The audit reported, "The Housing Authority has not developed internal controls that are adequate to ensure accurate accounting, financial statement preparation and review. Our audit identified significant deficiencies in internal controls over financial reporting that could affect the Housing Authority’s ability to produce reliable financial statements."
"During our audit, we also noted a large number of errors in the financial statements that individually were not significant but when taken together impair the understandability of the financial report. The errors required us to perform additional audit procedures to ensure they were corrected," the audit said.
The Housing Authority response, included in the audit report, said, "Unfortunately, AHA had a variety of situations that occurred last fiscal year which were a direct affect on the operations of AHA, resulting in errors on the financials which were the overall picture and not any of the routine entries made in each of the individual units of AHA. It is the desire of AHA to go forward with the recommendations made by the State Auditor now that the errors have been corrected, and a beginning platform has been established."
The Auditor's recommendations include:
- Provide adequate training to staff responsible for financial accounting and reporting to ensure compliance with reporting requirements.
- Establish an effective review process of the financial statements by a person knowledgeable of GAAP and Budgeting, Accounting and Reporting Systems (BARS) reporting requirements to ensure accurate preparation and reporting of the Housing Authority’s financial statements. The review process should be at the appropriate level of detail.
- Establish procedures, including close supervision and oversight, to ensure the general ledger balances are valid, accurate, complete and adequately supported.