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Controller Greuel Releases Housing Authority Audit
By Super User
Published December 19, 2011

Controller Greuel Releases Housing Authority Audit; Councilmembers Zine, Cardenas Join Greuel in Calling for Swift Reforms

LOS ANGELES — City Controller Wendy Greuel released the first phase of her investigation of the Housing Authority of the City of Los Angeles (HACLA) and declared that reckless spending and lax travel policies allowed for thousands of dollars to be wasted on lavish meals. Greuel also uncovered instances of double and triple dipping and inappropriate reimbursements and charges for hotel rooms that went unused.

Los Angeles taxpayers are being duped by Housing Authority officials who claim to serve the poor but instead recklessly waste public money to support their lavish lifestyles,” said Greuel. “Angelenos deserve better. There must be zero tolerance for this type of out-of-control spending and fraudulent activity.” 

The first phase of Greuel’s audit uncovered numerous unallowable expenses and excess costs. Examples of thousands of dollars of questionable or unsupported travel expenses include:

             Public safety representative Scott Butler was approved to drive an agency vehicle to San Diego but instead paid airfare exceeding gas cost and left the conference early to take a flight to Chicago, unnecessarily charging a night in a hotel that was not used;


             HACLA board member M. Del Angel paid costs for other travelers who were not HACLA staff and for whom executive approvals were not provided;


             Planning representative John King had meals paid in excess of $1,000, which is above the allowed per diem. The charges did not identify the names of individuals served, what was consumed to rule out the purchase of alcohol, and the business transacted at the group meal;


             Planning representative John King had excess meal costs for triple-dipping relative to meals for which subsistence was claimed while meals were also charged to HACLA’s P-card while meals were also provided at the conference. The audit also questioned a “no show” hotel charge in Chicago because King was in Philadelphia for another conference; and


             HACLA board member B. Stotzer did not prepare appropriate forms and only provided minimal receipts for hotel and baggage fees. Stotzer seldom provided receipts and instead signed a certification stating expenses were for HACLA business.


Greuel had released preliminary audit findings a few weeks ago which revealed Agency officials spent $300,000 per year on travel in 2009 and 2010. At that time, Greuel highlighted irregular travel expenditures, including staff reimbursements for sight-seeing tours. 

Greuel said whistle-blower complaints about questionable spending practices in other parts of HACLA make it clear that the Agency leadership created an environment for wasteful spending and fraudulent activity. 

“These findings, combined with the golden parachute for the recently ousted Chief Executive Officer, demonstrate that taxpayer funds have been misappropriated and the Agency has been mismanaged,” said Greuel. “What’s more alarming is that these findings are just the tip of the iceberg.”

Since she initiated her audit last Spring, Greuel said Agency officials created numerous obstacles and a hostile audit environment.  

“My concerns continued to grow as HACLA leadership kept delaying, making it extremely difficult for my auditors to obtain information needed for this audit. Many employees expressed fear to come forward with information, exemplifying the culture of the Agency. Employee intimidation tactics cannot and will not be tolerated,” added Greuel. 

During the course of Greuel’s audit, many red flags were exposed not just regarding HACLA’s travel policies, but also regarding its P-Card program and its LOMOD program, HACLA’s non-profit corporation that functions as a Contract Administrator for project-based Housing Assistance Payments contracts.   

“It is unfathomable that an Agency dedicated to creating and maintaining affordable housing for the poorest families in Los Angeles spent taxpayer money so irresponsibly when funds are insufficient to provide desperately needed housing in the City of Los Angeles,” said Greuel. “I appreciate the City Council and Mayor for supporting my efforts for a comprehensive top-to-bottom financial review of the Agency, which includes both of these programs.  Reforms are critically needed and the second phase of my investigation will serve as a roadmap for rehabilitating the beleaguered Agency.” 

Greuel’s comments were made just prior to a City Council presentation in which she discussed the problems that have plagued the Agency including news that taxpayers footed a $1.2 million golden parachute to ousted Agency official Rudy Montiel. 

“I appreciate Controller Greuel’s efforts to uncover wasteful spending issues at HACLA,” said Councilman Dennis P. Zine, Chair of the Audits & Governmental Efficiency Committee. “I am hopeful that we will get to the bottom of the unconscionable behavior exhibited by the HACLA employees, initiate top to bottom reform, redirect the funds for their rightful purpose, and that we can begin to restore the public’s trust in this Agency.”  

“The Housing Authority of the City of Los Angeles is responsible for serving the needs of our most vulnerable residents – I don’t understand how these questionable expenses fall in line with the core responsibilities of this Agency.  As an elected official and steward of the public’s money, I intend to ask the tough questions that will get us answers,” said Councilman Tony Cardenas, referring to the City Council presentation. “Once we’ve gotten our answers though, our work is not done. We also need to make sure that this doesn’t happen again, in this Agency or any other, and we must push for serious consequences for everyone involved in wrong doing.”


Controller Greuel’s audit is attached.  Controller Greuel has conducted more than 40 audits and uncovered nearly $100 million that the City has lost to waste, fraud, and abuse over the last two years. 

For more information, please visit the Controller’s website at


Categories: News (Business)

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