Housing authority employees to keep jobs

Two of the Morgan City Housing Authority employees who are accused of receiving improper pay and bonuses will continue to be employed with the authority at least until officials finish investigating the authority’s right to action against state Civil Service classified employees, the housing authority board decided Thursday.
After about an hour- and 15-minute long executive session to discuss proceedings regarding allegations of misconduct based on the state Legislative Auditor’s investigative audit report, the Morgan City Housing Authority Board approved a resolution Thursday for Housing Authority Attorney Robert Duffy, Interim Director Clarence Robinson and Board Chairman Victory Ho to approach the district attorney and the U.S. attorney for the determination and resolution of any criminal violations, to withhold civil suit until the criminal investigation is complete, to form an investigative committee to investigate the right to action against state Civil Service classified employees, and to ensure the interim director adjusts the salaries at the appropriate allowable levels immediately.
The committee will investigate the interim director’s rights of action whether it be termination, suspension or other action, Duffy said after the meeting. Housing authority officials are trying to determine what action the housing authority can take based on the facts presented by the legislative auditor, Duffy said.
Accounting technician Diana Pace and housing manager Sandra Greene are still employed by Morgan City Housing Authority as classified state Civil Service employees, Duffy said.
Pace received $137,661 in improper rewards and $47,965 in excess pay, according to the state Legislative Auditor. Greene received $165,405 in improper rewards and $61,756 in excess wages, the auditor stated.
“We wish to take appropriate action because state civil servants have the right to appeal and the right to a hearing to determine whether or not they have been discharged or suspended improperly,” Duffy said.
Duffy planned to contact Assistant District Attorney Anthony Saleme of the 16th Judicial District Court today and also try to set up a meeting with U.S. Attorney Stephanie Finley of the Western District of Louisiana to discuss any criminal action that may be taken, he said.
“A lot of it’s waiting on the investigation to happen,” Ho said. “Something will happen. Something is happening. And it will be resolved.” The board wants the money that the legislative auditor says was improperly awarded back “so we can use it to help this community out,” Ho said.
The difference in the good work that Robinson has done as interim director compared to the previous executive director is “night and day,” Ho said.
Robinson said he did not want to comment yet on the matters discussed during the meeting.
The board also approved a resolution to move forward with the four recommendations of the Louisiana State Auditor. The first recommendation was to consult legal counsel regarding recovery of compensation, rewards and pay increases improperly paid to employees. The second recommendation was to adopt policies and procedures requiring board approval of any increases or additional compensation awarded to employees.
The third recommendation was to make sure all pay increases are properly documented, approved and allowed by civil service rules. The fourth recommendation was to require, in accordance with civil service rules, that employees be evaluated annually and that records of the evaluation be maintained in the employee’s personal file.
According to a state Legislative Auditor’s report released Monday, the Morgan City Housing Authority paid almost $700,000 in improper bonuses and wages between 2007 and 2014, with most of that money paid to three office workers and the former executive director.
The housing authority “improperly paid” employees $566,544 in bonuses between November 2007 and March 2013 based on a reward policy that was altered by Tori Johnson, the authority’s housing manager, Legislative Auditor Daryl Purpera said. Johnson is no longer employed by the housing authority.
The auditor’s report said another $130,418 was improperly paid by the housing authority to three employees as raises in excess of Civil Service guidelines. The improper raises were paid in six separate increases between May 2009 and June 2014. Some employees received a 20 percent salary increase in a five-month period in 2009, according to the investigative audit.
Auditors said that state Civil Service Commission officials approved a one-time reward payment, equating to a bonus, for classified employees, not to exceed 10 percent of the worker’s annual salary. The payment was to be made to employees between July 2006 and November 2007 for work performed in removing the housing authority from its previous troubled status.
The audit said that the policy was altered to allow bonus payments to be made from July 1, 2006, to “January 1, 9999,” and in an amount not to exceed employees’ annual salaries. The Civil Service-authorized, one-time award to the qualified employees would have totaled $16,388. However, the authority paid an additional 169 bonus checks totaling $566,544 based on the altered reward policy. The report said Johnson “acknowledged that she improperly altered the policy without the authorization of Civil Service or approval of the MCHA boards.”
In total, according to the report, Johnson, a housing manager who handled all Civil Service matters, received $100,041 in improper rewards.
Former Executive Director Charles Spann received $111,657, the report stated. His first award was issued Nov. 21, 2007, and is included in the total because Spann was not a Civil Service employee, and thus, was not allowed to receive the bonus at all, the report said. Pace received $137,661, while Greene received $165,405.
Five full-time maintenance employees, not named in the audit, received a total of $41,802. Fourteen part-time maintenance employees, also not named, received a total of $9,978.
“By creating false public records and causing funds to be improperly paid to herself and other MCHA employees, Johnson may have violated state and federal law” dealing with theft, malfeasance and filing false public records. The employees who received the funds they were not entitled to may also have violated theft and malfeasance statutes, according to the report. Pace said she issued “all reward payments requested by Johnson based on the improperly altered policy,” the report said.
The report quotes Johnson as saying that after “numerous rewards were issued,” Spann saw that the “payments were not in line with the policy and directed her to alter it to allow for the rewards that were being disbursed.”
The report said Johnson told auditors that Spann and other employees “were primarily responsible for initiating the rewards. According to Ms. Johnson, she knew that the rewards were improper and communicated this to Mr. Spann, but he told her to do as he said and he had things under control.”
Spann denied that and said he did not direct Johnson “to alter the policy and was never told that the reward payments or the altered policy were improper,” according to the report.
On the finding concerning improper pay raises, the report said Greene received $61,756 in excess wages between May 2009 and September 2012; Pace received $47,965 in excess pay in the same period; and Johnson was paid $20,697 in excess wages during that period. The Civil Service regulations allowed up to a 5 percent increase, but in most cases the three workers received raises of 4 to 10 percent on each of the six occasions, according to auditors.
Johnson claims Spann or Pace directed her to make the improper pay increases, according to the report. Spann said in the report that he “was not aware of the 10 percent raises given to office employees.” Pace told auditors that Johnson “initiated all pay increases.” The report said that for each pay raise, the authority “failed to complete performance evaluations and neglected to report the pay increases to Civil Service as required.” The improper pay was ended June 18, 2014, a year after Spann resigned, the report said.