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July 18, 2024

HUD issued scathing report on Freeport Housing Authority; Designated as “Troubled” –

By John Kraft & Kirk Allen

On December 13, 2019


In a report issued by the Chicago Office of the United States Department of Housing and Urban Development (HUD), it is clear the Freeport Housing Authority has major problems.

HUD designated the Freeport Housing Authority as “Troubled” – which generally means that the Authority has failed 75% or more of performance standards, or an Authority with 75% or less failed standards over a long period of time.

According to HUD’s October 29, 2019, letter on the results and determinations of a PHARS assessment, the Authority received a “Troubled” designation by HUD”s Real Estate Assessment Center.

Financial records, Board minutes, and other documents were reviewed, and some of the findings are bulleted below. You can read the entire document below or (here):

  • The Board has had no training and does not know their responsibilities and roles
  • The Board does not provide sufficient oversight of the Executive Director
  • The Board is unaware of the Capitol Fund Grant program deadlines and reporting
  • The Authority has not maintained its properties
  • The Board does not monitor its vacant units
  • The Authority does not have Sexual Harassment or Equal Opportunity Employment training
  • Board meetings have been canceled and the Authority has been closed without notice and without prior Board approval
  • The Authority received a physical condition of 27 out of a possible 40 points and improvements in the score will require Capitol Fund spending and employee training
  • Abandoned antennas, dead trees, asbestos materials without surveys, 71 housing units in a Mapped Floodway, long-term vacant units
  • Not enough Board financial oversight of use of funds
  • Misuse of government funds identified in the Forensic Audit with areas of fraud, waste, and abuse in travel expenses, credit card transactions, and other financial transactions over a three year time period
  • Significant decreases in cash and increases in loan liabilities and other expenses resulting in large bank overdrafts between April 2017 and March 2019
  • Lack of knowledge in HUD rules and regulations
  • A multiyear financial score of 0 (ZERO)
  • Multiple years without a budget
  • Recent Financial Statements not completed
  • Financial policies without Board approval
  • A bank account named Northern Illinois Community Connections containing $103,000 not listed or accounted for on the Housing Authority accounting books
  • Authority’s inability to consistently collect monthly rent and past due rent
  • Money spent on retirement parties and funeral flowers is unallowable
  • Using maintenance employees for mowing of properties
  • Lack of detail in Board minutes
  • Inaccurate Grant reporting

For the Forensic Audit recommendations:

  • Develop policy and comply with the Local Government Travel Expense Control Act
  • Disclose potential conflicts of interest – it appeared that certain lease up procedures were circumvented entirely as it relates to employees of the RAD construction company
  • Report the Northern Illinois Community Connections bank account on the Authority’s financial books
  • Develop a written credit card use policy and keep all receipts
  • Develop a code of conduct prohibiting unlawful and improper use of Authority assets, prohibit undisclosed or unrecorded assets, prohibit false entries in the books, and prohibit improper payments

We currently do not have a copy of the forensic audit but have requested a copy of it under the Freedom of Information Act.




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  • Nehemiah
    Posted at 14:32h, 14 December Reply

    Funny cause everyone has been reporting Freeport Hud for years and nothing has ever been done.

  • danny
    Posted at 12:17h, 28 January Reply

    Illinois being the most corrupt state in the world can`t set an example for anything.

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