U.S. inspector finds no evidence former PHA chief Michael P. Kelly misspent money

A review by the U.S. Department of Housing and Urban Development's Office of Inspector General found no evidence that the former head of the Philadelphia Housing Authority misused any federal money on a female staffer with whom he had an improper relationship.

In a statement released this week, the Inspector General's Office said Michael P. Kelly did not misuse agency funds on gifts or unfairly promote Audrey Lim, a former member of his senior staff.

Kelly, who is married, abruptly resigned June 15, after admitting having an affair with Lim, who also left the agency. Kelly had promoted Lim in April 2012 to director of special projects, which paid a salary $125,000.

The relationship, though consensual, violated PHA's new ethics code, which prohibits fraternizing among senior staff and subordinates.

After Kelly's departure, the Inspector General's Office conducted a review, examining his credit-card statements, travel reimbursements, and payments to vendors for travel and training.

The office said it did not identify any evidence of wrongful spending by Kelly on Lim.

Investigators also reviewed Lim's personnel file and determined her educational record and work experience qualified her for promotions she received.

In the report, the Inspector General's Office concurred with findings from an earlier review by PHA's internal office of audit and compliance.

Lim, the report said, was qualified for the promotions she received. She had two master's degrees and a doctorate in philosophy. Lim joined PHA in August 2009 and worked as a senior adviser, director of research and development, and director of human resources.

Kelly left PHA and took a job as executive director of the Office of Housing and Community Development in Washington.