U. S.

Department of Housing and Urban Development Regional Administrator Region IV

Ms. Viola Davis 909 Rays Road Stone Mountain, GA 30083 Dear Ms. Davis: SUBJECT: Freedom of Information Act Request FOIA Control Number: 20ll-FI-R04-0276l

This is in response to your Freedom of Information Act (FOIA) request dated September 27, 2011. In this request, you asked for one copy of an independent forensic audit of the Housing Choice Voucher (HCV) Program the Housing Authority of DeKalb County (HADC) agreed to under Audit Report Number 2010-AT-10lO, and one copy of the settlement agreement between HUD and the HADC for the repayment of $2,591,854 misspent funding identified in said audit. We are releasing the information that you requested in accordance with the Freedom of Information Act, 5 U.S.C 552. There will be no charge for this release of these documents because the cost ofthe search did not exceed $25.00 If you consider this a denial of your request, you may request a review of this decision within thirty days of the issuance of this letter. The filing of the request for review may be accomplished by mailing to the attention of Carole Wilson, Special Counsel, U.S. Department of Housing and Urban Development, 1250 Maryland Avenue, SW, Suite 200, Washington, DC 20024, a copy of the request, a copy of the written denial, and a statement of the circumstances, reasons, or arguments advanced in support of disclosure of the original request for the record. The envelope containing the request and the letter should both clearly indicate that the subject is a Freedom of Information Act request for review. Your FOIA request, including your identity and any information made available, is releasable to the public under subsequent FOIA requests. In responding to these requests, the Department does not release personal information, such as home address, telephone number, or social security number, all of which are protected from disclosure under FOIA Exemption 6. If you need further, please contact Gloria Simmons, Public Housing Revitalization Specialist, at (678) 732-2513 or by email at gloria.simmons@hud.gov.

Enclosures Create strong, sustainable, inclusive communities and quality, affordable homes for all.
Five Points Plaza 40 Marietta Street Atlanta, GA 30303-2806 www.hud.gov
e

espanol.hud.gov

Correspondence Code

Originato
r

Concurrence 4APHP

Concurrence 4APHP

Concurrence

Concurrence

4APHP Name Simmons Crittendon

Date

Housing Authority

of Dekalb County

Forensic Audit Repayment Schedule

Payment Due Date 9/1/2011 9/1/2012 9/1/2013 9/1/2014 9/1/2015 9/1/2016 9/1/2017 9/1/2018 9/1/2019 9/1/2020 9/1/2021 9/1/2022 9/1/2023 9/1/2024 9/1/2025 9/1/2026 9/1/2027 9/1/2028 9/1/2029 9/1/2030 9/1/2031 9/1/2032 9/1/2033 9/1/2034 9/1/2035 Amount (103,674.16) (103,67416) (103,674.16) (103,574.16) (103,674.16) (103,57416; (103,674.16; (103,67416) (103,674.16) (103,67416) (103,674,16) (103,67416) (103,67416) (103,674.16) Balance

2,591,854.00
2,488,179.84 2,384,505.68 2,280,831.52 2,177,157,36 2,073,483,20 1,969,809,04 1,866,134.88 1,762,460.72 1,658,786.56 1,555,112.40 1,451,438.24 1,347,764.08 1,244,089.92 1,140,415.76 1,036,741.60 933,067.44 829,393.28 725,719.12 622,044.96 518,370.80 414,696.64 311,022.48 207,348.32 103,674.16 (0.00)

(103,574 16)
{103,674.16) .(103,674,16) (103,674.16) (103,674.16} (103,674.16) (103,674.16) (103,674.16) (103,674.16) (103,674.16) (103,674.16)

May 31,2011 VIA EMAIL TO ADA.H.HOLLOWAY@HUD.GOV AND HAND DELIVERY Ada Holloway, Director Office of Public Housing, Atlanta Five Points Plaza 40 Marietta Street Atlanta, GA 30303-3388 Re: Response to Address the HADC Improper Use of Net Restricted Assets Dear Ms. Holloway: The Housing Authority of DeKalb County (HADC) is writing this correspondence in response to the Field Office request to address the HADC Improper Use of Net Restricted Assets. As stated, in the Audit Report from the Office of the Inspector General (OIG) dated August 23, 2010 the HADC was found to have used more than $2.5 million of its net restricted assets to pay ineligible program and administrative expenses for other assisted housing programs. The Audit Report stated that this condition occurred because the Authority did not (1) maintain separate bank accounts, (2) properly track its net restricted assets funds, and (3) have proper policies and controls in place. As a result, the HADC misused net restricted asset funds that could have provided assistance to eligible families in its Housing Choice Voucher (HCV) Program. The recommendations from the OIG were that the Director of Public and Indian Housing require the HADC to (1) reconcile its books and records to determine the amount of net restricted asset funds used to pay program and administrative expenses for various housing programs, (2) reimburse the net restricted assets fund account from non-Federal funds the $2.5 million or the current amount owed from various housing programs, and (3) implement its established policy for the use of net restricted assets to ensure that net restricted assets are properly used and bank accounts remain separated for various programs. In response to the recommendations, the HADe performed various programmatic activities to include hiring an outside Auditing Firm (RezniCk) in July 2010 to conduct an audit of the Agency in an effort to classify and reconcile the books and records to determine the amount of net restricted asset funds used to pay program and administrative expenses for various housing programs. The audit was completed by Reznick in November 2010. On November 4, 2011, HUD notified HADC that the HUD Quality Assurance Division (QAD) had scheduled the Housing Authority of DeKalb County for participation in a Net Restricted Assets (NRA) review of its Housing Choice Voucher program. The entrance conference was scheduled for November 30, 2011. The primary objectives of the NRA review were to be:

750 Commerce Drive Suite 201 Decatur, GA 30030 ra, 404-270-25IlO

FAX404-27o-2556

www.dekalbhouslng.oi-g Board of Commissioners Dr. Glenwood Ross

GIaIr

Ms. Dorothy Wiliams VIce OI8ir Mr. George Maddox CiJmm/sslaner Ms. Carleen Cumberbatch

Ms. Pamela McCork/lH3unOJm CiJmm/ssloner Mr. Charles Yi COmmi5:>Ioner Mr. Gregory Worthy, Esq. Generdl Counsel
Mr. Eugene P. Walker, Jr.

Executfve DirectDr

Determine the true NRA balance as of December 31, for 2005 through 2009 in support of the Financial Management Center (FMC) prior remote reconciliation. Confirm the availability of cash and/or investments sufficient to support the balance calculated.

The entrance conference was conducted on November 30, 2011. The QAO review team included: II Nicole Jackson, Atlanta Quality Assurance Specialist Terry Gratz, Supervisory program Analyst Lynn Ambrosiano, Louisville Quality Assurance Specialist Joe Brown, Jackson Quality Assurance Specialist Prior to completing the NRA audit, the QAD reviewed the Forensic Audit completed by Reznick and concluded that the audit results were insufficient to meet the goals of their audit to determine the true NRA balance as of December 31, for 2005 through 2009 as the Reznick audit only provided data as of December 31, 2009. The Reznick results were subsequently rejected by HUD and the HADC was requested to have an independent audit firm conduct another forensic audit to determine the NRA balance as of December 31, for 2005 through 2009. Based on the expense and time involved in contracting a second independent firm, the HADe was granted permission by Ada Holloway, Atlanta Field Office, to conduct an internal forensic audit. This task was completed in May 2011 and the HADC is responding with the following comments.

SCOPE AND METHODOLOGY

OF INTERNAL

FORENSIC

AUDIT

The objective of the internal forensic audit performed by the Housing Authority of DeKalb County was to determine how the Authority expended its net restricted assets during the specified time frame, July 1, 2005 through June 30, 2009, as cited in the OIG Audit Report. The focus of the audit was on the deficit in Housing Choice Voucher programs and the identification of how the government funds were being used by the programs. HUD defines the net restricted assets balance as the difference between housing assistance payment funding provided to the Authority and the Authority's validated housing assistance payment expenses reported in HUO's Voucher Management System (VMS) each month. The Housing Choice Voucher (HCV) Program states that authorities may only use housing assistance payment funding for housing assistance payments for current calendar year and future calendar year housing assistance payment needs. Authorities may not use housing assistance payments funds or housing assistance payment net restricted assets for Section 8 administrative expenses, public housing expenses or development costs, or any other costs of the authOrity.

The scope of the internal forensic audit performed by the the Authority accounting records, policies and procedures, related documents.

HADC included reviewing

financial audits and

To ensure the audit was thorough in scope the general ledger and supporting documentation were reviewed for the following programs:

1. DHCV - Disaster Housing Choice Voucher Program 2. TPV - Tenant Protection Voucher Program 3. FSS - Family Self Sufficiency Program

4. HOV - Home Ownership Program

5. PORT - Portabte Vouchers Program

6. DVP - Disaster Voucher Program 7. HCV - Housing choice Voucher 8. RVP - Relocation Voucher Program 9. KHAP - Katrina Homebuyer Assistance Program
10. DHAP - Disaster Housing Assistance
11. VASH - Veterans Affairs Supportive Program Housing Program

For each program, the HADC performed the following forensic work:
{II'

.,

Prepared the Statement of Net Assets and Statement of Activities for each program; Verified the amounts due and to each program; Investigated the transactions that established the intercompany balances for each program; Verified the surplus or deficit for each program; Verified the reason for the surplus or the deficit for each program; Identified how the government funds were spent for each program; Verified that each program is now maintaining separate bank accounts; Verified how HADC tracks the net restricted assets/unearned revenue for each program; and Verified that policies and procedures currently in place ensure restricted assets/unearned revenue are expended as required.

RESULTS

OF INTERNAL

FORENSIC

AUDIT

The findings of the Audit concluded the following Variance to Expense Allocation per HUD guidelines: (Provided with this response is supporting documentation to each of the items listed. See Attachment A) 1. IT Management Fees - ($1,308,122) additional section 8 expenses were allocated to this program based on an arbitrary overhead allocation percentage determined by the Authority's management in place, at that time. HUD allows a $7.50 per unit, per month overhead allocation. The Authority began following HUD guidelines as of 0712008. The work papers reflect the corrected allocation for the prior periods.

'.

2. Administrative Salaries - ($114,777) additional expenses over budgeted dollars. The Authority did not adhere to the budget that should have been laid out for the cost associated with administrating the program. 3. Administrative Salaries - Temp - ($692,669) additional expense over budgeted dollars. The Authority used several different Temporary Labor Companies (Officeteam, Robert Half, Resource Direct) to review, amend and file information relating to the Housing Choice Voucher Program. Only Temporary Services vendors were charged to this account. No salaries or wages were expensed and all temporary labor was discontinued as of 07/2009. Upon review, the department was not organized correctly and lacked any oversight from HADC Management, as to the progress of their work. Therefore, the Authority incurred substantial expenses without any verifiable results. As a result, the current administration has had to hire temporary employees to review, amend and file all of the remaining information. The HADC is working diligently to complete this filing and reconciliation project. 4. General Expenses - FICA - ($134,377) additional expense over budgeted dollars. Inadequate budget coupled with additional costs resulted in the negative variance. 5. Bank Service Charges - ($127,865) additional expense over budgeted dollars. An audit adjusting journal entry was made on 06/30/2008 for $111,925 as a write off from the Portable Vouchers Program. The entry should have been reclassified to uncollectible accounts. 6. Compensated Absences - ($85,644) additional expense over budgeted dollars. An audit adjustment was made on 07/3112008 to accrue the outstanding vacation payable liability. The accrual will be reviewed and adjusted to actual liability each year during the annual financial audit. 7. General Expense - Bad Debt Other - ($73.538) additional expense over budgeted dollars. Audit entries to write off uncollectible accounts. There was no allowance made in the operational budget for this expense. Based on the findings, we concur with the DIG Audit finding that the Housing Authority of DeKalb County improperly used more than $2.5 million of its net restricted assets to pay ineligible program and administrative expenses for other assisted housing programs.

CORRECTIVE ACTION TAKEN The OIG Audit determined that the Housing AuthOrity of DeKalb County did not have adequate controls in place to ensure that net restricted asset funds were expended as required. The internal controls relevant to their audit o,pjective and assessed were:

1. Compliance with laws and regulations - Policies and procedures that management has implemented to reasonably ensure that resource use is consistent with laws and regulations; and 2. Effectiveness and effiCiency of operations - Policies and procedures that the Authority has implemented to provide reasonable assurance that a program meets its objective, while considering cost effectiveness and efficiency. In response, the Housing Authority of DeKalb County has taken the following corrective measures to eliminate the above referenced significant weakness in our internal controls: In October 2009, the AuthOrity moved its housing assistance payments and administrative fees into separate accounts and transferred its Veterans Affairs Supportive Housing program and Portability funds to a separate account. In January 2010, the Authority established a separate bank account for its net restricted asset funds. Implementation of relevant internal controls to include policies and procedures to comply with laws and regulations including, but not limited to: o Internal Control PoliCies and Procedures are being updated in Section 2 of the Standard Operating Procedures and Polices for Accounting Practices Manual for Board approval. A draft Internal Control Policy has been completed and is attached to this document. o Management has implemented a monthly review process and a deadline to have monthly reconciliations compfeted. We will continuously monitor our closing procedures to ensure a consistent and reconciled closing process. Accountants will follow a monthly checklist documenting each process as they are completed. Accountants I'1ae access to their daily account activities through online banking, which will ensure a timely reconciliation. In addition, the Finance Department maintains a binder with their monthly financials, bank statements, and all supporting documentations.
o We have updated our procedures to ensure that inter-company

activities are reconciled on a monthly basis. Currently, accountants reconcile inter-company activities on a monthly basis, which are reviewed by the Accounting Manager. Going forward, the Director of Finance will monitor and ensure inter-company balances are reconciled timely. o Management has a schedule in place for booking eliminating entries for inter-company activities. o Deferred revenue was recorded for VASH and DHVC programs. o Each accountant is required to monthly reconcile their general

ledger information with the applicable subsidiary ledgers. Reconciliations will be reviewed by management to ensure completeness. o We are currently working to make certain that payments are applied correctly in order to track receivables and payables. All corrections are being made in our accounting software. o Accountants currently have access to their daily banking activities which allows us to monitor and reconcile general ledgers and trial balances on a daily basis. Bank reconciliations are reviewed by the Accounting Manager at month end closing. Going forward, general ledgers and bank reconciliations will be reviewed and monitored on a consistent basis by the Finance Director. o For fiscal year 2011, a schedule of federal awards is being prepared based on the HUD guidelines and funding. o The Finance Department has structured monthly meetings with each department. Monthly meetings have been established with Housing Choice Voucher and Asset Management Departments to discuss departmental issues, concerns and operational improvements. o The aged payables are monitored and reconciled on a monthly basis, and are reviewed by the Accounting Manager. o As it relates to portability, we are reconciling the historical balances in the Yardi system to reflect the correct charges and receivables balances. These accounts are being required to be reconciled with the appropriate ledgers on a monthly basis. The recommendations from the OIG have been addressed as follows: 1. Require the AuthOrity to reconcile its books and records to determine the amount of net restricted asset funds that was used to pay program and administrative expenses for various housing programs {Housing Choice Voucher, Disaster Housing Assistance, Family Self-Sufficiency, Portability, Veterans Affairs Supportive Housing, and Homeownership. The Housing Authority of DeKalb County has performed an internal forensic audit and has reconciled its books and records as verified in the documentation attached. Audit results indicate and substantlete a Net Restricted Asset deficit of $2,591,854.

2. Require the Authority to reimburse the net restricted assets fund account from non-federal funds the $2,583,244 or the current amount owed. The Housing AuthOrity of DeKalb County proposes the following plan to repay the net restricted asset deficit amount of $2,591 ,854 as

identified in the internal forensic audit: HADe will enter into a repayment agreement with HUD and will utilize non-federal funds to repay the deficit balance owed at a rate of $103,674.16 per year for a period of 25 years. 3. Require the Authority to implement its established policy for the use of net restricted assets 10 ensure that the net restricted assets are properly used and bank accounts remain separated for the various programs. The Housing Authority of DeKalb County has implemented its established Net Restricted Assets Policy as attached to maintain a restricted asset account that is separate from its operating funds. These restricted asset funds shall be in separate bank accounts and on separate ledgers. The funds restricted for HAP shall be used for current and future calendar year housing assistance payment needs. The fund shall not be used for any other costs, including payment of Section 8 administrative fees, public housing expenses, or development costs. other than for the payment of housing assistance.

Please note that the following attachments substantiate and verify information provided in both the HADC Internal Forensic Audit and this correspondence: Attachment A: Internal Forensic Audit Summary of Work Papers Attachment B: HADC Net Restricted Assets Policy Attachment C: HADC Internal Controls Policy (Draft) If you have any questions in reference to this report please do not hesitate to contact me via email at epw@dekalbhousing.org or phone at 404-270-2503 or Djuana Wellington, Director of Finance via email at djw@dekalbhousing.org or at (404) 270-2509. Thank you in advance for all of your support as we work to restore the Agency to a status of high-performer. Sincerely,

cc: Gloria Simmons, Atlanta HUB Enclosure

ATTACHMENT A

INTERNAL FORENSIC AUDIT SUMMARY OF WORK PAPERS

Property

=-

fiIs_037 hov_035 port_033 dvp_036 hcv_031 rvp_030

\chap_OJ8 dllap_835 vash_030 tpl/J)ort

dhc''-640 Yas2.-0S0

Income statement (Summary)

Period ""

c:t Jan
2005

200S-Dee 2009

Book

= Accrual-Total
2006 2007
0

Accouat Number
11Sa..30).Q4S 33Q0.001.ooo 33()().()02-ooo 341~100.000 341~1DO-OOO 34500000-

InlXNlle

llatement
- Dua from-Dek Admin

2008 0 801,942

2009

Totals 0
0 ~.661,3B9 12,481 14,289,"0 1,313,709 0 19,337,349

Interprooram

0
472,752 23,763 2,187.968 0 2,684,483

Income - Portability AdmIn Fee Section 8 Fraud Recovery funds Retained Section 8 Income Admin Fee-- HCV Sectlon 8 lname AdmIn Faa other

632,680 24,308 2,180,471 461,604

0 732,497 24,410 2,305,678 1,830,881 0 4,893,466

1.021,518 O 5,226,669 51,860

D2,388.984 (1,030,636) 0 2,160,290

Fraud
Totll

r1ICXWery

0
3,299,063

0
6.300,047

Incarn~Reve"ua

_acpen
4110-000-000 4111-0000- 4111-001-000 4120-000-000
AdmlnlstrBtlve AdmlnlBtnltive Slilaries - Temp Salaries

AclmlnistreUve SalarIeS - Temp Compensabld

absences

0 1,632,390 151,129 18,084

4140-000-000 415O-JO.OOO

Local TrainInG Local Trawl - Mileage

Aalounting Fees Auditing fees

0
(Bl) 29,233 45,163 121,723 12,154 40,378 26,888 7,678

0 1,730,986 129,682 18,935 0

(44,D58) 1,738,010 327,005 21,061 0

0
(19,~30) 18,942 115,910 3,755 32,647 31,169 6,290 4,213 261 4,535 659

0
46,383 59,446 114,621 9,447 35,628

41JO..ooO.OOo
4171-000.000 4196-001000 4196-002-000 4196-003-000 419~ 4196-ClOS.ooo 4196-Q06..COO 4196-001-000 4196-008-000 4196-009-000

571 1,854,405 433,594 94,213 11,327 11,373 (15,536) 1,640 135,450 3,085

0
1,906,864149,995 11,36B 5,997 4,089

(43,487) 8,862,655 1,191,40S 163,661 17,324

15,381
40,750 147,454 614,918 30.075 200,846 78,926 37,324 16,319 7.483 18,217 4,720 39,322 49,398

0
22,263 127,214 1,634 42,187 16,736 6,286 2,595 4,923

Office rent
Telephone Expanse omce Supplies SUndry Aclverti5lng

50,006
19,765 6,776 4,218 352 4,266 726 18,894 6,405 8,971

(15,632)
10,294 3,523 352

pagers/Cell Phone
Subsa1pt1onll & Dues Printing and Binding

1,170
1,595 4,421 3,335 11,801 19,355 36,089

2,457
0 0 6,496 29,827

Publications Legal Services

Auto AlIow8nC8 Trelnlng and Travel

2,538 0
8,627 945 190

4196-0100.
41~l1-O00 4196-()12-OOO

0
16,197 29,974

105,051

4196-013-000
4196-014-000 4196-015-000

RepaIrs/MaintEnance - Office EquIpment Gas PLlrmall88 Postage

12,921 8,279

17,135 13,118

I Shipping
Reports

4196~
4196-045-000

0
3,234 20,820 0 829 19,045 10,620 6,090 3,346 16,891
Q

0
11,481 28,418 0

Equipment R.ent21I/Repeirv/l..eases Background Cilecial/Ctadit/Crhnlnal Reference Mablnals CoMUlting Computer Expenses NonRoutine Offlce Equipment OffIce Storage PaVroll ServIces BlInking Services Charges Scholarshfp Fund Property Management Fee Asset Management Fees

4196-046-000
4196.()47-o00 419f).()S().()OO 419SOS1-OOO 419&-052-000 4196-053-000 4196-055-000 4196-058-000 4197..001-000 4197{1()2-000 4197-003-000

829
10,540 4,945 4,734 3,418 21,161 0 0 0 221,156 0

3,729 25,085 264 50,076 27,929 475 2,065 5,448 1,315 5,815 2,115 13,574

1,754 36,738

602
14,337 19,288 45,773 26,086 214 11.446 3,767 111 12.837 2,513 33,037 1,000 (t,736) 806,657 246,833 259,098

137
42,354 21,756 0

36,141 91,557 19,689 152,918 125,009

689
15,169 44,120 30,932 37,489 13,794 224,865 1,000 (1,736) 1,207,985 2,968,212 259,098 2

0
5,320 13,881 8,013 2,402 140,202 0 0 401,328 843,718

4197~
423[).(]()3-000 4231-008-000 4430-008-000 4430-01&-000 4430-022-000 4510-000-000

IT Management Fees Ac:ctg Management Fee - Bookkeeping Tenant Sarvlc:es - Food Relocation Costs
M&lntlen8noe - Auto Repair MalntanallClB - Inspections MalntanallCB - Renovatlon General Expenses - Workers Camp Ins General J:xpen5eS- Property Insurance General Expenses - General liability General EllpenHS - Auto Insurance Genenlll ExpanleS -

D D 0
Q

0
1,656,505

0
0 8,023 10,480

0 0
14,405 13,463 2,288 19,795

0 0 0
30,535 11,270 2,250 30,364 0 20,141 1,611 83

0
2

3S
52,766 15,613 0 50,066 0 17,070 1,013 0

0 0
47,182 3,294

35
152,911 54,nO 6,826 lU,968 (121) 69,564 10,982 2,566 57,357 (296) 611,360 1,148,371 847,046 11,977 42,467 15,765

2,288
26,l!iO (124) 9,275 3,946 1,576 10,476 0 126,333 204,887 155,687 1,881 0 2,820

0
7,593

4S1D-002-GOO
4510-003-000 4510.(]O4-000 4510-005-000 4.S10.00a-OQo 4540-000-000 4.540-001-000 4540-002-000 4540-0Q3.()00 4540-004-000 4540-005-000
454().OQ~

3
6,008

0
11,010 1,545

2,867
907 11,013

Dao

Insruanoe

0
11,949 (296) U9,554 287,732 212,878 3,198 16,548 4,336

General Expenses - Uabllltv Insuf1lnc:e General expenses - Emp. Benefit Cont. General ecpenses - FICA General ElIpenses Health Gennl Expenses - ReUnamant General EJq)enses - Ufe Genal'lll Expenses - Dental GenBt'lilI Expanses - Disability

11,949

11,970
0 138,511 259,019 161,409 2,922 8,837 2,462

0 133,9S9
191,989 164,015

a
132,973 204,150 153,057 2,528 13,587 3,255

1,448
3,495 2,892

4540-007-000
4571..QQO-OOO

Ganeral Expenses GA Ilnemploment Taxes Genel'lll Expenses - Bad Debt Other OveriJead Fee Salary I Benllflt Overhead Fee - Other Admin Other General Elcpense Admin Fee Utility 08pos1t AssIstance Payment (DVP) Program R.eflInd Pavments Consulting Services
~

4,846
21,780 585,113

4S90-7()(H)OO
45~701-OOO

2,087 0 418,625
196,214 16,422

15,970 0

2,331
52,288

8,752 21,250

33,992
95,318 1,003,738

0
0

293,420
24,302

0 0
191,567

0
0

4591...QOO.OO()
4S9~O-OOO

4594-002~O
4595-001-000

Totalbpaneu Nit Income I (IAI )

0 0 0 0 0 18,651 0 0 __ '.-:""~~_"tl..." 3.776~990 .. ,66~.68S 4,773,638 ~ 0 0

(1,092,507)

0
0

489.634 232.291 0
18,651

a
5,135,991 (2,975,7011 4,578,899 ~721,148

21,929,:W3
(2,591,854.

(364,622)

119,828

HOusinl Authority at De/ailb County Expense Summary - Overqe

II Manqement

Fees

2fJlJ7
2008

(942.025) 1366.os7) UO,866 (33,866) . (191.777) (217.945) (iS5.699) (109,025)

(57,511) {56,863)

j1.308.122)

Administration

salaries

2007 2008 200J

"1JXJ7

(U.1,777)

Admlnfstratlon

salaries - Temporary

2008 2009
General Expenses - FICA

(692.669)

2DD7 2008
2009

(lG,D03) 11U7S (125,234) (12,8061 {22.U7}

,3.043)

(134,377)

Bank ServIce Chlraes

2007 2008

2009
EquIpment RentaVRl!!pain Lease

(127,865)

2007 2008 2009 2007 2008

2D09

847 4,937 (79.213) (U,368)

(24.!23)

Compensated AlRrx:ts

(85.644)

General Expense - Bad Debt Other

2fXI1
2008

2009
Gas Purcl8se5

(52.288) (2l.2SO) (11,&25)

73.538)

2007 2008 2009 2007 2008

2009

(11.932) 5,a6Z (13,518) (13,195)

General Expense - General Uabllity

(7.219)
(3,434) (24,171)

All other reatnc:lled account$

11.827 (2,591,854)

Total excess expendItUres

ATTACHMENT

HADC NET RESTRICTED ASSETS POLICY

--------Stanclard-Opera"tingi:iiOceciii;es-iiiid PcjjicliSTo,-Accoiiiiiinii

Housing Authority of DeKalb County

PractIces---------.. .__ "._,_

.

r Sec. 16.1.0
~~ ~~ '"' ....,_."c._ . ..
I

.---~---------------'""'""':'--..----~~--'---------------.-.-.--.-.-------. .;-------.. --.-. ---- --- . -- .-.----_._.--. -- "'--'- _-- _ ..-.--_--' -".- -_- ----.-. --..-- -..-- ---.-.. .. --.---.,.: _.",

; NET RESTRICTED _ ..._ .... _...... _ .......... '~.'~ ASSETS: POLICY ... ,........ _._ " .... ,~..........

_ .. _. __

.. _.

,_'.

.
I

I Policy: (as approved by Board Resolution No. , MMlDDIYYYY)

POLICY
It is the policy of the Housing Authority to DeKalb County to maintain a restricted asset account, separate and apart from its operating funds. Restricted asset funds shall be maintained in separate bank accounts, and on separate ledgers. Net restricted assets shall only be used for its intended purpose as restricted by IillD, other governments or by law. Funds restricted for Housing Assistance Payment shall only be used for current and future calendar year housing assistance payment needs. Funds shall not be used for any other costs, including payment of Section 8 administrative fees, public housing expenses, or development costs, other than for the payment of housing assistance.

Definition
Net restricted asset is defined, per HOD, as the difference between housing assistance payment funding provided to the Authority and the Authority's validated housing assistance payment expenses reported in HUD's Voucher Management System each month.
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16.1.1

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PROCEDURES
Net restricted assets shall be accounted for separate and apart from Operating Funds.

16.1.2 j Use of net restricted asset is limited only to Housing Assistance Payment.
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Reconciliation of NRA
On a monthly basis, Accountant shall reconcile the HAP funding received with the validated HAP expenses, and the difference between the two shall be

16.1.3

Updated 2010

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transferred to the NRA account,

Housing Authority of DeKalb County

Treatment of overpaid subsidy due to fraud: 16.1.4

The Housing Authority shall retain amounts defined under 24 CFR Section 792.202(a) that will flow to Administrative Fees Net Restricted Assets. The remaining balance of the recovery proceeds that the Authority is not authorized to retain shall flow to HAP Net Restricted Assets in accordance with 24 CFR Section 792.203(b).
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16.1.5

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16.1.6

If the Authority takes no action in collecting overpaid assistance, all amounts that constitute an overpayment of HAP subsidy in excess of $2,500 per review must be reimbursed to HAP Net Restricted Assets from Administrative Fees Net Restricted Assets or other non-federal funds.

Treatment of overpaid subsidy due to PHA error:

If the Authority overpaid HAP due to calculation or other errors in excess of $2,500 per review, 100 percent of that amount shall be reimbursed to HAP Net Restricted Assets from the Administrative Fees Net Restricted Assets or other j non-federal funds.

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Use of Administrative

Fees

16.1.7 ' The HCV program regulations at 24 CFR 982.152 provide that PHA
1 administrative fees may only be used to cover costs incurred to perform PHA ; administrative responsibilities for the program in accordance with HUD regulations and requirements. During the PHA's current fiscal year, any administrative fees received in that PHA fiscal year may only be used for this purpose. When the PHA fiscal year ends, the amount by which the program administrative fees paid by JIpD for the PHA fiscal year exceed the PHA program administrative expenses for the fiscal year become administrative fee reserves.
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Updated 2010

ATTACHMENT C HADC INTERNAL CONTROLS POLICY (DRAFT)

Housing Authority of DeKalb County

Standard Operating Procedures and Policies for Accounting Practices

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Sec. 1.2.1
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: Purpose
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24 CFR 85.20 directs PHAs to develop and maintain a system of internal controls, comprising methods and procedures that will safeguard its assets, check the accuracy and reliability of its accounting data, promote operational efficiency, and encourage adherence to prescribed managerial policies for accounting and financial controls.

Sec. 1.2.2

1.2.2.8

Internal control system comprises the plan ofthe Authority, and all methods and procedures adopted to safeguard its assets, check the accuracy and reliability of its accounting data, promote operational efficiency, and encourage adherence to prescribed policies. Internal control systems include both internal accounting and administrative controls. These two elements of internal control often overlap; however, it is not the intent of this policy to specifically address internal administrative controls. Internal accounting controls encompass the plan of organization and all procedures and records that are designed to provide reasonable assurance that:

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Obligations and costs are in compliance with applicable laws, regUlations, and policies;

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1.2.2.c

Funds, property, and other assets are safeguarded unauthorized use, or misappropriation; and

10f2

Drafted 01/2010

Housing Authority of DeKalb County

Standard Operating Procedures and Policies for Accounting
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Practices
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transactions are properly authorized, recorded, and accounted for to permit the preparation of accurate accounts and reliable financial and statistical reports and to maintain accountability over assets.
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1.2.3.a

Internal controls are to be established following basic internal control concepts, and are to aid in the assurance that the accounting records are accurate and in conformity with generally accepted accounting principles. The following basic concepts are to be followed:

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1.2.3.b

Separation of Duties - Whenever possible, no individual is to have complete control over any type of asset in any entity, department, or division of HADe. The work of employees handling public assets should be complementary to or checked by other employees. This will not only decrease the chance of loss by means of fraud or dishonesty, but will also provide a means to detect errors.

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Sound Policies and Procedures - Every effort is to be made to ensure that the assets of the Authority are properly handled. By supplying employees with strict control procedures and ensuring that they are followed through the use of checks and audits; the chance of losses will be greatly decreased.

1.2.3.d

Authorization and Record Procedures - A system of authorization and record procedures is to be provided in order to assure reasonable accounting control over assets, liabilities, revenues, and expenses. This includes the use of such forms as invoices, vouchers, and written receipts.

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Drafted 01/2010