Authority picks apart audit
Jeremy Styron
Days after Lenoir City Council heard an 18-month report from Knoxville-based Brown Jake & McDaniel on record-keeping deficiencies and mismanagement at Lenoir City Housing Authority, board members of the authority on Thursday cast a critical eye on the malfeasance allegations, voting not to renew its contract with Executive Director Debbie Cook, which is set to expire June 30.

“Her status goes from an employee covered by contract to an employee at will,” Lenoir City Housing Authority chairman Frank Hahn said in a follow-up interview.

Cook, who did not attend the housing authority meeting Thursday, told the board in early May that she would be taking a medical leave and supplied a notice from Dr. Milan Sheth, with UT Internal Medicine in Lenoir City. Hahn said Cook is expected to return to the job in early July.

During the housing authority meeting, Commissioner David Martin made a motion to allow Cook’s contract to expire and to not issue a contract to any future executive director. Lee Trout, housing authority maintenance supervisor, has acted as executive director in Cook’s absence.

“I personally, based on the status right now, I would not be interested in extending any kind of contract for anybody,” Martin said.

Hahn said contracts were typically reserved for city managers or other officials moving from outside the area to take a job.

“I don’t find a need for a contract for anyone in this position at all,” Hahn said in the meeting. “It’s beyond the pale as far as I’m concerned. ... In this case here there’s really no reason to have something like this because of the nature of our organization.”

Hahn, Martin and Commissioner Cheri Brown voted to end the contract. Resident Commissioner Jeff Ward was absent during the meeting this week, and according to authority minutes, he was not present at the May meeting.

Authority members also discussed numerous parts of the Brown Jake & McDaniel report, which included documentation showing that a new door for Cook’s office was upgraded from a quoted construction cost of $850 to $3,400. The audit also indicated the housing authority incurred expenses of $12,286 to build out Cook’s office, $20,127 to add parking and a covering for automobiles and $36,000 to install a covered stairway and deck leading from the parking lot to the executive director’s office.

“I think it’s the responsibility of the board — whoever it is — to watch these expenditures closely,” Hahn said, who was one of Mayor Tony Aikens’ three new appointees after the authority spent $90,000 in legal fees as part of an unsuccessful lawsuit against Aikens and the city.

The recent audit, which examined the period from Jan. 1, 2011, to June 30, 2012, also showed that while the board previously voted to fill up an employee’s vehicle one time per month to compensate for personal automobile usage, the gasoline purchases were not recorded as “taxable fringe benefits” on the authority’s payroll tax returns or the employee’s W-2 form.

“I don’t even think that’s lawful to do it in the manner that we’ve been doing it,” Martin, another new appointee, said. “If I understand it in the right context, the right thing to do that is you take mileage.”

Martin then made a motion that all business be conducted in a housing authority vehicle and that no compensation will be granted for travel in a personal vehicle for routine purchases. The motion passed 3-0.

Martin also noted from the report that housing authority board members or staff went to 13 conferences over the 18-month period.

“That concerns me; seems like a little abuse,” Brown said.

One conference in Miami ran from June 19-21, 2011. According to the report, Lenoir City Housing Authority paid hotel fees and per diems for a total of six days.

“There was no documentation available to determine if the additional night hotel stay and the additional day of per diem charges were necessary due to flight availability or the cost of flights,” the report said.

“Keep in mind we’re running a public housing authority, and we spend six days in Miami,” Martin said.

Martin cited part of a U.S. Department of Agriculture Rural Development report from October 2011, which also highlighted cases of inaccurate or insufficient record keeping.

“I only read that to say that it falls in line with the mismanagement that we read through the report,” Martin said about the Brown Jake & McDaniel audit. “It’s a public housing community, and it’s very troubling.”

“Very,” Brown added. “There’s a lot of concerns here.”