The Housing Authority of Santa Cruz County recently announced the results of a four-month investigation into allegations of employee manipulation of wait lists and landlord payments. It found no evidence of fraud. "After a thorough review of our records, systems and procedures I am pleased to report that we found no evidence supporting any of the allegations," said Ken Cole, the authority's executive director. "We feel that this investigation has demonstrated that our existing program safeguards are working and would prevent the kind of manipulation described in the complaint."

The report was accepted unanimously Wednesday by the six-member board. The investigation started Oct. 24, when a local newspaper informed the executive director of an unsigned letter alleging a housing authority employee boasted of moving up friends on the wait list for a Section 8 subsidized rental. The letter writer claimed that this same employee spoke of suspending subsidy payments for landlords to take advantage of the resulting financial distress.

Cole said he consulted with HUD's Office of Inspector General during the probe and submitted his report Feb. 10. In a four-page report, Cole said the agency reviewed 1,394 household applicants from Jan. 1, 2010, through the current date that reached the top of the wait list and calculated the number of days it took to get a housing voucher. In 15 cases, households got a housing voucher in less than six months; all 15 were examined.

"Nothing in the processing of these files seemed to be out of the ordinary or raised any suspicions," Cole said. "It appears that these households got through the application and eligibility process faster simply because they provided all of the required documentation in a very timely fashion."

Next, staff compared wait list data from the first weekly data backup in 2010 with data from the last backup prior to the new software system, generating "over 30,000 unique records." All changes to key wait list data were examined, and reporting records that changed reflected valid corrections.

The agency then identified 47 rentals where subsidy payment was suspended and the property changed hands in 2010, and found the employee in question handled 33 of these cases. The review found "no unusual patterns of property changes" and no housing authority employees as new property owners.