Webster Housing Authority
February 2, 2012 · Read the full official report (PDF) ↗
Published February 2, 2012 Audit covers March 1, 2008 – November 30, 2010 Under Suzanne M. Bump · 2011–2023
source
“Based on our review, we have concluded that, except for the issues noted in the Audit Results section of the report, for the period March 1, 2008 through November 30, 2010, the Authority maintained adequate management controls and complied with applicable laws, rules, and regulations for the areas tested.”
Read the plain-English breakdown
This is a state audit of the Webster Housing Authority, which runs public housing and rental voucher programs in and around Webster.
“In accordance with Chapter 11, Section 12, of the Massachusetts General Laws, we have conducted an audit of certain activities of the Webster Housing Authority for the period March 1, 2008 through November 30, 2010.”
The audit was requested after leadership turnover, including the prior executive director leaving and a period without a full-time director.
“The audit was conducted at the request of the current Executive Director following the departure of the previous Executive Director in September 2009 and the absence of a full-time Director until July of 2010.”
The Housing Authority manages homes and vouchers for elderly, handicapped, family, and special-needs residents, so weak controls can affect public money and housing services.
“The Authority has 72 one-bedroom apartments located at Golden Heights for elderly and handicapped residents (Chapter 667) and 30 family units (Chapter 200, one, two and three bedroom apartments) located at Second Island Road and Thompson Road.”
For residents and taxpayers, the biggest practical issue is that empty apartments were not filled quickly, which may have cost rental income and delayed housing availability.
“Because of the delays in filling 46 units, the Authority may have lost the opportunity to earn approximately $16,630 in potential rental income from state-aided housing programs.”
The audit found two main problem areas: unresolved contractor tax reporting and administrative controls that needed improvement.
“Our review identified that the Authority needs to strengthen its internal controls over certain administrative functions, including (a) inventory control, (b) reserve levels, (c) documentation of board meetings, and (d) filling vacant units, as follows:”
The auditor told the Authority to fix past tax filings, improve procedures, update inventory records, monitor budgets, document meetings, and fill empty units faster.
“The Authority should correct its IRS filings for 2008 and 2009 and issue a Form 1099-MISC to each contractor that received more than $600 in either year from the Authority.”
The audit matters because poor records and weak financial controls can make it harder to protect public assets, know what board decisions were made, and respond to emergencies.
“Without accurate public records of meetings held, the public cannot be sure what information was discussed or what decisions were made by the Board of Directors.”
A 1099-MISC is a tax form used to report payments to contractors; the Authority was supposed to file it for contractors paid more than $600 in a year.
“IRS regulations require entities to prepare and file with the IRS a Form 1099-MISC that details the name of each contractor, federal reporting number, and amount paid to each contractor that receives more than $600 during a calendar year.”
6 figure(s) pending source verification - not shown
What the Auditor checked
- Partially Did the Webster Housing Authority comply with applicable laws, rules, and regulations and maintain adequate management controls and practices over selected areas and functions?
What the Auditor found
Why it matters: Contractor payments may not have been properly reported to the IRS, creating compliance risk for the Authority.
Standard: IRS regulations require entities to prepare and file Form 1099-MISC for each contractor that receives more than $600 during a calendar year. ( IRS regulations requiring Form 1099-MISC for contractors receiving more than $600 during a calendar year )
2 recommendations
- The Authority should correct its IRS filings for 2008 and 2009 and issue a Form 1099-MISC to each contractor that received more than $600 in either year from the Authority.agency: agreed
- The Authority should establish procedures to ensure that all 1099-MISC Forms are properly prepared and filed with the IRS in a timely manner.agency: agreed
Agency response & Auditor reply
Agency: "We will comply with the suggestion of the State Auditor’s Office."
Why it matters: The Authority lacked adequate assurance that assets were properly accounted for and safeguarded against loss, theft, or misuse.
Standard: DHCD’s Accounting Manual for State-Aided Housing Programs, Section 15 ( DHCD’s Accounting Manual for State-Aided Housing Programs, Section 15 )
1 recommendation
- The Authority should update its inventory policy, prepare an inventory listing of all items, and reconcile the inventory listing to its financial statements.agency: already implemented
Agency response & Auditor reply
Agency: "Post-audit it has inventoried all of its physical equipment and assets and is working with its fee accountant to draft an Inventory Policy that satisfies both DHCD and HUD [Housing and Urban Development] guidelines so this inventory may be categorized and carried in the appropriate manner going forward."
Why it matters: The Authority may not have sufficient financial resources to fund emergency situations as they arise.
Standard: DHCD’s Accounting Manual, Section 14 ( DHCD’s Accounting Manual, Section 14 )
1 recommendation
- The Authority should review future budgets and monitor current spending to determine whether adjustments can be made that will increase reserves.
Agency response & Auditor reply
Agency: "In its 2011 state budget, the WHA requested, and DHCD provided, $50,000 in funding above the ANUEL (annual non-utility expense level) in recognition of its approved management practices in the previous years which contributed to the shortfalls."
Why it matters: Without accurate public records, the public cannot determine what information was discussed or what decisions were made by the Board of Directors.
Standard: Massachusetts General Law Chapter 39, Section 23B, and Chapter 30A, Sections 18 through 25 of the General Laws ( Massachusetts General Law Chapter 39, Section 23B; Chapter 30A, Sections 18 through 25 of the General Laws )
1 recommendation
- The Authority should ensure that all Board of Directors meetings are properly documented within the Authority’s records.
Agency response & Auditor reply
Agency: "Although the minutes were not available at the Authority, individual Board Members did in fact possess minutes from several of the meetings that were tested during the audit period including April 30, 2008, May 27, 2008, February 20 (not 23), 2009 and November 24 (not 20), 2009."
Auditor: "However, we continue to recommend that the Authority ensure that all Board meetings are properly documented within the Authority’s records."
Why it matters: The Authority may have lost potential rental income from state-aided housing programs.
Standard: DHCD Property Maintenance Guide ( DHCD Property Maintenance Guide )
1 recommendation
- The Authority should ensure its vacant units are filled within DHCD’s recommended timeframe.
Agency response & Auditor reply
Agency: "These waiver requests are still pending."
Prior findings revisited
"Our current review found that because of the turnover in staff during our audit period, the Authority could not assure us that our prior recommendations were implemented and the 2006 and 2007 1099 forms were issued."