Fraud, mismanagement led to millions in losses for Houston Housing Authority

As issues continue to persist across the country for local housing authorities, the situation in Houston has led to an investigation by prominent local media outlets and a commissioned report by outside legal counsel. The probe found that mismanagement of contractors and the submission of fraudulent paperwork likely led to millions of dollars in losses.

Stemming from a much-touted addition of air conditioning units to Houston public housing units in late 2023, the Houston Housing Authority (HHA) “hired 21 contractors to install 1,615 window units” at several communities, according to reporting by the Houston Chronicle.

HHA “agreed to pay $1.2 million for the AC units and $650 for each to be installed, for a total of $2.2 million in federal funding,” the report explained.

But residents reported that their new window AC units were removed only days after being installed.

This led to an investigation by the Chronicle and local NBC affiliate KPRC-TV about why the quick about-face transpired. The situation ultimately led to the resignation of HHA’s president and CEO in November 2024.

A report by HHA’s outside counsel was commissioned by its board of directors. The report itself is largely classified and protected by attorney-client privilege, but the board elected to release an executive summary earlier this week.

It found “significant lapses in process and procedures within HHA concerning the award of contracts, as well as contract administration and procedure, including the review and approval of payments under awarded contracts.”

In a memo to the HHA board to recommend the public release of the executive summary, new president and CEO Jamie Bryant called the matter “important to our constituents.”

Board chair Jody Proler added in a statement to the Chronicle that the “investigation has proven extremely helpful to our new president and his leadership team, who have embraced the opportunity to strengthen internal processes,” although Proler did not specify the process changes that had been considered or implemented.

The summary detailed that at the time the new AC initiative was implemented, “there were no formal HHA procedures for vetting contractors and ensuring contractors were ‘responsive and responsible’ as required [by Department of Housing and Urban Development] regulations and guidelines.”

As a result, “contractors lacked the experience, training, tools and resources to adequately perform the work,” the summary stated. “The contractors had little oversight, and submitted invoices that were paid by HHA before the work could be checked to determine that it was completed pursuant to contract specifications.”

Failure to properly vet contractors for the project also led to “at least one contractor with questionable business dealings and background” receiving financial “kickbacks” from the program, HHA reported. It added that one possibly unscrupulous contractor “was the likely source” of fraudulent paperwork submitted to HHA, according to the Chronicle.

The summary also cited instances of unspecified “inappropriate behavior” from some contractors toward HHA employees. The total sum for the AC program approved by the HHA board came out to roughly $2.2 million, but the total cost of the effort was in excess of $5.4 million.

The additional expenses were attributed to “the need for corrective and emergency work, and hiring additional vendors nearly doubled the project’s cost,” according to the Chronicle.