INDIANAPOLIS — An outside auditor has determined there is, “substantial doubt,” that the Indianapolis Housing Agency can survive.
The firm of Katz, Sapper & Miller, LLP, was contracted by IHA to review its finances and status for 2021.
The audit, delivered to IHA Board Commissioners earlier this month with little public comment, found that the Agency’s finances and internal controls are so precarious that it may not survive in its present state.
“We believe that the following events or conditions identified during the course of the audit raise substantial doubt about the Agency’s ability to continue as a going concern for a reasonable period of time,” reads the report.
“The Agency lacks funding to meet secured debt obligations due over the next twelve months from the date of the statement of net position. The Agency has had difficulty managing the various properties and meeting cash flow needs. We considered management’s plans, which are described in the notes to the financial statements, and determined that substantial doubt about the Agency’s ability to continue as a going concern for at least one year after the date of the statement of net position was alleviated.”
The report lists outstanding debts of nearly $19 million for the construction of various IHA properties.
IHA Interim Executive Director Marcia Lewis has repeatedly warned that on a month-to-month basis the Agency is in chronic danger of failing to make its payroll let alone hire staff or outside contractors.
This past week the Agency placed the Millikan II development on Mass Ave. for sale in an attempt to raise a projected $12 million to temporarily alleviate its debt and immediate funding crisis.
The report found that last year IHA had boosted its maintenance spending 71% to $7.6 million in an attempt to alleviate tenant complaints of drywall, plumbing, appliance and infestation issues along with broken windows, ransacked and empty apartments and non-functioning security cameras.
Mayor Joe Hogsett’s administration recently granted IHA $250,000 to hire outside contractors to tackle thousands of unfilled maintenance orders.
While operational revenues and expenditures increased in 2021, so did the Agency’s overall operating loss by two percent.
The report, which was forwarded to the State Board of Accounts, finds material weaknesses and deficiencies in IHA’s ability to monitor its own finances.
The audit finds IHA is not a “low-risk auditee”, and lacks oversight and completed reconciliations and its financial reporting was “incomplete and inaccurate.”
Despite Fox59’s exclusive disclosure in January of a federal whistleblower report alleging mismanagement, corruption and criminal acts that have plagued IHA for years, Lewis maintained, “We have no knowledge of fraud or suspected fraud that affects the Agency and involves: Management; Employees who have significant roles in internal control, or, others where fraud could have material effect on financial statements.
“We have no knowledge of any allegations of fraud or suspected fraud affecting the Agency’s financial statements communicated by the employees, former employees, regulators or others.”
Sources have confirmed they have not been questioned by federal authorities regarding the contents of the whistleblower report.
IHA oversees housing for approximately 24,000 low-income Marion County residents and is in the process of transitioning management of several apartment complexes to third party vendors due to its inability to hire, train and maintain essential management and maintenance personnel.
The Agency is still awaiting other financial and operational reviews undertaken by the U.S. Department of Housing and Urban Development.
Thursday evening FOX59 received this statement from IHA leadership.
Because of concerns about IHA portfolio and organizational condition and its continued viability, all work is structured around implementing strategies to address property and management improvements, generate financial viability for the short and long term, establish internal controls, improve program implementation, systems and customer service which should result in a better quality of life for those who live in our communities or receive assistance through our voucher program.Marcia E Lewis, IHA Interim Executive Director