CFO presents 2024 financial statements, warns of ongoing liquidity pressure and urges finance/audit subcommittee

Brad Leakes, HACM chief financial officer, presented the authority’s 2024 financial statements to the board on Sept. 10, described continuing liquidity constraints and urged formation of a board finance and audit subcommittee to oversee remediation and recovery work.

Leakes told the board that while some assets — notably three market‑rate developments referred to in discussion as major revenue generators — have produced positive cash flow, the authority still faces a “going concern” for liquidity: he said reserves are effectively negative and HACM has outstanding obligations to HUD, the city and lenders that were identified when new financial reviews began in late 2024. Leakes said auditors Berman Hopkins will review the 2024 financials on Oct. 1 and cautioned that the authority’s 2023 audit completion is a prerequisite for fully reconciled 2024 balance‑sheet figures.

Leakes described the scattered‑site portfolio as a structural cost driver that merits review because maintenance and capital costs for those units can be higher than for consolidated developments. He also flagged development fees and certain LLC arrangements as complicating cash flows and described short‑term borrowing and careful prioritization of vendor payments as part of ongoing cash‑management efforts.

Commissioners asked for regular balance‑sheet reporting and suggested forming a finance/audit committee composed of board members and outside professionals. Chair Hazlett said forming an audit/finance subcommittee is a priority and the board will work with leadership to establish it. Leakes offered to provide commissioners with the 2024 balance sheet and a clearer account of current assets, receivables and liquidity in follow‑up materials.