HACM leaders apologize to residents after the misuse of $2.8 million in Section 8 funds

 

MILWAUKEE (CBS 58) -- New leadership at the Housing Authority of the City of Milwaukee is admitting they have serious cash and liquidity issues, after what they called the illegal transfer of Section 8 funds to the tune of $2.8 million by the former administration.

It's a lot to unpack for HACM's new chief financial officer who took over just two weeks ago. For now, Brad Leak impressed on commissioner the need to follow the Department of Housing and Urban Development's outline to make things right.

"To our residents on behalf of this commission we apologize to you all," said a tearful Charlotte Hayslett, Chairwoman of the Board of Commissioners for HACM at Friday's special meeting.

Emotions are running high at this special board meeting after word broke that Milwaukee's Housing Authority misused $2.8 million in Section 8 funds.

"During interviews with the former finance director, it appeared that the reason for the transfer what the agency was encountering serious cash issues at the time and needed to borrow from one program to the other," said Brad Leak, Chief Financial Officer, HACM.

Leaders say the money meant for Section 8 housing was instead improperly used for payroll and other items. 

"And now I know why you don't have funds, because you been stealing from Peter to pay Paul," said Florence Riley, a Westlawn resident for the past four years who says she's often told they don't have money for things like garbage or security where she lives.

The misappropriation of funds happening under the Housing Authority's previous administration from 2019 to 2022.

"How dare you put the agency in such a dismal state of affairs and not apologize for the actions. The residents deserve better," said Hayslett.

Current expenditures are being paid 45 days late. The agency had to let go of 20 workers, issue a hiring freeze, eliminate non-essential expenses, and take on a $1.6 million payment plan to the Pension Board. They are desperately trying to correct their general ledger. Milwaukee Alderwoman Sharlen Moore is one of four new housing authority board members.

"When you have things that are covered up and you have people that you know kind of continued the status quo, you get what you've gotten and we know that that day is over," said Ald. Moore.

Answering to a rumor that Milwaukee's Housing Authority could face bankruptcy.

"So the intent was not to say we will be going to bankruptcy in 45 days, it was that if we did not swiftly act and during this week, we would be in the bankruptcy situation," said Leak.

Commissioners ended the meeting taking that swift action, approving a recovery agreement aiming to meet benchmarks over the next two years and regain better status with HUD.