new lancaster city housing authority lancaster, … (pa036) audit fy2013.pdf · 2017. 11. 22. ·...

LANCASTER CITY HOUSING AUTHORITY Lancaster, Pennsylvania

FINANCIAL STATEMENTS September 30, 2013

TABLE OF CONTENTS

PAGE INDEPENDENT AUDITORS’ REPORT .................................................................................................................... 1

REQUIRED SUPPLEMENTAL INFORMATION

Management’s Discussion and Analysis (MD&A) .......................................................................................... 4 FINANCIAL STATEMENTS ..................................................................................................................................... 9

Statement of Net Position ...........................................................................................................................10 Statement of Revenues, Expenses and Changes in Net Position ................................................................11 Statement of Cash Flows .............................................................................................................................12 Notes to Financial Statements .....................................................................................................................13

SUPPLEMENTAL INFORMATION .......................................................................................................................22 Financial Data Schedules:

Entity‐Wide Balance Sheet Summary ..................................................................................................23 Entity‐Wide Revenue and Expense Summary .......................................................................................25 Project Balance Sheet Summary ...........................................................................................................28 Project Revenue and Expense Summary ..............................................................................................30

Statement and Certification of Program Costs ............................................................................................33

SINGLE AUDIT REPORT ......................................................................................................................................34

Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ........................................... 35

Independent Auditors’ Report on Compliance with Requirements That Could Have a Direct and Material Effect on Each Major Program and on

Internal Control Over Compliance in Accordance with OMB Circular A‐133 .............................................. 37

Schedule of Expenditures of Federal Awards ...................................................................................................... 40

Note to Schedule of Expenditures of Federal Awards......................................................................................... 41

Schedule of Findings and Questioned Costs ........................................................................................................ 42

Schedule of Prior Year Findings and Questioned Costs ....................................................................................... 45

1

Independent Auditors’ Report Board of Directors Lancaster City Housing Authority Lancaster, Pennsylvania Report on the Financial Statements

We have audited the accompanying financial statements of the Lancaster City Housing Authority (the Authority) which comprise the statement of net position as of September 30, 2013, and the related statements of revenues, expenses and changes in net position, and cash flows for the year then ended and the related notes to the financial statements. Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

CliftonLarsonAllen LLP www.cliftonlarsonallen.com

An independent member of Nexia International

2

Opinion

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Authority as of September 30, 2013, and the changes in financial position and cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Other Matters

Required Supplementary Information

Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis on pages 4 through 8 be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information

Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Authority’s basic financial statements. The financial data schedules and statement and certification of program costs listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by U.S. Office of Management and Budget Circular A‐133, Audits of States, Local Governments, and Non‐Profit Organizations, and is not a required part of the basic financial statements. The financial data schedules, statement and certification of program costs, and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the financial data schedules, statement and certification of program costs and schedule of expenditures of federal awards are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated May 2, 2014 on our consideration of the Authority’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters.

3

The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the result of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority’s internal control over financial reporting and compliance.

a Baltimore, Maryland May 2, 2014

LANCASTER CITY HOUSING AUTHORITY MANAGEMENT’S DISCUSSION AND ANALYSIS

Year Ending September 30, 2013

4

The mission of the Lancaster City Housing Authority (LCHA) is to improve the quality of life consistent with local, commonwealth, and federal statutes by providing decent, safe, and sanitary housing for low and moderate income individuals and families, retired persons, and the handicapped; recognizing the residents as our ultimate customer; fostering an increased supply of quality housing affordable to low and moderate income residents throughout Lancaster County; fostering development, ownership, and successful management of housing; taking a comprehensive approach that goes beyond bricks and mortar, to build links to social service and economic development organizations, and to assist neighborhood residents and community organizations in creating successful neighborhoods; administering rental assistance and related programs which allow people to afford and access the widest range of housing opportunities; providing support and referral services which enable families and individuals to comprehensively address their housing and social service needs and to become increasingly self‐sufficient. As management of the Lancaster City Housing Authority, we offer the readers of the Authority's financial statements this narrative overview and analysis of the financial activities of the Authority for the year ended September 30, 2013. We encourage readers to consider the information presented here in conjunction with the Authority's financial statements. Questions concerning any of the information provided in this report or requests for additional information should be addressed to the Executive Director, Lancaster City Housing Authority. Financial Highlights

• The assets of the Authority exceeded its liabilities as of September 30, 2013 by $11,003,781 (net position).

• The Authority's unrestricted cash balance as of September 30, 2013 was $2,903,349, representing an increase of $443,331 from the prior year. This change was due primarily to operating revenue exceeding operating expense; along with the use of the capital fund program to supplement operations.

• The Authority had $1,675,009 in Tenant Revenue, $8,123,991 in HUD PHA Operating Grants, and $438,715 of HUD Capital Grants for the year ended September 30, 2013.

Overview of the Financial Statements The financial statements included in this annual report are those of a special‐purpose government engaged in a business‐type activity. The following statements are included:

• Statement of Net Position ‐ reports the Authority's current financial resources (short‐term spendable resources) with capital assets and long‐term debt obligations,

• Statement of Revenues, Expenses, and Change in Net Position ‐ reports the Authority's operating and non‐operating revenues by major source along with operating and non‐operating expenses and capital contributions.

• Statement of Cash Flows ‐ reports cash flows from operating, financing, and investing activities. The most important question asked about the Authority's finances is, "Is the Authority as a whole better or worse off as a result of the year's activities?"



5

The attached analysis of net position, revenues, and expenses is provided to assist with answering the above question. This analysis includes all assets and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private sector companies. Accrual accounting recognizes revenues and expenses when earned and incurred regardless of when cash is received or paid. Our analysis also presents the Authority's net position and changes therein. You can think of the Authority's net position as the difference between what the Authority owns (assets) to what the Authority owes (liabilities). The change in net position analysis will assist the reader with measuring the health or financial position of the Authority. Over time, significant changes in the Authority's net position are an indicator of whether its financial health is improving or deteriorating. To fully assess the financial health of any Authority the reader must also consider other non‐financial factors such as changes in family composition, fluctuations in the local economy, HUD‐mandated program administrative changes, and the physical condition of the Authority's capital assets. Economic Factors and Next Year's Budgets The following factors were considered in preparing the Authority's budget for the fiscal year ending September 30, 2014:

1. The uncertainty of a reduction of HUD funded subsidies.

2. The funding of the Housing Choice Voucher program for 2014 was essentially based on 2013 HAP Expense reported in the Voucher Management System. The Housing Authority anticipates being able to house an average of approximately 905 families based on appropriated Housing Assistance Payment funding plus HAP Reserves.

3. The Housing Authority continues to take steps and measures to keep costs under control and will utilize the Capital Fund grants to supplement operations. In the event of extraordinary and other unanticipated costs, the Authority's Unrestricted Net Position is currently sufficient to cover any shortfall.

Analysis of Net Position (Statement of Net Position) Total Assets for the years ended September 30, 2013 and 2012, were $11,869,780 and $12,404,463, respectively. This represents a net decrease of $534,683 over the prior year. Current Assets decreased by $164,371 from the prior year. This reduction is primarily due a decrease in HUD Capital grant and Other Government account receivables offset by an increase in cash based on positive operating results. Long‐term receivables decreased by $4,106 due to the collection of fraud recovery receivables from the prior fiscal year. Current liabilities decreased from $711,567 for the year ended September 30, 2012 as compared to $465,402 for the year ended September 30, 2013. This was a decrease of $246,165. This decrease is the result of a reduction in accounts payable and accruals under the Capital Fund Program. Noncurrent Liabilities increased by $48,011.



6

Statements of Net Position

2013 2012 Total Change % Change

AssetsCash and cash equivalents 3,650,053$ 3,314,690$ 335,363$ 10.12%Other current assets 277,825 777,559 (499,734) (64.27)%Long‐term receivable 66,966 71,072 (4,106) (5.78)%

Capital assets 7,874,936 8,241,142 (366,206) (4.44)%

Total assets 11,869,780 12,404,463 (534,683) (4.31)%

Liabilities

Current liabilities 465,402 711,567 (246,165) (34.59)%

Non‐current liabilities 400,597 352,586 48,011 13.62%

Total liabilities 865,999 1,064,153 (198,154) (18.62)%

Net positionNet investment in capital assets 7,874,936 8,241,142 (366,206) (4.44)%Restricted net position 450,138 572,605 (122,467) (21.39)%

Unrestricted net position 2,678,707 2,526,563 152,144 6.02%

Total net position 11,003,781 11,340,310 (336,529) (2.97)%

Total liabilities and net position 11,869,780$ 12,404,463$ (534,683)$ (4.31)%

Net Capital Assets decreased by $366,306 from the prior year.


Land 350,012$ 350,012$ ‐$ 0.00%Infrastructure 571,034 571,034 ‐ 0.00%Buildings and improvements 38,504,788 37,336,614 1,168,174 3.13%Furniture, equipment, and machinery 694,719 570,434 124,285 21.79%

Work in progress ‐ 833,669 (833,669) ‐100.00%

40,120,553 39,661,763 458,790 1.16%

Less: Accumulated depreciation (32,245,617) (31,420,621) (824,996) 2.63%

Net capital assets 7,874,936$ 8,241,142$ (366,206)$ ‐4%

Land and Infrastructure did not change from the prior year. Buildings and Improvements increased as completed capital improvements were transferred from work‐in‐ progress; along with the capital improvement costs incurred in the current fiscal year.



7

Furniture, Equipment, and Machinery increased for phone system upgrades and transfers from work‐in‐ progress

Work in Process decreased for capital projects undertaken under the Capital Fund as work items were completed and moved to Buildings and Improvements and Furniture, Equipment, and Machinery.

Accumulated depreciation increased due to fiscal year depreciation expense.

Analysis of Revenues (Statement of Revenues, Expenses, and Change in Net Position)

The Authority administers the following programs and the revenues generated from these programs for the year ended September 30, 2013 were as follows:

Central Office Cost Center 7,138$ Low Rent Public Housing (AMPs) 3,943,946

Section 8 Rental Voucher 6,441,155

Section 8 Moderate Rehabilitation SRO 60,451Business Activities 90Shelter Plus Care 165,155

Total revenues 10,617,935$

Total Revenues for the years ended September 30, 2013 and 2012 were $10,617,935 and $11,475,064, respectively. The change from 2012 to 2013 is due primarily to FEMA funds that were received in 2012 and decreased Capital Fund Grant activity.

Total Tenant Revenue increased by $138,460 because of maintained consistent leasing, leasing to higher income families, and increases in income for previously housed tenants.

Analysis of Expenses (Statement of Revenues, Expenses, and Change in Net Position)

Total Expenses decreased by $218,134 for the year ended September 30, 2013 as compared to the year ended September 30, 2012.

The variance in Administrative expense reflects an increase in salaries and benefits; along with, additional spreading of office expenses and IT support.

Tenant Service expenditures decreased by $36,730 as compared to the year ended September 30, 2012. The decrease can be accounted for lower tenant activity costs.

Utilities expenditures decreased by $15,450 due to a decrease in water usage.

Maintenance expenditures decreased by $274,737, due primarily to casualty loss costs incurred from flood damage in the prior fiscal year.

Protective Services costs decreased from the prior year.



8

General Expenses increased by $88,310. This is due primarily to higher insurance premiums and additional compensated absences expense incurred for a retiring staff person. Housing Assistance Payments (HAP) decreased because of lower funding appropriations. The increase in Depreciation Expense is due to an increase in the amount of capitalized cost being depreciated. The following table illustrates our analysis:


Revenues

Tenant revenue 1,675,009$ 1,536,549$ 138,460$ 9.01%

HUD PHA grants 8,123,991 9,184,502 (1,060,511) (11.55)%

Other government grants 438,715 350,844 87,871 25.05%

Investment income 1,912 878 1,034 117.77%

Other income 378,308 402,291 (23,983) (5.96)%

Total revenues 10,617,935 11,475,064 (857,129) (7.47)%

Expenses

Administrative 1,642,399 1,524,903 117,496 7.71%

Tenant services 77,695 114,425 (36,730) (32.10)%

Utilities 583,402 598,852 (15,450) (2.58)%

Maintenance, including extraordinary & casualty 1,283,993 1,587,597 (303,604) (19.12)%

General expenses, including insurance 403,137 285,960 117,177 40.98%

Housing assistance payments 6,138,841 6,300,294 (161,453) (2.56)%

Depreciation expense 824,997 760,567 64,430 8.47%

Total expenses 10,954,464 11,172,598 (218,134) (1.95)%

Change in net position (336,529) 302,466 (638,995) (211.26)%

Beginning net position 11,340,310 11,037,844 302,466 2.74%

Ending net position 11,003,781$ 11,340,310$ (336,529)$ (2.97)%

Contacting the Authority's Financial Management This financial report is designed to provide investors and creditors with a general overview of the Authority's finances and to show the Authority's accountability for the money it receives. If you have questions about this report or to request additional information, please contact Robert C. Schellhamer, Executive Director, at Lancaster City Housing Authority, 325 Church St., Lancaster, PA 17602 or (717) 397‐2835.

9

FINANCIAL STATEMENTS

LANCASTER CITY HOUSING AUTHORITY STATEMENT OF NET POSITION

September 30, 2013

The accompanying notes are an integral part of these financial statements. 10

ASSETS

CURRENT ASSETS

Cash and cash equivalents ‐ unrestricted 2,903,349$

Cash and cash equivalents ‐ restricted 746,704

Accounts receivables, net 107,877

Prepaid expenses 84,903

Inventories 85,045

Total current assets 3,927,878

NONCURRENT ASSETS

Capital assets, net 7,874,936

Other assets 66,966

Total noncurrent assets 7,941,902

TOTAL ASSETS 11,869,780$

LIABILITIES AND NET POSITION

CURRENT LIABILITIES

Accounts payable 153,767$

Accrued compensated absenses ‐ current portion 26,347

Accrued liabilities 111,190

Tenant security deposits 172,581

Unearned revenues 1,517

Total current liabilities 465,402

NONCURRENT LIABILITIES

Accrued compensated absences 276,612

Other noncurrent liabilities 123,985

Total noncurrent liabilities 400,597

Total liabilities 865,999

NET POSITION

Net investment in capital assets 7,874,936

Restricted net position 450,138

Unrestricted net position 2,678,707

Total net position 11,003,781

TOTAL LIABILITIES AND NET POSTION 11,869,780$

LANCASTER CITY HOUSING AUTHORITY STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION

Year Ended September 30, 2013

The accompanying notes are an integral part of the financial statements. 11

OPERATING REVENUESTenant dwelling rental 1,548,227$

Other tenant rental 126,782

Total tenant income 1,675,009

HUD grants ‐ noncapital 8,123,991

Other income 378,308

Total operating revenues 10,177,308

OPERATING EXPENSESAdministrative 1,642,399Tenant services 77,695Utilities 583,402Maintenance and operations 1,283,993General expense 403,137Housing assistance and portability payments 6,138,841Depreciation expense 824,997

Total operating expenses 10,954,464

Net loss from operations (777,156)

NONOPERATING REVENUES (EXPENSES)

Investment income 1,912

Total nonoperating revenues (expenses) 1,912

Net loss before capital contributions (775,244)

HUD grants ‐ capital outlays 438,715

DECREASE IN NET POSITION (336,529)

NET POSITION, BEGINNING OF YEAR 11,340,310

NET POSITION, END OF YEAR 11,003,781$

LANCASTER CITY HOUSING AUTHORITY STATEMENT OF CASH FLOWS



CASH FLOWS FROM OPERATING ACTIVITIESReceipts from customers and users 1,677,406$ Governmental grants and subsidiary ‐ operations 8,631,132 Cash received from other sources 378,308 Payments to suppliers for operations (589,349) Payments for housing operations and tenant services (1,329,644) Housing assistance payments (6,138,841)

Payments to employees (2,275,485)

Net cash flows provided by operating activities 353,527

CASH FLOWS FROM INVESTING ACTIVITIES

Interest receivable 1,912

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIESGrant revenue ‐ capital grants 438,715 Acquisition of capital assets (458,791)

Net cash flows used in capital and related financing activities (20,076)

NET INCREASE IN CASH AND CASH EQUIVALENTS 335,363

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 3,314,690

CASH AND CASH EQUIVALENTS, END OF YEAR 3,650,053$

RECONCILIATION OF OPERATING LOSS TO NET CASH

PROVIDED BY OPERATING ACTIVITIESNet loss from operations (777,156)$ Adjustment for reconcile operating loss to net cash

provided by operating activities:Depreciation and amortization 824,997 Bad debt expense (tenants) 13,510 Effects of changes in operating assets and liabilities:Accounts receivable 493,631 Prepaid expenses 5,664 Other assets (8,965) Accounts payable (249,637) Accrued liabilities (24,698) Unearned revenue (574) Compensated absences 62,256 Security/trust deposits 2,397 Other current liabilities 12,102

NET CASH PROVIDED BY OPERATING ACTIVITIES 353,527$

LANCASTER CITY HOUSING AUTHORITY NOTES TO FINANCIAL STATEMENTS

September 30, 2013

13

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Introduction The Lancaster City Housing Authority (the Authority) was established for the purpose of engaging in the development, acquisition, and administrative activities of low‐income housing programs and other programs with similar objectives. The United States Department of Housing and Urban Development (HUD) has direct responsibility for administering the low‐income housing programs under the United States Housing Act of 1937, as amended. HUD is authorized to enter into contracts with local housing authorities to provide funding to assist the local housing authorities in financing the acquisition, construction and/or leasing of housing units and to make annual contributions (subsidies) to the local housing authorities for the purpose of maintaining the low‐rent character of the local housing programs. Reporting Entity Consistent with guidance contained in generally accepted accounting standards promulgated by the Governmental Accounting Standards Board (GASB), the criteria used by the Authority to evaluate the possible inclusion of related entities (authorities, boards, councils, and so forth) within its reporting entity, are financial accountability and the nature and significance of the relationship. In determining financial accountability in a given case, the Authority reviews the applicability of the following criteria: The Authority is financially accountable for:

1. Organizations that make up its legal entity. 2. Legally separate organizations if Authority officials appoint a voting majority of the organization's

governing body and the Authority is able to impose its will on the organization or if there is a potential for the organization to provide specific financial benefits to, or impose specific burdens on, the Authority as defined below. Impose its Will ‐ If the Authority can significantly influence the programs, projects, or activities of, or the level of services performed or provided by, the organization. Financial Benefit or Burden ‐ If the Authority (1) is entitled to the organization's resources or (2) is legally obligated or has otherwise assumed the obligation to finance the deficits of, or provide support to, the organization or (3) is obligated in some manner for the debt of the organization.

3. Organizations which are fiscally dependent on the Authority. Fiscal dependency is established if the organization is unable to adopt its own budget, levy taxes or set rates or charges, or issue bonded debt without the approval of the Authority.

Based on the foregoing criteria, no additional entities are included in the accompanying basic financial statements.


September 30, 2013

14

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Reporting Entity (continued) A summary of each of the programs administered by the Authority included in the financial statements is provided below to assist the reader in interpreting the financial statements. These programs constitute all programs subsidized by HUD and operated by the Authority.

Public Housing Agency Owned Housing Program The public housing agency owned housing program is designed to provide low‐cost housing within the city of Lancaster. Funding is provided by subsidies from HUD as well as from monthly rents charged to eligible residents based on family size, family income, and other determinants. On the financial data schedule, this program is recorded on the asset management project level. Public Housing Capital Fund Program The public housing capital fund program utilizes grants from HUD for capital and management activities, including modernization and development of public housing. On the financial data schedule, this program is combined with the operating fund at the asset management project level. Section 8 Moderate Rehabilitation Single Room Occupancy The section 8 moderate rehabilitation single room occupancy program provides rental assistance to homeless individuals. Under the program, HUD enters into annual contributions contracts with public housing agencies in connection with the moderate rehabilitation of residential properties that, when rehabilitation is completed, will contain multiple single room dwelling units. Shelter Plus Care Program The shelter plus care program provides rental assistance to homeless persons with disabilities and their families. Section 8 Housing Assistance Payments Programs The Authority administers programs of rental assistance payments to private owners on behalf of eligible low‐income families under Section 8 of the Housing and Urban Development Act of 1974. The program provides payments covering the difference between the maximum rental on a dwelling unit, as approved by HUD, and the amount of rent contributed by a participating family. Funding for this program is provided by grants from HUD. Business Activities Program This program accounts for amounts allocated from state grant programs and excess operating reserves from Section 8 in prior years.

Basis of Accounting Basis of accounting represents the methodology utilized in the recognition of revenues and expenses reported in the financial statements. The accounting and reporting treatment applied is determined by the measurement focus.


September 30, 2013

15

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Basis of Accounting (continued) The Authority operates as a proprietary fund type (enterprise fund) and measures and reports all assets, liabilities, revenues, expenses, gains, and losses using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned, and expenses are recorded when a liability is incurred, regardless of the timing of the related cash flows. The Authority distinguishes operating revenues and expenses from non‐operating items. Operating revenues and expenses generally result from providing services in connection with the Authority's principal ongoing operations. The principal operating revenues of the Authority are tenant income, HUD grants, and other operating income. Operating expenses include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non‐operating revenues and expenses. Revenue resulting from exchange transactions, in which each party gives and receives essentially equal value, is recorded on the accrual basis when the exchange takes place. Non‐exchange transactions, in which the Authority receives value without directly giving equal value in return, includes grants. Revenue from grants is recognized in the fiscal year in which all eligibility requirements have been satisfied. Eligibility requirements include timing requirements, which specify the year when the resources are required to be used or the fiscal year when use is first permitted, and expenditure requirements, in which resources are provided to the Authority on a reimbursement basis. Budgets Budgets are not legally adopted or legally required for financial statement preparation. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents The Authority considers all certificates of deposit and all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Inventory The Authority's inventory is comprised of maintenance materials and supplies. Inventory is valued at cost and the Authority uses the first‐in/first‐out (FIFO) flow assumption in determining cost.


September 30, 2013

16

NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Inventory (continued) The consumption method is used to record inventory. Under this method, the acquisition of materials and supplies is recorded initially in inventory accounts and charged as expenditures when used. Prepaid Assets Payments made to vendors for services that will benefit periods beyond September 30, 2013, are recorded as prepaid items. Interprogram Receivables and Payables Interprogram receivables and payables arise from interprogram transactions and are recorded by all programs affected in the period in which transactions are executed. The interprogram receivables and payables have been eliminated in the preparation of the basic financial statements. Net Position Generally accepted accounting principles require the classification of net position into three components as described below:

Net Investment in Capital Assets: This component of net position consists of all capital assets, reduced by the outstanding balances of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.

Restricted Net Position— This component of net position consists of restricted assets when constraints are placed on the asset by creditors (such as debt covenants), grantors, contributors, laws, regulations, etc.

Unrestricted Net Position— This component consists of net position that does not meet the definition of "Net Investment in Capital Assets" or "Restricted Net Position."

Capital Assets and Depreciation The Authority's property, plant, and equipment with useful lives of more than one year are stated at historical cost (or estimated historical cost) and comprehensively reported in the basic financial statements. Donated assets are stated at fair value on the date donated. The Authority generally capitalizes assets with a cost of $1,000 or more as purchase and construction outlays occur. The costs of normal maintenance and repairs that do not add to the asset value or materially extend useful lives are not capitalized. Capital assets are depreciated using the straight‐line method. When capital assets are disposed of, the cost and applicable accumulated depreciation are removed from the respective accounts and the resulting gain or loss is


September 30, 2013

17

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Capital Assets and Depreciation (continued) recorded in operations. Estimated historical costs of capital assets were derived, when information supporting historical costs was not obtainable, by adjusting current replacement cost back to the estimated year of acquisition. Estimated useful lives, in years, for depreciable assets are generally as follows:

Infrastructure 20 years Buildings and Improvements 15 – 40 years Furniture, Equipment, and Machinery 3 – 10 years

Compensated Absences The Authority accrues vacation and sick leave as a liability as the benefits are earned by the employees if it is probable that the employer will compensate the employees for the benefits through time off or some other means. Additional amounts are accrued for salary‐related payments associated with the payment of compensated absences using rates in effect at the balance sheet date. The Authority has accrued the employer's share of social security, Medicare taxes, and pension costs. New GASB Pronouncements In the current year, the Authority implemented GASB Statements No. 61 through 63 as follows:

GASB Statement No. 61, The Financial Reporting Omnibus‐an Amendment of GASB Statement No. 14 and No. 34, modifies certain requirements for inclusion of component units in the financial reporting entity. This includes the concept of financial burden or benefit on the relationship between the primary government and the component unit. The implementation of this new standard had no impact on the Authority’s 2013 financial statements.

GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance Contained in Pre‐November 30, 1989 FASB and AICPA Pronouncements incorporates into GASB authoritative literature certain accounting and financial reporting guidance previously included in FASB, APB, and AICPA guidance issued before November 30, 1989. The implementation of this new standard modified certain language in disclosures related to the applicable basis of accounting in the Authority’s 2013 financial statements.

GASB Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position revised the financial reporting for elements of the financial statements as a consumption or acquisition of Net Position that are applicable to a future reporting period. These items are distinct from assets and liabilities. This statement also identified net position. The implementation of this new standard revised the presentation in the financial statements for those items identified as deferred outflows and inflows and revised the names and certain captioning of the statements.


September 30, 2013

18

NOTE 2 – CASH AND CASH EQUIVALENTS Custodial Credit Risk ‐ For deposits, custodial credit risk is the risk that, in the event of the failure of the bank, the Authority’s deposits may not be returned to it. At September 30, 2013, cash and cash equivalents consisted of deposits with financial institutions that were fully insured by FDIC insurance and/or collateralized by securities held by third party in the name of the Authority. The Authority’s deposits had a carrying amount of $3,650,053 and bank balances of $3,646,723 at September 30, 2013. NOTE 3 – ACCOUNTS RECEIVABLE Accounts receivable consisted of the following at September 30, 2013: Tenant receivable, less allowance for doubtful accounts of $4,514 2,202$ Accounts Receivable ‐ PHA Projects 981 Accounts Receivable ‐ HUD 86,700 Accounts Receivable ‐ Other 2,890 Accounts Receivable ‐ Fraud Recovery 15,104

Total 107,877$

NOTE 4 – LONG‐TERM RECEIVABLE – FRAUD RECOVERY The Authority has receivables from tenants who committed fraud or misrepresented information and as a result now owe additional rent for prior periods or retroactive rent. At September 31, 2013, the long‐term portion of these receivables was $66,966 and the current portion, which is included in other receivables, was $15,104.


September 30, 2013

19

NOTE 5 – CHANGES IN CAPITAL ASSETS Capital asset activity for the year ended September 30, 2013, was as follows:

Balance Balance

October 1, September 30,

2012 Additions Deletions Transfers 2013

Historical cost:

Capital assets not being depreciated:

Land 350,012$ ‐$ ‐$ ‐$ 350,012$

Work in progress 833,669 ‐ ‐ (833,669) ‐

Total cost 1,183,681 ‐ ‐ (833,669) 350,012

Capital assets being depreciated:

Infrastructure 571,034 ‐ ‐ ‐ 571,034

Buildings and improvements 37,336,614 334,505 ‐ 833,669 38,504,788

Furniture, equipment, and machinery 570,434 124,285 ‐ ‐ 694,719

Total cost 38,478,082 458,790 ‐ 833,669 39,770,541

Accumulated depreciation:

Infrastructure 249,752 29,334 ‐ ‐ 279,086

Buildings and improvements 30,675,466 778,235 ‐ ‐ 31,453,701

Furniture, equipment, and machinery 495,403 17,427 ‐ ‐ 512,830

Total accumulated depreciation 31,420,621 824,996 ‐ ‐ 32,245,617

Net capital assets being depreciated 7,057,461 (366,206) ‐ 833,669 7,524,924

Net capital assets 8,241,142$ (366,206)$ ‐$ ‐$ 7,874,936$

NOTE 6 – UNEARNED REVENUES Unearned revenues as of September 30, 2013, are as follows:

Rent prepaid by tenants $1,517 NOTE 7 – COMPENSATED ABSENCES A summary of total compensated absences as of September 30, 2013, is as follows:

Balance BalanceOctober 1, September 30,

2012 Additions Used 2013

267,727$ 41,608$ 6,376$ 302,959$


September 30, 2013

20

NOTE 8 – PENSION PLAN

The Authority sponsors a money purchase pension plan for eligible employees, To be eligible, an employee must have attained age 20 and completed one year of service with the employer. There are no restrictions based on classification of employees. The Authority contributes and allocates to the account of each eligible participant 12% of such participant's compensation in that plan year up to the maximum contribution allowed by the Internal Revenue Service. All contributions to the plan are held in trust for the exclusive benefit of participating employees. The employer contributions that are made to the plan are credited to separate accounts established in each participant's name. The total contribution for the fiscal year ended September 30, 2013, was $183,494. Each participant shall acquire a vested and nonforfeitable percentage in his or her account balance attributable to employer contributions and the earnings thereon based on the following vesting schedule:

Years of Service Vesting Percentage 1 20 2 40 3 60 4 80

5 and after 100

All employees who attain age 62 become fully vested.

NOTE 9 – DEFERRED COMPENSATION PLAN

The Authority offers its employees a 457 deferred compensation plan administered by a third party administrator. The plan, available to all employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to the employee or their beneficiaries until termination, retirement, death, or an unforeseeable emergency. All plan assets are recorded at market value at September 30, 2013.

The following is a summary of the activity in the plan for the year ended September 30, 2013:

Plan assets (at market) ‐ October 1, 2012 771,277$ Employee contributions 83,772 Investment income, net of fees 98,164

Withdrawals (4,325)

Plan assets (at market) ‐ September 30, 2013 948,888$

NOTE 10 – RISK MANAGEMENT

The Authority has purchased insurance to cover various risks of loss related to workers' compensation, employee health, property and liability, and errors and omissions. Settlements resulting from these risks have not exceeded insurance coverage in any of the past three fiscal years and there has been no significant reduction in insurance coverage from the prior year.


September 30, 2013


NOTE 11 ‐ CONTINGENT LIABILITIES Construction Projects The Authority is performing various improvements to buildings and related facilities. Outstanding contract commitments totaled $50,750 at September 30, 2013. Grant Programs Amounts received or receivable from grantor agencies are subject to audit adjustment by grantor agencies. Any disallowed claims, including amounts already collected, may constitute a liability of the applicable funds. The amount, if any, of expenditures which may be disallowed by the grantor cannot be determined at this time although the Authority expects such amounts, if any, to be immaterial. NOTE 12 – ECONOMIC DEPENDENCY Both the PHA owned housing program and the Section 8 program are economically dependent on annual contributions and grants from HUD. Both programs operated at a loss prior to receiving the contributions and grants.

22

SUPPLEMENTAL INFORMATION

LANCASTER CITY HOUSING AUTHORITY ENTITY‐WIDE BALANCE SHEET SUMMARY

September 30, 2013

23

Line

Item # Accounts Description

Low‐Rent Public

Hsg 14.850

Housing Choice

Vouchers 14.871 Business Activities Shelter Plus Care

Moderate Rehab.

14.856

Central Office Cost

Center Elimination Total

ASSETS

CURRENT ASSETSCash:

111 Unrestricted 1,897,405$ 308,187$ 204,822$ ‐$ ‐$ 492,935$ ‐$ 2,903,349$ 112 Cash ‐ restricted ‐ modernization and development ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 113 Other restricted 64,474 509,649 ‐ ‐ ‐ ‐ ‐ 574,123

114 Tenant security deposits 172,581 ‐ ‐ ‐ ‐ ‐ ‐ 172,581

Total cash 2,134,460 817,836 204,822 ‐ ‐ 492,935 ‐ 3,650,053

Accounts and notes receivable:

122 Accounts receivable ‐ HUD 83,032 ‐ ‐ ‐ 3,668 ‐ ‐ 86,700

124 Accounts receivable ‐ other government ‐ ‐ ‐ ‐ ‐ 981 ‐ 981

125 Accounts receivable ‐ miscellaneous 2,890 ‐ ‐ ‐ ‐ ‐ ‐ 2,890

126 Accounts receivable ‐ tenants rents 6,716 ‐ ‐ ‐ ‐ ‐ ‐ 6,716

126.1 Allowance for doubtful accounts ‐ tenants (4,514) ‐ ‐ ‐ ‐ ‐ ‐ (4,514)

127 Notes receivable ‐ current ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

128 Accounts receivable ‐ fraud recovery ‐ 15,104 ‐ ‐ ‐ ‐ ‐ 15,104

128.1 Allowance for doubtful accounts ‐ fraud ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

129 Accrued interest receivable ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Total receivables, net 88,124 15,104 ‐ ‐ 3,668 981 ‐ 107,877

142 Prepaid expenses and other assets 65,138 11,502 ‐ ‐ ‐ 8,263 ‐ 84,903

143 Inventories ‐ ‐ ‐ ‐ ‐ 85,045 ‐ 85,045 143.1 Allowance for obsolete inventories ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

144 Interprogram due from ‐ 3,596 ‐ 52 ‐ 42,925 (46,573) ‐

Total current investments 65,138 15,098 ‐ 52 ‐ 136,233 (46,573) 169,948

Total current assets 2,287,722 848,038 204,822 52 3,668 630,149 (46,573) 3,927,878

NONCURRENT ASSETSCapital assets:

161 Land 350,012 ‐ ‐ ‐ ‐ ‐ ‐ 350,012 162 Buildings 38,267,051 187,737 50,000 ‐ ‐ ‐ ‐ 38,504,788 164 Furniture and equipment 382,716 43,983 ‐ ‐ ‐ 268,020 ‐ 694,719 167 Work in process ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

166 Accumulated depreciation (31,880,909) (114,436) (18,764) ‐ ‐ (231,508) ‐ (32,245,617)

168 Infrastructure 571,034 ‐ ‐ ‐ ‐ ‐ ‐ 571,034

Total capital assets, net 7,689,904 117,284 31,236 ‐ ‐ 36,512 ‐ 7,874,936

174 Other assets ‐ 66,966 ‐ ‐ ‐ ‐ ‐ 66,966

171 Notes receivable ‐ noncurrent ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Total noncurrent assets 7,689,904 184,250 31,236 ‐ ‐ 36,512 ‐ 7,941,902

TOTAL ASSETS 9,977,626$ 1,032,288$ 236,058$ 52$ 3,668$ 666,661$ (46,573)$ 11,869,780$

LANCASTER CITY HOUSING AUTHORITY ENTITY‐WIDE BALANCE SHEET SUMMARY

September 30, 2013

24

Line Item # Accounts Description

Low‐Rent Public

Hsg 14.850

Housing Choice


Moderate Rehab.

14.856

Central Office

Cost Center Elimination Total

LIABILITIES AND NET ASSETS

CURRENT LIABILITIES

311 Cash overdraft ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$

312 Accounts payable < 90 days 47,534 912 ‐ 52 ‐ 6,801 ‐ 55,299

321 Accrued salaries/payroll withholding 55,472 17,495 ‐ ‐ ‐ 31,721 ‐ 104,688

322 Accrued compensated absences 933 ‐ ‐ ‐ ‐ 25,414 ‐ 26,347

325 Accrued interest payable ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

331 Accounts payable ‐ HUD PHA programs ‐ 496 ‐ ‐ ‐ ‐ ‐ 496

333 Accounts payable ‐ other gov. 97,972 ‐ ‐ ‐ ‐ ‐ ‐ 97,972

341 Tenant security deposits 172,581 ‐ ‐ ‐ ‐ ‐ ‐ 172,581

342 Unearned revenue 1,517 ‐ ‐ ‐ ‐ ‐ ‐ 1,517

343 Current portion of L‐T debt ‐ capital projects ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

345 Other current liabilities ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

346 Accrued liabilities ‐ other 2,890 3,540 ‐ ‐ 72 ‐ ‐ 6,502

347 Interprogram (due to) 42,977 ‐ ‐ ‐ 3,596 ‐ (46,573) ‐

Total current liabilities 421,876 22,443 ‐ 52 3,668 63,936 (46,573) 465,402


351 Long‐term debt, net of current ‐ capital projects ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 354 Accrued comp. absences ‐ long term 156,982 22,254 ‐ ‐ ‐ 97,376 ‐ 276,612 353 Noncurrent liabilities ‐ other ‐ 123,985 ‐ ‐ ‐ ‐ ‐ 123,985

Total noncurrent liabilities 156,982 146,239 ‐ ‐ ‐ 97,376 ‐ 400,597

Total liabilities 578,858 168,682 ‐ 52 3,668 161,312 (46,573) 865,999

NET POSITION508.1 Capital assets net of related debt 7,689,904 117,284 31,236 ‐ ‐ 36,512 ‐ 7,874,936 511.1 Restricted 64,474 385,664 ‐ ‐ ‐ ‐ ‐ 450,138 512.1 Unrestricted 1,644,390 360,658 204,822 ‐ ‐ 468,837 ‐ 2,678,707

Total net position 9,398,768 863,606 236,058 ‐ ‐ 505,349 ‐ 11,003,781

TOTAL LIABILITIES AND NET POSITION 9,977,626$ 1,032,288$ 236,058$ 52$ 3,668$ 666,661$ (46,573)$ 11,869,780$

LANCASTER CITY HOUSING AUTHORITY ENTITY‐WIDE REVENUE AND EXPENSE SUMMARY


25


Low‐Rent Public

Hsg 14.850

Housing Choice


Moderate Rehab.

14.856

Central Office Cost


REVENUE70300 Net tenant rental revenue 1,548,227$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ 1,548,227$

70400 Tenant revenue ‐ other 126,782 ‐ ‐ ‐ ‐ ‐ ‐ 126,782

70500 Total tenant revenue 1,675,009 ‐ ‐ ‐ ‐ ‐ ‐ 1,675,009

70600 HUD PHA operating grants 1,718,061 6,180,324 ‐ 165,155 60,451 ‐ ‐ 8,123,991 70610 Capital grants 438,715 ‐ ‐ ‐ ‐ ‐ ‐ 438,715 70710 Management fee ‐ ‐ ‐ ‐ ‐ 527,447 (527,447) ‐ 70720 Asset management fee ‐ ‐ ‐ ‐ ‐ 67,680 (67,680) ‐ 70730 Bookkeeping fee ‐ ‐ ‐ ‐ ‐ 131,181 (131,181) ‐ 70740 Front line service fee ‐ ‐ ‐ ‐ ‐ 10,079 (10,079) ‐ 70750 Other fees ‐ ‐ ‐ ‐ ‐ 3,515 ‐ 3,515 70800 Other governmental grants ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 71100 Investment income ‐ unrestricted 1,766 22 90 ‐ ‐ ‐ ‐ 1,878 71200 Mortgage interest income ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 71300 Proceeds from disposition of assets held for sale ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 71310 Cost of sales of assets ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 71400 Fraud recovery ‐ 15,758 ‐ ‐ ‐ ‐ ‐ 15,758 71500 Other revenue 110,363 245,049 ‐ ‐ ‐ 3,623 ‐ 359,035 71600 Gain or loss on the sale of fixed assets ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 72000 Investment income ‐ unrestricted 32 2 ‐ ‐ ‐ ‐ ‐ 34

Total revenue 3,943,946 6,441,155 90 165,155 60,451 743,525 (736,387) 10,617,935

EXPENSESAdministrative:

91100 Administrative salaries 241,123 255,221 ‐ 5,430 6,614 453,108 ‐ 961,496 91200 Auditing fees 15,804 5,530 ‐ ‐ 150 6,116 ‐ 27,600 91300 Management fee 419,610 107,837 ‐ ‐ ‐ ‐ (527,447) ‐ 91310 Bookkeeping fee 50,076 81,105 ‐ ‐ ‐ ‐ (131,181) ‐ 91400 Advertising and marketing 3,434 74 ‐ ‐ ‐ 528 ‐ 4,036 91500 Employee benefit contributions ‐ administrative 97,851 129,853 ‐ 2,246 3,373 177,383 ‐ 410,706 91600 Office expenses 37,150 32,091 ‐ ‐ ‐ 34,056 ‐ 103,297 91700 Legal expense 10,580 1,581 ‐ ‐ ‐ 2,392 ‐ 14,553 91800 Travel 3,595 2,331 ‐ ‐ ‐ 6,131 ‐ 12,057 91810 Allocated overhead ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 91900 Other 52,759 16,518 ‐ 109 ‐ 49,347 (10,079) 108,654

Total administrative 931,982 632,141 ‐ 7,785 10,137 729,061 (668,707) 1,642,399

92000 Asset management fee 67,680 ‐ ‐ ‐ ‐ ‐ (67,680) ‐

Tenant services:92100 Salaries 55,680 ‐ ‐ ‐ ‐ ‐ ‐ 55,680 92200 Relocation costs ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ 92300 Employee benefit contributions 21,392 ‐ ‐ ‐ ‐ ‐ ‐ 21,392 92400 Other 158 465 ‐ ‐ ‐ ‐ ‐ 623

Total tenant services 77,230 465 ‐ ‐ ‐ ‐ ‐ 77,695



26


Low‐Rent Public

Hsg 14.850

Housing Choice


Moderate Rehab.

14.856

Central Office Cost


EXPENSES (Continued)Utilities:

93100 Water 233,272$ 564$ ‐$ ‐$ ‐$ 751$ ‐$ 234,587$ 93200 Electricity 190,505 3,335 ‐ ‐ ‐ 6,679 ‐ 200,519 93300 Gas 144,735 1,186 ‐ ‐ ‐ 2,375 ‐ 148,296

93500 Labor ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

93600 Sewer ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

93700 Employee benefit contributions ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

93800 Other utilities expense ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Total utilities 568,512 5,085 ‐ ‐ ‐ 9,805 ‐ 583,402

Ordinary maintenance & operations:

94100 Labor 600,548 ‐ ‐ ‐ ‐ ‐ ‐ 600,548

94200 Materials and other 149,329 933 ‐ ‐ ‐ 19,298 ‐ 169,560

94300 Contracts 244,999 5,873 ‐ ‐ ‐ 16,702 ‐ 267,574 94500 Employee benefits contribution 246,311 ‐ ‐ ‐ ‐ ‐ ‐ 246,311

Total ordinary maintenance & operations 1,241,187 6,806 ‐ ‐ ‐ 36,000 ‐ 1,283,993

Protective services:

95100 Labor ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

95200 Other contract costs ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

95300 Other ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

95500 Employee benefit contributions ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

95000 Total protective services ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Insurance premiums:

96110 Property insurance 74,084 475 ‐ ‐ ‐ 686 ‐ 75,245

96120 Liability insurance 12,975 2,253 ‐ ‐ ‐ 3,850 ‐ 19,078

96130 Workmen's compensation 59,080 951 ‐ 17 ‐ 2,135 ‐ 62,183

96140 All other insurance 23,026 6,327 ‐ ‐ ‐ 1,945 ‐ 31,298

96100 Total Insurance premiums 169,165 10,006 ‐ 17 ‐ 8,616 ‐ 187,804

General expenses:

96200 Other general expenses ‐ 22,438 4,130 ‐ ‐ 6,808 ‐ 33,376

96210 Compensated absences 33,013 ‐ ‐ ‐ ‐ 8,595 ‐ 41,608

96300 Payments in lieu of taxes 97,972 ‐ ‐ ‐ ‐ ‐ ‐ 97,972

96400 Bad debt ‐ tenant rents 13,510 ‐ ‐ ‐ ‐ ‐ ‐ 13,510

Total general expenses 144,495 22,438 4,130 ‐ ‐ 15,403 ‐ 186,466

96710 Interest of mortgage or bonds payable ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

96730 Amortization of bond issue costs ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

96700 Total interest expense and amortization cost ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

Total operating expenses 3,200,251 676,941 4,130 7,802 10,137 798,885 (736,387) 3,961,759

Excess of operating revenue over

operating expenses 743,695 5,764,214 (4,040) 157,353 50,314 (55,360) ‐ 6,656,176



27

Line Item # Accounts Description Hsg 14.850 Vouchers 14.871 Business Activities Shelter Plus Care 14.856 Center Elimination Total

EXPENSES (Continued)

97100 Extraordinary maintenance 28,867$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ 28,867$

97300 Housing assistance payments ‐ 5,727,472 ‐ 157,353 50,314 ‐ ‐ 5,935,139

97350 HAP portability ‐ in ‐ 203,702 ‐ ‐ ‐ ‐ ‐ 203,702

97400 Depreciation expense 811,730 5,971 1,250 ‐ ‐ 6,046 ‐ 824,997

Total expenses 4,040,848 6,614,086 5,380 165,155 60,451 804,931 (736,387) 10,954,464

Other financing sources (uses):

10010 Operating transfer in (68,767) ‐ ‐ ‐ ‐ ‐ (68,767) (137,534)

10020 Operating transfer out 68,767 ‐ ‐ ‐ ‐ ‐ 68,767 137,534

Total other financing sources (uses) ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

EXCESS (DEFICIENCY) OF REVENUE OVER

(UNDER) EXPENSES (96,902)$ (172,931)$ (5,290)$ ‐$ ‐$ (61,406)$ ‐$ (336,529)$

Memo Account Information

11020 Required annual debt principal payments ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$ ‐$

11030 Beginning equity 9,495,670 1,036,537 241,348 ‐ ‐ 566,755 ‐ 11,340,310

11040 Prior period adjustments, equity transfers and correction ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐

11170 Administrative fee equity ‐ 477,942 ‐ ‐ ‐ ‐ ‐ 477,942

11180 Housing assistance payments equity ‐ 385,664 ‐ ‐ ‐ ‐ ‐ 385,664

11190 Unit months available 6,768 11,559 ‐ 253 144 ‐ ‐ 18,724

11210 Unit months leased 6,677 10,814 ‐ 253 139 ‐ ‐ 17,883

11270 Excess cash 1,482,250 ‐ ‐ ‐ ‐ ‐ ‐ 1,482,250

LANCASTER CITY HOUSING AUTHORITY PROJECT‐WIDE BALANCE SHEET SUMMARY

September 30, 2013

28

Accounts Description AMP 012 AMP 034 AMP 711 Total

CURRENT ASSETSCash:

Unrestricted 427,252$ 958,125$ 512,028$ 1,897,405$ Restricted ‐ ‐ 64,474 64,474

Tenant security deposits 62,142 77,661 32,778 172,581

Total cash 489,394 1,035,786 609,280 2,134,460

Accounts and notes receivable:Accounts receivable ‐ HUD 38,054 42,307 2,671 83,032 Accounts receivable ‐ other government ‐ ‐ ‐ ‐ Accounts receivable ‐ miscellaneous 1,172 659 1,059 2,890 Accounts receivable ‐ tenant rents 5,806 219 691 6,716 Allowance for doubtful accounts ‐ tenants (4,257) (74) (183) (4,514) Allowance for doubtful accounts ‐ other ‐ ‐ ‐ ‐ Notes receivable ‐ current ‐ ‐ ‐ ‐ Accounts receivable ‐ fraud recovery ‐ ‐ ‐ ‐ Allowance for doubtful accounts ‐ fraud ‐ ‐ ‐ ‐

Accrued interest receivable ‐ ‐ ‐ ‐

Total receivables, net 40,775 43,111 4,238 88,124

Current investments:Investments ‐ unrestricted ‐ ‐ ‐ ‐ Investments ‐ restricted ‐ ‐ ‐ ‐ Prepaid expenses and other assets 33,764 19,887 11,487 65,138 Inventories ‐ ‐ ‐ ‐ Allowance for obsolete inventories ‐ ‐ ‐ ‐

Interprogram due from ‐ ‐ ‐ ‐

Total current investments 33,764 19,887 11,487 65,138

Total current assets 563,933 1,098,784 625,005 2,287,722

NONCURRENT ASSETSCapital assets:

Land 119,555 171,598 58,859 350,012 Buildings 13,606,767 14,068,132 10,592,152 38,267,051 Furniture and equipment 185,639 178,156 18,921 382,716 Improvements ‐ ‐ ‐ ‐ Work in process ‐ ‐ ‐ ‐ Accumulated depreciation (11,685,954) (10,385,618) (9,809,337) (31,880,909)

Infrastructure 312,228 157,075 101,731 571,034

Total capital assets, net 2,538,235 4,189,343 962,326 7,689,904

Notes receivable ‐ noncurrent ‐ ‐ ‐ ‐

Investment in joint ventures ‐ ‐ ‐ ‐

Total noncurrent assets 2,538,235 4,189,343 962,326 7,689,904

TOTAL ASSETS 3,102,168$ 5,288,127$ 1,587,331$ 9,977,626$

ASSETS

LANCASTER CITY HOUSING AUTHORITY PROJECT‐WIDE BALANCE SHEET SUMMARY

September 30, 2013

29


CURRENT LIABILITIES

Cash overdraft ‐$ ‐$ ‐$ ‐$

Accounts payable < 90 days 11,281 35,501 752 47,534

Accrued salaries/payroll withholding 24,651 22,459 8,362 55,472

Accrued compensated absences 933 ‐ ‐ 933

Accrued interest payable ‐ ‐ ‐ ‐

Accounts payable ‐ HUD PHA programs ‐ ‐ ‐ ‐

Accounts payable ‐ other gov. 27,922 53,736 16,314 97,972

Tenant security deposits 62,142 77,661 32,778 172,581

Unearned revenue 860 648 9 1,517

Current portion of L‐T debt ‐ capital projects ‐ ‐ ‐ ‐

Other current liabilities 1,172 659 1,059 2,890

Interprogram (due to) 29,326 10,980 2,671 42,977

Total current liabilities 158,287 201,644 61,945 421,876


Long‐term debt, net of current ‐ capital projects ‐ ‐ ‐ ‐

Accrued comp. absences ‐ long term 61,653 71,359 23,970 156,982

Noncurrent liabilities ‐ other ‐ ‐ ‐ ‐

Total noncurrent liabilities 61,653 71,359 23,970 156,982

Total liabilities 219,940 273,003 85,915 578,858

NET POSITION

Capital assets net of related debt 2,538,235 4,189,343 962,326 7,689,904

Restricted ‐ ‐ 64,474 64,474

Unrestricted 343,993 825,781 474,616 1,644,390

Total net position 2,882,228 5,015,124 1,501,416 9,398,768

TOTAL LIABILITIES AND NET POSITION 3,102,168$ 5,288,127$ 1,587,331$ 9,977,626$

LIABILITIES AND NET POSITION

LANCASTER CITY HOUSING AUTHORITY PROJECT‐WIDE REVENUE AND EXPENSE SUMMARY


30


REVENUESNet tenant rental revenue 478,147$ 829,947$ 240,133$ 1,548,227$

Tenant revenue other 35,507 73,763 17,512 126,782

Total tenant revenue 513,654 903,710 257,645 1,675,009

HUD PHA grants ‐ operating 754,204 559,706 404,151 1,718,061 HUD PHA grants ‐ capital 272,798 131,887 34,030 438,715 Investment income‐ unrestricted 484 748 534 1,766 Other revenue 14,822 93,525 2,016 110,363 Investment income ‐ restricted ‐ ‐ 32 32

Gain/(loss) on disposition ‐ ‐ ‐ ‐

Total revenues 1,555,962 1,689,576 698,408 3,943,946

EXPENSES

Administrative

Administrative salaries 97,804 110,534 32,785 241,123

Auditing fees 6,184 7,256 2,364 15,804

Management fees 146,771 191,330 81,509 419,610

Bookkeeping fees 17,677 24,037 8,362 50,076

Advertising and marketing 2,187 878 369 3,434

Employee benefits ‐ administrative 42,631 42,358 12,862 97,851

Office expense 16,050 16,627 4,473 37,150

Legal expense 8,841 1,247 492 10,580

Travel expense 2,672 882 41 3,595

Other operating ‐ administrative 19,756 26,106 6,897 52,759

Total administrative expense 360,573 421,255 150,154 931,982

Asset management fee 23,880 32,400 11,400 67,680

Tenant servicesTenant services ‐ salaries ‐ 55,680 ‐ 55,680 Employee benefit ‐ tenant services ‐ 21,392 ‐ 21,392

Other tenant services 113 45 ‐ 158

Total tenant services 113 77,117 ‐ 77,230

UtilitiesWater 102,357 56,421 74,494 233,272 Electricity 29,993 159,696 816 190,505 Gas 66,578 76,474 1,683 144,735 Labor ‐ ‐ ‐ ‐ Sewer ‐ ‐ ‐ ‐ Other utilities ‐ ‐ ‐ ‐

Employee benefits ‐ utilities ‐ ‐ ‐ ‐

Total utilities expense 198,928 292,591 76,993 568,512



31


EXPENSES ‐ continuedOrdinary maintenance and operation

Labor 291,999$ 203,439$ 105,110$ 600,548$

Materials 87,631 30,421 31,277 149,329

Employee benefit contributions 127,213 77,917 41,181 246,311

Garbage and trash removal contracts 24,395 13,832 15,226 53,453

Elevator contracts ‐ 13,466 ‐ 13,466

Heating & cooling 11,824 15,118 174 27,116

Electrical contracts ‐ ‐ 422 422

Plumbing contracts 4,449 2,835 2,933 10,217

Extermination contracts 2,670 9,374 2,250 14,294

Unit turnaround 3,420 20,900 ‐ 24,320

Routine maintenance 6,103 3,509 830 10,442

Miscellaneous 6,803 68,772 15,694 91,269

Total ordinary maintenance & operation 566,507 459,583 215,097 1,241,187

Protective services

Protective services ‐ salaries ‐ ‐ ‐ ‐

Employee benefits ‐ protective services ‐ ‐ ‐ ‐

Other protective services ‐ ‐ ‐ ‐

Total protective services ‐ ‐ ‐ ‐

General expenses

Property insurance 25,975 25,928 22,181 74,084

Liability insurance 2,929 8,544 1,502 12,975

Workmen's compensation 28,412 20,470 10,198 59,080

Insurance ‐ other 16,921 4,203 1,902 23,026

Other general expenses ‐ ‐ ‐ ‐

Compensated absences 11,312 17,307 4,394 33,013

Payments in lieu of taxes 27,922 53,736 16,314 97,972

Bad debt ‐ tenant rents 10,879 263 2,368 13,510

Bad debt ‐ mortgages ‐ ‐ ‐ ‐

Severance expense ‐ ‐ ‐ ‐

Total general expenses 124,350 130,451 58,859 313,660

Financial expenses

Internal expense ‐ mortgage payable ‐ ‐ ‐ ‐

Interest expense ‐ notes payable ‐ ‐ ‐ ‐

Amortization ‐ insurance costs ‐ ‐ ‐ ‐

Total financial expenses ‐ ‐ ‐ ‐

Total operating expense 1,274,351 1,413,397 512,503 3,132,571

Excess operating expense 281,611 276,179 185,905 811,375

Other expensesExtraordinary maintenance 15,235 10,282 3,350 28,867

Depreciation expense 246,829 407,408 157,493 811,730

Total other expenses 262,064 417,690 160,843 840,597

Total expenses 1,536,415 1,831,087 673,346 4,040,848

Excess of revenue over expenses 19,547$ (141,511)$ 25,062$ (96,902)$



32


Transfer of funds ‐$ ‐$ ‐$ ‐$

Transfer of equity ‐ ‐ ‐ ‐

Prior period adjustments ‐ ‐ ‐ ‐

Beginning net position 2,862,681 5,156,635 1,476,354 9,495,670

Ending net position 2,882,228$ 5,015,124$ 1,501,416$ 9,398,768$

Units available 2,388 3,240 1,140 6,768

Units leased 2,357 3,205 1,115 6,677

LANCASTER CITY HOUSING AUTHORITY STATEMENT AND CERTIFICATION OF PROGRAM COSTS


33

2010 Capital Fund Program Grant (CFP) PA26P036501‐10

Funds approved 886,694$ Funds expended 886,694

Excess of funds approved ‐$

Funds advanced 886,694$ Funds expended 886,694

Excess of funds advanced ‐$

2010 Capital Fund Program Grant (CFP) PA26P036501‐11

Funds approved 706,359$ Funds expended 706,359

Excess of funds approved ‐$

Funds advanced 706,359$ Funds expended 706,359

Excess of funds advanced ‐$

1. The distribution of costs as shown on the Actual Modernization Cost Certificates submitted to HUD for

approval are in agreement with the Authority’s records. 2. All modernization costs have been paid and all related liabilities have been discharged through

payment.

34

SINGLE AUDIT REPORT

35

Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards

Board of Directors of the Lancaster City Housing Authority Lancaster, Pennsylvania We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Lancaster City Housing Authority (the Authority), which comprise the statement of net position as of September 30, 2013 and the related statements of revenues, expenses, and changes in net position, and cash flows for the year ended September 30, 2013, and the related notes to the financial statements, and have issued our report thereon dated May 2, 2014. Internal Control Over Financial Reporting

In planning and performing our audit of the financial statements, we considered the Authority's internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Authority’s internal control over financial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.



36

Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Authority's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the result of that testing, and not to provide an opinion on the effectiveness of the Authority’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Authority’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.


37

Independent Auditors’ Report on Compliance with Requirements that Could Have a Direct and Material Effect on Each Major Program and on Internal

Control Over Compliance in Accordance with OMB Circular A‐133

Board of Directors of the Lancaster City Housing Authority Lancaster, Pennsylvania Report on Compliance for Each Major Federal Program

We have audited the Lancaster City Housing Authority’s (the Authority) compliance with the types of compliance requirements described in the OMB Circular A‐133 Compliance Supplement that could have a direct and material effect on each of the Authority’s major federal programs for the year ended September 30, 2013. The Authority’s major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs.

Management’s Responsibility

Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs.

Auditors’ Responsibility

Our responsibility is to express an opinion on compliance for each of the Authority’s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A‐133, Audits of States, Local Governments, and Non‐Profit Organizations. Those standards and OMB Circular A‐133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about the Authority’s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of the Authority’s compliance. Opinion on Each Major Federal Program

In our opinion, the Authority complied, in all material respects, with the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs for the year ended September 30, 2013.



38

Other Matters

The results of our auditing procedures disclosed instances of noncompliance, which are required to be reported in accordance with OMB Circular A‐133 and which are described in the accompanying schedule of findings and questioned costs as items 2013‐001 and 2013‐002. Our opinion on each major federal program is not modified with respect to these matters. The Authority’s responses to the noncompliance findings identified in our audit are described in the accompanying schedule of findings and questioned costs. The Authority’s responses were not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on them.

Report on Internal Control Over Compliance

Management of the Authority is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered the Authority’s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with OMB Circular A‐133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of the Authority’s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies and therefore, material weaknesses or significant deficiencies may exist that were not identified. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, we identified certain deficiencies in internal control over compliance, as described in the accompanying schedule of findings and questioned costs as items 2013‐001 and 2013‐002, that we consider to be significant deficiencies.

The Authority’s responses to the noncompliance findings identified in our audit are described in the accompanying schedule of findings and questioned costs. The Authority’s responses were not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on them.

39

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the result of that testing based on the requirements of OMB Circular A‐133. Accordingly, this report is not suitable for any other purpose.


LANCASTER CITY HOUSING AUTHORITY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS


The accompanying notes are an integral part of this schedule. 40

Federal

Federal Grantor CFDA Federal

CFDA Program Title Number Expenditures

U.S. Department of Housing and Urban Development (HUD)

Shelter Plus Care 14.238 165,155$

Public and Indian Housing 14.850 1,505,532

Section 8 Housing Choice Vouchers 14.871 6,614,086

Section 8 Moderate Rehabilitation Single Room Occupancy 14.249 60,451 Public Housing Capital Fund Program 14.872 651,244

TOTAL EXPENDITURES OF FEDERAL AWARDS 8,996,468$

LANCASTER CITY HOUSING AUTHORITY NOTE TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS

September 30, 2013

This information is an integral part of the accompanying schedule. 41

NOTE 1 – BASIS OF PRESENTATION The Schedule of Expenditures of Federal Awards is presented on the accrual basis of accounting and includes all expenditures of federal awards administered by the Authority. Several programs are funded jointly by the State in accordance with requirements of the various federal grants. Costs incurred for such programs are applied to Federal grant funds in accordance with the terms of the related Federal grants with the remainder applied to funds provided by the State.

LANCASTER CITY HOUSING AUTHORITY SCHEDULE OF FINDINGS AND QUESTIONED COSTS


42

I. Summary of Independent Auditors’ Results Financial Statements Type of auditors’ report issued: Unmodified Internal control over financial reporting:

Material weakness(es) identified? Yes X No

Significant deficiency(ies) identified that are not considered to be material weaknesses?

Yes

X

None reported

Noncompliance material to financial statements noted? Yes X No

Federal Awards Internal control over major programs:

Material weakness(es) identified? Yes X No

Significant deficiencies identified that are not considered to be material weaknesses?

X

Yes

None reported

Type of auditors’ report issued on compliance for major programs: Unmodified

Any audit findings disclosed that are required to be reported in accordance with Section 510(a) of Circular A‐133?

X

Yes

No

Identification of Major Programs

Name of Federal Program CFDA

Number

Expenditures

Housing Choice Voucher Program 14.871 $ 6,614,086

Dollar threshold used to distinguish between type A and type B programs: $ 300,000

Auditee qualified as low‐risk auditee? X Yes No



43

II. Financial Statement Findings None III. Federal Award Findings and Questioned Costs Finding 2013‐001 Housing Choice Voucher Program, CFDA #14.871 Federal Agency U.S. Department of Housing and Urban Development Compliance Requirement: Eligibility Type of Finding: Noncompliance, Significant Deficiency Condition Testing of 40 Housing Choice Voucher tenant files found exceptions in 5 files which did not contain a completed and signed Declaration of Section 214 status of the dependant family members to document citizenship status. Criteria 24 CFR 982.201 requires tenants to declare citizenship status for all household members. Cause The Authority did not obtain all necessary Declaration of Section 214 status signatures for dependants prior to completing the reexamination. Effect The Authority is not in compliance with HUD regulations. Questioned Costs Unable to determine. Recommendation We recommend that management review their procedures for retrieving tenant information and establish a method that ensures compliance. Management’s Response The Declaration of Citizenship form was addressed at our most recent HCV staff meeting. We have instructed all personnel to remember to have this form signed and dated by all household members who are 18 years of age or older. Also, additional members added to the household for any reason must sign as required, or, if a minor, an adult must sign this form for them.



44

Finding 2013‐002 Housing Choice Voucher Program, CFDA #14.871 Federal Agency U.S. Department of Housing and Urban Development Compliance Requirement: Special Tests and Provisions‐ HQS Quality Control Inspections Type of Finding: Noncompliance, Significant Deficiency Condition Testing of 8 Housing Choice Voucher tenant files found that quality control re‐inspections were performed concurrently with actual inspections, with the inspector present. Criteria The PHA must inspect the unit leased to a family at least annually to determine if the unit meets Housing Quality Standards (HQS) and the PHA must conduct quality control re‐inspections. The PHA must prepare a unit inspection report (24 CFR sections 982.158(d) and 982.405(b)). Cause The Authority did not follow established procedures as documented in their Administrative plan to ensure that all quality control inspections are done in compliance. Effect The Authority is not in compliance with HUD regulations. Questioned Costs Unable to determine. Recommendation We recommend that management review their procedures for performing quality control HQS inspections and establish a method that ensures compliance. Management’s Response HCV Quality Control Inspections will be conducted via a random sampling of all inspections completed during the previous month. We will begin Quality Control (QC) Inspections for 4 units each month. Staff member, Javier Ortiz will complete these inspections the third Wednesday of the month. The first QC inspections under this new system are scheduled to be done on April 16, 2014.

LANCASTER CITY HOUSING AUTHORITY SCHEDULE OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS


45

There are no prior audit findings.

new lancaster city housing authority lancaster, … (pa036) audit fy2013.pdf · 2017. 11. 22. ·...

Documents