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updated: 8/18/2011 4:08 PM

DuPage Housing board adopts ethics ordinance

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By Robert Sanchez

After the DuPage Housing Authority mismanaged more than $10 million by failing to follow federal regulations and its own policies, the agency's new regime intends to follow a fresh set of rules geared toward preventing another financial scandal.

The members of the revamped housing board on Thursday adopted an ethics ordinance and several spending and reimbursement policies.

Peter Lennon, the authority's interim executive director, said the measures bring the Wheaton-based agency into conformance with what DuPage County government is doing.

"A lot of these policies are based upon a review of DuPage County's policies," he said.

The new policies, which include stricter travel guidelines, are being praised by county board Chairman Dan Cronin.

"We must have a higher standard of conduct because we are public servants," Cronin said. "They (the authority's former leadership) became insulated and operated under the radar and got real cozy. But that era is gone."

Cronin forced the resignation of the authority's former executive director, John Day, after learning about two audits critical of the agency by the federal Office of Inspector General.

Then Cronin replaced every member of the housing authority board when a third audit concluded that the agency misspent more than $5.8 million in federal money and failed to adequately document another $4.7 million.

Auditors blamed Day and former DHA board members for the agency's failure to follow its own policies and U.S. Department of Housing and Urban Development guidelines.

"Decisions were made that were contrary to what the federal government dictated in their regulations," Lennon said. "They had access to the code of federal regulations. They just didn't always follow them."

That includes when Day repeatedly used his agency-issued credit card to buy meals, flowers, clothes and beverages for housing authority staffers. Federal officials said the purchases were an inappropriate use of housing funds.

Lennon said all the credit cards are gone.

"No one has a credit card," he said. "They've all been canceled and cut up."

Now authority employees use their own money on business-related purchases and travel and submit expense forms to get reimbursed.

Even the authority isn't making any significant purchases without first getting federal approval. In addition sending weekly reports to HUD, Lennon says he asks HUD officials to sign off on expenditures of more than $1,000.

"We're basically just following the book for everything," he said.

In the meantime, authority officials are continuing to work with HUD on a corrective action plan. That's expected to include how the agency is going to meet a requirement to repay more than $10 million to the federal government using "nonfederal" funds.

Most of the agency's budget comes from federal sources. It receives nearly $23 million a year in HUD assistance and has limited amounts of cash in its nonfederal accounts.

Cronin said he would like to see the housing authority put the "black eye" of what happened behind it.

"We have people who need affordable housing," Cronin said. "We've got to make sure we fulfill that mission."