TALLAHASSEE — Under pressure from Gov. Rick Scott, the head of the Florida Housing Finance Corp. has resigned in the wake of an audit that rapped the agency for hosting expensive meals, including a $52,000 dinner, and awarding nearly $443,000 in employee bonuses while thousands of Floridians were waiting for help to save their homes.
Stephen Auger, executive director of the state-run agency since 2005, said he was stepping down from his job in a letter dated Thursday, after the Tampa Bay Times reported on the highly critical audit.
"Whenever any tax dollars aren’t used effectively and transparently, the governor is obviously concerned,” Jackie Schutz, Scott’s spokesperson, said Friday. "The governor does think there needs to be new leadership and new vision, and he did ask him to resign."
Under Auger’s tenure, Florida Housing repeatedly has come under fire for its lackluster performance in helping struggling homeowners during the foreclosure crisis. In a blistering report last year prompted by a Times’ investigation, a top federal official said Florida had one of the highest rejection rates of applicants seeing mortgage relief from the federal Hardest Hit Fund.
As of September, fewer than 30,000 homeowners had been accepted while more than 100,000 had been turned down for Hardest Hit help.
Created in 1998, Florida Housing Finance Corp. oversees government programs designed to increase the state’s stock of affordable housing. It also administers Florida’s $1.1 billion share of the $7 billion Hardest Hit Fund.
The state audit that prompted Auger’s resignation criticized Florida Housing for hosting a "lender appreciation” dinner of filet mignon and broiled lobster tails last year to honor firms that deal with low-income borrowers. The $52,548 tab included $2,025 for hors’ d’oeuvres; $1,800 for an "imported and domestic cheese display”; and $540 for 10 fruit baskets.
Other expenses that "did not appear to be clearly necessary” for the performance of the agency’s duties included two receptions for staff and board members. One reception, costing more than $3,000, featured a $574 beer and wine bar.
The audit also criticized Florida Housing for lacking a "consistent methodology” for determining which employees should receive bonuses and how much they should get. In 2014 and 2015, the agency awarded bonuses totaling nearly $443,000 to employees, including $12,500 to its inspector general — whose job is to act as a watchdog over the agency and "enhance public trust in Florida’s Public Housing.”
In a letter Thursday to the agency’s board chairman, the director of the governor’s Office of Policy and Budget said Scott is committed to the wise spending of public money.
"It is imperative that we protect all taxpayer dollars,” Cynthia Kelly wrote. "To that end, public funds should not be used for appreciation dinners or similar purposes and employee bonuses should always be performance based and awarded based on metrics approved by the (agency) board.”
The letter also instructed Florida Housing’s board to adopt "significant reforms" to improve its business practices and "ensure total financial transparency for Florida taxpayers.”
Among the changes:
• Publish online external reports detailing public spending.
• Publish employee position and salary information. (The salaries of Auger and other Florida Housing employees are not on a state employee payroll website.)
• Publish all relevant audits, tax returns, financial reports and summaries.
• Publish all public expenditure details by vendor/recipient, with all (agency) contracts provided online.
In its audit for the period January 2014 to December 2015, Florida’s auditor general also cited several areas in which the housing agency did not follow up on recommendations made in previous audits. Among them: the need for better safeguards against unauthorized access to confidential information, including Social Security numbers.
This is the second week in a row in which Scott has asked for and received the resignation of a state agency head following revelations of questionable spending of taxpayer money.
Last Friday, Visit Florida CEO Will Seccombe announced he was stepping down after Miami music star Pitbull revealed the state’s tourism agency had paid him $1 million to promote the state through performances, a social media hashtag and a "Sexy Beaches" music video.
Visit Florida had previously agreed to make the contract private — citing "trade secrets" it contained — and refused for months to release the terms. Pitbull shared the contract on Twitter last week after House Speaker Richard Corcoran, R-Land O’ Lakes, sued to make the contract public.
Scott, who had until then been silent on the controversy, then asked for Seccombe’s resignation. Similar to the housing corporation, Scott’s office also sent a letter to Visit Florida with a list of suggested reforms to improve operations.
Contact Susan Taylor Martin at firstname.lastname@example.org or (727) 893-8642. Follow @susanskate