Purpose of Audit

The purpose of our audit was to assess the Board's oversight of the Authority's financial operations for the period January 1, 2015 through September 30, 2016.

Background

The East Hampton Housing Authority is located in the Town of East Hampton in Suffolk County and is governed by an appointed five-member Board of Commissioners. The Authority, which was created in 1983 to create and perpetuate affordable housing opportunities for qualified individuals, manages 93 housing units located on three properties in the Town and purchased a fourth property in 2016 where another 40 housing units will be built. Operating expenditures for the Authority's affordable housing program totaled $745,802 in 2015.

Key Finding

• The Board and Authority officials have not adopted policies and procedures to ensure that cash receipt, cash disbursement and bank reconciliation duties are segregated.
• Signed blank checks were kept on hand for use in emergencies.
• Bank reconciliations were not properly performed.

Key Recommendation

• Adopt written policies to ensure that the duties for cash receipts, disbursements and bank reconciliations are adequately segregated among employees or, when that is not practical, increase managerial oversight.
• Discontinue the practice of keeping on file and using signed blank checks.
• Prepare thorough and accurate bank reconciliations each month and ensure that any discrepancies or reconciling items are promptly identified, reviewed and resolved.