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Program type Program account description Amount due to
the low-rent
public housing
program
Non-HUD Property management $124,669
HUD Community Development $105,582
Block Grant
HUD HOME Investment $ 11,747
Partnerships
Non-HUD Tax-exempt bonds $ 4,256
Total $246,254
The Authority鈥檚 use of low-rent public housing funds to support other HUD and
non-HUD programs is a violation of its consolidated annual contributions
contract. The contract states 5 that the Authority may withdraw funds from the
general fund only for the payment of the costs of development and operation of
the projects under the consolidated annual contributions contract with HUD, the
purchase of investment securities as approved by HUD, and such purposes as may
be specifically approved by HUD. It further states that program funds are not
fungible and that withdrawals shall not be made for a specific program in excess
of the funds available for the program.
The violation occurred because the Authority did not have controls in place to
ensure that it reimbursed its low-rent public housing program in a timely manner.
The Authority needs to reimburse its low-rent public housing fund $246,254 and
create and implement policies and procedures to ensure that the due-to/due-from
account is reconciled and settled monthly, thereby putting $489,522 in low-rent
public housing funds to better use over a one-year period.
The Authority Did Not Always
Record Transactions on Its
Books in a Timely Manner
For fiscal year 2005, the Authority did not record its year-end adjusting entries on
its books. The Authority鈥檚 consolidated annual contributions contract 6 requires it
to maintain complete and accurate books of account. Although its independent
public accountant included the adjusting entries in the financial data reported to
HUD, the independent public accountant did not provide the adjusting entries to
the Authority to update its books until we requested them in October 2006. To
prevent this from occurring in the future, the Authority needs to create and
implement policies and procedures to ensure that all transactions are recorded on
the books in a timely manner.
5
Part A, section 9(C).
6
Part A, section 15(A).
6Jump to an indexed page (15 of 15)