Monday, February 25, 2008

This Post Cost HACP $37,560.38

I didn't want to chime in on the Matt H. story about alleged fiscal mismanagement over at the Housing Authority until I had a better sense of what what actually going on... or at least until sweeps week was over for KDKA. Five days on, however, and I still don't know what's going on... so I feel the need to throw my $.02 in.

First three notes:

(1) I won't purport to know what's actually going on over there at the Housing Authority, because I don't know what's going on over there and I'm not going to say that I do. I can only base my current speculations on my previous activities with them and my years in government. I don't have many facts, just instinct and a priori knowledge. So, everything you read from here on in is speculation. Please keep that in mind.

(2) I won't say that there's anything illegal going on either; I'm not that reckless.

(3) My analysis completely ignores the premise that there is an organizational problem or a bad corporate culture at the Housing Authority.* Although if the alleged fiscal mismanagement was real, you would have thought that it would have filtered up to the top and the executives would have taken care of it. Of course, if the executives had been the ones causing the mismanagement...

Anyway, I'm guessing that the real problem here is less the Housing Authority and more general bureaucratic crap for the following reasons.

(1) Money is not created equal.
(2) You must spend your allocation, lest it be taken back.
(3) You must spend all your allocation, lest you get a reduced allocation next time.

First, Money is Not Created Equal. This is, as I've said before, a confusing premise for people that don't work in Government. Allocations are regularly given from Pot of Money X to be used for Project Y and only Project Y. Project Y may have access to Pot of Money Z, or not, depending on the mandate of Project Y. Let's just say that the whole process of project financing is akin to fitting round pegs in round holes and only round holes.

In concrete terms, HUD gives out money for, let's say, the Housing Authority's Section 8 program. The money for the Section 8 program must be used for the Section 8 program and no other program can be funded by any Section 8 money. Moreover, ONLY Section 8 money can be used for the Section 8 program. The problem is readily apparent: if you try to use other money to pay for the Section 8 program, it's illegal.

This is why you can have a surplus of funds in one project and a deficit in another, causing a budget crunch in the first and rabid spending in the second; you may have a lot of money, but you don't have the right *type* of money.

OK, but why do you have to spend the extra money in the first place? Well (Point #2), You must spend your allocation, lest it be taken back. The problem for local governments is that when they request an allocation from the Feds/State they usually have to tell the Feds/State that they're going to actually *do* something with the money. You can't call up Washington and just say "I want money for 'stuff'"... well, I suppose you could, but they'd laugh at you.

Now, there are plenty of other organizations throughout this great land of ours that want this allocation that your local governments have gotten their grubby little hands on. Local Governments are oftentimes relieved, even joyous, that they get a chance to spend other people's money. The problem, obviously, is that you've encumbered a valuable resource that could be used to do something, anything else. If the Fed/State government doesn't see that the money is actually being used, it will, therefore, take the money back.

This is generally bad because (Point #3), You must spend all your allocation, lest you get a reduced allocation next time. From an organizational standpoint, it does not pay to be *too* efficient. If you didn't spend all of it, you were padding your budget at the beginning and therefore, the logic goes, defrauding the government. You need to spend nearly to the penny, what you said you were going to spend, but preferably more. Underestimating funds needed for a project is forgivable; overestimating funds needed for a project is greedy and inexcusable.

So, at the end of the year, you buy a giraffe.

And yes, this is like a Dilbert Cartoon. Don't laugh, it's not funny, it's HACP.

So, here's my guess at what happened over at the Housing Authority: (1) the Authority ended up with a pot of money that they had no other acceptable use for and (2) they needed to spend the money lest they never get the allocation again or lest they be forced to give it all back.

Admittedly, this is a ass-backwards way of looking at the world, but it is, from a bureaucratic vantage point, fairly reasonable... and if you know the Housing Authority, you know the meaning of Bureaucracy (and ass-backwards, for that matter).

*Anybody remember Stanley Lowe?


Bram Reichbaum said...

Yes but. How does this account for Matt's assertion that HACP has a million things it needs to repair or improve, and the managers are always telling him there's no money? Is it possible that pot of money X can be spent on giraffes but not on playgrounds?

EdHeath said...

I would assume the Feds have been reducing the amount of money they give out for Section 8 housing. I still wonder if part of the issue might have been the transfer of the Housing police to the Pittsburgh police, and the pot of money left over.

O said...

Yup. Crazy, i'n'it?

O said...

The "Yup" was for Bram BTW.