Nonprofit racks up credit card charges
Top administrators for the agency in charge of providing housing for lowincome residents have spent thousands of dollars on meals at some of Columbus' most expensive restaurants, fitness equipment for a gym at its headquarters, tickets to a water park and baseball games, flowers and gifts.
The Dispatch reviewed credit card records from the Columbus Metropolitan Housing Authority from 2014 through April 13 of this year.
The newspaper's review found that spending on Chase credit cards issued to Charles D. Hillman, the agency's president and CEO, as well as Tom Williamson, the agency's chief financial officer, and other CMHA officials totaled $906,413.43 over that period.
The largest amount — $371,234.50 — went toward travel expenses for airfare and lodging for conferences from 2014 through April 13, 2019.
Much of the restaurant spending is listed under the category of “business development, meeting.” During that same period, agency administrators ran up credit card charges totaling $101,062.35 in that category. Besides spending at restaurants and brewpubs, that figure also includes purchases at places such as Kroger, Giant Eagle and Whole Foods.
Another $49,131.89 in credit card purchases were for “recognition.” That includes purchases for flowers, including $1,512.24 at Petals and Leaves in 2018, and $1,910.21 foremployee awardspurchased in 2015 at Things Remembered, the mall gift store where buyers can get engravings on gifts such as clocks, pens, keepsake boxes and watches.
The total annual spending amount increased each year, from $120,471.88 in 2014 to $259,759.05 in 2018. (Some of therecords the housing authority provided The Dispatch include some spending from previous years.) Travel expenses increased from $48,266.41 in 2015 to $111,327.48 in 2018.
In an interview last week, Williamson said the “business development, meeting” expenses were often for meetings with “investors, tax credit syndicators, and others.
“We’re meeting with anyone that can help us with our affordable housing mission,” he said. “Sometimes it’s a matter of convenience. Sometimes it’s about building relationships.”
CMHA board Chairman Stan Harris said: “Sometimes they treat us, sometimes we treat them.”
“Some entertainment is needed to foster those relationships,” Harris said. The benefit is more affordable housing, he said.
Hillman said that last year the agency closed $91 million in development deals that will result in homes for nearly 600 families.
Williamson said that CMHA is transforming its business model from being “a passive pass-through of federal money to a real estate developer, asset manager and construction management company with expertise in low-income housing.”
“As we develop more housing from the ground up in neighborhoods, it’s a different business model,” he said.
Those lunches or dinners were also for CMHA board members and staff. In recent years, after the last board meeting of the year in December, the five CMHA board members and executive staff go to Smith & Wollensky at Easton Town Center for an annual holiday party, Williamson said.
On Dec. 14, 2018, under an “events” expense category, the tab came to $2,418.61 for about 36 people. That’s about $67 per person. The year before, the agency spent $3,144.80 for the holiday event at Smith & Wollensky for about 40 people. That comes to more than $78 per person.
The authority also spent $1,450.39 at Wolf’s Ridge Brewing on Oct. 27, 2018. Williamson said that was to celebrate finishing the budget with the agency’s executive staff and accounting team and “some of our partners.”
The agency also has spent $6,323.29 for exercise equipment at CMHA’S headquarters at 880 E. 11th Ave. in South Linden. Asked about that, Williamson said the equipment contributed to a healthier staff that led to a $110,000 decrease in health insurance premiums over the past 18 months.
As for the $1,512.24 it spent at Petals and Leaves, Williamson said the agency buys flowers for employees who have lost family members; the executive team also sends personal notes. He said the agency also buys flowers to decorate the headquarters for the holidays.
Harris said the board does not review each credit card transaction, and added he felt “a little shocked” that someone would consider the spending “exorbitant and out of control.”
“This is such a small part of our overall budget. But it’s very necessary and very effective,” he said. “A high priority of the board is to operate within budgetary constraints.”
The leader of a watchdog group said housing authority officials shouldn’t be surprised if their spending is scrutinized.
“The benefit of that public scrutiny is that agencies are more likely to be really careful with resources,” said Catherine Turcer, executive director of Common Cause Ohio, a nonprofit group.
Nonprofit and government organizations have a responsibility to be “frugal and thoughtful,” she said, especially agencies like the authority, which exists to serve low-income residents.
“It’s all connected to the mission,” she said. “And at the end of the day, the mission is to provide housing to the poorest of the poor.”
Michael Lowry, who has lived at Sawyer Manor, housing authority townhouses on the Near East Side, said he had an expense account when he worked for a cabinet maker in southeastern Ohio. He said he wasn’t surprised by the Source: Columbus Metropolitan Housing Authority credit card statements
housing authority’s spending.
“’Hey, it’s free.’ It’s not free. Who gets the bill?” said Lowry, 58.
In an earlier email, Williamson said that CMHA’S Central Office Cost Center is the source of funds for making credit card payments. The total annual spending out of that cost center, including credit cards, comes to about $8 million, Williamson said.
“As noted in our previous correspondence, these are non-federal funds,” he wrote. What Williamson is referring to is a business model that public housing authorities nationwide continue to use that allow once-public funds to lose their federal designation after they are deposited into certain accounts. Williamson said money also comes from market-rate housing as well as income from developer and contract administration fees.
As to the limits to be spent on the cards, Williamson said, “The Columbus Metropolitan Housing Authority uses agency credit cards to make customary and routine business purchases for agency operations. Credit card holders make purchases on behalf of the entire agency — not just the cardholders. These include business development activities, office supplies, business travel, and costs associated with programs that benefit our residents, including summer camps for kids, senior events and property-based activities.”
Williamson said that expenditures are governed by the authority’s annual
board-approved budget, and the credit cards are just one means of payment.
Turcer said that, as the head of a nonprofit organization, she reminds herself that spending on conferences or lunches “is coming out of the budget” and therefore won’t be available for core needs.
Though it might be acceptable to send an employee flowers to mark a birth or family death, or to celebrate a major accomplishment or milestone, the key is balance, Turcer said. A handwritten note also is a welcome — and virtually free — way to afford recognition or to convey thanks.
The U.S. Department of Housing and Urban Development’s Office of Inspector General issued an “integrity bulletin” in 2016 that urged public housing authorities nationwide to have in place strong, written policies and procedures for credit card use.
Board members should continually reinforce expectations, HUD said, and set dollar limits that are tailored for each cardholder. HUD also recommended monthly reviews of expenses and receipts by a supervisor or independent person.
The bulletin said that purchase and travel card abuse is among the issues commonly identified during audits and investigations of housing authorities.
mferench@dispatch.com @Markferenchik rprice@dispatch.com @Ritaprice