HUD May Have Broken Law When It Paid Salary of Senior Advisor

In Green/

The Housing and Urban Development Department may have broken the law when it paid more than $620,000 in compensation to a senior advisor on detail from a non-profit organization.

HUD “incorrectly” used funds from the Office of Public and Indian Housing and the Office of Housing to pay $622,369 in salary and benefits for a senior advisor to Secretary Shaun Donovan from 2011 through 2014, according to a new report from the department’s inspector general. The department also overpaid for the advisor’s services by $2,365 more than the initial amount agreed upon when it reimbursed his employer, Community Builders, Inc., an affordable housing developer.

Congress directed HUD in its fiscal 2011 spending law to pay all senior and special advisors to the secretary directly from the Office of the Secretary’s budget to increase accountability. “Despite the direction in the House report and guidance from its own appropriations attorney, HUD reimbursed Community Builders, Inc., for the senior advisor’s services from [Public and Indian Housing] and Office of Housing funds,” stated the May 30 memo from HUD Regional IG for Audit Gerald Kirkland to Acting Deputy Secretary Helen Kanovsky and Deputy Chief Financial Officer David Sidari. That could amount to violations of the Antideficiency Act, which places limits on expending and obligating government funds.

Kirkland’s memo said HUD “may” have violated the Antideficiency Act when it paid the Community Builders employee from the wrong coffers, noting that under HUD’s fiscal 2003 Appropriations Act, the department’s chief financial officer “is responsible for investigating potential violations, determining whether actual violations have occurred, reporting on any such violations, and ensuring HUD takes action.” 

Federal employees who violate the ADA face administrative and/or penal sanctions, which can include suspension from duty without pay, removal from office, fines or imprisonment. The Government Accountability Office keeps track of agencies' ADA violations. Several agencies, for instance, are listed on GAO's website for violating the law in fiscal 2013.

HUD spokesman Jerry Brown said the department has "infrequently" been found to be "antideficient." 

Agencies can bring non-federal employees on board for a short time under a hiring authority when it serves a public good and is mutually beneficial. Under an Intergovernmental Personnel Act agreement, the worker on detail remains an employee of his permanent organization, and returns to that employer at the end of the detail. As part of the agreement, the agency and the organization work out cost-sharing, which typically includes reimbursing the non-federal employer for the detailed employee’s compensation.

Under the arrangement HUD had with Community Builders in the case the IG looked at, the department agreed to reimburse the group a yearly maximum of $205,000 ($155,000 in salary and $50,000 in benefits) for the employee’s services, which was “significantly less than his salary” at Community Builders, the IG report said. “The employee served as an advisor to the secretary; therefore, HUD’s reimbursements to Community Builders, Inc., should have been made from the Office of the Secretary’s executive direction account.”

The employee’s primary job was as a project manager for the department’s Rental Assistance Demonstration program, which uses different financing tools to help preserve and rehab the government’s affordable housing stock. A Jan. 13, 2011, email from the department’s assistant secretary for public and Indian housing said the employee was to be paid by Public and Indian Housing and would be physically located in that office. But according to the IG audit, “there was no evidence that the senior advisor reported to or was housed within PIH.” Documents and video show that the employee was a senior advisor to Secretary Donovan, the IG concluded.

HUD officials in response to the audit said they would investigate whether the department violated the law and if so, “take any necessary and appropriate administrative and other actions” against any employees responsible. HUD also pledged to ensure that those on detail under the hiring authority have a proper agreement in place beforehand and that the department pays employees from the appropriate pool of money.

Brown said the department is just beginning the investigation, and is hoping to leverage some of the IG's work in its own assessment. "We have to be thorough in our review if we are to stop this from happening again," he said. When asked whether HUD would have to reimburse PIH and the Office of Housing somehow for the funds that were used to pay for the senior advisor's salary, Brown said it was too early in the investigation to discuss specifics.

(Image via In Green/

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

  • The Big Data Campaign Trail

    With everyone so focused on security following recent breaches at federal, state and local government and education institutions, there has been little emphasis on the need for better operations. This report breaks down some of the biggest operational challenges in IT management and provides insight into how agencies and leaders can successfully solve some of the biggest lingering government IT issues.

  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

  • Ongoing Efforts in Veterans Health Care Modernization

    This report discusses the current state of veterans health care


When you download a report, your information may be shared with the underwriters of that document.