Audit - 1980
"'~.'.
..'I....~O' .
~ 'O'Q.,
::. Ii:)
~,...uo..,.
,;; . .. .... u.s. Department of Housing and Urban Development
Region VII
In Reply Rof., to. 7.llR:AS
Prof..ionol Building
1103 Grand
Ken.. City, MiIIou,' 64106
RECEIVED
Dte 111980
CITY MANAGER'S OFFICE
DEe 1 2 1980
Mr. Michael Gilbert.
Executive Director
Salina Iblsing Authority
P.O. Box 1202
Salina, Kansas 67401
Dear Mr. Gilbert:
.
~ have received theaull.t~Lofthe Authority of the City of Salina,
Kansas, for thepericx1 of July 1, 1978, through June 30, 1980. A ~
of this letter and the report have been sent to the Mayor of.your City.
'B1e report contains. five fi.rr:lings .coosidered. to.be minar.in nature and
the report is closed. H:JileveI:', the Public lbusing 1\gency is expected to
inplenent the reocmnendations of the auditor. If for any reason, the PHA
detennines that it cannot 00IIp1y with the r""-'-"ll.e.ldations, then please
advise this office.
l<brb;lage CJ:edi.t Review
Exhibit E contains. the sta1:.ellent. and Certification of Actual DeveJ.oprent
Costs for KS 38,..2. Please subnit :inm9diately, Htl!r52427, Certificate of
Actual Developtent OJst,.and HUD-52484, stat.alent of l\ctUa1 Developtent
OJst, in accordance. with Handbook 7417 a, Chapt:er.1Q,.-17 . These should
be directed to the attention of the l<brb;lage CJ:edi.t Branch of the Kansas .
City Area Office.
Developtentadvancesasshcwn on Exhihit Fare in aYL"""'''''lL with Area
Office records.
If further infontation is necessary, please contact this office.
Sincerely,
~o>
v
~ed~
Tb:lmas s. Ki.lbride
Area Manager
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!lOUSING ~l,I'l'HORr'n' OF Sl\LINA.
SAI.J;NA, KANSl\S
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R~port on E~~~in~tion of F~n~nci~t
St~t~m~nt~an~ S~plement~l Pat~
TWe~ty-rour Mont~s Ended June 30, 1980
LaFrance, W~lker, Jackley .~ Saville
Certifieq ~ub1i9 Accountants
Great Bend, ~nsas
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TABLS OF CONTENTS
Accountants' Re~t
F:j:NANCIAL STATEME:NTi3
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Balance Sheet - ?HA Owned H@using, at June 30, 1980
Balance Sheet - Hous~n9 Assist~ce Pa~e~~ Program,
at June 30, 1980
Statement of Income and Expenses ~ ?HA Owned Housing-
Twenty-Four Ment!1s Ended J~ne 30, 1980 .
Statement of Incoll\e' and Expenraes'- HQusing Assistan'i'e
Payment Program - Twenty-Four Months'Ended J~e 30, 198Q
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SUPPLEMENTARY DATA
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Analysis of Surplus - PHA Owned Housing - Twenty-Four
Months Ended June. 30, 198Q
Analysis of Surplus - ~ou~ing As~istance' P~~ent Progr~ -
Twenty-Foul'" Montlls Ended June ;30, 1980
Computation of Residual Receipts and Accruing ~ua~
COntributions - PHA Owned Housing - Years Ended
June 30, 1979 and 1980
~cmputation of A~ua1 Contr!putions ~rned and Project
Account - Operating.ReserVe CqaJ:lgell, lIoulling
Assistance payment Pl'"ogr~, Yeal'"S Ended
June 30, 1979 and 1980
Statement and Certification of ActUal Development
Cost Project. ~~ 38-2
Reconciliation of Develop~nt Funds Advanced
With Costs at June 30, 1980
Analysis of General Fund Cash Balance
PHA Owned Housing at June 30, 1980
Analysis of General Fund Cash ~alance
Housing Assistance Pa~eht Program
at June 30, 1980
Comments on Compliance and Administrative
Internal COntrol
Status of Prior Audit Findings
Findings, Recommend~ns and Replies
General Comments'
Activities of the. PHA
Schedule of Journal Entries -
PHA Owned Housing
Schedule of Journal Entries -
Housing AssistancePa~ent.Program
SXHIBIT
PAGE
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A
2
)>.-1
3
B
4
B-1
5
c
6-7
C-l
8
D
9
D-J. ;l.O-ll
S 12
F 13
G 14
<<-1 ;1.5
16-;1.7
18
19-20
21
22
23
24
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LaFRANCE, WALKER, JACKLEY & SAVILLE
Certified Public,Accountants
Gordon Lab Building
Post Office Box 214
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GREAT BEND, KANSAS 67530
OfFICES IN
PRINCIPAlClTIES
FOREIGN AFFIUATES
li679'W71
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ACCOUNTANTS' REPORT
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Bo,ard of Commissioners
~e Housing Authprity qf sa~~na
Sal:l,na, Kans,,"s
~gion~l Inspector General
for Audit
Department of ~ousing and
Urban Development
Kansas City, Missouri
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We halT~\lxamj.ned- the finanqiaL s~~entsl~sted in thl'l Table of Contents of
the Housing I\.uthority ot'Salina pertain;l.ng to its low,.;l.ncome houl3ing program.
Our examination~as..made in a~cordanqe with generally accepted auditing standards
and the audit;.;equirements setfqrth in the Department.of Housing anq. UI;I;>~
Development Audit Guide fOr Audits o~ PiW],ic HOUsing Agencies by Independent
Public Accountants dated August 1978, and accordingly included such tests of
, . . .
the accounting reyords and other auditing.procedupesas we cpnsidered necessary
in.the circumstanpes. .
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As described in qeneral Comments, the authority's policy is to prepare its
financial staternen~s on the basis of accounting practices prescribed or per-
m.j,tted RY the Depar~nt of Housing and Urban Development. These practices
differ in some respects from generally aocepted acoo~ting principles. Accord-
ingly the acco~panying f;l.~ancial statements are npt intended to prl'lsent .
financ;ial position and resuJ,tsef 'lperations in oonformity with gl'lnerally
accepted accounting.principles. This report is intenqed solely for filing
with the Department.of Housing and Urban Development and is not intended for
any other purpose.
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In our opin.j,onr the financial ~tatem~nts :r;eferredto above present fairly the
assets, liabilities.and surplus of the Houlling Authority pf Salina as of June
30, 1980, and the results of its operation$ and chaJ'lges in its surplus for the
two years then ended, on the ~asis of accounting described in General Comments,
whiph basis has been applied consistently.
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The supplemental. financial information as listed on the Table of Contents has
been tested.by us as q..part.of our auditing.procedures followed in the examipa-
tion of tne fin~cial statements mentioned above, and in our opinion, it is
fairly ~tated in all.!llaterial rel;!pec1;s in relation to the financial statement
taken as a Whole.
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OQtobe~ 17, 198&
Great Bel\d, Kan$as
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/({~ d.I.../~V,~~~h ~~
LaFrance, Walke~~ky " Saville
Certified P~lic Accountants
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HOUSING ~qTHORITY QF S~LIN~
l;ALINA, DJlSAS
BAI,ANCE SHEF'':f
JUNE 30, 1~80
ANNUAL OON~~IBUTIoNS CON~BACT FW~1114 and ~C~1029
. P~OJEC~: l<ANS 38-], and 38-2
ASSF.:'l;'s
, .
Cash
I\.Ccounts R~ce~vable eLl
Investmep.ts
Debt ~q~ti~atiQn Funds
Defer~ed Cha~ges
Land, St~cturEls and ~ipment
T9l:al Ass,ets
LI~ILITIES AND SURPLUS
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Accounts Payable
Accrued Liabilities
Def~rred C~edits
fixed Liabilities
Total Liabilities
Su~plus - ~it C
'l;'ctal Liapi1il:ies and S~~p],us
(1) Tenan~s A~counts ~eceivabie
2
. F.:"HIB!t~ A
$ 11,559.62
10,954.23
18,000.00'
52,859.27
8,519.59
872,R3:l.57
$974,525.~
$ 5,164.78
21,525.34
192.00
781,637.24
$808,519.3q
166,005.92
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$974,525.28
$' 3,299.22
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HOU/;;I:NGAU'1'HORI~ OF SfoLINA
SAL;r:NI\, 1<l\Nl!iAS
IlALANCIl SJlEET
Jl)NE 30, 1980
EXH;I:B;I:T A-1
~UAL ODNTR;I:BUTIONS OONTRACT K~~7015
PRQJECT. Kl!i .40-E03l3-001
ASSETS
Cash
Accounts ReceivaQle
Total AS!lets
$ 19,029.58
733.04
$ 19,762;62
LI~ILITIESAND SURPLUS
, ' J "
Accounts PaYable
Defe~req Credit!l r Other"
Total Liabilities
Surplus - ~hibit C-l
$ 7,470.84
10,680.00
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$ 18,150.84
1 ,611. 78
$ 19/762.62
Total Liabilities and Surplus
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HPUSIN" AUTHOIUTY OF ~INA
SAPJ;NA, K/\NSI\S
STATEM~T OF INCOME AND EXPENS~S ~ PHA OWNEP HOUSING
TWENTY-FOUR MONTll$ l!lNDED JUNE 3D, 1~80
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EXHIBIT B
ANNUA4 CONTRIBUTIONS CONTRACT ~C-l029
PROJECT: ~S 38-2
Total Qperat~n9 Income ~ Exhibif D
YEAR ENDED YEAR ENDED
JUNE 30, JUNE 30,
1979 \ 1980
$ 63,420.73 $ 71,702.00
$ 63,420.73 $ 71,702.00
1,836.51 1,429.71
3,902.13 1,876.67
$ 69,159.37 $ 75,008.38
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OPERATING INC~
Dwelling Rental
Total Rental Income
Inter~st On 'General Funq Investm~nts
Other Income
OPERATING EXPENSES
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Total Operatin~ E~ense , ~qibit D
Net Operating InCQ~e (~ossl
$ 16,078.09 $ 23,852.5~
1,438.\l3 2, ;338. 95
19,838.08 25,025.40
13,064.54 13,9:;1. 40
8,73;1..33 13,885.39
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$ 59,150.97 $ 79,053.68
$ 10,008.40 $ (4,045.30)
Adminilltration
Utilities
Ordin~y Maintenance and Operations
General Expe!,\se
Nonroutine Main~nance'
OTHER CHARGES
Interest on Notes and Bon~~ Fayable
prior Year AdjUll~l'\ts , Aff~cting
Resid~al Receipts
$ 48,907.27
$ 43,102.85
4,446.99
Totj>l Other Chcq;gei>
$ 48,907.27
$ 47,549.84
Net (Loss) - Exhibit C
$(38,898.87)
$(51,595.14)
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HOUSING AUTHORITY OF ~fNA
SALINA, KANSA~
STAT~T OF JNCO~ AMp E~~~SE - HOUSING ASSJSTAMCE
l'A'iMENT l'ROGRA/1 T ';\'WEN'):'Y-FQUR MON'l'HiS IilNDEO JUNE 30, 1980
Ij;XHIBI'l' 13-1
A~UAL CONTRIBUTIqNSC~TRACT~-7015
l?ROJECT: KS 40.,.E038..,001
Ol'ERATING INCOME
YIj;AR ENp:EP
JUNfl 30,
1979
Y~ ENOj1;p
JUNE 30,
1980
j?rior Year Adj~stme~ts - Affeqti~g
Residua1.Receipts
$
$ 2,916.67
Total Operating Inco~~ -Exhibit 0-1
$
$ 2.9:).t;;,87
OPERATING EXl?ENSE,
Pre1i~inarY A~inistrative EX~nse
Prior to ~n~alContriQution .contract
l?re1iminary Administrative EXpense
After AnnuaLContriPuticl/'l COl'ltract
A~inistrative ~ense
Other G~nera1 Expense
Housing Assistance l?ayments
Total Operating EXl?ense - Exhibit 0-1
$ 1,67q.00 . $
8,979.00
10,667.37 13,878.69
4,202.75 1,613.32
54,646;50 102,063.00
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$ 80,165.62 $1:).7,575.01
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$(80,165.62) $0-14,658.14)
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Net Operating (Loss)
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jlOUSJ;NG A~HORITJ( OF SALINA
Sl\LINA, KANSj\.S
ANA4~$IS Of SURPLUS
FOR !l'IlE 'l'WJ;:NTY-fOUR MONTHS ENI;lED JVNE 30, 1980
ANNU~ ~ONTRIBUTI0NS CONTRACT FW-~1\4 and ~-+029
PROJECT: KANS 38-1 an~ ~8-2
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UNRESERVED SURPLUS
Balance Per Audit Report at J~e 30, 1~78
Balance Per Books-at June 30, 1978
Net ():.os,,) ;1;01' year Ended June 30, 1979 .,~ibit B
Net (Loss) for Year Ended June 30, 1980 - E~ibit B
(Provision fQ~) Operatipg ReSe~es for
Year Ended June 30, 1979 _ Exhibit D
Rl'duct;i.on pf Operating,Reserves tor
Year Ended June 30, 19~0., EKhibit-D
Tran"ferred from Rese+ved Surplus .,
Operating Re~ed -_ Leased Housing
Balance at June 30, 1980
RESERVED SURPLUS - OPERATING RESERVE ., LHI\- OWNED
Balance Per Audit-at,June 30, 1978
prior Audit Adjuetments
Balance Per Books at June 30, 1978
Provision for Operating Reserves for
Year Endli'd June 3D, 1979 - Exltibit D
(Reduction of) Operating Reserves for
Year Ended June 30, 1980 _ ~~ibit 0
Balance at June 30, 1~80
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EXHI~;IT C
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$(756,783.9l)
$(756,783.9l)
(38,898.87)
(51,5g5.l4)
- (3,1!i2.25)
8,1,104.93
2,504.04
$(839,131.20)
$ 25,675.00
260.00
$ 25,935.00
3,162.25
(S, 804.93)
$ 20,292.32
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HOUSING AU'1:HORITY <;)F s~INA
SALINA, l<ANsAl1
~ALYSIS OF SURPLUS
FOR THE TWEN~-FOUR ~ONTHS ENDED JUNE 3Q, 1980
ANNUAl. CONTRIBUTIONS COllTRACT FW-].1l4 ,mi! ~-10;a9
PROJECT: l<ANS 38-1 and. 38-2 .
~SERVED SURPLUS - OP~~TING RESERVE - L~SED'HOUSING
Balance Per Audit June 30, 1978
Balance Per Books at June 30, 1~78
Tfansferred to Unr~served, SUfP1us
Balance at June 30, 1980
CUMULATIVE CONTRIBUTIONs
Project l<ANS 38-1 Leased Housing:
Balance per. Audit ~PPrt at June 3q, 1978
Balance at June 30, 1980
projec;:t l<ANS 3a-lHLIlJl. Owned,:
Balance per Audit Report at June ~G, 1978
Ad,justment by HUD of'Annual Contribution for
pHA Owned Housinq.for ~eaf Ended June ~o, 1978
Accruing Annual Contfibution for ~ear
Ended June 30, ,1979
Accruing Annual contribution for Year
Ended June 30, .l98~L .
Removal of ~served. Surplus - Operating
Reserve - Leased Housing
Balanqeat June 30, 1980
BalanCe Cumulative - Contributions at Jun~ 30, 1980
Total Surplus- Exhibit' A
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EXHIJ;lIT C
$ 2,504.04
$ 2,50.4.04
(2,504.04) .
$ ...0-'
$ 666,303.29.
$ 666,303.29
,
$ 246,261.42
(29,969,;!1)
51,894.07
52,859.27
(2,504.04)
$ 318,541.51
,
$ 984,844.80
$ 166,005.92
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HOUSING A~THPRIT~ OF ~INA
~;J:NA, IWISAI'
AN~YSI~ OF SURPLUS
~ENTYTFOUR MONTHS ENP~p JUNE 30, l~~O,
ANNUAL CO~TRIBpTIONS CONT~CT ~~7015
PROJECT: KS 40TE03~~Q01
UNRESERVED SURPLUS
Net (Lo~~) for Year Ended J~ne 30, 1~79
Net (Loss) for Ye~r Ended June 30, 1960
(prov~sion for) Redu9tion of Re,e~e fOr
Year Ended June 30, 1979
Operating Reserve
Project Account -Unfunded
(provis~on for) ~eduction Of Reserve for
Year EndeqJune 30, 1960
Operating Reserv~
pro~ect Aocount - unfUnded
Balance at June 30, 1960
RESERVE SURPLUS - OPEllATING RESji::\lVE;
Provis~on fOr Operating Reserve fOr
Year Ended June-30, 1979
Provis~on tor Opera1;;i.nq!ljasepre for
Year Ended JUne 30, 1960
Balance at JVne 30, 1980
RESERVE S;URPLUS - PROJECT ACCQON;r l!NFUNOED
provision for Year Ended June 30, 1979,
Provision for Ye~ Ended June 30, ~9ao
Balance at June-...30, 1980
CUMULATIVE HUDCONTRIBUT~ONS
Annual contr~bution for t~e
Year Ended June' 3D, 1979
Year Ended J~ 30, 1980
Balance at June 30, 1980
Total Surp1u~ - Exhibit A-l
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EXHIBITC-l
$ (80,165.62)
(114,658.14)
(102,964,33)
(1,611. 78)
(54,796.96)
$(354,196.83)
$
1,611.78
$ l,6:L1.78
$ 102,964.33
54,796.96
$157,761.29
$ 76,320.50
120,115.04
$ +96,435.54
$ 1,611.713
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HOU~ING A,U'fHORIT'l pF ~Il'lA
SALIm>., KANSAl/
COMPUTAT~ON OF ~SIDUAL ~C~+PTS AND ACCRUING
ANNUAL CON'l;'RIBUTIONl:l - PHA P~ED HOUSING
ANNUAL CONTRI~UTIONS CONTRAGT KC-l029
PROJECT, KANS 3~-f
YJj:AR ENDED
;rUNE 30,
l<;l79
OPERATING RECEIPTS
Op~rating In~om~ _ Exhibit B
$ 69,;1.59.37
Total operati~g Re~ei~ts
$ 69,159.37
OPERATING EXPENDITURES
$ 59,1&0.97
Operating Expenses - ExhiQit B
<;apita;t E1l1peIlliitures I
Replacement of NoneXpen,ap~e ~~ip~nt
Property Bette~ent anqAdditiops
Prior Year Adju~tmentsAtfectin9 Residual
Receipts - ~xljiPit B
6,176,25
669.90
Total OPElP!l.t;ing Expendi ture.s
$ 65,997.12
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$ 3,162.25
Residual Receipts (Deficit) Per Audit
Residl:la1 liieceipj::s. (Qefici~) P4ilr PHA before
Provision fer-Reserve
provision for (Red~ction of) Operating
Reserve - Exhibi~ C
$ 3,162,25
3,162.25
Residual j(eceipts Per PHA
$ -0-
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COMPUTATION OF AOCRUING ANNUAL CONTRIBUTIONS
J. I , -, ' .,
Fixed-Annua1CentriQl:ltion
~nua1 Contribution Part tI Reduction
$ 52,135<;1.27
- (<;165.20)
~ccruing Annual Contribution - Exhibit C
$ 51,894.07
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EXHIBIT D
YEAR ENDE!:)
JUNE 30,
1<;180
$ 75,008.38-
. I
$ 75,008.38
$ V9,OS3.68
312,64
4,446.99
$ 83,~13.31
$ (8,804.93)
$ (8,e04.93)
(8,804.93)
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$ -0-
$ 52,859.:21
$ 52,859.27
HOQ~ING ~~OR~TY OF SALINA
S}\LINA, KANSAS .
GOMPUTATION c;lF ANNUJ\L CON':l'RIBU':fION~P AND
P~J~CT ACCQUNT ~OPERAT~G ~SER~ C~G~S HOUSING
ASqISTANCE.P/l.YIUmT PRQGl'lAM
ANNUAL CONTRIElUTIONS COJ:llI'R/l.CT 1<;C-7015
. PROJECT: 1<;S 40-~03~-OOl
~IMU~ CO~RIBUTION AVAILABLE
Maximum apntr~uti9n Auth9r~z~d
Pro Rata ~aximu~ Annual contribution
applicabl~ toa.P~riod of less than
Twelve Mon~hs
Maximum Contri,bu~ion for Period
Project ~c9unt Balan~e ~t Beginning
of Fisc",l Year
Total Annual contribHt~on Av~ilabl~
l\llNUAL EX>NTRIBUT10N REQUIRED
Prelimin4+Y A~inistrative ~pense
Administrative Fee-
Housing As~istance Pa~nts
Total Funds Requirl'd
. Project Receipts oth~r than Annual
contributions ~ Exhibit B-t
Total Anrual Contribution R~qu~red
P~JECT ACCOONT CHANGE
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Provision for'. project. Account - Exhibit C-l
Annual Contribution Earnrd
Lesser of Contribution Available or
Contribution Required _. Exhi9it 0-1
.10
. YEAR ENDED
JUNE 30,
],979
~p4,912.00
4,3'72.83
$179,284.83
$],79,284.83
$ ],0,~49.00
;1.1,025.00
.54,646.5Q
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$ 76,320.50
$ 76,320.50
$3.02,964.33
$ 76,320.50
ElPIIBIT D-l
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YEAR ENJ;lED
JUNE 30,
1980
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$174,912.00
$114,93.2.00
102,964.33
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$277(876.33
$
18,032.04
102,083.00
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$120,115.04
$120,115.04
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$ 54,796.96
$120,115.04
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/lOj}IlING Ali':jFl\)IlI'n OFS!>WINj'.
SA~;J;NA, !Q\NSAS
CO~UTA~ION QF ANNll~ CON~IBllT~ON WlRNBD ANP
P~E<;:'1' JlCCOlJN'1' .,OPERATING RESERVE ClQINGES HQllSING'
,I ,.". . , " ..
ASSIS~~C~ PAVM~T PROGRAM .
AmilJ1\I; CON'tRIBllTIqNS cpNTRACT KC-7015
PROJECT; KG 4Q~E038-001
OPERA'l'!t'IG RES~VE r!/lANGJ::S
,J I
Qperat~n9 Incom~- Exhib~t B-1
Ann~a1 CQntr~ution ~~ned
Total Operating Ileceipts
OPERAT:l:NG EXPENPJ;TUREs
I' ') , r
.Operatin9 Expe~se - Exh~it B-+
Deficit fro", Preced.j.l\g Yeil+' .
Total Opel:at~g EX~enditures
Net Operating.Reee~pt~ Ava.j.lab+8
prQvision f9l: oper~t~ng ~sel:ve ., EXhibi~ 0-1
Deficit Ca~ryover
.11
YEAR ENDED
,TIjNE 3D,
1979
$
76,3~0.50
$ 76,320,50
$ 80,165.1;2
$ 80,165.62
$ (3!845.12l
$ 3,845.12
ElIHIBI';t' 0-1
yEAR ENDED
JUNE 3().,
1980
,
$ <1,916.137
+20 ,US. 04
$+23,031. 91
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$1].7,575:01
. 3,845.12
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. $121,420.13
.' $ 1,611.78
$ +,611.78
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HOI',liINGAUTIIORITY OF S;ALJ;NA
~INA, KANSAS
S'!"ATeMENT AND <;:ERt':t:FICAT:i:ON OF ACTUJU,
DEVELOP/4ENT COST
J\lNE 30, 1,~80
1\NNU~ cOIlTRIBUTIQNSCONTRACT KC~1029
P,RO.;JECTI KANS ~8-2
1. The Actual Develo~ment Costs of the Project are as follows:
PRIOR
AUDIT
C~SSIFICATION
$56,279.02
2,703.42
7,200,12
794,1;1.0.66
4,350.13
,
Interest - Net
In~ti~;1. ~eratirig DElf~cit
S~te Acquisition
Dwelling $truct~reS
Nondwel,ling Equi~ment
Total qast - ~hibit F
$!l64,643.35
CllR~T
AUDIT
$
$
EXHIBIT E
'I'O'!"AL
$ 56,279.02."
2,.703,42
7 ,200.12'
794,110.66
4,350.13
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2. The IjIta1;emellt ,of Ac1<UIl;l.' ~ve+o)?lllentCO$tll hils .n<1t been submittetj to 1ItlI/ fOr
ap~roVal.
3. All devel<;>plllelll; (lolltshave been paid and all pel,ated liabilities havs been
discharged througq pa~ent.
4. The p~ incurred the following budget overruns.
BUDGETED
CLASS:J;FICA'r;tON'
,
Dwel,l,ing structures
$787,478.83
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ACTUAL
$794,110,66
OVERRUN.
$6,631.83
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HOUSING AUTllplU'J,'Y OF. S1<!,INA
. S,/\I,.INA. KANSAS
RE;CPNq~IATION OF PWJ~LOPMJ;;NT FtmJ;lS ADVANCE;D
JUNE 30, 1980
ANNU~ CON~RIBUWIONS CONT~CT ~~1029
P~JECT: ~S 38-2
cash ~C\van<;ed
pevelP~men~ In~eFeS~.
To~a1 D~v~lop~~t AdvaAcee
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~ve1opment qosts - ~Qib~t E
&Kcese of A4v~nces ~ ~h~b~t G
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EXH;I:BI'):' f
AUDITE;D
BALANCE
JUNE 30.
198()
$810.223. ;p
56.,:79.02.
$8Ej6.;;02.35
864;643.35
. $ 1..859.00
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HOUStNG ~UTHORITY OF ~IN~
SALINA, KANSAS
ANALYSI9 OF GID'!ERl\,l:. FONO q\SlI
AT J~E~O, 1~80
EXHIBIT G
ANNUAL CONT~IBUTIONS CONT~CT rw~~~14 and KC~10~9
PROJ~CT, KANS 38-1 and 38-2
GOMPOSITION B~ORE-~~S~~TS
Net Operating ~oe~Pt$-Retairted:
OpeFating Reaeryes-- Exhibit C
Sec~rity Deposits
~cess Deve+opment Funds - Exhibit F
$;20,292.32
5,075.00
1,859.00
$ 27,226.3f
AD.;ruSTMENTS
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~penseS / Cost Not Paid:
Accounts Payable
Accrued !?aymenta-in ~ieuof T~es
Tenants Prepaid Rent
$ 89.78
21,525.34
1~;2'00
Income Not Received:
AcClO1.jf\t!; Receivable
(3,299.22)
$ 45,734,22
GID'!ERAL FUNP CASH AVAIVJ!LE
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General FunPCa!;h,
I\lvested
Ap~1ied to~~err~ Charge~
Advance to Cqn~act ~-70-15
Advance to Community Development
$(18,OOO.00)
(8,s19.59)
(7,615.01)
(40,00)
$ 11,559.62
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General Fund Cash - Exhibit A
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HOVS~NG AUTHOR~~ OF S~~~A
SALINA, KANSAS
AN~YSIS 9F GEWE~L F~D CASlj IlAl:J\NCE
JUNE 30, 1980
ANNUAL CONTRIBUTIONS CONT~CT KC-7015
PROJECT: KS 40-E038-001
CO~OS~TION BEFORE ADJUSTMENT
,
Net Operating Receip~ ~etained
ADJUSTMENTS
AcCOUPts Pay~:j.e
Pehrred Credits
AC9QURts Receiv~le
General Fund Cash - Exhibit A-~
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EXHI~IT G-l
$' ).,611.71'3
$ 1,611.78
7,470.84
10,680,Oq
(733.04)
$ 19,029.58
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COMMEN'I'S QN C~MPLI~CE .~D ADIUNISTRATIVE IN'I'ERNAbCONTROL
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~. We have examined the financial statements of the Houstng Authority of Salina
for the twenty-four (24) months ended June 30, ~980, and have-.issued our report
thereqn dated October 17, 1980. Based on our tests of transactions and examina-
tion of records as required by Appendix 2, except as otherwise evidenced by the
findings and comments in this report, we believe that the Housing Authority of
Salina (PijA) ~as complied with the following,
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a. The financial terms and conditions of the oontracts with HUD,
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b. The regulations, pq~icies and procedures prescribed by the
Depar~ent regarding the Low-Income Housing Program.
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c. The financial regulations and procedures prescribed by management
and those of its governing board.
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As part of our examination, we reviewed and tested the PijA's system of
internal acoounting control to the extent We considered necessary to
evaluate the system as required by generally accep~ed auditing standards.
Under these standards the purposes of suoh evaluations are to establish a
basis fOr reliance.on the system of internal accounting control in determin"-
ing the nature, timing, and extent of other auditing procedures that are
necessary for expressing an opinion on the financial .statements and to assist
the auditor in planning and performing the examination.of the financial state~
ments. ~dditionally, our examination-included procedures necessary in our
jUdgement to dete~ne compliance.with contractual terms and conditions and
regulations, policies, and procedures prescribed by HUD and by management and
the governing board o~' the Authority, insofar as suoh oompliance 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.
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The tiQjective of internal accounting control is to Provide reasonable, but
not absolute, assuranoe as to the safeguarding of assets against loss from
unauthorized use or 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 acpountingcontrol should not exceed the benefits derived and also
recognizes that the evaluation of these factors necessarily requires estimateS
and judgements by management!.
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CQ~T~ ON COMPLIANCE AND ADMINISTRATIVE INTERNAL GONTRQL CONT.
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'l'herOil are inherent limitations that should bere<<ognized in.considering the
potential effectiveness of any system of internal accounting control. In
the perfo~ance of most control procedures, errors c~n result from misunder-
standing of instr~ctions, mistak~s of jUdgement, carelessness, or other
PerSonal factors. control procedures. whose effectiveness depends upon
segregation of duties can be circumvented by cOllusion. Similarly, cRntrol
procedures can be.circumvented intentionally by.~agement wi~ respect either
to the.e~ecution and~recordingof transactions or with respect to the estimates
and judgements required in the Preparation Of financial statements. F~ther,
projeCtion of finY evalujiltion of. internal a<;counting COntrol tc:> future .periods
is s~~ect. to the risk that the prc:>cedures maY become inadequate beCause of
ch~ges in conditions, and that the degree of compliance with tpe procedures
may deteriorate.
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Oup examination of the finan<;ial statements made in accordance with generally
aocepted auditing.stanqal'ds, including the study.andevaluation of the PHA's
. iiystElm of int~nal accounting contrOl for the twenty-;foUf. (24) mOnths ended
June 30, 1980, that WaS made for tile purposes set forth in the first p,u'agrapl1.
of this report, would not neCessarily disclose all weaknesses in the sYstem
beC;;lI,use it Wjl.S. based on sel,ectivetests of accountingrecorqs and relato;\d data.
However' such study and.eval,uation disclpsed the following conditions that we
believe to be material weaknesses,
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S~ATOS O~ PRIOR~UOIT ~INDI~GS
The prior /iludit.repor1;. ':Qr. th~,period.endeqJune.30,.1978, cOllt"ined-
three (3) finding$. The corrective action taken by the ~HA is de~cr~ped
pelo'w:
1. Equipment - Rec,ord -C,l.1;C!a ;mq. Invelltory: The PM has \lfiltablished
Equipment Recprd.C~dson the office eq~ipment and a written
record of the annual inveptory has been retained.
2. Fidelity Bo~d: The PM hafilPurch~sed an all positions fidelity bond.
to cover .all board members and any other l?ersonss~'iJlling cneo!tll or
ha,ndliIl9cash.
3. Tenants gepurity DeP9sits: The PllA's detailed sohedule of Tenants
Security Deposits agrees ~itn.thecontrol a~OOunt of the General
Ledger.
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fINDJ;NGS, RECOl1MENDATION9 AND REPLIE;S '
The fol~9wiq9 a~d~~ findings were discussed with Michael A, Gi~er~,
during the course of the audit and at a ~o~ference peld October 17, 1980.
1. ~CCOUNTS RECEIVABLE - ACCOUNTS PAYABLE
The books of ~e PHA owned project shows a balance of $7,615.01
due from the Section 8 Project while the books of the Section 8 Project
show $7,470.80 payable to, tqe PHA owned projeqt.Between'the twp sets
of bOQks the variance is $144.17. '
RJ;:CO~ATION '
-We :recommend that your fee accountant be infolfllled of this vllr:\.ance.
,REPLY
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We will inform our fee accountant of tpis variance.
2. FORE~ST OF EXCESS FUNDS
We ~:re i.nfol:Jlled that the PHA did not Pl'epare the 90 day forecast
of excess fundS.
RECOMMENDATION
We ,ecommend that the PHA prePare theSe ~O day forecas~ of excess
funds and :retain them i~thei~ file' until ,the next au4it.
REPLY
We will pr~pare these forecast of excess funds and retain them for
review during subse~ent audits.
3. OUTSTANDING CRECKS,
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The PHA has a number of old outstanding checks, a number of these
checks have ~een outstanding in excess Of one year.
RECOMMENDATION
We recommend that a stop payment order be iss~ed to your bapk and
your fee accountant be instructed to remove these cheCkS from your books.
RSPLY
We will discuss this with our Board of commissioners,
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FIND:J;NC;;S, RECOMMJ;;NDATIONS AND REPLIES
4.
. CASH RECEIPTS
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The cl\sh receipts are being re~ained in the of~ice for as fang as
;2(,) d/l.Ys.
RECOMMENDATIONS
Wer~co~end that the cash receipts be d~os~~ed int/l.ct, on a
tilnlaly basis.
REPI,Y
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We wif~ folloW your reco~ndation.
5.
OPERATING BopGET OVERRUNS
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The Annual Contributions Co~~act Sec. 407H, states that the PHA spall
not at any t1me after th~ en~ of the initial operat~g perip~, for any .
project, inF~ any operating expenditures with respec~ to SUch p~o~ect
e)l!cept pursuant to and ill ,\ccordance with an approveq operating budget
for such project. The PHA incurred the following budget overr~6:
AcCOI/NT
INCURRED
OVE;RRUN
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BUDGETED
Fiscal Year Ended 6-30-79
Replacement of Nonexpenqable
Equipment $ 5,420.00
$ 6,176.25
$
75~.25
Fiscal.Year Ended 6-30-80
Total A~inistrative Expense
Total ~outine Expense
Property Betterment /l.nd
Additions
22,90(,).00
63,910.00
23,852.54
65,168.29
952.54
1,258.29
312.64
312.64
Nqne
RECOMMENDATIONS
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We recommend that the PHA obtain prior approval before incurring
expenditures in excess of the. approved b4d~et.
REPI,Y
We will obta~n HUD approval.
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.G~ERAL COMME;NTS
1.
In accordance wi~ GQyerpmental Accounting, A~diting and Financial
Reporting, Pa~el0, no de~reciation has been recorded. In accq~dance
wi~ HUD Accounting Procedures the Hou~ing Authority is not required
to record depreciatiqn.
2.
The amount l~sted on the boo~s as HUD Annual Contribution Receivable is
what the PHA has determined ill owing to them, but this amount has not
been approved by ijUD.
3.
The ~CCOUl\t "Payment; in Lieu of Taxes" has a balanoe of $21,525.34 this
balanoe ocins~stof amounts due froll\.thefiscal ye~s, end;l,nq .:rune 30, 1977,
1978, 1979 and 1980.
4.
~e Jo~rnal Vouoher~ that were prepared by the fee acooUlltapt did not
have all ~f th~ neces8~ry bac~up information,
2:\.
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ACTIVITIES OF T~E PHA
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1hePHA has 10/5 units in management.
Ml\.NAGEMlllNT
Owned H9using Kans ~8-2
~'s P~~gram KS 40-E038~OOl
22
UNITS
75
100
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NUMB6R
l..
HOli,sIlllG A\lTHORITY OF S~~NA
i:lALINA, lffiNSAS
JOUIUjI\L eNTRIES
JuNE 30, 1980
AlllNUAL CQNTRIBUTIONS CONTRACT FW~~ll4 and ~C-1029
P~OJECT KANS 38-1 and 38-2
DESCR:tPTION
A<;:COUNT
NUMBER
FOR PIIJ\ DEBIT
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Tenants ~ccounts
Receivable
192.00
'l!l"nant$ Prepaid
Rent
To ~ec1aeai~y Tena~t~
PrllP<:lid Rent.
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CREDlT
192,00
. MIDIT ACCOUNT
NUMB$R
F~R . REPORT, ,
1122
2240
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NUMBeR
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1.
HOUS~NG AUTHOR~T~ 9F ~INA
SALINA, KANsAS
JOliRNAL EN'fRIJ;:S
JUNE 30, 1~80
ANNUAL CONTRIBUTIONS CQNTRACT KC~7015
PROJ~CT: KS 40-E038~001
..
DESCR;J:PTION
Re~erve S~fpl~s ~ Broject
l\CcolUlt lin!'Jmded
U~reserved Surplus
To cqrree~ the ~ccru~l of
th~ short period t~e effective
d~te qfthe Annual COntributiqn
Contract ~as JlUle 22, 1978
ACCOUNT
NUMBER
FOR PRA DEBIT
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2827 24,779.17
2610
24
CREDIT
24,77~.17
. AUDIT ACCOUNT .
NUMBER
. FOR REPO~Ij;'
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2El27
281Q