1. 1 AAHRA/HUD Fall Workshop October 15-17 2012 Audit Findings Joseph S. Przybyzewski Financial Analyst 205-745-4417

2. 2 AAHRA/HUD Fall Workshop October 15-17 2012 Audit Findings The Importance of the Preventing and Resolving Audit Findings An audit finding is an indication that a significant problem exists in your PHA. Without resolution the problem will continue, become more complex and will negatively impact your housing authority’s operations. Depending upon the nature and severity of the finding, it may result in the housing authority being designated as troubled. Preventing and resolving audit findings is a major component of the performance of your management and fiscal responsibilities.

3. 3 AAHRA/HUD Fall Workshop October 15-17 2012 Noteworthy Discussion Points Finding is the responsibility of the Housing Authority- not the accountant. Board is inclusive of the finding and in resolving it in a timely manner. 2 CFR Part 225 [OMB 87]: Cost Principles for State, Local, and Indian Tribal Governments. Specifically Appendix B to Part 225-Selected Items of Cost SACS 115 and 112-Segregation of Duties. Documentation. A-133 Single Audit Requirement-OMB Circular A-133 requires and audit of all non-federal entities expending more than $500,000 of federal funds annually. 24 CFR 902.33-HUD regulation requiring the submission of an audited financial statement no later than 9 months after the close of the FYE. Annual Contributions Contract as well as State and Local Law.

4. 4 AAHRA/HUD Fall Workshop October 15-17 2012 Keys to Preventing Audit Findings Obtain and maintain quality accounting and audit services. Implementing Internal Management Controls. Establishing Standard Operating Procedures. Effective Staff Training. Records Creation and Maintenance. Oversight: Constant adherence and enforcement of policies and procedures. Respond to audit findings in a timely manner, prevents it from perpetuating.

5. 5 AAHRA/HUD Fall Workshop October 15-17 2012 Keys to Preventing Audit Findings (Continued) Procuring an Audit (REAC-GAAP Flyer #6). You are not required to accept the lowest bid. The PHA gets reimbursed for audit costs on their form HUD-52723. Check the quality of the proposed auditor’s work with other housing authorities. Do not retain an auditor or fee accountant who will not sign an agreement including all of the terms and requirements of the RFP including the incorporation by reference of adherence to HUD program standards.

6. 6 AAHRA/HUD Fall Workshop October 15-17 2012 The Reason for changing auditors is... To preserve the independence and objectivity of examining the financial statements, Public Housing Authorities are encouraged to rotate auditors in receiving quality and objective audits. Note that contracts exceeding five years, including options, require HUD approval. http://www.hud.gov/offices/reach/pdf//gaapflyer6.pdf