$2.8M misused within Milwaukee’s public housing authority, CFO says

Charlotte Hayslett’s voice cracked with emotion as she spoke to Milwaukee’s public housing residents in a city conference room last week.

“To our residents, on behalf of this commission, we apologize to you all,” said Hayslett — recently-appointed chair of the Housing Authority of the City of Milwaukee’s board — to applause and echoes of “amen.”

Between 2019 and 2022, the authority known as HACM improperly diverted $2.8 million from its Section 8 voucher program funds into its central office to cover payroll and benefits for staff, Chief Financial Officer Brad Leak announced at the meeting.

The $2.8 million discrepancy in HACM’s books had attracted federal regulators in 2022.

Now, the agency is making cuts. It recently laid off 24 employees as a first step back to financial health, Leak said.

New leadership reveals mistakes that led to financial crunch

Rising material costs during the COVID-19 pandemic hit HACM as it was building its Westlawn Gardens development, said interim Secretary-Executive Director Kenneth Barbeau, who’s been in the role since Jan. 2, 2025.

“We could’ve tried to cut back and scale back what we were building and what we were doing,” he explained. “Instead, we moved forward, we incurred the costs.”

Crunched for cash, agency leaders started siphoning money from the Section 8 voucher program — a separate pool — into their corporate office, primarily to cover payroll and benefits.

“You cannot cross those lines,” said Leak, who was hired by HACM in December 2024 and promoted to CFO in late January.

He said only income from housing projects can pay for administrative expenses.

Leak said he didn’t need long to reconcile the books and discover the misuse of funds.

“The folks before me had high integrity,” he said. “They just ran into tough times. And they just did not have the wherewithal to move forward with transparency.”

HACM’s previous director, Willie Hines, retired on Jan. 1, 2025.

Now, “lean and mean” is Leak’s prescription for HACM’s financial ills.

“The next six to 10 months is cutting back the corporate fat,” he said.

Leak said staff cuts would not affect resident-facing services, and that HACM is filling vacancies by promoting from within.

A recent forensic audit of HACM found that none of the $2.8 million were embezzled to anywhere outside the organization, Leak said.

Mood of reconciliation at board meeting

It was Leak who delivered the bad news about HACM’s finances at Friday’s meeting. But the fact that the disclosure was made at all seemed to break a dam in the room.

“Typically, people want to hide this information” said Hayslett, a former HACM resident, to calls of “yes” around the room. “This is not being hidden.”

Residents of HACM properties, complaining of bedbug and rat infestations, filed a lawsuit against their landlord in August after organizing for years around substandard living conditions.

Hayslett called last week’s meeting a “new day” for the agency, promising transparency.

“You don’t have to run exposés and do all of this other craziness,” she said. “I will be knocking on your doors.”

HACM’s seven-person oversight board is appointed by Milwaukee’s mayor. Four of its five current members started their terms after November 2024.

Board member and Milwaukee Alder Sharlen Moore said the board hopes to present their picks for the two vacancies to Mayor Cavalier Johnson in the next 30 days.

Many HACM residents came to the meeting with Common Ground, the community organizing outfit that’s been working with public housing residents.

One of them was Florence Riley, who lives in the Westlawn Gardens development.

“Already, from being nominated in, they’re listening to us, asking our opinion,” Riley said of HACM’s new board. “So that’s a good thing.”