Marcell, Struzzi Respond to Auditor General’s PHFA Audit
“Taxpayers are not a bottomless pit of money for government bureaucracy to waste
but that’s exactly what happens when agencies like PHFA cannot and do not manage programs as they are supposed to.”
HARRISBURG –Reps. Kristin Marcell (R-Bucks) and Jim Struzzi (R-Indiana) issued the following statement in response to the
auditor general’s performance audit of the Pennsylvania Housing Finance Agency’s (PHFA) PennHOMES program.
During her first term in office, Marcell raised questions during House Appropriations Committee hearings about transparency and accountability within PHFA. An audit of the agency has not been done since the 1980s and concerns have been raised about the mismanagement of COVID funds. The newly released audit confirms those concerns were well founded, particularly with regard to oversight of the agency’s PennHOMES program.
“No matter how worthy a program, it is still taxpayer dollars funding it and those dollars needed to be managed responsibly; this audit proves that PHFA is failing in that responsibility at a time when taxpayers need more confidence their dollars are being well-managed than ever before,” said Marcell. “This audit also reinforces why legislative oversight matters.”
Appropriation Committee Chairman Struzzi praised Marcell’s efforts to bring accountability and transparency to taxpayer-funded programs. “The fact that this audit even happened is proof that House Republicans like Rep. Marcell are getting things done for Pennsylvania taxpayers. Every dollar lost to mismanagement or improper payments drives up the cost of government, which results in increased costs and lack of affordability for Pennsylvanians. This is why the PHFA must address the audit findings and recommendations with urgency.”
Marcell pointed to one failure of PHFA’s management found in the audit as an example of why she fought for the audit as well as the need for continued strong oversight to ensure reform and continuing transparency.
“Fifty-eight percent of loan recipients were not even asked to pay back their loans. This is inexcusable and ridiculous,” said Marcell. “Taxpayers are not a bottomless pit of money for government bureaucracy to waste but that’s exactly what happens when agencies like PHFA cannot and do not manage programs as they are supposed to.”
Specifically, auditors found that PHFA purged hard-copy documents for unfunded projects without first scanning them into electronic format, that scoring sheets did not include all factors considered in funding decisions and that documentation supporting financial capacity and project viability reviews was lacking. Additionally, they found concerns regarding properties being unable to repay PennHOMES loans.
The audit reviewed only PHFA’s 2022 and 2024 application cycles and found two formal findings with 24 recommendations for improvement. While auditors did not find issues with the completeness or timeliness of applications that were awarded funding, they identified concerns related to missing written documentation supporting award decisions.
The audit also found that PHFA did not consistently perform, review or adequately document monitoring of PennHOMES-funded properties. Among the findings:
• Supervisory review of financial performance reviews was not documented for 37 properties.
• Twenty-four properties (or 58% of those reviewed) were not sent loan repayment billings in 2023 due to low surplus or cash deficits.
• One housing development project received 2022 funding despite a PHFA staff member recommending that it not be funded.
• Monitoring was not performed for five properties as required by policy.
• Inaccurate rent and income information was found on six properties.
“This audit covered only a tiny sliver of the agency and they found these significant issues. Yet, PHFA has still not yet responded to the audit as requested,” said Marcell. “This should concern every taxpayer who is footing the bill for these programs, and I look forward to hearing the agency’s response and how they plan to address these issues now and in the future.”
To view the audit, click here.
Representative Kristin Marcell
178th Legislative District
Pennsylvania House of Representatives
Media Contact: Will Patterson
267-688-2590
wpatterson@pahousegop.com
RepMarcell.com / Facebook.com/RepMarcell