A report released by the Office of Program Evaluation & Government Accountability (OPEGA) confirms previous reports that the Maine Housing Authority spent hundreds of thousands of public dollars on gift cards, travel, meals and memberships in groups unrelated to MaineHousing’s mission.
The “rapid response” OPEGA report was done at the request of Maine’s Legislature and pulled just a small sample of MaineHousing spending between 2007 and 2011. OPEGA reviewed 1,037 transactions and the available supporting documentation for each.
What OPEGA found in the review was “several expense categories that might be questioned as potentially unnecessary.” OPEGA noted that the expenses in question are outside the scope of normal spending in public agencies. “These types of expenses are not typical for a State agency or are not incurred with the same frequency we observed at MaineHousing,” the report states.
The expense categories that included the unnecessary spending were the same expenses that had been highlighted as questionable or inappropriate in early media reports. Sponsorships and organizational memberships, out of state conferences, food and refreshments for employees, gift cards for employee bonuses and meals for MaineHousing management are all listed in the OPEGA report as expenses that are not typical in state agencies.
Sponsorships and organizational memberships
OPEGA found that at least $458,410 was spent between 2007 and 2011 on “contributions specifically for sponsorships, donations, and membership.” The report notes that there was no policy guiding the Authority on which organizations these contributions would support. Former Director Dale McCormick was solely responsible for, “decisions about sponsorships and donation.”
Many of the sponsorships and memberships highlighted in the report include expenditures that had been previously reported by the Maine Wire. An example is $15,250 sent to “Maine Inside Out” a program that teaches “art for social change inside and outside of U.S. prisons.” Former MaineHousing director Dale McCormick made the case that this was an appropriate expense before her departure.
Other sponsorships and memberships reported by the Maine Wire and confirmed by the OPEGA report include EqualityMaine, The far left-wing advocacy group Maine Initiatives, NAACP Portland, Women Unlimited, GrowSmart Maine, the liberal think tank Maine Center for Economic Policy, National Association of Women in Construction, and the Sierra Club.
The OPEGA report confirms that while some of the sponsorships could serve a useful purpose to MaineHousing’s mission, “some of MaineHousing’s sponsorships or donations went to organizations that did not appear to have a direct or clear connection to MaineHousing’s mission.”
A recently enacted law by Maine’s Legislature requires quasi- governmental agencies such as MaineHousing and the Maine Turnpike Authority to have formal policies and strict guidelines on handing out sponsorships and memberships.
Travel and Meals
OPEGA also reviewed a sample of travel and meals by MaineHousing staff and found those expenses to be out of line with the typical expenses of a state agency. The report found that former director McCormick incurred at least $50,000 in reimbursements for travel and meals in just five years. That total included at least 40 out-of-state trips and two international trips.
OPEGA reported that McCormick regularly used her personal credit card and then sought reimbursement, despite having a corporate credit available to her. At least four times, McCormick received “duplicate payments,” although MaineHousing claims those were unintentional payments.
In all, 62 MaineHousing staff members attended 89 conferences in just five years between 2007 and 2011. The total cost exceeded $115,000. OPEGA determined that some of conferences were only indirectly connected to MaineHousing’s mission and the “apparent frequency of conference attendance in general may raise questions as to whether it is necessary to attend them all.”
The report also stated that receipts for travel, meals and lodging were not always provided, leaving the door open for fraud.
Former director McCormick regularly incurred costs for meals, “while she was not traveling and when no business purpose was documented,” according to the report. McCormick spent, or was reimbursed for $9,625 in meals that took place when she was not travelling and when no business purpose was documented.
OPEGA also chastises the Authority for its practice of paying for meals for upper management when no business was taking place. “Business meals among upper management seem to have been common and we question whether they were truly necessary to conduct the Authority’s business, particularly when no outside parties were in attendance.” The Maine Wire had previously questioned this practice in initial reports.
Employee bonuses, staff parties, tuition
In the five years that OPEGA looked at, MaineHousing spent $309,400 on “teambuilding, recognition and appreciation, and wellness incentives,” according to the report. This total includes more than $70,000 in gift cards, awards, gift, flowers and coffee. Another $106,000 was for staff training including “leadership” and “diversity training.”
An additional $27,000 over five years was spent on tuition for employees. OPEGA also highlighted the same “all-staff days” that the Maine Wire first reported on. OPEGA found that MaineHousing regularly held staff parties including, “annual All Staff Day, summer picnic, office clean up day, all staff breakfasts, holiday parties, birthday parties, and project completion celebrations.”
These staff “celebrations” costs taxpayers a total of more than $44,000 in just the five years OPEGA looked at. OPEGA questioned the practice, noting that, “the frequency with which these expenses were incurred cause us to question whether they were all truly necessary.”
Like the Maine Turnpike Authority under now imprisoned former Director Paul Violette, MaineHousing had a practice of giving out gift cards. McCormick purchased and handed out $59,000 in Hannaford gift cards to employees in 2009, “in lieu of raises.”
The gift cards were first reported by the Maine Wire in original reports, however, OPEGA found an additional $10,000 in gift cards that MaineHousing had not released details on. The additional gift cards were handed out as, “incentives for clients to participate in the Energy Education program,” according to the report. Additionally, OPEGA reports there is $4,000 in gift cards currently sitting in a locked cabinet at MaineHousing.
Other Inappropriate Expenditures
The OPEGA report also highlights a purchase of $17,412 for artwork for the MaineHousing offices. The art was purchased from Greenhut Galleries, in Portland. Greenhut Galleries is owned by Peggy Greenhut Golden, who previously worked as the head of the Maine Art Commission under former Governor Angus King.
Also of concern to OPEGA was $3,500 in bonuses given to vendors. Also, former director Dale McCormick used MaineHousing funds to pay for consultants to accompany her to conferences associated with MaineHousing’s “carbon project.” The OPEGA report does not give details, but does highlight a 2008 conference when McCormick was reimbursed $3,245, some of which covered the cost of a consultant attending the New York carbon conference.
OPEGA also noted that McCormick, “often did not provide receipts to support charges on her corporate credit card within the 30 days allowed by policy. This appears to have resulted in MaineHousing incurring frequent late fees and finance charges on the corporate charge card, totaling $455 over five years.”
OPEGA laid out four recommendations for the Agency to get their spending in line, including more detailed reporting on credit card purchases, limiting the use of personal credit cards for business expenses, a regular practice of Dale McCormick, recording expenses in more accurate categories, and reconsider certain expenses when implementing new policies. The last recommendation refers specifically to sponsorships and donations.
Overall the OPEGA report confirms exactly what the Maine Wire had reported earlier. Travel, meals, gift cards, sponsorships of groups handpicked by McCormick, and other questionable spending at MaineHousing are unnecessary and wasteful of taxpayer dollars.
OPEGA did not delve into other issues, including the green energy initiatives, the multi-million dollar carbon projects, the high costs of affordable housing and the failure of MaineHousing to provide safe section 8 housing.
OPEGA noted that this was not a comprehensive review of the Agency, but a “rapid response” look at specific questionable expenditures. A full OPEGA review of MaineHousing is scheduled.