HUD Seeks to Recoup Nearly $150,000 From Public Housing Authorities That Overpaid Executives

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The Housing and Urban Development Department is seeking reimbursement of nearly $150,000 from six public housing authorities that violated a 2014 federal spending cap on their top officials’ compensation.

Public housing authorities in California, New Jersey and New York exceeded the congressionally-mandated pay cap of $157,100 in fiscal 2014 on the amount of federal funds that can be used to pay PHA executives, according to the latest data just released by HUD. The amount the PHAs overpaid their executives using federal funds ranged from $95 at the Hoboken Housing Authority to $58,281 at the Irvington Housing Authority, both in New Jersey. The other PHAs that exceeded the federal spending cap on total executive compensation in 2014 were: the Guttenberg Housing Authority in New Jersey; the Municipal Housing Authority in Yonkers, N.Y.; the Housing Authority of the Borough of Lodi in New Jersey; and the City of Richmond Housing Authority in California. The total compensation made up of federal money for those individuals in 2014 ranged from $215,381 (Irvington) to $157,195 (Hoboken).

The six PHAs owe Uncle Sam a total of $148,522 for not complying with the 2014 cap.

"HUD is seeking reimbursement to these agencies' relevant program accounts from non-federal sources for any amount over the statutory limit," said department spokesman Jereon Brown in an email.

PHAs -- which are state and locally-run entities that receive a significant amount of federal funding -- were prohibited in fiscal years 2012 and 2013 from using federal Section 8 and Section 9 funds to pay the salaries of their top officials in excess of $155,500, after reports surfaced in 2011 of excessive compensation at some PHAs across the country. Lawmakers extended the prohibition for fiscal years 2014, 2015, and 2016. The annual cap is based on Level IV of the Executive Schedule pay scale. For fiscal 2016, the cap is $160,300; for fiscal years 2015 and 2014, it was $158,700 and $157,100, respectively.

PHAs can pay their executives more than the cap using nonfederal funds if they choose, and many do. The highest-paid PHA executive according to the 2014 data was the CEO of the Santa Monica, Calif., housing authority who received $374,142 in total compensation for that year. No federal funds were used for that individual’s compensation. Several of the highest-paid PHA executives run housing authorities in California, the data showed.

HUD gathered and vetted the compensation data from thousands of PHAs across the country, and found that 99 percent of them complied with the federal salary cap involving Section 8 (Housing Choice Voucher) and Section 9 (public housing capital and operating fund) money. The department reported that overall the average annual salary paid to PHA executives from Section 8 and Section 9 funds in 2014 was roughly $75,000, well below the cap.

In 2013, HUD published a notice in the Federal Register asking public housing authorities for more comprehensive data on how they pay their executive directors, including a breakdown of base salary, bonus and incentive compensation, and which payments are made with federal funds. More than 4,000 PHAs nationwide manage public housing programs. While HUD oversees PHAs, they are administered by states and localities, and are similar in structure to a school district.  Their employees are considered state employees, not employees of the federal government.

“HUD greatly improved the integrity of its data for the 2014 reporting cycle by requiring PHAs to provide compensation information from W-2 forms versus the previous self-certification requirement,” said a department press release.

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