A report from the Louisiana Legislative Auditor’s Office released Monday found about two dozen problems with the Kenner Housing Authority’s 2012 financial statements, including missing documentation, inadequate controls and incomplete records.
The report also includes the findings of two reports from the U.S. Department of Housing and Urban Development issued earlier this year and in 2013 that asked the Kenner authority to repay $2.9 million of federal money that it spent but couldn’t account for.
The results of the latest audit were not particularly surprising. The beleaguered agency has been under the supervision of the Baton Rouge Housing Authority’s executive director since April 2013 after years of alleged mismanagement under former directors.
In February, interim Executive Director Richard Murray was granted a few extra months to get together what information he could to account for the agency’s 2012 and 2013 fiscal years.
Monday’s report covered only 2012. The state auditors’ review of the 2013 financials likely will be released in the coming months.
The report noted that the housing authority lost $2 million in 2012 as expenses outstripped income. It had $8.5 million in revenue for the year and spent $10.6 million.
Its “net position” at the end of the year ending June 30, 2012, was $9.1 million, down from $12.3 million a year earlier.
It had total cash on hand at the end of the year of $4.4 million. Its capital assets totaled $5 million.
The report chronicled missing paperwork, inadequate financial controls, untrained staff, tardy deposits, unreconciled ledgers and a lack of payroll documentation, among other problems.
In five of nine test cases in the authority’s Housing Choice Voucher Program, there was no documented evidence of independent third-party verification of the recipients’ eligibility for the aid.
The report noted in several instances that incomplete financial statements made it impossible for the board and management to make informed decisions and created the potential for misappropriation.
Murray, who splits his time between the Kenner and Baton Rouge housing authorities, could not be reached for comment Monday. But he has said he is confident the agency can be turned around and that he is addressing the issues as quickly as he can.
The authority’s responses contained in the report noted that staff is being better trained and that deposits now are made within 24 hours of receipt of payment.
The authority said an accounting technician is managing its finances under Murray’s supervision and a fee accountant is working to try to bring records up to date and on time.
The report notes the outstanding issue of a questionable 2004 payment of $143,553 made to an outgoing director who had supposedly accrued more than 4,000 hours of unused leave. That decision was made despite lack of proper documentation and apparently violated the authority’s policy limiting compensation for such unused leave to 300 hours.
As for the $2.9 million it may have to repay HUD, the authority is awaiting an answer to its request that some of it be forgiven.
Follow Chad Calder on Twitter, @Chad_Calder.