MILWAUKEE — People who live at Housing Authority of the City of Milwaukee (HACM) properties are outraged to learn the agency is at risk of bankruptcy in as little as 45 days after misusing Section 8 funds to pay staff salaries and benefits.
The news comes after TMJ4 News obtained an internal email that details the dire financial situation HACM faces.
Multiple sources have confirmed this email was sent by HACM's Chief Financial Officer, Brad Leak, and was sent to several board commissioners on Monday.
The email states unreconciled cash balances in the agency’s audits show that since 2019, $2.8M in funds were removed from the Section 8 program to cover agency overhead salaries and benefits in order to make payroll.
Documents obtained by TMJ4 state this was not reported to the Department of Housing and Urban Development (HUD), the agency that oversees HACM.
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-EXCLUSIVE: HACM at risk of bankruptcy for improperly using Section 8 funding to pay staff, sources say
Watch: HACM at risk of bankruptcy for missing Section 8 funding, residents outraged
"Now you're talking about going bankrupt? That's my problem with them," said Chris Logan who lives at the Mitchell Court Tower near 26th and National Avenue. "What are we supposed to do? Everybody is sending in their rent right now. So we paid rent to do what? To worry about where we're gonna go and what's going to happen?"
That concern echoes across the city.
TMJ4 Lighthouse Reporter Ryan Jenkins spent Friday driving across the city to different HACM properties and speaking with neighbors.
"Hopefully I can still have my home," said Florence Riley, a HACM resident who lives at HACM's West Lawn property near 65th and Silver Spring. "You're just going to come up missing $2.8 million and now in 45 days, you might file bankruptcy? HACM! That's a big deal? Somebody needs to be held accountable for that kind of money."
The mismanagement of funds frustrated neighbors who said they've been raising concerns about quality of life for years.
"My main thing is security. They say they don't have enough money. That's $2.8 million that could've gone toward security," said Riley.
Neighbors like Florence and Chris say this latest discovery sends a clear message to residents: "You don't care about your people and that's not fair to none of us," said Logan.
Meanwhile, HACM leadership is now promising to work with HUD on a roadmap towards solutions.
"What can we tell them to assure them that they have some stability in their housing? What do we tell them," asked Commissioner Sharlen Moore.
"We have to be holding our staff accountable who are improving our performance so that we can get out of this troubled status," said Ken Barbeau, HACM Interim Secretary and Executive Director.
A call for accountability and transparency as HACM leadership works to figure out what it would mean for residents if the agency does file for Bankruptcy.
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