House Financial Services field hearing finds long-running failures at Little Rock Housing Authority

A House Financial Services subcommittee held a field hearing in Little Rock to examine what members called ‘‘Broken Promises’’ at the Metropolitan Housing Authority of Little Rock (MHA), where HUD audits and witnesses testified to years of weak financial controls, missing audits and transfers that put federal housing funds and residents at risk.

Subcommittee chair (referred to in the transcript as Chairman Muser) opened the hearing by saying the committee’s goal was ‘‘to fully understand how these failures were allowed to continue for so long and to make sure the necessary fixes are put in place so the residents of Little Rock…can have confidence moving forward.’’ Chairman French Hill, chair of the full Financial Services Committee, said HUD designated MHA ‘‘troubled’’ in 2023 and cited nearly $30 million in potentially unallowable expenses.

Witnesses described conditions they said they inherited. Joan Adcock, a city director for Little Rock, said some MHA properties have been ‘‘30 to 40%’’ vacant and that the agency is struggling to repair units and house families on a lengthy waiting list. Dr. Naen Garman, the executive director of MHA, testified she filed a detailed complaint in 2020 and was terminated; upon returning in 2024 she found missing audits (four years), unpaid bills to vendors, HUD noncompliance findings and dozens of required corrective actions. She said MHA entered a HUD recovery agreement in November 2024 and has retained a national accounting firm (transcribed in the record as Novagradit) to close outstanding audits.

Members pressed witnesses on the role of a nonprofit affiliate, the Central Arkansas Housing Corporation (CHC). Commissioner Carrie Wright said the previous arrangement left the nonprofit ‘‘running the housing authority’’ in practice and blocked access to financial systems and bank accounts when new commissioners sought records. Witnesses described months-long delays obtaining passwords and bank statements and said the nonprofit’s office continued to house some employees who had been removed from the housing authority.

Lawmakers focused on Madison Heights, an MHA property that became delinquent on a balloon note and entered foreclosure proceedings. Committee members were told that private lenders (identified in testimony as Southern Bank Corps and Enterprise Foundation) negotiated a loan to avert foreclosure and that MHA planned a roughly $4.6 million closing; witnesses said approximately $500,000 of that would be dedicated to unit repairs matched by MHA capital funds. Dr. Garman warned that MHA’s cash flow projections at closing are thin and depend on leasing up long-vacant units.

The hearing also aired concern about HUD’s prior response. Witnesses said HUD’s field office engagement was uneven and that at one point HUD had swept $3.7 million in HUD-held reserves from MHA—an action Dr. Garman described as ‘‘punched down on an agency that's already troubled.’’ Committee members asked whether gaps in oversight allowed the mismanagement to continue for years; witnesses recommended stronger, clearer field-office coordination, more on-site assistance, limits on overlapping governance between PHAs and affiliated nonprofits, and mandatory training and certification for commissioners.

The subcommittee did not vote on legislation at the hearing. Members requested follow-up materials and said they would continue oversight. The committee set a deadline for witnesses to file written responses and additional documents (witness responses were requested by April 17, 2026). The hearing closed with lawmakers urging both federal and local officials to prioritize rehousing affected residents and restoring the financial integrity of MHA.

Provenance: first related content begins at SEG 012 (hearing opening) and the last related statements for this article are in SEG 2704 (adjournment).