Bridgewater Housing Authority

This is a state audit of certain Bridgewater Housing Authority activities covering October 1, 2008 through March 31, 2011.

“In accordance with Chapter 11, Section 12, of the Massachusetts General Laws, the Office of the State Auditor has conducted an audit of certain activities of the Bridgewater Housing Authority for the period October 1, 2008 through March 31, 2011.”

Auditors checked whether the Authority followed laws and rules, and whether its management controls were adequate in areas like tenant selection, rent, spending, inventory, contracts, cash, budgets, subsidies, modernization funds, and rental voucher payments.

“The objectives of our audit were to determine the Authority’s compliance with applicable laws, rules, and regulations and to review and analyze its management controls and practices over the following areas and functions for the purpose of determining their adequacy: (1) tenant selection; (2) preparation and reoccupation of vacant units; (3) rent determinations; (4) collectability of accounts receivable; (5) site inspections; (6) payroll, travel, and fringe benefits; (7) disbursements; (8) inventory controls over property and equipment; (9) contract procurement; (10) cash management and investment practices; (11) Department of Housing and Community Development (DHCD)–approved budgets versus actual expenditures; (12) level of need for operating subsidies and operating reserves; (13) the administration of modernization awards to determine, among other items, the existence of excess funds; and (14) payments made under the Massachusetts Rental Voucher Program (MRVP).”

Poor inventory controls mean public property may not be properly tracked, which increases the risk of loss, theft, or misuse.

“As a result of these internal control deficiencies, the Authority’s accounting records may not reflect all acquisitions and disposals of inventory items, and these items, which as of December 31, 2010 had a value of $73,505, may be vulnerable to loss, theft, or misuse.”

For residents and taxpayers, the report is about whether a public housing agency is properly managing public resources and following rules meant to protect funds and property.

“Authority expenditures to determine whether they were reasonable, allowable, and applicable to the Authority’s operations and were adequately documented and properly authorized in accordance with established criteria.”

The main problems were that the Authority had not kept its inventory current since 2003 and did not issue required tax forms to two contractors paid over $600.

“Specifically, the Authority had not updated its inventory lists or performed an annual physical inventory of these items since 2003.”

The Authority said it would put the audit recommendations into practice, including improving inventory procedures and issuing required contractor tax forms.

“The Authority’s Executive Director stated that our recommendations would be implemented.”

The audit did not find material weaknesses in the many tested areas, but it did identify specific control and tax-reporting issues that needed correction.

“Our tests in the above-mentioned areas disclosed no material weaknesses.”

A Form 1099-MISC is an IRS form used to report payments to contractors; the audit says the Authority should issue it when a contractor is paid more than $600 in a calendar year.

“For each contractor paid more than $600 during a calendar year, IRS regulations require entities to prepare and file with the IRS a Form 1099-MISC that details the name of the contractor, federal reporting number, and amount paid.”