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April 10, 2007


State Audit Details Extensive Wrongdoing by Former Executive Director of the Ithaca Housing Authority

Former Executive Director Misused More Than $200,000 of Authority Money,
Audit Details Breakdown of Oversight by Authority Board

Audit Referred to the Tompkins County District Attorney’s Office

A former executive director of the Ithaca Public Housing Authority spent more than $206,000 for his own personal benefit and other questionable purposes, according to an audit released today by State Comptroller Thomas P. DiNapoli. Auditors found that the former director abused authority credit cards, gave payroll advances to himself, lived rent-free in an apartment for low-income individuals for almost two years, and made a number of questionable purchases and donations.

Auditors found that the former Executive Director Lawrence Williams could override the authority’s internal controls and process payments outside of the normal flow of transactions without fear of discovery because the board did not review his expenses and provided little, if any, oversight of the authority’s fiscal operations. The board also approved questionable transactions that allowed the Cayuga Housing Development Corporation (CHDC) to purchase property from the authority board chairman for Williams’ use. In addition, auditors found that employees who could have identified the problematic expenses were afraid to do so because of threats of dismissal. The findings of the audit have been referred to the Tompkins County District Attorney’s Office.

“Any misuse of public dollars, particularly when those monies are intended to support needy families, is unacceptable,” DiNapoli said. “This audit clearly illustrates what can happen when an individual charged with safeguarding public funds decides to take advantage of his position for personal gain, and what happens when a board fails to take its oversight responsibilities seriously.”

Williams served as the executive director of the Ithaca Housing Authority from March 2001 to November 2003. The board terminated his contract in November 2003 after Williams attempted to eliminate five maintenance positions to reduce costs. At the time, the maintenance workers’ union had attempted to review the authority’s credit card statements because of allegations later found to have merit by auditors that Williams was charging personal expenses to maintenance budget line items. Upon advice of outside legal counsel, when the board terminated Williams they provided him with a $40,000 severance payment.

The State Comptroller’s Office commenced an audit of the authority’s records from October 2002 to January 2005 after being made aware of a U.S. Housing and Urban Development review that identified several problems at the authority.

Auditors noted that the board has taken a number of steps to improve operations since Williams left. The board has established a number of new policies and guidelines to tighten controls. Since Williams left the authority, the board has noted that credit card charges have decreased by more than 80 percent.

Among the inappropriate and questionable purchases or actions taken by Williams (See Appendix A, B and C for a complete breakdown):

  • Credit Card Abuse. $44,366 was inappropriately charged on authority credit cards, including $9,586 for a range of items such as invitations to his relative’s birthday party; $8,003 for personal travel-related expenditures such as a massage; $4,242 for electronic equipment and other household items; $3,918 for meal costs at Ithaca-area restaurants; $2,996 for excessive and improper relocation expenses for himself and another former authority employee; $2,787 for out-of-state purchases including a computer; $2,365 for furnishings; $1,763 for perfume, a toy train and other personal expenses; $718 for flowers including $161 for his relative’s funeral in North Carolina; and $464 for a car and one-way truck rental to North Carolina. He reimbursed the authority for $11,847 in additional personal purchases he made; however, he determined which purchases were personal, not the board.
  • Improper Payroll Advances. $24,400 in payroll advances to himself ranging from $2,400 to $6,000 without board approval. In January 2002, Williams authorized a payroll advance of $1,500 to Crystal Johnson, who at that time was a prospective employee.
  • Rent-Free Apartments. Williams lived in an authority-owned apartment rent-free from April 2001 to December 2002. From January to November 2003, he paid $250 per month for rent. According to authority officials, based on his income level, he received $17,101 as a rent benefit but it was never reported on his wage statements. In addition, Williams allowed Johnson to live in a rent-free apartment, which auditors valued at $7,500 but was also not reported in her wage statements.
  • Misuse of Signature Stamp. $21,230 was spent on a sport utility vehicle for his own use. Williams used the chairman’s signature stamp, without the chairman’s knowledge, to purchase the vehicle.
    Sale of Property at Less Than Fair Market Value. Two vehicles were sold to Williams’ sister and another individual for $300 each. Auditors determined the conservative value of these vehicles was about $2,800 each.
  • Improper Donations. $4,337 was donated to various organizations by the authority ― a portion of these donations were improperly approved by the board. This included $1,838 in donations that Williams’s personally made, including a $100 donation to a church in Charleston, South Carolina for a Palm Sunday Tea. Federal guidelines do not permit donations to be made by housing authorities.
  • Undocumented and Inappropriate Expenses. $9,223 was paid for non-credit card purchases that had no supporting documentation or justification, including such as $2,412 for Christmas decorations, $1,000 to have six office chairs upholstered out of state, $913 for executive writing pad and rosewood pens. Another $5,000 was spent for 400 copies of a children’s book and $913 for personalized mints for the reception desk that were not approved by the board.

Auditors found that the board provided little or no oversight of the executive director’s activities. It did not properly review and approve claims for payment, even though numerous claims were questionable and did not have proper documentation.

Auditors also found that the board improperly advanced $40,610 to CHDC, which was used to purchase a house and vacant lot in the town of Dryden from the Chairman of the Ithaca Housing Authority’s Board, Sam Leonardo. According to Leonardo, Williams could not secure financing to buy a house on his own, so the CDHC was created and authority funds were used to purchase the chairman’s house for Williams’ use. The purchase of the chairman’s property by a subsidiary of the authority created at least the appearance of a conflict of interest. In addition, the authority is not authorized to purchase property outside the city and therefore is not authorized to make loans to its subsidiary to make these types of purchases.

Auditors made ten recommendations to improve operations at the authority. In its response to the audit, the board disagrees with many of the report’s findings and recommendations. The board believes that “most of the expenditures listed were in fact legitimate expenditures.” While auditors offered to provide the board with their documentation identifying the inappropriate expenditures by Williams, the board did not request the documentation. The board claimed that it was “victimized by the manipulative and coercive actions of the former executive director.” Auditors believe the board’s response letter “dismissed and rationalized Williams’ inappropriate behavior,” and the board’s effort to justify these expenditures after the fact sets a poor tone at the top for the authority.

The Ithaca Housing Authority is located in the city of Ithaca. The authority provides low-rent housing for qualified individuals through public housing and Section 8 housing programs. The authority operates independently of the city, but the board chairman and four board members are appointed by the mayor. The operating budget for the authority was $5.4 million in 2004.

Click here for a copy of the audit or visit

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