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Audit: THA misspent $10,000

State auditors say the Tacoma Housing Authority misspent nearly $10,000 on catered events for staff members and board commissioners from mid-2010 through 2011 - the byproduct of what auditors describe as the agency’s lax approach for ensuring public money is properly spent.

“The Housing Authority spent money intended for the administration of low-income, public housing programs on food, drink and other expenditures for staff retreats and employee recognition,” the Jan. 10 audit report said. “When it uses public money to host employees with no apparent public purpose, the Housing Authority risks violating state law prohibiting gifts of public funds.”

Officials for the public housing agency dispute the audit’s findings, saying all of the questioned spending paid for legitimate events that foster strategic planning, team building and employee appreciation.

“We count these kinds of expenditures well within the mainstream view of what a responsible employer does with a staff of our size to make sure they keep working together effectively and feeling appreciated,” THA Executive Director Michael Mirra said Monday. “I think that’s where we disagree with the auditor.”

Nonetheless, Mirra agreed with an audit recommendation that his agency adopt an explicit policy for spending public funds.

“We will do that,” he said.

The audit, which examined agency spending over an 18-month period, found THA received $64.1 million in federal funds during that time.

Of that amount, the agency spent nearly $39,000 on various events, including $7,147 on board and staff retreats, $15,633 on employee appreciation events and $11,047 on food, snacks and prizes during them, auditors found.

From those events, auditors identified as “examples of excessive spending”:

*$3,693 spent on catering and facility rental for a staff retreat at Cheney Stadium

*$2,395 spent on catering for an employee picnic at Titlow Park

*$3,263 spent on catering for an employee luncheon at C. I. Shenanigans Seafood & Steakhouse on Ruston Way

*$250 spent for a professional photographer hired to take a staff photo.

The expenses didn’t include salaries and wages paid to employees to organize and attend the events, the audit noted.

As part of the review, auditors considered a state constitutional provision that restricts spending of public funds, as well as the state Attorney General’s guidelines for eating and drinking at the public’s expense and for gifts of public funds.

“Housing Authority management made expenditures for employee events without evaluating the appropriateness or legality of using public money for such events,” the audit found.

The audit recommended THA’s management and five-member commission “educate itself about the propriety and legality of spending public money on food and entertainment for employees.” Commissioners also should adopt a policy for employee spending on food, drink and entertainment that would require “documentation of a public purpose,” it added.

All of the questioned spending involved “events that have been happening every year as long as anyone can remember,” Mirra said Monday.

“That’s why this audit was such a surprise to us,” he added. “They audit us every year and they’ve never had difficulty with this previously.”

The events included an all-day staff retreat at Cheney Stadium meant for strategic planning and staff training; a holiday luncheon at Shenanigans to recognize employees; and a summer picnic at Titlow Park aimed to appreciate employees, Mirra said. THA also hired the photographer to shoot a staff photo and make a copy of it for each of its roughly 100 employees, he said. Mirra took issue with auditors’ reference to the photography expenses as “entertainment.”

“Entertainment doesn’t seem like the right word,” he said. “It makes you think we hired belly dancers.”

In all, spending for the questioned events totaled $9,601 - a breakdown of about $32 per event for each employee.

Citing such arithmetic, THA officials wrote in a formal response “the expenses identified were neither egregious nor excessive and therefore do not warrant audit criticism.” But auditors disagreed, saying “the nature and amounts suggest otherwise and raise question as to the appropriate use of public funds.”

Other than the suggested recommendations, the audit did not require the housing agency to take further action.

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