Auditor: Housing Authority finances improving

The Morgan City Housing Authority’s 2013-14 fiscal year draft audit report shows substantial improvement with compliance and internal control compared with prior years, according to the auditor.
During a recent housing authority meeting, Auditor William Daniel McCaskill presented, via telephone, a draft report of the housing authority’s audit for the year ended Sept. 30, 2014.
The housing authority’s internal controls and compliance with regulations have drastically improved compared to the past few years, McCaskill said. The authority’s financial statements are materially correct, and the authority’s internal controls are acceptable in accordance with government auditing standards, he said. The authority is also in compliance with federal regulations, he said.
McCaskill presented several findings in the audit, all of which the housing authority has corrected, Housing Authority Interim Director Clarence Robinson said at the meeting.
McCaskill stated that the authority’s public housing units showed a loss of $244,000 for the fiscal year, he said.
Those units have $342,000 of equity, McCaskill said. “The authority determined that there are two sites that are accounted for differently, and both of those sites are losing money each year,” he said. The cost center that manages those sites is also losing money, McCaskill said.
“I would suggest that you all pay as much attention as you can to costs and revenues … such that both of those sites and the cost center make a profit rather than have a loss each year.”
In response to the finding, Robinson said he hopes, by the start of the authority’s next fiscal year in October, the authority will no longer use any Asset Management Programs, or AMPs. The housing authority took McCaskill’s advice in 2014 on the audit finding and was able to fix it quickly, Robinson said.
Housing Authority Accounting Technician Diana Pace said the central office cost center receives no income, and instead has fees paid by each of the authority’s Asset Management Programs based on occupancy. Each program requires its expenses and income to be kept separate on the books in order to determine whether that AMP makes money, Pace said.
“The office itself runs it (the AMP), and it gets fees from the AMP. And this is all paperwork. This is all on the books,” Pace said.
The audit report also shows that the authority’s central office cost center owes the low rent program $43,000 yet the center only has $17,000 available to pay that money back, McCaskill said. “This will take a while for the cost center to generate funds to pay that back,” McCaskill said. There has been improvement in the finding over the past year, he said.
The draft audit report also shows the $121,000 of the authority’s bank deposits did not have enough Federal Deposit Insurance Corporation, or FDIC, coverage, he said. McCaskill called that “a minimal finding” as the bank would have to go bankrupt and then the government wouldn’t bail the bank out, he said.
McCaskill noted that the authority’s voucher program didn’t properly verify that rents paid to the landlords were reasonable.
In response to that finding, Robinson said the housing authority has already sent out a “rent reasonable” file to verify the rents.
The auditor additionally noted that the housing authority must send a self-rated voucher report to the U.S. Department of Housing and Urban Development each year, and, for the 2013-14 fiscal year, the authority didn’t document that it had a supervisory sample of housing quality standards for re-inspections, he said.
Robinson does the Section 8 housing inspections and is supposed to have someone else also do the inspections, Robinson said. Robinson now has a maintenance worker trained to follow up on his inspections, he said.
McCaskill believes the housing authority is financially stable, but certain programs are in deficit operations, he said.
The central office cost center has minus $17,000 of equity and lost $11,000 this year, McCaskill said.
“That really does need to be addressed and corrected,” McCaskill said. “It’s very hard to correct that but it takes some time.”
As of the 2013-14 fiscal year, the housing authority’s voucher program has $755,000 of equity and made a profit of $26,000 during the 2013-14 fiscal year, McCaskill said. H
owever, that number can be misleading because Congress restricts the U.S. Department of Housing and Urban Development’s funding differently from year to year, he said.
“The authority has very little to do anything about that,” McCaskill said.

This story was written by Zachary Fitzgerald of The Daily Review staff. Reach him at zfitzgerald@daily-new.com