000 debt. What is new since the 2013 scandal rocked the public housing agency is its strengthening financial position.
DeSue and West have both entered pleas to theft of federal funds and are due to be sentenced Sept. 2 and Sept. 9 respectively.
An audit tracks only the documentation provided, and does not take into account judgement calls and decisions made by staff and board members -- the key reason an audit under DeSue's tenure didn't necessarily raise red flags as a standalone document.
What the audit does show, however, is the agency's overall financial position.
Last August, the agency -- then under former acting executive director Darcy Branch -- was showing signs of recovering from the 2012-2013 fiscal year debt. A large part of the recovery had to do with no longer paying DeSue's and West's salaries -- about $240,000 combined -- and DeSue's reckless spending on bonuses for himself while the debt was growing.
Executive Director Ellis Mitchell Jr., hired in November, immediately took some cost-saving moves.
Cost-saving measures include selling the majority of the small agency's vehicle fleet and reducing taxpayer-paid gas receipts from thousands to under $100. Those moves in fiscal year March 31, 2014 to March 31, 2015 left the agency with $558,000 in available working capital, up $196,000 from the previous year.
Mitchell also cut two highly employees with combined salaries of $220,000. Those savings have not been calculated into the agency's current financial standings because final paychecks were just recently cut, along with thousands of dollars in vacation and sick time. At the same time, the board approved a $5,000 raise for Mitchell, bumping his salary to $139,000.
CPA Rich Larsen, of Fallon & Larsen, a Washington, D.C.-based accounting firm that audits 48 housing authorities across the country, said the agency has a little more work to do, but has essentially recovered from DeSue's activities that led federal agents to raid the agency in September 2013. Larsen had said last year that the agency would only survive for about two months if funding suddenly quit.
The Department of Housing and Urban Development sustainability standards, he said, "are between four to six months and right now you are in that target range of five months' sustainability. Last year wasn't that good. You had higher expenses and less liquidity."
The BHA, with a $2.5 million budget, has about $706,000 in total assets, but the majority of that is tied up in buildings, which does not count toward working capital. Larsen said the agency cut administrative costs from $974,000 last year to $705,000 this year, and trimmed operating costs from $1.7 million to $1.3 million.
Given the public housing environment, Larsen said, "Not many housing authorities are coming away with a clean report like yours. It's a very tough environment in public housing right now, so this is a very good report. You did a lot better than I thought it would go because 2014 was not looking very good."
Mitchell said he expects to increase the agency's liquid assets in the months ahead, predicting another $100,000 in overall savings despite recently hiring a replacement for former development director Lance Clayton.
Mitchell said the development director title has been renamed to housing operations and his newest staff member will start Sept. 1, with a base salary of $88,400 compared to Clayton's salary of more than $100,000. Mitchell said the new employee will essentially do Clayton's former job, "and a lot more."
Mark Young, Herald urban affairs reporter, can be reached at 941-745-7041 or follow him on Twitter@urbanmark2014.