A dispute over a Baltimore Office of the Inspector General report on millions in unpaid water has bubbled for days, as first the Housing Authority of Baltimore City objected to the conclusions and then the inspector general herself responded, arguing the Department of Public Works and housing authority need to work it out.
A report published Tuesday detailed the disagreement between public works and the housing authority. Investigators reviewed years of public works water billing records and found that the housing authority’s balance as of June 2023 was $7,869,000.
But housing authority officials told the inspector general that claim by public works is “wildly inaccurate,” and said the balance is $1.02 million — and that more than half of that figure is from accounts that are still being resolved.
“The focus of our investigation was initially on DPW,” Inspector General Isabel Mercedes Cumming said on Friday. “However, the investigation revealed there are two government entities with wildly divergent beliefs in how much is owed.”
What the report says
The OIG report said the housing authority, which is federally funded, has had a widely varying water bill balance over the last three years, with delinquent bills that have totaled as low as $6 million and and as high as $16 million.
Investigators reached the conclusion after examining years of records from public works’ customer information and water billing system. The report noted that one public works employee was responsible for all consolidated water billing for the city’s master accounts — that is, accounts that tally the total water bills for multiple properties.
Housing authority staffers told the inspector general that the agency owns and is financially responsible for over 7,000 properties; public works’ master account for the housing authority contains 1,209 subaccounts. The public works employee told investigators that the housing authority’s bill ballooned due to its record of making only partial payments.
Additionally, the inspector general found that public works’ customer information and water billing system and the Department of Finance’s spending portal listed different dates and amounts of the most recent payments for some housing authority-owned properties — a discrepancy that neither the public works agency or housing authority could explain to the inspector general’s satisfaction.
Richard Luna, the interim public works director, told the inspector general that his agency will complete an audit of all housing authority properties in its water billing system; it is scheduled to conclude by the end of the year.
What the Housing Authority of Baltimore City says
According to internal data provided by the housing authority, the agency has paid public works more than $50 million of water bills since 2017, while also discovering inaccurate billings. Housing authority President and CEO Janet Abrahams released her agency’s own record of water bills to both the inspector general and media; the documents listed an account balance of just over $1 million, though the housing authority is contesting that almost half of that figure is incorrect and tied to Perkins Homes, the public housing complex that was demolished earlier this year and is being redeveloped.
According to the report, the housing authority has entered into a settlement with City Hall in February to clear a delinquent balance at the public housing complex: The housing authority paid $764,000 toward the account’s balance, while Baltimore remitted the remainder of a $2.6 million bill.
“While an HABC staff member was contacted by your office to discuss the water billing system issue, our records were not part of your fact-finding process. Without reviewing our ledgers and other important financial records, we believe your review is considered incomplete,” Abrahams wrote to the inspector general.
What the IG insists: “The true amount owed continues to be disputed”
Luna, of DPW, told investigators that his agency will meet with the housing authority to discuss a potential settlement agreement over the outstanding water bills.
In her office’s report, Cumming recommended that the leaders of public works and the housing authority consult with City Hall to settle the outstanding balance and create a plan to manage late or inaccurate bills. She also wrote that public works should internally investigate the disconnect between its own records and those of the city’s finance department.
“The OIG sincerely hopes DPW and HABC will commit to collaborating to resolve the account balance and address any billing discrepancies that may exist as the true amount owed continues to be disputed,” she added.