At a time when lack of affordable housing has reached crisis proportions across the country but nowhere more than in the U.S. Virgin Islands, one agency stands out for meeting its federal mandates, which means community members of modest means might look forward to a new and vastly improved roof over their head in the relatively near future.
Auditor Richard M. Larsen, a partner at Novogradac & Company LLP, said Tuesday that V.I. Housing Authority’s 2020 audit reports showed “the highest level of assurance that we can give.”
Novogradac specializes in audits of large housing authorities, serving about 70 sizeable clients across the country, according to Larsen.
Among the items that he said stood out in the unmodified opinions – meaning the auditors have no concerns – is the V.I. Housing Authority currently has an “outstanding” liquidity ratio. “They have 10 ½ months of operating funds,” he said, “leaving them in a position to pay their bills in a timely manner.”
Larsen, whose area of focus is the affordable housing industry, with a particular expertise in auditing public housing authorities and their affiliate entities, said normally if a housing authority has four to six months it is considered “good.”
The abnormally high liquidity is an indication of a “tight ship” he said, adding the local agency is “running their federal programs efficiently.”
The three audit reports that are routinely provided in one audit package cover financial statements independent government standards and uniform guidance practices.
“There were no findings or questions about costs in any of the three audit reports,” he said.
Larsen only awaits the pension reports from the Government Employees’ Retirement System to “formally” sign off on the audit. “They are very, very late with it,” he said, adding that he hoped to receive that final piece “any day now.”
The findings of the 2020 audit reports are a far cry from those 19 years ago when the V.I. Housing Authority was placed in receivership by the U.S. Department of Housing and Urban Development. The Housing Authority stood out back then as well when measured against its mainland counterparts.
When the Housing Authority was placed in receivership in 2003, HUD Assistant Secretary Michael Liu said, “Since 1985, there have been 17 takeovers out of 3,200 housing agencies nationwide.”
Robert Graham, has been at the helm of the current tight ship since 2008 when HUD selected him to be the executive director.
Within six years of being appointed by HUD, Graham had steered the agency back local control.
Graham says he was able to do that by “working with HUD receivers to devise a plan to achieve that end.”
There is nothing better than a picture to tell a story. A table of the last eight years of audits shows that in most of those years the auditors found “no concerns,” synonymous in less dry audit-ese terms of a notable degree of distinction.
Relative to the highly unusual liquidity ratio, Graham said he worked with his “excellent accounting team” to cut costs. One major area was water. Over 10 years he cut the Housing Authority’s annual $10 million water bill in half by reducing it by $500,000 a year. He did it he said by replacing the water pipes that were cast-iron and highly susceptible to cracking and leaking. “We were paying for water that went into the ground.”
Along the way, in 2017 Graham was forced to maneuver the ship through two Category 5 hurricanes that turned 10 percent of Housing Authority’s inventory of dwellings into rubble, and left the rest in various states of damage.
Currently, Graham has a reality-based plan and the money to bring 3,000 housing units up to date. “Essentially,” he said, “ we are replacing the 3,000 obsolete units with new or completely rehabilitated construction. In other words we’re replacing all of the public housing on St. Thomas and St. Croix over the next 10 years.”
He said the timing couldn’t be better.
“This is an unprecedented time to do some really good work,” he said, thanks to President Joe Biden’s administration’s commitment to massive federal dollars being pumped into the territory and elsewhere for recovery and rebuilding. He said that translates to more than $200 million for the Housing Authority to work with.
That still leaves 6,000 people on the waiting list for affordable housing not under the Housing Authority’s umbrella, with little on the horizon to suggest their modest needs will be met anytime soon.
In a tiny territory bursting at the seams with tourists and transplants of substantial means, Graham’s concerns reach beyond simply putting people in housing units. It is also his job to build community. In a recent Senate hearing, Graham spoke of just such a program when talking about the rebuilding of 300 units. He said that some of the construction workers will be participants in the Skills For Today Program, which helps low-income people gain job skills. In conjunction with the Department of Labor, the program has graduated 15 people and is training another 23. A total of 215 people have expressed interest in the program, he said.
There are many more community-based initiatives coming online shortly. But right now the rebuilding is front and center.
“All of the work over the last 10 years and the recovery money gave us the ability to reposition and replace the entire public housing inventory,” Graham said.
As for the Dean’s List, Graham said the audit report findings arrived just minutes before the principal. For the first time in many years HUD Secretary Marcia L. Fudge arrives Friday on St. Thomas to check his work.