Purpose of Audit

The purpose of our audit was to evaluate the Authority’s internal controls over claims processing for the period January 1, 2011, to February 29, 2012.

Background

The Watertown Housing Authority is a municipal housing authority created to provide low-rent housing in the City of Watertown. The Authority is governed by a seven member Board of Commissioners (Board). Five commissioners are appointed by the Watertown City Manager and two are elected by the tenant population. The Board, which has ultimate responsibility for the Authority’s operations, appointed an Executive Director to oversee day-to-day operations. The Authority’s 2012 fiscal year operating budget totaled approximately $5.6 million.

Key Finding

The Authority has established and designed an adequate system of internal controls over claims processing.

• While the Authority’s overall controls over claims audit were effective, we found the Authority’s management provided weekend trips for five retirees costing $4,962, which management characterized as a gift for their years of service and dedication to the Authority. We are aware of no authority in NYS Public Housing Law for a housing authority to make a gift, such as paid trips, to an employee or retiree. It is permissible in our view for a housing authority to provide a token of appreciation to a retiring employee in recognition of long and faithful service. However, the values of these weekend trips were more than nominal amounts and we believe beyond tokens of appreciation. Accordingly, the weekend trips could be considered as gifts of public funds, which are impermissible.

Key Recommendation

• Refrain from making gifts of public funds to employees or retirees.