Audit - 1987/1988
,1'
. ,.
-.
HOUSING AUTHORITY OF
THE CITY OF SALINA
Salina, Kansas
gq - K(!, - .:J,.b.L /9ÞC ~ ,2l>/1
REPORT ON EXAMINATION OF
FINANCIAL STATEMENTS AND SUPPLEMENTAL DATA
FOR THE TWELVE MONTHS ENDED
June 30, 1988
SAUNDERS & ASSOCIATES
Certified Public Accountants
P. O. Box 1406
630 E. 17th
Ada, Oklahoma
(405) 332-8548
(405) 436-:,330
Exhibit
A
B(1)
B(2)
C(l)
C(2)
D(l)
0(2)
E (1)
E ( 2)
HOUSING AUTHORITY OF
THE CITY OF SALINA, KANSAS
INDEX TO FINANCIAL STATEMENTS
June 30, 1988
Paqe
Report of Certified Public Accountants.
1
Balance Sheet at June 30,
1988
2
Statement of Income and Expenses - Low-Rent
Program.
3
Statement of Income and Expenses - Housing
Assistance Payment Program.
4
Statement of Analysis of Surplus -
Low-Rent, Program.
:'
statement of Analysis of Surplus -
Housing Assistance Payment Program.
6
Notes to Financial statements.
7
Supplemental Information:
Schedule of Federal Financial Assistance -
Low-Rent Program.
8
Schedule of Federal Financial Assistance -
Housing Assistance Payment Program.
9
Computation of Residual Receipts and
Accruing Annual Contribution - Low-Rent
Program.
10
Computation of Annual C'~lntributions Earned
& Project Account - Operating Reserve
Changes - Housing Assistance Payment
Program.
11
Exhibit
F
G
H
I
HOUSING AUTHORITY OF
THE CITY OF SALINA, KANSAS
INDEX TO FINANCIAL STATEMENTS - CONT'D
June 30, 1988
Paqe
statement of Oevelopment Costs -
Uncompleted Project KS-38-03.
12
Statement & Certification of Actual
Modernization Costs - Project KS-38-902 .
13
Reconciliation of Development & Modernization
Advances with Costs.
14
Analysis of General Fund Cash Balance.
15
Accountant~s Report on Internal Control.
16
Accountant's Report on Compliance.
18
status of Prior Audit Findings.
19
Current Audit Findings, Recommendations
& Replies.
20
Schedule of Adjusting Journal Entries -
Low-Rent Program.
21
General Comments.
22
i j
('105) 332-85'18
S~£UUÍ~
~~Cfa~
630 f9. 17~
<;£.O, 93<= H06
Cùx, ð~ 711820
('105) 436-5330
Board of Commissioners
Housing Authority of the
City of Salina
P. o. Box 1202
Salina, Kansas 67402
Regional Inspector General for Audit
Office of the Inspector General
Department of Housing and Urban Dev.
Region VII, 1103 Grand Avenue
Kansas City, MO 64106
We have examined the balance sheet of the Housing Authority of the
City of Salina, Kansas pertaining to its Low-Rent and Section 8
Housing Programs as of June 30, 1988, and the related statements of
income and expenses and analysis of surplus for the twelve months then
ended. Our examination was made in accordance with generally accepted
auditing standards, General Accounting Office Standards for Audit of
Governmental Organization Programs, and the Compliance Supplement to
Office of Management and Budget Circular A-128, and, accordingly,
included such tests of the accounting records and other such
procedures as we considered necessary in the circumstances.
As described in Note A, the authority's policy is to prepare its
financial statements on the laws of accounting practices prescribed or
permitted by the Oepartment 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 cognizant agency and is
not intended for any other purpose.
In our opinion, the fin~ncial statements referred to above present
fairly the financial position of the Housing Authority of the City of
Salina, Kansas at June 30, 1988, and the results of its operations for
the twelve months then ended, in conformity with accounting practices
generally followed by local authorities applied on a basis consistent
with the Department of Housing & Urban Development procedures.
The supplemental financial data 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 respects in relation to
the financial statements taken as a whole.
/1 .
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SAUNDERS & ASSOCIATES
October 13, 1988
1
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
Exhibit A
BALANCE SHEET
,June 30, 1988
Assets
Cash (Exhibit I)
Accounts receivable:
Tenants
Other
Advances - other
Investments
Debt amortization funds - HUD
annual contributions receivable
Deferred charges - prepaid insurance
Development cost
Development cost - contra
Land, structures and equipment
TOTAL ASSETS
Liabilities and Surplus
Accounts payable:
Tenant's security deposits
HUD
Other
Accrued liabilities:
Interest payable - development
notes
Interest payable - administration
notes
Payments in lieu of taxes
Deferred credits - tenants prepaid
rents
Fixed liabilities - permanent
notes HUD
Total Liabilities
:3urplus (Exhibit C-l,2)
TOTAL LIABILITIES AND SURPLUS
KC-1029
KC-7051
$
18,102.27
$
8,979.58
673.47
1,635.38)
300.00
49,000.00
26,330.76
67,888.11
6,066.97
2,476,075.27
(2,2Q3,675.10)
2,232,311.83
3,406.53
$ 38,716.87
$ 2,645,107.44
-------------
-------------
---.-------
----------
$
10,408.00
13,692.5~
1,164.90
$
5,7613.75
( 1,820.38)
68,951.91
129,119.19
10,628.91
441. 00
2,229,07.1.42
2,463,477. '92
3,948.37
181 , 6_2 c; . 52
34,76i3.50
$ 2,645,107.44
$ 38,716.87
--------'------
-------------
------.----
----------
* The accompanyinq notes are an inteqral part or the financidl
statement~,
2
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
Exhibit 8(1)
STATEMENT OF INCOME AND EXPENSES
For the Twelve Months Ended June 30, 1988
Low-Rent
KC-7051
Operating Income
Dwelling rental
Nondwelling rental
$ 113,092.36
00.00
Total Rental Income
113,092.36
Interest on general fund investments
Other income
7,919.23
3,572.91
Total Operating Income (Exh. E-l)
124,584.50
Operating Expenses,
Administration
utilities
Ordinary maintenance and
General expense
Nonroutine maintenance
operation
29,609.39
4,743.66
52,384.41
34,313.61
30,666.22
Total Operating Expenses (Exh. E-l)
Net Operating Income (Loss)
151,717.29
( 27,132.79)
other Credits and (Chargesì
Interest on notes and bonds payable
Prior year adjustments - affecting
residual receipts
( 55,774.73)
510.12
NET INCOME (LOSS)
(Exhibit C-l)
$( 82,397.40)
--------------
------------
* T ii"? a c-. corn pan y j n (} not !' :'; a u--' a Ii i n t e <) r alp."\ r t (; f t- h e f í n ,3 n . ¡ ,3 1
':,,;tatement:=:; .
3
Exhibit 8(2)
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
STATEMENT OF INCOME AND EXPENSES
For the Twelve Months Ended June 30, 1988
Housing Assistance Payment Program
KC-7051
Operatinq l!lç':..gme
Interest income
$__lL}84.59
~erating Expense
Housing assistance payments
Administration expense
General expense
Audit
379,079.52
47,505.64
9,309.69
-_~ILhQJL
Total Operating Expenses (Exh. E-2)
436,476.85
Net Operating Income (Loss)
(434,692.26)
Other Credits and (Charqes)
Prior year adjustments - affecting residual
receipts
.L__650~~)
NET INCOME (LOSS) (Exhibit C-2)
$(435,342.62)
---.------.----
---.---------
* The accompanyinc¡ note:,; are an inteqral part of the financial
staternent.::; .
4
Exhibit C(1)
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
STATEMENT OF ANALYSIS OF SURPLUS
For the Twelve Months Ended June 30, 1988
Low-Rent
KC-l029
Unreserved Surplus
Balance per audit June 30, 1987
Audit adjustments backed out
Retained residual receipts for year ended
June 30, 1987
$(1,360,668.69)
( 1,128.25)
5,,835.69)
Balance per books at June 30, 1987
(1,367,632.63)
Net income (loss) (Exhibit B-1)
Provision for operating reserve
82,397.40)
11,:,09.40
Balance at June 30, 1988
(1,438,520.63)
Operatinq Reserve
Balance per audit June 30, 1987
Residual receipts retained for year ended
June 30, 1987
60,315.00
5,835.69
Balance per books at June 30, 1987
66,150.69
Provision for operating reserve
11,509.40)
Balance at June 30, 1988 (Exhibit I)
54,64.1.29
Cumulative HUD Contributions
Balance per audit June 30, 1987
Adjustment to annual contribution for year
ended June 30, 1987
Residual receipts retained for year ended
June 30, 1987
Accrued annual contribution for year ended
June 30, 1988 (Exhibit E-1)
HUD operatin'] sub::;idy
1,492,199.56
25,462.50)
5,83:,.6Q
67,888.lI
2:'/043.00
Balance at ,June 30, 1988
-1.., 56 5 1 ') 08 . 86
TOTAL SURPLUS (Exhibit A)
c~
181/¡:,':J'J.:'<;
--------,- ,....
----.---------
* Th,~ dccompdnyinq note;:, arp. an inteqral part .)f the financial
statements.
-'
Exhibit C(2)
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
STATEMENT OF ANALYSIS OF SURPLUS
For the Twelve Months Ended June 30, 1988
Housing Assistance Payment Program
KC-705l
Unreserved Surplus
Balance per audit June 3D, 1987
Audit adjustment made in subsequent period
Balance per books June 30, 1986
Net income (loss) for year ended
June 3D, 1988 (Exhibit B-2)
Provision for operating reserve
(Exhibit E-2)
Provision for project account unfunded
(Exhibit E-2)
$(2,282,248.39)
650.36
(2,281,598.03)
435,342.62)
3,613.23)
84,783.75)
Balance at June 30, 1988
~05,337.63)
Operating Reserve
Balance per audit June 30, 1987
Provision for operating reserve
27,748.74
3,613.23
Balance at June 30, 1988
31,361.97
Project Account - Unfunded
Balance per audit at June 30, 1987
Provision for project account
462,062.83
84,783.75
Balance at June 30,
1988
546,846.58
Cumulative HUD Contributions
Balance per audit June 30, 1987
Annual HUD Contribution for year ended
ended June 30, 1988 (Exhibit E-2)
1,822,941.33
--.!~9 56. 2~;
Balance at June 30,
1988
2,261,897.:;8
TOTAL SURPLUS (Exhibit A)
...
;;:.
34,768.:>0
-.---------------
--------------
* The accompanying notes are an integral part of the finanrial
:'3tatements.
6
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
NOTES TO FINANCIAL STATEMENTS
Note A:
Summary of Siqnificant Accountinq Policies:
Basis of Accounting:
The accounting records are maintained in accordance with the standards
set forth by the U. S. Department of Housing and Urban Development for
Public Housing Authorities.
Not e .ê.J...
Land, Structures, and Equipment
All costs related to the acquisition of land, original construction of
the housing units, completed modernization costs, and equipment costs
are carried in this account.
*The accompanying notes are an integral part of the financial
statements.
'7
I
SUPPLEMENTAL INFORMATION
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
SCHEDULE OF FEDERAL FINANCIAL ASSISTANCE
For the Twelve Months Ended June 30, 1988
Low-Rent
KC-I029
F'pdl"ra] Cr,1t1l:or: U.:;. Dept. of Housing and Urban Dev.
Federal CFDA: 14.J46
OJ
Proqrdrn TiLles
Mo(Ìerni7.Ation Costs
KS 3H-902
Development Costs
K S - 1 H- () 1
Annud 1 contr ibut ion:,
Contract.
Hou:.:,in'j Authority
O[>eratiomi (Noh')
Proqram
Amounfs
Receipts
Beqinninq Balance,
7-1-87
$
250,000.00
$( 3,546.93)
$ 13,410.00
],270,607.ûO
34,314.18
8],634.00
87,514.92
00.00
87,514.92
00.00
601315.00
1561869.48
'['nTAL F'FDF'.RAL A:")S I :;TANCE
$ 91,082.25
$339,428.40
-- -- _. - - _h -- - - -
- --- - ,- -- - -- --
----------
------------
NOTE:
Disbursements
Endi.!lg, Balance
6-30-88
$ 1 2, 68"° . 07
$( 2,8]7.00)
130,709.37
(14,761.19)
87,514.92
00.00
1621543.19
541641.29
$393,447.55
$37,063.10
----------
-.---------
----------
---------
Receipts from Housing Authority operations $156,869.48 includes $5,835.69 residual
receipts retained for year ended June 30, 1987 and the current audit adjustment $891.17.
* 1'IH' ,H'compdnyin'] noLf~s are an inteqral part of the financial statements.
g
t-'.
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>-'
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
SCHEOULE OF FEDERAL FINANCIAL ASSISTANCE
For the Twelve Months Ended June 30, 1988
Housing Assistance Payments Program
KC-705l
Felleral Grantor: U.S. Dept. of Housing and Urban Dev.
Federal CFDA: 14.156
P-I (J c¡ ri~Xfl 'I' 1 1. 1 e :-,
Pror¡ram
Amounts
---
Beainnlnq Balance
7--1-87
Rece i pts
H 0 u::c; 1 IVj Aut h 0 I: i t Y
O[Jf'I:dtìon5 (Note)
$,138,956.2'>
$27L748.74
$ 44 0 L 7 4 0 . 8 4
<-0
TrJTM, FEDEPAL Ar;:_~rSTANCE
$27,748.74
$440,740.84
----------
---------
---------..-
-----.-.----
Disbursements
$437 L 127.61
$437,127.61
------------
-..----------
* Thp accompanyinc] notes are an inte!;JTal part of the financial statements.
EndilliI. Balance
6-30-88
$:UL361.97
$31,361.97
---------
----------
g
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Exhibit E(1)
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
COMPUTATION OF RESIDUAL RECEIPTS AND
ACCRUING ANNUAL CONTRIBUTION
For the Twelve Months Ended June 30, 1988
Low-Rent
KC-I029
Computation Qi Residual Receipts
Total Operating Income (Exhibit B-1)
HUD operating subsidy
Prior year adjustments affecting residual
receipts
$ 124,584.50
25,048.00
510.12
Total Receipts
PSO/142.62
Total operating expenses (Exhibit B-1)
Capital expenditures
151,717.29
10,825.90
Total Expenditures
162/543.19
Residual Receipts Per Audit
( .12,400.57)
Audit Adjustments Backed Out
891.17
Residual Receipts Per LHA
( 11,509.40)
Provision for operating reserve (Exhibit C-l)
RESIOUAL RECEIPTS
,...
Ç>
:11,509.40
00.00
--.---------
------------
Computation Qf Accruing Annual Contribution
Fixed annual contribution
Adjustments
~
~,
67,888.11
00.00
ACCRUING ANNUAL CONTRIBUTION (Exhibit C-])
$
67,888.11
--------------
-----..----------
* The accornpanyitv] note" are dn intp<jral part ()~ the Ei_nancial
statements.
10
Exhibit E(2)
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
COMPUTATION OF RESIDUAL RECEIPTS AND
ACCRUING ANNUAL CONTRIBUTION
EARNED & PROJECT ACCOUNT - OPERATING RESERVE CHANGES
For the Twelve Months Ended June 30, 1988
Housing Assistance Payment Program
KC-7051
Operatinq Reserve Changes
Operating income (Exhibit B-2)
Annual contributions earned
PROVISION FOR OPERATING RESERVE
(Exhibit C-2)
$: 1,784.59
438,956.25
440,740.84
436,476.85
650.36
.4 (]
437,127.61
3,613.23
$ ( 3,613.23)
--------------
-----------
Total Operating Receipts
Operating expense (Exhibit B-2)
Prior year adjustments - affecting
residual receipts
Property betterments & additions
Total Operating Expenditures
Residual Receipts Per Audit
ANNUAL CONTRIBUTION EARNED - LESSOR OF
CONTRIBUTION AVAILABLE OR CONTRIBUTION
REQUIRED (Exhibit C-2)
$ 438,956.25
-----------------
---.----------
Maximum Contribution Available
Maximum annual contribution
Project account balance at beginning
of fiscal year
$ 523,740.00
462,062.83
TOTAL ANNUAL CONTRIBUTION AVAILABLE
$ 985,802.83
---------------
----------.-..-
Annual Contributio~ Required
Housing assistance payments
Admjnj~tration fees
Hard-to-House fees
Audit
Project receipts other than annual
contribution
$ 379,079.52
59,239.(,]
450.00
582.00
(
394.88)
1'01' AT. ;',NNUAL CON1'P I BUT ION REQI! J RED
$ 43R,9:.6.2r:1
-.----.-----.---.-.
-- .- -- -- .- -- --
* The dccumpanyin'j note:) dU'-' an inte'jral p.::¡rt ,::¡£ the fjnanc;¿:!1.
statement,-=¡ .
11
Exhibit F
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
SCHEDULE OF DEVELOPMENT COST - UNCOMPLETED
June 30, 1988
KS-38-03
Funds approved
$ 1,270,607.00
Funds advanced
Interest to DOFA
(1,150,872.00)
( 68,951.91)
EXCESS OF FUNOS APPROVED (Exhibit H)
$
50,783.09
-------------
-------------
Funds advanced
Interest to DOFA
$ 1,150,872.00
68,951.91
Funds expended
(1,234,585.10)
EXCESS (DEFICIENCY) OF FUNDS ADVANCED
(Exhibit H)
~ (
14,761.19)
-------.-------
-------------
* TI1t:: acc:ornpanyin'] nute;""; art~ an lnte']ròl part of the finóncldl
~3tatements .
1 2
Exhibit G
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
STATEMENT AND CERTIFICATION OF ACTUAL MODERNIZATION COST
1.
The actual Modernization Costs of the project are as follows:
KS-38-902
Administration
Site Improvements
Dwelling Structures
Equipment
$ 17,483.70
9,751.65
214,632.00
10,949.65
TOTAL
$252,817.00
----------
----------
2.
The distribution of costs by major cost accounts as shown on the
Statement of Actual Modernization Costs dated December 11, 1987
accompanying the Actual Modernization Certificates submitted to
HUD for approval is in agreement with the Housing Authority's
records.
3.
All modernization costs and related liabilities have been paid.
4.
The Housing Authority had the following budget overruns.
Classification
Budqet
Actual
Overrun
Administration
Dwelling structures
$ 16,000.00
206,000.00
$ 17,483.70
214,632.00
$1,483.70
8,632.00
* The accompanying notes are an integral part of the financial
statements.
] 3
Exhibit H
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
RECONCILIATION OF DEVELOPMENT AND MODERNIZATION
AOVANCES WITH COSTS
June 30, 1988
KC-l029
Funds approved
KS-38-03
$ 1,270,607.00
Funds advanced
Interest to DOFA
EXCESS (DEFICIENCY)
OF FUNDS APPROVED
(Exh. F, G, 1)
(1,150,872.00)
( 68,951,91)
KS-38-902
$ 250,000.00
(250,000.00)
Total
$ 1,520,607.00
(1,400,872.00)
( 68,951.91)
$
50,783.09
$
~
y
50,783.09
-------------
-------------
------------
-----------
- - - -. - - - - -- - - --
-------------
Funds advanced
Interest to DOFA
$ 1,150,872.00
68,951.91
$ 250,000.00
$ 1,400,872.00
68,951.91
Funds expended
(1,234,585.10)
(252,817.00)
..lL.,487,402.10)
EXCESS (DEFICIENCY)
OF FUNDS ADVANCED
(Exh. F, G)
$ (
14..761.19) $(
2,817.00) $(
17,578.19)
-------------
---------.----
-----------
-------------
-------------
-----------.--
* The acccrnpdnylnq ¡j(j1ec::; ,'ire an integr<'il part of t.ìl(c fin:::flcial
éë t a tJ> me n t s .
J 4
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
ANALYSIS OF GENERAL FUND CASH
June 30, 1988
Composition Before ~djustments
Net operating receipts retained:
Operating reserves (Exh. C-l, C-2)
Tenants security deposits'
Deficiency in Development/Modernization
funds (Exh. H)
Deferred credits - tenants prepaid rents
Audit adjustments backed out
Adjustments
Expenses/costs not ,paid:
Accounts payable:
HUD
Other
Accrued liabilities - PILOT
Income not received:
Accounts receivable:
Tenants
Other
Advances other
General Fund Cash Available
General Fund Cash b12.12l~d
Investments
Deferred charges - prepaid insurance
GENERAL FUND CASH (Exhibit A)
KC-1029
$ 54,641.29
10,408.00
(17,578.19)
441.00
891.17)
13,692.59
1,164.90
10,628.91
673.47)
1,635.38
300.00)
73,169.24
(49,000.00)
-L..b. 066.97)
$ 18,102.27
----------'-
----------
Exhibit I
KC-705l
$
31,361.97
5,7f,8.75
1,820.3r})
35,310.34
( 26,330.76)
$
8,979.58
.---..----------.--
----_._------
"* The ,::¡ccnmpanyinq not:,,::., ace an inteqral p<3rt of thf' financial
statements.
1 :\
(405) 332-8548
~~£UUL~
('~~~
630 &, 17tK,
9?ð. 93<= H06
ßJ~ ð~ 7lt820
(1¡O5) 1¡36-5330
Accountant's Report on Internal Control
Board of Commissioners
Housing Authority of the
City of Salina
P. O. Box 1202
Salina, Kansas 67402
Regional Inspector General for Audit
Office of Inspector General
Department of Housing and Urban Dev.
Region VII, 1103 Grand Aveune
Kansas City, MO 64106
We have examined the financial statements of the Housing Authority of
the City of Salina, Kansas, for the twelve months ended June 30, 1988,
and have issued our report thereon dated October 13, 1988. As a part
of our examination, we made a study and evaluation of the Housing
Authority's system of internal accounting control and those controls
which provide a reasonable assurance of compliance with laws and
regulations to the extent we considered necessary to evaluate the
system as required by the standards for financial and compliance
audits contained in the U.S. General Accounting Offices' Standards
for Audit of Governmental Orqanizations, Proqrams, Activities, and
Functions and Office of Management and Budget Circular A-128, Audits
of State and Local Government.
For the purpose of this report, we have classified
significant internal accounting controls into
categories:
the
the
Authority's
following
(1) Payroll/Personnel
(2) Revenue/Cash Receipts/Receivables
(3) Expenditures/Cash Disbursements/Payables
(4) Property and Equipment
Further, we have classified the significant administrative controls
designed to provide reasonable assurance that federal programs are
being managed in compliance with laws and regulations into the
following categories:
(1) Political activity
(2) Davis-Bacon Act compliance
(3) Civil Rights
(4) Cash management
(5) Eligibilities
(6) Real property acquisition
and relocation
(7) Federal financial reports
(8) Reporting
(9) Special tests & provisions
üur study included all of the control categories listed above which
are applicable to this Housing Authority. The purpose of our study
and evaluation was to determine the nature, timing and extent or the
16
Accountant's Report on Internal control
Page 2
auditing procedures necessary for expressing an opinion on the
Authority's financial statements. Our study and evaluation was more
limited than would be necessary to express an opinion on the system of
internal control taken as a whole, or on any of the aforementioned
categories of controls.
The management of the Housing Authority of the City of Salina, Kansas
is responsible for establishing and maintaining a systE~m of internal
control. In fulfilling this r~sponsibility, estimates and judgments
by management are required to assess the expected benefits and related
costs of control procedures. The objectives of a system are to
provide management with reasonable, but not absolute assurance that
assets are safeguarded against loss from unauthorized use or
disposition, that transactions are executed in accordance with
management's authorization and recorded properly to permit the
preparation of financial statements in accordance with generally
accepted accounting principles, and that there is compliance with
applicable laws and règulations.
Because of inherent limitations in any system of internal control,
errors or irregularities may nevertheless occur and not be detected.
Also, projection of any evaluation of the system to future periods is
subject to the risk that procedures may become inadequate because of
changes in conditions or that the degree of compliance with the
procedures may deteriorate.
Our study and evaluation made for the limited purposes described in
the first paragraph would not necessarily disclose all material
weaknesses in the system. Accordingly, we do not express an opinion
on the system of internal control of the Housing Authority of the City
of Salina, Kansas, taken as a whole, or on any of the categories of
controls identified in the second paragraph. However, our study and
evaluation disclosed no conditions that we believe to be material in
relation to the financial statements of the Housing Authority of the
City of Salina, Kansas.
This report is intended solely for the use of management and the
cognizant Federal agency, and should not be used for any other
purpose.
~~~
SAUNDERS & ASSOCIATES
October 13, 1988
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Accountant's Report on Compliance
Board of Directors
Housing Authority of the
City of Salina
P. O. Box 1202
Salina, Kansas 67402
Regional Inspector General for Audit
.Office of the Inspector General
Department of Housing and Urban Dev.
Region VII, 1103 Grand Avenue
Kansas City, MO 64106
We have examined the financial statements of the Housing Authority of
the City of Salina, Kansas for the twelve months ended June 30, 1988.
Our examination was made in accordance with generally accepted
auditing standards; th~ General Accounting Office Standards for Audit
of Governmental Organizations, Programs, Activities and Functions, as
they pertain to financial and compliance audits; the provisions of the
Office of Management and Budget's (OMB) Compliance Supplement for
Single Audits of State and Local Governments; and the provisions of
OMB's Circular A-128, Audits of State and Local Governments, and
accordingly included such tests of the accounting records and such
other auditing procedures as we considered necessary in the
circumstances.
The management of the Housing Authority of the City of Salina, Kansas
is responsible for the entity's compliance with laws and regulations.
In connection with the examination referred to above, we selected and
tested transactions and records from each major federal financial
assistance program and certain nonmajor federal financial assistance
programs. The purpose of our testing of transactions and records from
those federal financial assistance programs was to obtain reasonable
assurance that the Housing ~uthority of the City of Salina, Kansas,
had, in all material respects, administered major programs, and
executed the tested nonmajor program transactions, in compliance with
laws and regulations, including those pertaining to financial reports
and claims for advances and reimbursements, noncompliance with which
we believe could have a material effect on the al10wability of program
expenditures.
The results of our tests indicate that for the transactions and
records tested, the Housing Authority of the City of Salina, Kansas,
complied with the laws and regulations referred to above, except as
described in the accompanying schedule of findings and questioned
costs.
] B
Accountant's Report on Compliance
Page 2
In our opinion, subject to the effect of the ultimate resolution of
those instances of noncompliance referred to in the preceding
paragraph, for the year ended June 30, 1988, the Housing Authority of
the City of Salina, Kansas, administered each of its major federal
financial assistance programs in compliance, in all material respects,
with laws and regulations, including those pertaining to financial
reports and claims for advances and reimbursements, noncompliance with
which we believe could have a material effect on the allowability of
program expenditures.
The results of our testing of transactions and records selected from
nonmajor federal financial assistance programs indicate that for the
transactions and records tested the Housing Authority of the City of
Salina, Kansas, complied with the laws and regulations referred to in
the second paragraph of our report, except as noted in the
accompanying schedule of findings and questioned costs. Our testing
was more limited than would be necessary to express an opinion on
whether the Housing Authority of the City of Salina, Kansas,
administered those programs in compliance with all material respects
with those laws and regulations noncompliance with which we believe
could have a mater'ial effect on the allowability of program
expenditures¡ however, with respect to the transactions and records
that were not tested by us, nothing came to our attention to indicate
that the Housing Authority of the City of Salina, Kansas, had not
complied with laws and regulations other than those laws and
regulations for which we noted violations in our testing referred to
above.
4~~~ y L~~~
SAUNDERS & ASSOCIATES
October 13, 1988
18-]
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
STATUS OF PRIOR AUDIT FINDINGS
1 )
Excessive Accounts Receivable ~ Collection Loss
Write = Otis. Accounts receivable - tenants and collection
losses are not excessive at June 30, 1988. This finding is
cleared.
2 )
Lonq = Outstanding Checks. The Housing Authority continues to
carry these checks as outstanding on the Section 8 Program. (See
General Comment.)
* The accompanying notes are an integral part of the financial
statements.
] 9
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
CURRENT AUDIT FINDINGS, RECOMMENDATIONS
AND REPLIES
1 )
Budqet Overruns: The Housing Authority experienced the following
budget overruns during the current audit period:
Classification
Budqet
Actual
Overrun
Total routine expense
Total non-routine expense
$119,970.00
28,300.00
$121,051.07
30,666.22
$1,081.07
2,366.22
Note: $891.17 of the overrun Total non-routine expense is caused
by audit adjustment No.1.
Recommendation: The Housing Authority should closely monitor
expenditures and f~le budget revisions when it becomes apparent
overruns will be incurred.
Reply:
We will comply.
2 )
Annual Unit Inspections: Documentation of annual unit inspections
during the prior twelve months could not be located in low-rent
tenants' files.
Recommendation: Annual unit inspections should be scheduled as
soon as possible.
Reply: The Housing Authority is in the process of catching up on
annual inspections.
* The accompanying notes are an integra] part of the financial
statements.
20
Audit
Acct.
02-4610
02--1460/
02-1400.4
03-1460
03-1400.3
02-1460
02-1460
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
SCHEDULE OF ADJUSTING JOURNAL ENTRIES
June 30, 1988
Low-Rent
KC-7051
(1)
pro
Extraordinary maintenance
Dwelling income
$891.17
To adjust for modernization
expense overrun for 901
Modernization funds closed
in 1986 audit:.
( 2 )
Modernization cost $625.00
Modernization cost - contra
Modernization cost - contra $625.00
Modernization cost
To adjust for incorrect coding
of check 100577.
21
Cr.
$891.17
$625.00
$625.00
LHA
Acct.
6010
02-1460/
02-1400.4
03-1460
03-1400.3
02-1460
02-1460
HOUSING AUTHORITY OF THE
CITY OF SALINA, KANSAS
GENERAL COMMENTS
We recommend that total budget overruns on Modernization Project KS-
38-902 be moved to Extraordinary maintenance as a prior period
adjustment. Also, the following Section 8 checks should be voided and
either rewritten or removed from the Housing Authority's expenses with
an appropriate adjustment to the cash account.
Check No. Date Written Amount
8290 9-01-85 $ 12.00
800001 4-10--86 190.00
800604 10-01-86 140.00
,.."..,