Lavish spending at Florida agency includes $52k filet mignon dinner
To show appreciation for lenders who work with low-income borrowers, Florida's housing agency hosted a $52,000 dinner that featured filet mignon, broiled lobster tails and a bar stocked with "deluxe brand liquors.''
At a reception for its own board members, the agency spent $300 for a bartender, $425 for a pork carving station and $420 for a "Spanish charcuterie station.''
And a time when thousands of Floridians were waiting for help in saving their homes, the agency awarded a total of nearly $443,000 in bonuses to its employees.
Those are among the findings in a critical state audit of the Florida Housing Finance Corp. Released this month, the report cites several areas in which it said the organization needs to better account for its spending, improve controls over electronic fund transfers and ensure the security of confidential personal information.
Established in 1998, Florida Housing Finance oversees government programs designed to increase the state's stock of affordable housing. It also administers Florida's $1.1 billion Hardest Hit Fund, which provides mortgage relief to struggling homeowners.
Florida Sen. Bill Nelson and the federal official who monitors the use of Hardest Hit funds both have criticized the agency for its slowness in getting the money out to those who need it.
In its audit of the period from January 2014 to December 2015, Florida's auditor general said the housing agency incurred expenses that "did not appear to be clearly necessary'' for the performance of its duties. Among them:
• In August 2015, Florida Housing held a "lender appreciation'' dinner that cost $52,548, of which $37,548 came from the agency's coffers and the rest from sponsorship fees. The total included $2,025 for hors' d'oeuvres; $1,800 for an "imported and domestic cheese display;'' $540 for 10 fruit baskets and $413 for foliage.
• Before a board meeting in August 2014, the agency hosted a reception for 30 people including six board members and 12 agency employees. The $3,315 cost included $574 for a beer and wine bar and $300 for a dessert station. The service charge came to $571.
• Before another board meeting that year, the agency hosted a $1,188 reception for seven board members and six agency employees. The 13 consumed a total of 39 alcoholic beverages and $761 worth of food.
In a written response to the audit report, Florida Housing's executive director, Stephen Auger, said state law authorizes "recognition programs'' for lenders and others who help with affordable housing.
As for the receptions, Auger said, they "provide an opportunity for board members to interact with staff and key advisors, and as such, are an ordinary and necessary expense.''
The audit also found that Florida Housing Finance had "no consistent methodology'' for determining which employees are eligible for bonuses or how much they should receive.
In 2014, the agency paid $208,650 in bonuses to 63 employees, including $52,000 to eight senior managers. Last year, $233,700 in bonuses were divvied between 69 employees, including $59,500 to eight senior managers. Bonus recipients also included Florida Housing's inspector general, Chris Hirst, whose job is to act as a watchdog over the agency and enhance "public trust in Florida's Affordable Housing.''
The audit found that Hirst received a $5,000 bonus in 2014 and a $7,500 bonus in 2015, with Florida Housing "unable to provide evidence of board approval" for the payments. In the future, the audit said, the board should approve all bonuses to the inspector general and the executive director.
In response to the audit, Auger said the failure to get full board approval for Hirst's bonuses was an "oversight'' and that the amount of employee bonuses depends in part on how much money the housing agency has left at year's end.
In other findings, auditors said Florida Housing Finance:
• Did not require "sufficient documentation" from underwriting agencies to support their denial of Hardest Hit mortgage assistance to some applicants.
• Did not take adequate steps to ensure that electronic fund transfers were going to authorized recipients.
• Did not have adequate safeguards against unauthorized access to confidential information including Social Security numbers.