The 2017 fiscal year audit for the City of Winslow was presented to the city council earlier this month, which included a $69,000 discrepancy from the public housing authority. During that council meeting, the public was alerted to the fact that former public housing director Joyce Shorthair had admitted to misappropriating the funds.
Winslow City Manager Steve Pauken explained that the city was aware of the issue and it has been mitigated. In a follow up interview with Pauken he clarified. “We had been getting some information from Lindsey and Company, a third party accounting firm that handles public housing. They began noticing that the money didn’t look like it was supposed to and simultaneously, (finance director) Elias Jouen was gathering financial statements to prepare for the audit. As he was piecing things together, he also noticed there was money that was not there in excess of $43,000.”
In September of 2017, Shorthair went before the city council and asked for them to waive an amount of $43,000 from the ledgers citing a clerical error, which the council approved. A few weeks after that meeting, according to Pauken, “Joyce came into my office and confessed to taking the money.”
Pauken alerted the Winslow Police Department to the matter, as well as the Department of Housing and Urban Development (HUD). “We had Sergeant Hayes start the investigation immediately and he interviewed her twice, where she confessed to him also.” Shorthair was on administrative leave during the investigation and was terminated three weeks later. “I would have done it sooner,” Pauken said, “But I was thinking that someone would file charges. Sergeant Hayes was working with the (Navajo) County Attorney to build the case but the Inspector General was assigned the investigation and Hayes turned over all of the information he had collected. Therefore, no charges were filed in our county court.” Pauken said.
“In December or January, I asked the Inspector General’s Office when they were going to file charges and he said they needed more information so that they could be sure it was ironclad.” To that Pauken said, “She gave us a confession, she has admitted to everyone what she has done. It would appear to me that it is already a slam dunk.”
The investigator explained to Pauken that because it is a federal crime, it is low on the priority list due to the amount being below $100,000.
Shorthair had been with the housing authority for about two years, according to Pauken. “We don’t believe she stole any money until right before Jesse (Fernandez, retired director) left. So, $69,000 over the course of 10 or 11 months.”
It is important to note that the housing authority employs three people, the director, a housing specialist, and a facilities manager. None of the other employees have been implicated nor are they under suspicion in this crime.
“In fact,” Pauken said, “just before the audit, the housing specialist came in and told Human Resources Director Dave Coolidge that she couldn’t prove anything, but she thought something funny was going on.” When asked how Shorthair was able to appropriate these funds, Pauken said, “It has been the policy of public housing not to accept cash. Shorthair allowed the tenants of these low income houses to pay in cash. The residents pay rent according to their income. She was doing the paperwork as if someone’s income had gone down, so she would put in the ledger the lower amount of the rent paid and keep the difference.”
No charges have been filed as of press time and the investigation remains in the office of the Inspector General under the direction of HUD. Shorthair was not available for comment, but according to Pauken, “I believe her mother was ill, living in Farmington and being treated in Flagstaff. So that is a reason she gave for having taken the money. In her confession, she said she thought she had taken about $20,000. It turns out it was more than three times that.” He added, “She won’t get away with it, she will be charged and I am 100 percent sure she will be convicted. And I am relatively sure that will happen in 2018.”
Currently, the public housing department is being headed by an interim director. Andrew Loubert is in charge of the day to day operations for the department and he is on site three days a week. Loubert is working directly with HUD to bring the housing units up to date and make sure routine maintenance is done. He is also working to get the financial aspects of the office organized.
The future of the program is still in discussion, according to Pauken. “We are discussing the possibility of the Flagstaff housing authority merging with ours. They would take over ownership and management of the facility.” Benefits to a merger would be a larger staff, and experience in managing public housing. “Without equivocation it would be better for the community and for the tenants. It’s in the community’s best interest to get the best, qualified, knowledgeable management on board.”
Pauken made sure to mention that no jobs will be lost in the department if the City of Flagstaff does take over, “In fact, it could increase the amount of jobs available with housing.” That merger is not an absolute at this time, but as Pauken explained, “It would be ideal.”
