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Home My WebLink About840898.tiff Weld County Housing Authority Greeley, Colorado Report on Examination of Financial Statements and Supplemental Data Twenty-six months ended September 30, 1983 840898 14(_. 1114 gIMI Weld County Housing Authority Greeley, Colorado Contents Page Accountant's Report 2 Comments on Compliance and Administrative Internal Control 3-4 Financial Statements: Balance Sheet 5 Statement of Income and Expense - Housing Assistance Payment Program 6 Analysis of Surplus 7-8 Notes to the Financial Statements 9 Supplemental Information: Computation of Annual Contributions Earned and Project Account - Housing Assistance Payment Program 10-11 Analysis of General Fund Cash Balance 12 Findings, Recommendations and Replies 13 Activities of the PHA 13 Audit Journal Entries 13 _ 3. Kevin Smith Certified Public Accountant P.O. BOX 29398 DENVER CO. 303/2IU-6639 60229 Accountant's Report Board of Commissioners Regional Inspector General Weld County Housing Authority For Audit 315 N. 11th Ave. Department of Housing and Greeley, Colorado Urban Development Denver, Colorado We have examined the financial statements listed in the Table of Contents of the Weld County Housing Authority pertaining to it's low-income housing program. Our examination was made in accordance with generally accepted auditing standards and the audit requirements set forth in the Department of Housing and Urban Development Audit Guide for Audits of Public Housing Agencies by Independent _ Public Accountants dated August 1978, and accordingly include such tests of the accounting records and other auditing procedures as we considered necessary in the circumstances. As described in note 1, the authority's policy is to prepare it's financial statements on the basis of accounting practices prescribed or permitted by the Department of Housing and Urban Development. These practices differ in some respects from generally accepted accounting principles. Accordingly, the accompanying financial statements are not intended to present financial position and results of operations in conformity with generally accepted accounting principles. This report is intended solely for filing with the Department of Housing and Urban Development and is not intended for any other purpose. In our opinion, the financial statements referred to above present fairly the assets, liabilities and surplus of the Weld County Housing Authority as of September 30, 1983 and the results of it's operations and changes in its surplus for the twenty-six months then ended, on the basis of accounting described in note 1, which basis has been applied consistently. The supplemental financial information as listed in the Table of Contents has been tested by us as a part of our auditing procedures followed in the examination of the financial statements mentioned above and, in our opinion, is fairly stated in all material ersects in relation to the financial statements taken as a whole. November 30, 1983 '" gra'IC Denver, Colorado Weld County Housing Authority Greeley, Colorado Comments on Compliance and Administrative Internal Control I have examined the financial statements of the Weld County Housing Authority for the twenty-six months ended September 30, 1983 and have issued my report thereon dated November 30, 1983. Based on my tests of transactions and examination of records as required by appendix 2, except as otherwise evidenced by the findings and comments in this report, we believe that the Weld County Housing Authority has complied with the following: a. The financial terms and conditions of the contract with HUD. b. The regulations, policies and procedures prescribed by the Department regarding the low-income housing program. c. The financial regulations and procedures prescribed by management and those of it's governing board. As part of my examination, I reviewed and tested the Weld County Housing Authority's system of internal control to the extent I considered necessary to evaluate the system as required by generally accpted auditing standards. Under these standards, the purpose of such evaluations are to establish a basis for reliance on the system of internal control in determining the nature, timimg, and extent of other auditing procedures that are necessary for expressing an opinion on the financial statements. Additionally, our examination included procedures necessary in my judgement to determine compliance with contractual terms and conditions and regulations, policies, and procedures prescribed by HUD and by management and those of it's governing board, insofar as such compliance review was necessary under the provisions of paragraph 20 in the Department of Housing and Urban Development Audit Guide for Audits of Public Housing Agencies by Independent Public Accountants, dated August 1978. The objective of internal accounting control is to provide reasonable, but not absolute, assurance as to the safeguarding of assets against loss from unauthorized use of disposition, and the reliability of financial records for preparing financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a system of internal accounting control should not exceed the benefits derived and also recognizes that the evaluation of these factors requires estimates and judgements by management. There are inherent limitations that should be recognized in considering the potential effectiveness of any system of internal accounting control. In the performance of most control procedures, errors can result from misunderstandings of instructions, mistakes of judgements, carelessness, or other personal factors. Control procedures whose effectiveness depends upon segregation of duties can be circumvented by collusion. Similarly, control procedures can be circumvented intentionally by management with respect to the execution and recording of -3- r Weld County Housing Authority Greeley, Colorado Comments on Complaince and Administrative Internal Control (Cont.) transactions or with respect to the estimates and judgements required in the preparation of financial statements. Further, projection of any evaluation of internal accounting control to future periods is subject to the risk that the procedures may become inadequate because of changes in conditions, and that the degree of compliance with the procedures may deteriorate. My examination of the financial statements, made in accordance with generally accepted auditing standards, including the study and evaluation of the Weld County Housing Authority's system of internal accounting control for the twenty-six months ended September 30, 1983, that was made for the purposes set forth in the first paragraph of this report, would not necessarily disclose all weaknesses in the system because it was based on selective tests of accounting records and related data. -4- Weld County Housing Authority Greeley, Colorado Balance Sheet at September 30; 1983 Annual Contributions Contract DEN-2392 Assets: Cash $ 7,657.27 Accounts Receivable 12,039.46 Investments 23,418.95 Land, Structures and Equipment 3,303.46 AL Total Assets $ 46,419.14_ Liabilities and Surplus: Accounts Payable $ 16,853.25 Total Liabilities 16,853.25 Surplus 29,565.89 Total Liabilies and Surplus $ 46,419.14 The Accompanying Notes Are An Integral Part of This Financial Statement -5- Weld County Housing Authority Greeley, Colorado Statement of Income and Expenses - Housing Assistance Payments Program Twenty-six Months Ended September 30, 1983 Annual Contributions Contract DEN-2392 Fourteen Months Ended Year Ended September 30, 1982 September 30, 1983 _ Operating Income: Interest on General 79.48 Fund Investments $ -0- $ Total Operating Income -0- _ 79.48 Operating Expenses: Preliminary Administrative Expenses - Prior to Annual Contribution Contract 2,184.00 910.13 Preliminary Administrative Expenses - After w. Annual Contributions Contract 13,360.00 3,142.65 Administrative Expense 6,161.81 9,389.14 General Expense 828.15 1,619.75 Housing Assistance Payments 83,329.30 115,528.30 Total Operating Expense 105,863.26 130,589.97 Net Operating Loss $( 105,863.26) $( 130,510.49) The Accompanying Notes Are An Integral .-� Part Of These Financial Statements -6- Weld County Housing Authority Greeley, Colorado Analysis of Surplus Twenty-six Months Ended September 30, 1983 Annual Contributions Contract DEN-2392 Unreserved Surplus: Net Loss for the Fourteen Months Ended September 30, 1982 $( 105,863.26) Net Loss for the Year Ended September 30, 1983 ( 130,510.49) Provision for Operating Reserve for the Fourteen Months Ended September 30, 1982 ( 5,431.64) Provision for Operating Reserve for the Year Ended September 30, 1983 ( 7,860.02) Project Account - Unfunded ( 98,293.84) Balance at September 30, 1983 ( 347,959.25) Reserved Surplus - Operating Resrve: Provision for Operating Reserve for the Fourteen Months Ended September 30, 1982 5,431.64 Provision for Operating Reserve for the Year Ended September 30, 1983 7,860.02 Cash Withdrawals for the Year Ended September 30, 1983 263.29 Balance at September 30, 1983 13,554.95 Housing Assistance Payments Program - Project Account - Unfunded: Provision for Project Account for the Fourteen _ Months Ended September 30, 1982 41,318.59 Provision for Project Account for the Year Ended September 30, 1983 56,975.25 Balance at September 30, 1983 98,293.84 -7- Weld County Housing Authority Greeley, Colorado Analysis of Surplus (Cont.) Twenty-six Months Ended September 30, 1983 Annual Contributions Contract DEN-2392 - Cumulative HUD Contributions: Annual Contribution for the Fourteen Months Ended September 30, 1982 $ 114,305.41 Annual Contributions for the Year 138,336.75 Ended September 30, 1983 Balance at September 30, 1983 252U642.16 Cumulative Donations: Donation for the Fourteen Months 10,543.08 Ended September 30, 1982 Interest on Donated Funds for the Fourteen 764.97 Months Ended September 30, 1982 Interest on Donated Funds for the Year 1,726.14 Ended September 30, 1983 Balance at September 30, 1983 13,034.19 Total Surplus - September 30, 1983 $ 29,565.89 The Accompanying Notes Are An Integral Part Of This Financial Statement P Weld County Housing Authority Greeley, Colorado Notes To The Financial Statements September 30, 1983 Note 1: Omission of Certain Disclosures: _ This audit report is intended solely for use by the Department of Housing and Urban Development and the Housing Authority. HUD provides the Housing Authority with detailed manuals which prescribe and describe accounting principles and procedures to be used by the PHA. Any significant or material deviations from prescribed principles or procedures are required to be reported as findings in the audit report. For this reason, an enumeration of all significant accounting policies has been omitted from this report.. Also, in accordance with HUD accounting procedures, depreciation on structures and equipment is not reflected in the financial statements. Structures and equipment are recorded at cost, including indirect development costs. Note 2: Accounts Receivable - Tenants: No allowance for doubtful accounts is provided as the Housing Authority expenses bad debts in the year deemed uncollectable. There are no accounts receivable from tenants at September 30, 1983. Note 3: Accounts Payable - HUD: The Housing Authority owes HUD $ 16,853.25 at September 30, 1983 for the overpayment of annual contributions. Note 4: Accounts Receivable - Other: The Accounts Receivable - Other at September 30, 1983 of $12,039.46 represents October payments made in September by the Weld County Treasurers office. Although these amounts have been paid by the county and reimbursed by the Housing Authority, through journal entries by the county, the applicable expenses are not yet recorded. -9- Supplemental Information Weld County Housing Authority Greeley, Colorado Computation of Annual Contributions Earned And Project Account - Operating Reserve Changes . Housing Assistance Payment Program —. Annual Contributions Contract DEN-2392 Fourteen Months Ended Year Ended September 30, 1982 September 30, 1983 Maximum Contribution Available: Maximum annual contribution 195,312.00 authorized $ 133,392.00 $ — Pro rata maximum annual contribution applicable to a period of less than _O_ twelve months 22,232.00 Maximum contribution for 195,312.00 period 155,624.00 Project account balance at -0- 41,318.59 begining of fiscal year Total annual contribution 236,630.59 available 155,624.00 Annual Contribution Required: Preliminary Administrative 4 052.78 Expense 15,544.00 Administrative Fee 12,304.60 18,659.20 Housing Assistance Payments 83,329.30 115,528.30 Property Betterments and 175.95 Additions 3,127.51 Total Funds Required 114,305.41 138,416.23 Project receipts other than 79.48 annual contributions -0- Total annual contribution 138,336.75 required 114,305.41 y Project Account Change: Provision for project 56,975.25 account $ 41,318.59 $ Annual Contribution Earned- „ Lessor of contribution available or contribution required $ 114,305.41 $ 138,336.75 -10- Weld County Housing Authority Greeley, Colorado Computation of Annual Contributions Earned And Project Account - Operating Reserve Changes Housing Assistance Payments Program (Cont. ) Annual Contributions Contract DEN-2392 Fourteen Months Ended Year Ended September 30, 1982 September 30, 1983 Operating Reserve Change: Operating Income $ -0- 79.48 _ Annual Contribution Earned 114,305.41 138,336.75 Total Operating Receipts 114,305.41 138,416.23 Operating Expenditures: Operating Expenses 105,863.26 130,589.97 Capital Expenditures 3,127.51 175.95 Total Operating 130,765.92 Expenditures 108,990.77 Net Operating Receipts 7 b50.31 Available (per audit) 5,314.64 Audit Adjustments 117.00 209.71 Provision for Operating 7,860.02 Reserve $ 5,431.64 $ -11- Weld County Housing Authority Greeley, Colorado Analysis of General Fund Cash Balance at September 30, 1983 Annual Contributions Contract DEN-2392 Composition Before Adjustments: Net operating receipts retained: $ 13,554.95 Operating Resrves Donations 10,543.08 . Audit adjustments (backed out) ( 326.71) 23,771.32 Adjustments: Expenses/costs not paid: Accounts Payable 19,344.36 Income not received: Accounts Receivable ( 12,039.46) General Fund Cash Available 31,076.22 General Fund Cash: Invested ( 23,418.95) -- General Fund Cash $ 7,657.27 -12- Weld County Housing Authority _ Greeley, Colorado Findings, Recommendations and Replies at September 30, 1983 Status of Prior Audit Findings: This is the initial audit of the Weld County Housing Authority. Thus, there are no prior audit findings. Current Audit Findings: Finding 1: Operating Budget Overruns: The Weld County Housing Authority incurred the following operating budget overruns: FYE September 30, 1982: Budget Actual Overrun Property Betterments and Additions $ 3,004.00 $ 3,127.51 $ 123.51 Recommendation: The Housing Authority should review monthly financial statements — with the appropriate operating budget. Expenditures that create overruns should not be made if possible. If a budget overrun appears inevitable, a revised operating budget should be submitted _. to HUD for Approval prior to the fiscal year end. Activities of the PHA The Weld County Housing Authority manages 70 units of Section 8 - Existing - Housing Assistance Payment Program. Audit Journal Entries Audit PHA Account Account Number DR CR Number 1. Cash 1111.1 $ 216.37 1111.1 General Fund Investments 1162 12,491.11 1162 Other General Expense - 1982 4590 117.00 6010 - 1983 4590 209.71 6010 Interest on Donations - 1982 2850 $ 764.97 2850 - 1983 2850 1,726.14 2850 Cumulative Donations 2850 10,543.08 2850 To record Donation from county prior to HUD activities, not recorded on books -13- Hello