The Housing Authority of the City of Milwaukee (HACM), an independent agency in Wisconsin’s largest city that was already embattled following the discovery of millions of dollars in misappropriated federal funds, is facing further financial scrutiny this week after the city’s comptroller said it is owed more than $5 million in reimbursements to a city department. This is according to reporting by Wisconsin Public Radio (WPR).
City officials said that HACM has reportedly failed to reimburse the city for employees housed in its Department of City Development. Some staff members who perform HACM functions are on that department’s staff under the terms of an agreement with the city, and the total of employees under this arrangement was as much as 150.
Now, that figure has dropped severely to encompass only four employees, according to comptroller Bill Christianson. But at a meeting of the city’s Steering and Rules Committee held on Feb. 17, Christianson said HACM has failed to make any reimbursement payments to the city for these employees since 2021, with an estimated $3.6 million owed by HACM to the city for salaries and benefits.
“It was a surprise, not only to myself, but several of my colleagues who weren’t sure […] how HACM owed the city that amount of money and for what,” said Milwaukee Common Council President Jose Perez according to WPR. “We wanted to get to the bottom of it.”
The comptroller is investigating how the amount owed could have been allowed to run up to such a high figure, saying it was not immediately clear to him why the affected positions were “allowed to remain in the city’s budget.”
Christianson added that he thinks the city should designate a department that would have responsibility over the financial arrangements between the city and HACM to ensure the housing authority’s compliance in paying what is owed.
HACM itself is assessing how to move forward, according to a statement issued to WPR.
“HACM’s new leadership team will conduct a thorough review and collaborate with the city to assess its current financial obligations,” it said. “Moving forward, HACM is committed to establishing a more transparent and efficient process to ensure financial clarity and accountability.”
But the reportedly owed money doesn’t end there. Christianson added that HACM owes the city another $1 million from its Payment In Lieu of Taxes (PILOT) program, which is designed “for tax-exempt properties in Milwaukee that agree to a voluntary payment,” WPR said. On top of that, another $500,000 is owed to the city for legal, internet and data services the city provided to HACM.
That brings the total money the city says it is owed by HACM to $5.1 million.
Earlier this month, the agency’s new chief financial officer reportedly identified as much as $2.8 million in misappropriated federal funds that he said were used inappropriately by his predecessors. The source of the financial discrepancy reportedly came from the misallocation of funds tied to U.S. Department of Housing and Urban Development (HUD)’s Housing Choice Voucher (HCV) program for rental assistance.
HACM addressed the misallocation in an announcement where it said it has partnered with HUD on a recovery plan. HACM is also in the middle of a search for a new director after its previous leader resigned effective Jan. 1, 2025.
