By Donald Wittkowski
The Ocean City Housing Authority on Tuesday approved an overhaul of its management and financial structure in the wake of an embezzlement scandal involving its chief executive.
In a series of votes to reform the troubled agency, the authority’s board members formally removed Executive Director Alesia Watson, approved her interim replacement and authorized a forensic audit of its finances from Oct. 1, 2013, to May 1, 2017.
The forensic audit will cover the period that Watson worked at the agency. She began in August 2013 and remained executive director until she pleaded guilty on May 8 to embezzling federal housing funds to pay credit card bills for personal expenses.
“We want to make sure everything is on the up and up,” Bob Barr, the housing authority’s chairman, said of the forensic audit.
The board also voted Tuesday to officially remove Watson from the authority’s bank accounts. Watson formerly was in charge of signing the authority’s checks. A new system approved by the board gives the agency more financial oversight by authorizing three people to sign the checks now. The signees include Barr, authority board member Edmond Speitel and the new executive director.
Beginning Wednesday, veteran housing official Jacqueline Jones will take charge as the agency’s new interim executive director. Jones, who currently serves as executive director of the Vineland Housing Authority, will assume the same duties in Ocean City under a shared services agreement between both cities.
Barr, in remarks during the board meeting, stressed that Jones will serve as interim executive director in Ocean City on a month-to-month basis while the housing authority searches for a permanent replacement for Watson.
He said the housing authority may eventually stick with Jones and the shared services agreement with Vineland as “the permanent solution,” but noted “that’s a decision for another day.” The housing authority will pay $4,875 per month for Jones’ services.
In an interview, Barr touted Jones’ qualifications, saying that she maintains an excellent reputation with officials at the U.S. Department of Housing and Urban Development, or HUD. He also said Jones formerly helped to clean up the troubled finances of the Buena Housing Authority, giving her the experience to undertake a similar task in Ocean City.
“I’m 100 percent confident that this agency will get back on track with the new team that is in place,” said Barr, who is also a city councilman, in addition to serving as the housing authority’s chairman.
Barr, who took over as chairman this year, tried to have Watson removed from her job in March after growing suspicious of the authority’s finances, but was unable to win enough support then from his fellow board members.
Watson became the executive director of the Ocean City Housing Authority in 2013 under a shared services agreement with the Brick Housing Authority, where she held the same position. On Tuesday, the board terminated the agreement with Brick, effectively getting rid of Watson to make way for Jones.
Before she was hired in Ocean City, Watson had four previous theft convictions, according to a report in The Press of Atlantic City. She resigned her position as executive director of the Atlantic City Housing Authority in 2007 after the paper disclosed her criminal past.
Barr was unable to explain why Watson was hired in Ocean City, despite her previous theft convictions. He noted that he was not an authority board member at that time.
In pleading guilty to embezzlement, Watson admitted that she misused two Ocean City Housing Authority credit cards to buy 69 MasterCard gift cards between December 2013 and March 2015. The gift cards were used for personal expenses and were also shared by Watson with friends and family members, authorities said.
Watson then used HUD funds administered by the housing authority to pay off the credit card bills associated with her purchase of the gift cards, according to the U.S. Attorney’s Office.
Authorities said between $6,500 and $15,000 was lost in Watson’s embezzlement scheme. Watson, 54, of Galloway Township, is scheduled for sentencing in federal court on Aug. 15 and faces a maximum penalty of one year in prison and a $100,000 fine.
Barr said he and other housing authority board members were unaware that Watson had been under investigation until her guilty plea was announced last week.
The Ocean City Housing Authority uses federal funds from HUD to provide affordable housing for low-income senior citizens, families and the disabled at its Pecks Beach Village and Bay View Manor facilities.
Although the city has no oversight of the housing authority’s finances or management, it did help the agency when residents of Pecks Beach Village were displaced by Hurricane Sandy in 2012 and efforts to get them back into their homes stalled.
Barr explained that the housing authority borrowed Federal Emergency Management Agency funds that were given to the city to help with Sandy recovery efforts at Pecks Beach Village. The housing authority must pay the FEMA money back to the city.
In all, the authority owes the city a total of $298,000 in FEMA reimbursements and payments in lieu of taxes, Barr and other agency officials said.
Barr said he was surprised to learn in April that the housing authority, “all of a sudden,” owed an additional $141,000 in FEMA reimbursements to the city. The $141,000 is included in the total payments of $298,000.
According to Barr, the $141,000 in FEMA funding took the form of a check made out to the housing authority in 2013. The check was cashed on May 1, 2013, but the authority doesn’t know who cashed it and where the money went, he said.
“We don’t know where that money is,” Barr said.
The city found a copy of the cashed check, prompting it to notify the housing authority in April that an additional $141,000 in FEMA funds must be paid back, Barr said.