Updated Oct. 7 to correct reference to Lincoln Merrill

Maine State Housing Authority board members said Wednesday that a federal audit showing the agency failed to adequately oversee its low-income housing program is further confirmation that the agency was mismanaged and is falling short of its mission.

Chairman Peter Anastos and fellow board members Lincoln Merrill and Bruce Poliquin held a news conference at the State House in Augusta to discuss the audit. Afterward, Poliquin said in a phone interview that the housing authority will face more scrutiny.

The board has approved hiring a firm to do an audit looking at how the agency awarded more than $7 million in contracts for its computer systems, said Poliquin, who is also the state treasurer.

The audit will also look at carbon credits that were collected from houses that were weatherized and signed over to MaineHousing, which then sold the credits to use for additional weatherization programs, he said. The agency could have lost $1 million or more in developing the program, he said.

“The board is refocusing MaineHousing’s mission on helping the most vulnerable Maine families with their housing needs and not wasting tax dollars in doing that,” Poliquin said.

The quasi-independent agency has been taking heat for more than a year for spending, payroll costs and expenses that critics say were excessive. The agency has an annual budget of about $14 million and more than 160 employees.

Director Dale McCormack resigned in March, citing a “systematic attack” by critics on the board.

MaineHousing’s new director, John Gallagher, started the job Monday. He was hired after a search for an affordable-housing professional, Anastos said.

Anastos said MaineHousing has made progress in the past year. Pricing is now part of the formula for procuring new housing, and rules for awarding contracts are followed, he said.

He questioned why the agency delved into something like carbon credits, which he called a “venture capital idea.”

“Why were we doing that, getting away from the central mission of providing safe, decent, affordable housing?” he said in a phone interview.

The HUD audit was requested by U.S. Sen. Susan Collins after the weekly Advertiser Democrat of Norway exposed substandard Section 8 housing units last year.

The audit showed that 53 of the 61 housing units inspected did not meet federal standards. It concluded that MaineHousing had inadequate management of third parties that oversaw the properties.

As a result, some tenants lived in apartments that didn’t meet HUD’s standards for “decent, safe and sanitary housing,” and the authority made at least $194,956 in housing assistance payments for units that didn’t meet quality standards. The report recommends that MaineHousing repay the money to HUD.

The agency agreed that many of the units had substandard living conditions, and said it has since instituted training programs for inspectors and improved communications with local code inspectors and with landlords and tenants.