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No audit of housing finance agency since time of USSR

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(The Center Square) — Though state housing agencies have seen failure, malfeasance, and money gone missing across the nation, it’s been ages since Pennsylvania’s has been audited.

If some legislators get their way, though, the situation could change.

House Bill 2387, sponsored by Rep. Kristin Marcell, R-Richboro, would require the auditor general to conduct an annual audit of the Pennsylvania Housing Finance Agency. Current law requires an audit “from time to time,” but has effectively meant “once in a generation” at best.

“It’s come to our attention that the PHFA has not undergone a thorough audit in recent memory, a situation that raises concerns about the transparency and effectiveness of its operations, especially given its failures during the COVID-19 pandemic,” Marcell said during an April press conference.

When Marcell reached out to the auditor’s office, their best guess was the last PHFA audit happened in the 1980s — but couldn’t find a copy of the report.

“We cannot in good faith authorize an increase for PHFA until we ensure the proper safeguards are put in place,” she said.

Republicans raised concerns about the PHFA since the agency only disbursed $54 million of a possible $175 million for rental and mortgage assistance in 2020. In 2021, it received $350 million from the American Rescue Plan for a homeowners assistance grant program, but the program was shut down for more than a year due to technical issues.

The agency blamed the contractor it chose for botching its mortgage relief program.

“When we allocate critical funds to support Pennsylvanians in crisis, we must have confidence that PHFA is distributing those funds appropriately and timely,” Marcell said.

Pennsylvania isn’t the only state to have some trouble with its housing agency.

A report from the Government Accountability Office in 2023 found that the risk of fraud was high in the nation’s largest federal housing program due to a lack of audits and “weak control mechanisms.”

The Washington D.C. Housing Authority has faced allegations of conflicts of interest and voucher fraud in recent years and is years behind on turning in audits to the federal government. In North Carolina, authorities discovered that $3 million was stolen from the state housing agency. And in Oregon, the state had sent out almost $500 million in emergency rental aid, but the housing agency couldn’t verify the money was used properly.

Other city housing agencies have had a tendency to spend too much and end up in debt.

Whether the bill will come up for a vote, though, remains to be seen. Marcell’s bill awaits action in the House Commerce Committee.

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