PHA Accountants May Be Held Liable for Former Director’s Fraud

Facts: A local PHA sued its former accountants, seeking to recover losses from their alleged negligent failure to detect the fraudulent conduct of its former executive director and former finance director. The former executive director’s employment agreements established his annual salary at $107,000 for the 2001 fiscal year. The PHA was required to submit annual budget reports to the Department of Housing and Community Development (DHCD) for approval, subject to regulatory limits on the amount by which a PHA could increase administrative salaries.

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