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RESULTS OF AUDIT
Finding 1: The Authority Did Not Settle Interfund Balances Due to Its
Low-Rent Public Housing Fund in a Timely Manner
Contrary to its consolidated annual contributions contract, the Authority used low-rent public
housing funds 1 to pay expenses of other HUD and non-HUD programs and did not settle the
balance due to the low-rent public housing fund in a timely manner. Additionally, the Authority
did not always record financial transactions on its books in a timely manner. These problems
occurred because the Authority did not have internal controls requiring it to reconcile and settle
its accounts monthly and ensure that it recorded financial transactions on its books in a timely
manner. As a result, at the end of the Authority鈥檚 fiscal year 2006, 2 $246,254 had been owed to
the low-rent public housing fund by the Authority鈥檚 other HUD and non-HUD programs for
more than 30 days, and its financial records were incomplete. By developing and implementing
policies and procedures to ensure that the due-to/due-from account is reconciled and settled
monthly, the Authority can put $489,522 3 in public housing funds to better use over a one-year
period.
Interfund Balances Due to the
Low-Rent Public Housing Fund
Were Not Settled Monthly
The Authority used a due-to/due-from accounting system to account for
transactions directly between other funds and/or other entities included within its
general ledger but did not have adequate internal controls requiring it to reconcile
and settle its accounts monthly. A program鈥檚 or entity鈥檚 due-to balance (payable)
represents amounts it owes another fund or entity for disbursements and/or
advances made on its behalf. A due-from balance (receivable) represents an
amount owed to the program or entity.
At the end of the Authority鈥檚 fiscal year 2005, three HUD program accounts 4 and
three non-HUD program accounts owed the low-rent public housing fund
$732,790. At the end of fiscal year 2006, two HUD program accounts and two
non-HUD program accounts owed the low-rent public housing fund $246,254 as
shown below.
1
Public housing operating subsidy and rent revenues.
2
The Authority鈥檚 fiscal year ends June 30.
3
Average amount of funds owed to the low-rent public housing program over a two-year period. $246,254 was
owed to the low-rent public housing program at the end of the Authority鈥檚 fiscal year 2006, and $732,790 was owed
at the end of fiscal year 2005. Therefore, $246,254 + $732,790 = $979,044 divided by two years equals $489,522
annually.
4
Section 8 Housing Choice Voucher program, Community Development Block Grant program, and HOME
Investment Partnerships Program.
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