AAHC v HUD

continued

It was a financial nightmare that nearly caused a human tragedy: a bookkeeping error that threatened to force the Ann Arbor Housing Commission to evict families supported by "Section 8" vouchers from the federal Department of Housing and Urban Development.

"We found it in August," says Marge Novak, the commission's interim executive director. "HUD was starting to pull together information for next year's budget, and they wanted us to review and confirm their numbers. And their numbers put up a big red flag that was like 'Whoa!'"

Whoa, indeed. HUD planned to scale back its Section 8 payments this year, and expected the city to make up the difference from a reserve fund built up from prior payments. But the feds thought that reserve was much bigger than it was. If its budget went into effect, by December the AAHC would have been short $450,000--forcing it to cut off half of the households supported by Section 8.

Nor was the commission alone. "This was something that happened to public housing authorities across the county," Novak says. "I brought it to the board, and they told us to do everything we could to not have to terminate families."