After a two-year tenure, the director of Washington D.C.'s Housing Authority (DCHA) resigned and has now sued the entity after questions were raised about a bonus payment she received.

The former director was tasked with fixing the long-troubled Authority, which owns and manages 52 public housing complexes and administers D.C.'s housing vouchers.

In January of 2023, she received a $41,250 bonus, the maximum amount allowed under her contract, just weeks after the U.S. Department of Housing and Urban Development issued a scathing audit of DCHA. The 2022 HUD report identified issues in nearly all of DCHA's operations, including property management, voucher allocation, contracting and procurement, board oversight, and executive leadership.

The former director and DCHA refused to answer questions in 2023 when a news organization initially reported on her bonus payment, claiming those details were confidential. She took the same position in refusing to describe the criteria she met, and who approved the payment, when asked by an At-Large Councilmember during the D.C. Council's annual oversight and budget process last year.

She alleges she was a whistleblower who was essentially forced out in part due to the Council Member's questioning and his alleged "pattern of reprisal and retaliation" for her refusal to answer questions about her bonus. The Council Member alleged during a press conference and in a letter to the agency that acts of corruption and potential "criminal behavior" had occurred and that the director's bonus was awarded in a "suspect and likely illegal way."

The former director further alleges the board's failure to approve a 2023 performance plan for her amounted to a breach of her contract.

This former director is not the only former DCHA executive with a claim against the Authority. The housing authority's former general counsel and deputy director sued in 2020 for wrongful termination. "Former Director Brenda Donald Is Suing the Housing Authority, Its Board, and Robert White" www.washingtoncitypaper.com (Aug. 14, 2024).

Commentary

Whether the suit has merit will rest, in part, on whether the bonus was paid according to a written contract or other document, an act of the board, or was given at the whim of leadership.

Directors of a corporation, public or private, have a fiduciary duty of oversight to the nonprofit to supervise and monitor its operations, including contracts and finances.

This duty of care is also required of directors and board members. Making decisions, based on adequate information and a good faith belief that any decisions are in the best interest of the organization is required.

This due diligence should be reflected in the board minutes, which should be kept of all scheduled and special board meetings. Although board meeting minutes need not include the minutia of all board discussions, they should demonstrate the extent of the information presented to the board and the breadth of the board's analysis and discussion.

Not only action but inaction can be reflected in board minutes. Many organizations face liability not for what they did, but for what they failed to do, address, or discuss, as reflected in the minutes.