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Feds Placed New Rochelle Municipal Housing Authority Under Review for Accounting Irregularities, Operating Funds Suspended

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NEW ROCHELLE, NY — In April, three months after the unexpected resignation of longtime Executive Director Steve Horton, the U.S. Department of Housing and Urban Development suspended operating subsidies to the New Rochelle Municipal Housing Authority in April due to “accounting errors”. 

The NRMHA was placed under a “procurement lockdown,” unable to make major purchases and remains under a QASS review, a rigorous federal assessment that looks at a housing authority’s finances and the accountants responsible for monitoring them.  QASS reviews “seek to pinpoint the causes of financial irregularities.” Some accountants previously under QASS review have lost their licenses.

Steve Horton resigned abruptly as Executive Director last January, leaving the NRMHA board to scramble to find a replacement, Chairman Rick Smith told Talk of the Sound at the time. Bernel Hall, Steve Horton’s successor as Executive Director worked preciously at the NYCHA creating mixed use and affordable housing.

HUD restored NRMHA funding in September based on assurances from Executive Director Hall that things will be done differently moving forward. HUD has also created several temporary requirements:

  • Submit a recovery plan (typically required by HUD to help address problems at “troubled” housing authorities
  • Complete three large procurements ($25,000 or more) subject to HUD review to prove NRMHA can be trusted
  • Submit monthly expense reports.

For years, New Rochelle’s public housing has been among the lowest rated in the United States in terms of building conditions. On a scale of 0-100, Bracey Houses scored 44, Hartley House scored 25, and Queen City Tower scored 55, according to HUD’s annual inspection data from 2016.

Talk of the Sound has received numerous tenant complaints about bedbug infestations, rampant mold, problems with the roofs, heating issues and more, many of which were raised at numerous public meetings of the NRMHA board. The cost to clean Bracey Houses alone, according to board meeting minutes, is estimated to be $25,000.

La Rochelle Manor, a senior housing facility located at 111 Lockwood Avenue and operated by NRMHA, experienced a gas leak earlier this week due to leaking water pipes, according to a discussion at the November 14th board meeting. The gas has been shut off leaving tenants with no stoves to heat or cook food. NRMHA is now providing a (communal) microwave and hot plates until the problem is fixed.

The NRMHA is currently responding to potential legal action from a man who broke his leg after reportedly falling as a result of shoddy work done by an unlicensed contractor. The NRMHA settled another unrelated lawsuit for $20,000.

During a discussion of new security cameras at the November 14th board meeting, a board member suggested that the housing authoity may want to limit how long surevlance data is stored since it has previosuly been used by litigants in lawsuits. He refered to this as a problem.

Problems at the New Rochelle Municipal Housing Authority are not new, based on a review of audits by HUD’s Inspector General. An April 2010 audit found that NRMHA did not determine whether some tenants were eligible for public housing.  NRMHA did not complete annual inspections of units, or make sure that they were “decent, safe, and sanitary.” In two cases it took two years (and HUD intervention) for work orders to be issued to fix maintenance problems. Employees were paid for days that the attendance record did not have them working. 

In one case where an NRMHA employee was residing in an NRMHA building, the housing authority could not prove the employee was eligible for his rent rate, possibly undercharging him in excess of $60,000.

In eight cases, the housing authority did not have open bids for procurements of supplies or services, and executed 12 contracts totaling over $1,000,000 without a cost or price analysis. The housing authority also used its program’s funds interchangeably.

Another OIG audit looked at concerns with two programs meant to help families living in public housing to become independent and empowered, Resident Opportunities and Self-Sufficiency (ROSS) Program and Family Self-Sufficiency (FSS) Program ROSS hire coordinators to hook people up with services and jobs. The housing authority used over $200,000 of ROSS and FSS funds for ineligible expenses including holiday parties, consulting fees, and tenant background checks. Some money was used for costs incurred before the grants began. OIG recommended HUD require that the money be repaid. If a FSS participant’s rent is raised as a result of extra income the money is saved in an account which they can access upon program graduation.  The housing authority wrongly withheld about $3,000 of a graduate’s money, and listed $33,000 in tenant’s accounts as unrestricted assets (money they could use) on a tax returnROSS and FSS programs have funding for separate coordinators, but only one was hired (with both sums of money.)  NRMHA could not prove that an additional $100,000 in charges were “necessary or reasonable.”

HOME funds are used to build, rehabilitate, or rent housing for low income people. According to a 2007 HUD IG audit, $12,000 in HOME funds were paid out for “housing counseling sessions” to NDR Group, a community development organization founded by former New Rochelle Mayor Frank Garito. Neither NDR nor NRMHA was able to produce records of the number of participants, or if they became HOME tenants The HUD IG found the housing authority did not complete required reports monitoring NDR’s performance for two years (2004-2006,) and committed HOME funds for the construction of senior units without knowing how many would be built or what supportive services they would provide.

The housing authority still owes $285,000 they agreed to return as a result of these audits.

My next article will concern RAD, a process the housing authority will be using to transfer its buildings to partially private ownership, and the Heritage Homes deal, which they have only recieved $200,000 for so far.

The NRMHA did not respond to a request for comment.



Talk of the Sound has been reporting for years on a signifcant lack of transparency at the NRMHA (some of which has been addressed over the past two years), serious questions about financial controls, poor maintenance of NRMHA properties and sweetheart deals for certain “connected” individuals.

Lack of Accountability the Norm for New Rochelle Municipal Housing Authority under Executive Director Steve Horton

NRMHA Public Hearing Not So Friendly to the Public

Who is Elisa Singer?

New Rochelle Municipal Housing Authority Board Meeting: August 11, 2014

OPEN LETTER: New Rochelle Municipal Housing Authority Violations of New York State Open Meeting Law

Jared Rice: “I Have A Special Role To Play in Today’s Civil Rights Movement”

NEW ROCHELLE TO FEDS: Goal of Heritage Homes Project to Reduce Concentration of Black People

Journal News Article on New Rochelle Soul Food Restaurant Ignores Rather Obvious Questions

TALK OF THE SOUND EXCLUSIVE: City Failed to Apply Nondiscrimination and Equal Opportunity Policy Under New Rochelle Mayor Noam Bramson

Diversity in New Rochelle Public Housing – 2013

The Gathering Of Men Express Disappointment with New Rochelle’s Failure to Apply Resolution 205 to Heritage Homes Project

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