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HomeMy WebLinkAbout1980-11-18; City Council; 6244-1; Acceptance of Report From Geo. A. Peterson & Co. Regarding Housing Authority Financial and Management Systemsb * 4 ;-. * CITY OF CARLSBAD Initial : Dept - Hd: * C. Atty, c '& AG-QIDA BILL NO, DATE : DEPARTMENT : Housing and Redevelopment C- Mgr. > Sub] ect : ACCEPTANCE OF. REPORT FROM GEO. A. PEmON si COTlECARDI~G AUTHORITY FINANCIAL AND MANAGEFENT SYSTEMS. Statement of the Matter At its meeting of April 29, 1980, the City Council approved a contract with the firm of George A. Peterson and Co., for the purpose of reviewing and revising rep0 and records maintained by the Housing Authority since July 1, 1978. was the result of a Housing and Urban Development Field review conducted in the sp of 1980. The attached report from the Housing and its findings, and actions necessary to implement the f irmb recommendations. The contract Redevelopment Director outlines the repc EXHIBITS : Report from Housing and Redevelopment Direc'cor dated November 10, 1980 RECOMMENDATION: Accept report. Council Action: 11-18-80 Council accepted the report. * e ,.. -c MEMORANDUM DATE : November 12, 1980 TO : Frank Aleshire, City Manager FROM : SUBJECT: GEORGE A. PETERSON & CO., REVIEW OF FINANCIAL AND Jack E. Henthorn, Housing and Redevelopment Direct IANAGEMENT SYSTEMS Attached are the results of the George A. Peterson & Company's review of the Carlsbad Housing Authority financial and management data systems. recommendations and adjustments contained in the attached material are the re: of analysis and review of records maintained and reports submitted since July 1, 1978 to the Department of Housing and Urban Development for the housii programs operated by the Carlsbad Housing Authority and its predecessor, the Carlsbad Housing and Redevelopment Commission. The In addition to reviewing the currently active Section 8 Rental Assistance Payments Program, the consultant firm also reviewed the cost allocation and close-out of the now inactive Section 23 Leased Housing Program. The recommendations made by the consultant involve the following from. general areas: - Adjusting journal entries, resulting from the reconstruction of the financial data and the close-out of the Section 23 Program in accord: with HJJD specified guidelines. Instructions for filing the required HUD report forms as revised, fo the continuing Section 8 Program as of June 30, 1979 and the final close-out of the Section 23 Program as of March 1, 1979. Improvement in accounting and reporting procedures and management - - procedures. - Suggested responses to selected HUD Financial Management Review Comments of April 15, 1980. e a c \ CONSULTANT RECOMMENDATIONS: Specific recommendations for improvement in accounting and reporting procedur and management procedures were prepared by the consultant in the course of hi review. As part of the review, an evaluation of procedures followed in accounting, management and internal control was made, the following comments and suggestions in the areas listed below: This evaluation has given rise to GENERAL Certain suggested improvements by the previous auditors and HUD representativc have already been made by Commission staff. administration and accounting for the continuing HUD programs. regulations and guidelines will undoubtedly require future adjustments. These changes will help in the Changing Fede CONVERSION CHART OF ACCOUNTS The chart of accounts conversion list does not show HUD account numbers adjac to city account numbers. A revision has been made to show HUD account numbers This is required by HUD and is most helpful for preparation of HUD reports ant assistance in HUD audits. PREPAEUTION OF HUD YEAR END REPORTS HUD year end reports have been prepared on incorrect report forms. The financ department should prepare the annual report forms as they require an advanced expertise in accounting theory. The annual report forms are due 20 days aftei the fiscal year end of June 30th and should be sent as per our instructions for filing the June 30, 1979 annual report forms. The correct forms are as fc * e \ 1) 2) 3) Balance Sheet - HUD Form 52595 Operating Statement - HUD Form 52682 Voucher For Payment of Annual Contributions - HUD Form 52681 The executive director of the Carlsbad Housing and Redevelopment Commission or his designee should be familiar with the content of the report forms as he must approve them and they are an important management tool for the operation of the program. YEAR END CLOSING ENTRIES HUD year end closing entries are very complex, and are not easily memorized. The format of the entries should be retained by the general ledger accountant. The year end closing entries are shown in the attached schedule. BOOKING OF CONTRIBUTIONS Prepaid annual contributions received are incorrectly booked to a revenue account. earned as of the receipt date. account 2210 - Prepaid Annual Contributions. When funds are received from HUD, they are prepaid by HUD and not HUD requires that these funds be booked to INTERNAL CONTROL A review of cash disbursement transactions indicated some payments to owners of leased dwellings were supported by a photo-copy of the recurring monthly rent paid to owners schedule. The lower portion of the photo-copy included t original approval for the first month the schedule was used. A photocopy is an acceptable document for recurring payments of this nature, however, the approval cannot be part of the photocopy. Each month, the person responsiblc for approving the payments must date and sign the schedule indicating reappr ACCOUNTING PROCEDURE QUESTIONS The City does not have a current list of HUD personnel to contact regarding -2- a 0 ir \ accounting questions. financial information on HUD forms or the proper way to present financial When questions arise as to the proper way to present information on HUD forms or the proper way to record a transaction, Ted Rive] the Chief HUD Accountant should be called at (415) 556-7316 at the San Franc: Regional Office. He will answer your questions and refer you to the publicai in which that answer could be found. Financial questions might also be refer to Roxie Goodman at the Assisted Housing Management Branch in Los Angeles. She can supply forms, publications, information and referrals as required. BOOKING OF ADJUSTING JOURNAL ENTRIES The independent auditor's adjusting journal entries for June 30, 1978 were incorrectly booked into the accounts of the subsequent year. adjustments for a particular year which are booked to the accounts of a subs€ year must not be booked to income and expense accounts, rather only to balanc sheet accounts. future journal entries would be to book all income and expense account entrie to the unreserved surplus account. Auditor's The preferred way to have booked those journal entries and SUBSIDIARY ACCOUNT BALANCES Subsidiary account balances for accounts receivable - tenants and tenant secu deposits are not reconciled to general ledger control on a regular basis. Thl tenant security deposits have all been transferred to the owners of the units as of August 1, 1980. This was part of the relinquishment of managerial dutic to the owners of the units. The accounts receivable from the tenants must be analyzed for uncollectable amounts and reconciled to the general ledger contrl account. CASH REQUIREMENTS Cash balances and required monthly cash data is not being submitted to HUD accompanying the HUD Form 52663 - Request for Partial Payment. of February 22, 1978 requesting and showing the required format should be referred to and this data should be submitted as instructed in that letter. The HUD lettei -3- e e * STAFF ACTION Staff has taken actions necessary to implement all of the consultant's recommendations for improvement of the Commission's financial and management systems. The Commission will be asked to take four actions at its meeting of November 18, 1980, to close-out the consultant's findings as well as some of those raj in earlier HLTD field reviews. over-payments made by the Department of Housing and Urban Development. action will involve final close-out of now inactive Section 23 program, The final action to be requested will authorize staff to solicit proposals fr independent audit firms for the purpose of performing a required biennial audit. Two of the actions will involve refunding of One RECOMMENDATIONS - That the consultant's report be submitted to the City Council at its meeting of November 18, 1980, for approval. - That Commission actions as outlined above be requested at that same meeting (November 18, 1980). JEH: a1 0 0 \ GEORGE A.PETERSON & Co. CERTIFIED PUBLIC ACCOUNTANTS MEMBERS AMERICAN INSTITUTE OF GEORGE A PETERSOU,C P A 7816 IVANHOE AVENUE RICHARD E EVANS,C P A LA JOLLA, CALIFORNIA 92037 THOMAS J BRADY,A P C ,C ? A GEQE R KONRA0,C P A CERTIFIED PUBLIC ACCOUNTAI TELEPHONE (7141 454-6176 CALIFORNIA SOCIETY OF CERTIFIED PUBLIC ACCOUNTAI Honorable City Council City of Carlsbad Enclosed please find the results of our review of the Carlsbad Housing Authority financial and management data and systems. Th recommendations and adjustments contained in the enclosed materi are the result of analyses and review of records maintained and reports submitted since July 1, 1978 to the Department of Housin and Urban Development for the housing programs operated on behal of the City of Carlsbad. We have also reviewed the cost allocat and close-out of the Section 23 program. recommendations in the following areas: We are presenting our - Adjusting journal entries, resulting from the reconstruction of the financial data and the close-out of the Section 23 Program in accor- dance with HUD specified guidelines. - Instructions for filing the required HUD report forms as revised, for the continuing Section 8 Program as of June 30, 1979 and the final close-out of the Section 23 Program as of March I, 1979. - Improvement in accounting and reporting procedures - Suggested responses to selected HUD Financial Manage- and management procedures. ment Review Comments of April 15, 1980. At this time, we would like to express our appreciation for the cooperation and assistance we received from the City of Carlsbac personnel in the completion of this review. We would be pleasec to discuss the matters reported or to answer any questions you may have at your convenience. 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INSTRUCTIONS FOR FILING HUD REP0:RTS 0 0 GEORGE A.PETERSON & Co. CERTIFIED PUBLIC ACCOUNTANTS GEORGE A PETER SON,^ P A 7816 IVANHOE AVENUE ME MB ERS RICHARD E EVANS,C P A AMERICAN INSTITUTE Of THOMAS J BRAOY, A P C , C P A CERTIFIED PUBLIC ACCOUNTi CALI FOR N I A SOCIETY OF CERTIFIED PUBLIC ACCOUNT/ LA JOLLA, CALIFORNIA 92037 TELEPHONE (714) 454-6176 GENE a KONRAD,C P A INSTRUCTIONS FOR FILING THE REQUIRED HUD REPORT FORMS AS REVISED FOR THE CONTINUING SECTION 8 PROGRAM AS OF JUNE 30, 1979 AND THE FINAL CLOSE-OUT OF THE SECTION 23 PROGRAM AS OF MARCH 1, 1979: Enclosed please find copies of the following forms for the Section 23 Program: HUD - 52981 - Statement and Voucher For Basic Annual Contribution Leased Housing HUD - 52599 - Statement of Operating Receipts And Expenditures HUD - 52596 - Statement of Income and Expenses And Changes in Accumulated Surplus or Deficit From Operations HUD - 52595 - Balance Sheet Form 52981 shows an amount due to HUD of $11,767. Prepare a check and send as instructed below. Also enclosed are the following forms for the Section 8 Program : HUD - 52681 - Voucher For Payment Of Annual Contributions Housing Assistance Payments Program HUD - 52682 - Operating Statement - Housing Assistance HUD - 52595 - Balance Sheet Payments Program a e L Form 52681 shows an amount due to HUD of $33,395. Prepare a check payable to U. S. Department of Housing and Urban Deve- lopment for that amount. Will you kindly sign and date all forms and mail as soon as possible as indicated. Mail original and check to: U. S. Department of Housing and Urban Development San Francisco Regional Office Regional Accounting Division pAF c/o Ronnie Davis 450 Golden Gate Avenue San Francisco, Ca 94102 copy to: U. S. Department of Housing and Urban Development Assisted Housing Management Branch c/o Donne11 Curry 2500 Wilshire Boulevard Los Angeles, Ca 90057 The Section 23 forms represent the final close-out of that program and therefore must be accompanied with a resolution of the Carlsbad Housing Authority containing the following: 1) A certification that close-out of the Section 23 program has been conducted in accordance with U. S. D.H.U.D.- Notice H 80-14 (PHA) and is complete with the exception of the IPA audit and that all assets and cash remaining from the Section 23 program have been disposed of in accordance with HUD Notice H 80-14 (PHA) ; -2- a e 2) A certification that the.Board of Commissioners has examined the books of account and records of the Section 23 Program and has determined that there are n outstanding obligations or receivables; and 3) A statement agreeing to the termination of the Section 23 ACC once the final IPA audit is completed and all findings are closed or cleared. According to the regulations, the cash balance remaining in the Section 23 Program at the time of close-out may be applied towards Section 8 - Annual Contributions. Therefore, you must indicate on the next form HUD - 52663 Requisition For Partial Payment of Annual Contributions, line 19 Total Partial Payments Received For Fiscal Year To Date an additional amount received beyond that currently received in the amount of $67,14 This amount is shown on Form HUD - 52595 Balance sheet for Section 8 at June 30, 1979 line 62 - Prepaid Annual Contributio Please examine all forms and call us if you have any quest: The enclosed copies are for your files. - 3- 0 0 RET STATEMWT AND VOUCHER FOR BASIC ANNUAL CONTRIBUTION LEASED HOUSING TO: DEPARTMENTOF HOUSINGANDURBANDEVELOPMENT FROM: Carlsbad Housins Authoritv 3096 Hardinq Street Carlsbad, California 92008 I. MAXIMUM BASIC AN 1. Zero Bedroom Un 2. One Bedroom Uni 3. Two Bedroom Un 4. Three Bedroom U 5. Four Bedroom Un 6. Five Bedroom Un 7. Six Bedroom Unit 11. Increase or (Decrease) in Operatin Fiscal Year (Line 9 mmus Line 1 12. Deficit, before HUD contributions Current Fiscal Yaor (Form HUD- Additional HUD Annual Contributions for: 14. 15. 16. Existing Operating Deficif -Curl Special Subsidy Families - Current Year Rental Assistance - Current Year 11. BASIC ANNUAL CONTRIBUTION 19. Basic Annual Contribution Earned - Current Yeor (Lzne 8 or Line 18. rvhichever IS lesser) 20. Basic Annual Contribution Earned - Prior Year Adlustments (Account 8011) - credit or (d 21. Basic Annual Contiibution Payable (Line 19plrs the credit or mmus (he debu on Line20 IV. PREPAID BASIC ANNUAL CONTRIBUTION 22. Partial Payments Received from HUD During Fiscal Year 23. Overpoyment Due HUD !Amount by whrch Line 22 exceeds Line 211 ules, and statements have been examined by me and to the best of my knowledge and belief are true, correct, and complete. iXame o! Local Authority) HUD-Wash., D.C. 211639-P July 1973 r kT. CODE (14) iBASlC PROJECT NO. 'SYSTEM COO1 (3-8) 06 CAL-77-1 U. S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT TYPE OF ASSISTED PROJECT(S1: (11-121 FV ENOING LOW-RENT HOUSING PROGRAM (Cheek One) 114) LHAOwned Rental Housing 01 a 1. 3 N STATEMENT OF LHA Owned Mutual Help 03 0 2. 3 Jl OPERATING RECEIPTS AND EXPENDITURES LHA Lased ~~~~i ~~~~i~~ 04 a 3. 0 s LHA Owned Homeownership 10 0 4. C LHA Leased Homeownership 11 NO. OFPROJECTSNO. OF D. U. (15-17) (18-23) 124-28) 'NO. OF D.U. U NAME OF LOCAL AUTHORITY CARLSBAD HOUSING AUTHORITY 2 140 13: 1,024 32,: 3096 HARDING STREET CARLSBAD, CALIFORNIA 92008 ADDRESS NO.OFUNIT MOS.AVAILA6lLITY OR NO.OF UNITC UNDER LEASE (29-35) LEASE (3642) REPORT FOR PERIOD ENDED PROJECT NUMEER(S1 . June 30, 1979 FIN CAL 77-1 & 77-2 LINE ACCT. BUDGET ACTUi NO. NO. A ACCOUNT TITLE AMOUNT PUM PUM 143-451 j HOMEBUYERSMONTHLY PAYMENTS FOR: 0 0 HUD-52599 July 1973 CAL 77-1 SF-436 (Per Operaling Budge(, Form HtiD-j2564. j I I , 0 R LOCAL AUTHORITY 0 MUD-52596 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT January 1971 LOWRENT HOUSING PROGRAM CARLSBAD HOUSING AUTHO AOORESS 3096 HARDING STRE STATEMENT OF INCOME AND EXPENSE CARLSBAD, CALIFORNIA 9 CONTRACT NO. PROJECT NUMBERIS) AND CHANGES IN ACCUMULATED SURPLUS OR DEFlClT FROM OPERATIONS SF-436 1 CAL 77-1& 7 FOR FISCAL YEAR ENDED June 30, 1979 DEBIT CR LINE ACCT. NO. NO. I I INCOME AND EXPENSE j 1 INCOME: 17 1 ' 3000 Operating Income 2 15210 Premiums an Nates and Bands I 3 5220 Bond Purchase Discount 4 5230.1 Interest on Debt Service Fund Investments 5 5230.2 Interest on Other Debt Amortization Fund Investments 6 5240 Interest on Payments for Offdite Utilities EXPENSE: 230,551 7 4000 Operating Expenae 8 5610 Interest on Notes and Bonds Poyable 9 5640 Bond Redemption Pverniums SURPLUS CREDITS AND CHARGES: 10 6010 Prior Yeor Adiustments- Affecting Residual Receipts (or Delicit) 11 ! 6020 Prior Year Adiustments-Not Affecting Residual Receipts 12 i 6110 13 6120 Gain or Loss from Disposition of Nonexpendoble Equipment 14 Gain or Loss from Disposition of Real Property Residual Receipts-initial Operating Period (Credit1 15 Totals !Lines 1 thr0ugh 14) 230,551 77 16 NET INCOME OR DEFlClT-CURRENT YEAR (Net debit or credit difierence 152,868 between total debits and credits on Line 25) i \ CHANGES IN ACCUMULATED SURPLUS OR DEFICIT FROM OPERATIONS 2810 UNRESERVED SURPLUS: 17 Balance at end of previous fiscal year when books were closed 1,293,107 4 ia 19 20 7010 Provision for Operating Reserve- Locally Owned Projects Total debit end credit odiu.tment. dvrins current fisc-l year Net income or dpiicit-current year (Line 16) d 152,868 j I 21 7011 Provision for Operating Reserve- Leased Proiects 8,232 1 22 7013 Provision for Operating Reserve - Homeownership Proiects Totals (Liner 17 through 22J 1,454,207 5 24 2810 Unreserved Surplus balance at end of current fiscal year (net debit 07 crediz dif/erence between rotal debits and credits on Line 231 2820 OPERATING RESERVE-LOCALLY OWNED PROJECTS: 1,448,213 I 25 26 27 28 2820 Balance at end of previous fiscal year when books were closed Totol debit qnd credit entries to Account 2820 during current fiscal year 23 I :' Totals (Lines 25 and 26) I I 37, Operoting Reserve Balance at end of Current fiscal year (ner credit difference between total debits and credits on Line 271 2821 OPERATING RESERVE-LEASED PROJECTS: 29 Balance at end of previous fiscal yeor when books were closed Totol debit and credit entries to Account 2821 during current fiscal year 2.9 8 8, Totals (Lines 29 and30) I 37, I 32 2821 1 2823 Operating Reserve balance at end of current fiscal year (net credtt dz/ference between total debits and credits on Line 311 OPERATING RESERVE -HOMEOWNERSHIP PROJECTS: 33 1 i Bolance at end of previous fiscal year when books were closed Totol debit and credit entries to Account 2823 during current fiscal year Operating Reserve balance at end of current fiscal year (net credit difjerence ~ Totots (Liner 33 nnd 34) 34 I 35 ~ 36 2823 between total debrrs and credits on Line 35) t 1 37 ACCUMULATED SURPLUS OR DEFICIT FROM OPERATIONS (net debit or credit totai 01 balances on Lines 24, 28, 32, and 36) I I APPROVED EY. PREPARED BY: Signature Sipnature Cor* Title Date ____ --- Title -..---- HU REV 0 e US. DEPARTMENT OF HOUSING AN0 URBAN DEVELOPMENT LOW-INCOME HOUSING PROGRAM BALANCE SHEET ASSETS ty Deposit Fund ........................... Cash Fund 50 .............................. buyers ................................ -~ 2,565 31 RECEIVABLE ............................. ___ EIVABLE ............................... .......................... ~- gFund .......................... ingFund ......................... aid. Rent l ...................... 25,850 2: ............................... DEFERRED CHARGES 121 1 Prepaid Insurance ............................. 1212 Insurance Deposits ............................. 1255 Maintenance Work in Process ....................... 1260 Inventories . Materials ........................... 1270 tnventories . Equipment .......................... 1290 Other .................................... 1400.2 Development Cost ................. 1400.3 Less: Development Cost. Contra ......... 1400.4 Land, Structures and Equipment ...................... 4,396 4 1510 PAYMENTS FOR OFF-SITE UTILITIES .............................. 34 1620 Ineligible Expenditures ....................................... 35 1820 Undeposited Bid Guaranties ........................ 36 1830 Less: Returnable Bid Guaranties - Contra , , , , , , , , , , , . , , , , , 37 1860 Advances from General Fund to Debt Service Fund ............ 38 1870 Less: Refunds Due General Fund from Debt Service Fund - Contra . . , . LAND, STRUCTURES AND EQUIPMEXI UNDISTRIBUTED DEBITS BID GUARANTIES ADVANCES FOR DEBT AMORTIZATION 128 TOTAL ASSETS HUD-525 a 0 e Page 2 Of 2 PUBLIC HOUSING AGENCY CARLSBAD HOUSING AUTHOR17 ~~0.5259~ FeOruary 1976 CONTRACT NUMBER PERIOO ENOEO BALANCE SHEET June 30, SF-436 LIABILITIES u. 20 ACCOUNTS PAYABLE 72 40 21 11 Vendors and Contractors ......................... 353 41 2112 Contract Retentions ............................ 42 21 13 Performance Deposits ........................... 43 2114 Tenants Security Deposits ......................... 6,645 44 2118 HUD(Accrs. 2118.1, 2118.3& 2118.6) ................. LL,W- 45 46 2122 Project Loan Notes . HLD ........................ 47 2123 Administrative Notes . HUD ....................... 48 2126 Project Notes. Non-HUD ......................... 49 2129 Sundry Notes ............................... 50 2131.1 Interest Payable . Development Notes and Bonds . HUD 51 2131.2 Interest Payable . Administrative Notes . HUD .............. 52 2131.3 Interest Payable. Other Notes (Deferred Payrnenri HUD ........ 53 2132 Interest Payable . Nctes -Non-HUD .................... 54 2133 Interest Payable . Bonds . Non-HUD ................... 55 2137 Payments in Lieu of Taxes ........................ 56 Other (Accrs. 2134, 2135, 2136 & 21391 ................ 57 2161 Homebuyers Ownership Reserve ..................... 58 2162 Homebuyers Nonroutine Maintenance Reserve .............. 59 2165 Mortgagors Taxes and Insurance ..................... 60 2166 Mortagors Maintenance Reserve ...................... 61 2168 Annual Contributions for Security and Utility Deposit Funds Provided . 62 2210 Prepaid Annual Contribution ....................... - Other (Accounrs 21 15, 211 7 & 21 191 Due .to. Sixtion. 8 ... 62,123 ____ 8C NOTES PAYABLE ACCRUED LIABILITIES ......... TRUST AND DEPOSIT LIABILITIES DEFERRED CREDITS 63 2240 Tenants Prepaid Rents .......................... 64 2241 Prepaid Monthly Payments. Homebuyers ................ 65 2250.1 Investment Income . Homebuyers Ownership 66 2250.2 Investment Income - Homebuyers Ownership 67 225 1 .I Investment Income . Homebuyers Nonroutine 68 125 1.2 Investment Income - Homebuyers Noruoutine 1 69 2290 Other ................................... 70 231 1 Permanent Notes . HUD ......................... 71 2321 Series “A” Notes and Bonds Issued ....... 72 2322 Series “A’ Notes and Bonds Retired ...... ( ) 73 2331 Series “D” Notes and Bonds Issued ....... 74 2332 Series “B Notes and Bonds Retired ....... ( 1 75 1 2341 New Housing Agency Bonds Issued ....... 76 I 2342 ) Reserve . Unapplied .............. Reserve. Applied ................ ( 1 Maintenance Reserve . Unapplied ....... Maintenance Reserve. Applied ......... f FIXED LIABILITIES New Housing Agency Bonds Retired ....... ( Other Notes Payable to HLD (Deferred] 78 1810 Contract Awards . Contra ........ , , , .. , , , , , . , , , , , , 79 1800 Less: Uncompleted Contracts ...................... 80 TOTAL LIABILITIES 80, 81 2810 Unreserved Surplus ................ -(1,44&, 213) 82 2820 Operating Reserve. Locally Owned Projects ... 83, 2821 Operating Reserve. Leased Projects ....... 37.490 771 2351 ................. CONTRACT AWARDS SURPLUS 84 2823 Operating Reserve. Homeownership Projects . . 85 2824 Operating Reserve . Section 23 HAP Projects . . 86 2825 Contingency Reserve - Unfunded Sect. 23 HAPProj. 87 2826 Operating Reserve. Section 8 HAP Projects ... 88 2827 Project Account - Unfunded - Sect. 8 HAP Projects . 89 Total surplus from Operations ...................... ( 1 t 4 10 r 7 23) 90 2540 Cumulative HUD Annual Contributions ................. .1 r 340,035 117,903 91 , 2850 Cumulative Donations .- .O.p.erating. Subsidy. ........ 92 ~ 2855 Cumulative Proceeds from Sale of Dwellings ............... 93 2856 Cumulative Contributions by Homebuyers for Property .......... 94 2860 Book Value of Projects Conveyed by HUD ... ........ 95 2870 Less: Contract Payments to HUD ( ) 96 2880 Development Cost Undeveloped Projects ( ) 97 2890 Book Vaue of Capital Assets Conveyed to Homebuyers ......... ( 1 47 -2- 98 TOTAL SURPLUS AND LIA5ILITIES -1zLl! . ................ PREPARE 0 0 Y (Si~nnture, APPROVED BY /S@,mZure) TITLE DATE TITLE DATE I I REV e a HUD-52681 January 1976 ). HOUSING ASSISTANCE PAYMENTS PROGRAM -.- SECTION 23 ___ SECTION 8 E 3096 HARDING STFSET MAXIMUM ANNUAL CONTRIBUTIONS AVAILABLE 1. Maximum Annual Contribution Authorized - per Annual Contributions Contract 2 Pro Rata Maximum Annual Contribution Applicable to a Period of Less Than Twelve (12) Months 3. Maximum Annual Contribution For Fiscal Year (Lines 1 and 2) 4. Contingency Re&( Iwwnc %51 for Section 23 projects or Prolect Account !4ecounr 28271 for Section 8 projects - Balance at beginning of Fiscal Year 5. Total Annual Contributions Available(hc~, 1 and 1) ANNUAL CONTRIBUTIONS REQUIRED 6. Housing Assistance Payments;.!cr.,,,nl KI~) 7. Administrative Fee ih /!d~/rwr'm~J 8. Preiiminary Administiative Expense - Prior to ACC! I~~.c. IOIO/ EXCESS OR DEFICIT IN ANNUAL CONTRIBUTIONS AVAILABLE 18. Excess/ inlOLIni b iihLch I.~~. ; ..yct.l.d, !.rnt. I;; 19. Deficit ( lnmni h? .chrd /.w /7 ..IC(., d. h. jj STATUSOF PROJECT 24 Prolect Account ' Baiance 25 Provrsion tor Project Am if l,cw. I (IVY!\ i.i,,c :A, STATUS OF CONTINGENCY RESERVE (Section 23 proiectr only; 26. Contingency Reserve . Balance at !he End of Flscal Year i itcouni .is;i -.. - -. ..- ..- - of the obore numbered Annuol Cont,lbutlonr Contract hnre been complied with by the Houszng Agency; ond *hot rhii Voucher for Annual Contributior exomined by mebnd to the best of my inorledge end belief it IS true, COII~CI and complete. REVIEWED BY: received rro ertiiied for pay b 1 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT OPERATING STATEMENT HOUSING ASSISTANCE PAYMENTS PROGRAM SECTION 6 u SECTION 23 NAME AND ADDRESS OF PUBLIC HOUSING AGENCY (Including ZIP Code) CARLSBAD HOUSING AUTHORITY 3096 HARDING STREET CARLSBAD, CALIFORNIA 92008 NUMBER OF DWELLING UNITS UNDER ACC UNDER LEASE NUMBER OF UNIT MONTHS 240 219 1,760 SEE INSTRUCTIONS ON REVERS .STATE CODE 06 TYPE OF PROJECTIS) FY END /Check one] (Chec EXISTING 01 a 1. c] M NEW 07 0 1. a JL REHAB. 03 0 3. 0 SI 4. 0 Dl AC CONTRACT PROJECT NUMBERW NO. CA-h&;E-8Ji SF-535 ACCOUM TITLE LINE ACCT. NO. NO. PART I OPERATING RECEIPTS AND EXPENDITURES OPERATING RECEIPTS 010 3610 Interest on general fund investments 030 020 3690 Other Income Total Operating Income (Lines 01 0 and 020) ACTUAL PUM AM( .64 17.91 RET CARLSBAD HOUSING AUTHORIT' 1) Page 1 of 2 PUBLIC HOUSING AGENCY e HUO-52595 February 1976 LOCALITY US. DEPARTMENT OF HOUSING AN0 URBAN OEVELOPMENT CITY OF CARLSBAD LOW-INCOME HOUSING PROGRAM PERIOD ENDED June 30, 1979 BALANCE SHEET CONTRACT NUMBER SF-535 CA-16-E-077-001,003,004 PROJECT NUMBERS) See Insffucfions on rhe Reverse, 0 W ASSETS z CASH I 11 11.1 General Fund lDevelopment andlor Operarion) .............. 30,902 1, 2 I1 11.2 General Fund (Unapplied Debt SeTvice Funds) .............. 3 1 I14 Security Deposit Fund ........................... 4 11 17 5 I1 18 Change Fund Petty Cash Fund .... I .. , . , .. , .. , .............. ACCOUNTS RECEIVABLE 50 3( ................................ - 6 1122 Tenants .................................. 1,904 7 1124 Homebuyers ................................ 8 1125 HUD .................................... 45,55& 9 1127 Advances for Security and Utility Deposits ................ 10 1129 Other .o.WnerS.. ............................ 1,239 48 11 1 I30 NOTES AND MORTGAGES RECEIVABLE ............................. 12 114s ACCRUED INTEREST RECEIVABLE ............................... 13 1155 Limited Revolving Fund .......................... 14 1156 Unlimited Revolving Fund ......................... IS 1157 Other .-. .pr.epaid.Peat. ..................... 34 , 916 34 16 1162 GeneralFund ............................... 50.491 17 1163 Homeownership Reserve Funds ...................... 50 18 1171 Debt Service Fund ............................. 19 1172 Advance Amortization Fund ........................ 20 1173 Investments ................................ 21 1174 Accrued Interest Receivable . Investments ................. 22 I176 HUD Annual Contributions Receivable .................. ADVANCES INVESTMENTS DEBT AMORTIZATION FUNDS 23 1177 Deposits with HUD ............................ 24 121 1 Prepaid Insurance ............................. DEFERRED CHARGES 25 121 2 insurance Deposits ............................. 26 1255 Maintenance Work in Process ....................... 27 I260 Inventories . Materials ........................... 28 1270 Inventories . Equipment ......................... 29 1290 Other.. .................................. 30 1400.2 Development Cost ................. 31 1400.3 Less: Development Cost . Contra ......... 32 1400.4 Land, Structures and Equipment ...................... 7.696 7, 33 1510 PAYMENTS FOR OFF-SITE UTILITIES .............................. 34 1620 Ineligible Expenditures ....................................... 35 1820 Undeposited Bid Guaranties ........................ 36 1830 Less: Returnable Bid Guaranties . Contra ................. 37 1860 Advances from General Fund to Debt Service Fund ............ 38 1870 Less: Refunds Due General Fund from Debt Service Fund. Contra .... 39 LAND, STRUCTURES AM) EQUiPMENT UNDISTRIBUTED DEBITS BID CUARAXTIES ADVANCES FOR DEBT AMORTIZATION TOTAL ASSETS 172, L'The General Fund includes S - O- representing proceeds from disposition of properr? reserved for replacemenr of equipment or ocher purposes as provtded in the annual contribucionr or adminisrration confracr. NOTE: Accrued annual leave of ernployens at rhe end of the fwl yaar S HUO.5259! Page 2 of 2 I HUD-52595 February 1976 BALANCE SHEET PUBLIC HOUSING AGENCY . CARLSBAD HOUSING AUTHORI’ SF-535 June 3 CONTRACT NUMBER PERIOD ENDEO 0 REV1 I a LIABILITIES w. 20 - iz ACCOUNTS PAYABLE 42,135 40 21 11 Vendors and Contractors ......................... 41 2112 Contract Retentions ............................ 42 2113 Performance Deposits ........................... 43 2114 Tenants Security Deposits 5,124 ......................... ~ 44 2118 HLTD (Accrs. 2118.1. 2118.3 & 2118.6) 45,162 45 ................. Other (Accounrs 21 15, 21 I7 & 21 19) 92 .................. MOTES PAYABLE 46 2122 Project Loan Notes . HUD ........................ 47 2 123 Administrative Notes . HUD ....................... 48 2126 Project Motes . Non-HUD ......................... 49 2129 Sundry Notes . , ..... , 51 21312 Merest Payable . Administrative Notes. HUD .. , ........... ....................... ACCRUED LlABILITIES 50 2131.1 Interest Payable .Development Notes and Bonds . HUD ........ 52 2131.3 Interest Payable -Other Notes (Deferred Payment) HUD ........ 53 2132 Interest Payable . Notes -Non-HUD .................... 54 2133 Interest Payable . Bonds . Non-HUD ................... 55 2137 Payments in Lieu of Taxes ........................ 56 Other (Accts. 2134. 2135, 2136 & 21391 ................ 57 2161 Homebuyers Ownership Reserve ...................... 58 2162 Homebuyers Nonroutine Maintenance Reserve .............. 59 2165 Mortgagors Taxes and Insurance ..................... 60 2166 Mortagors Maintenance Reserve ...................... 61 2168 Annual Contributions for Security and Utility Deposit Funds Provided . TRUST AND DEPOSIT LlABlLlTIES DEFERRED CREDITS 62 2210 Prepaid Annual Contribution ....................... - 67 t 142 63 2240 Tenants Prepaid Rents .......................... 64 2241 Prepaid Monthly Payments. Homebuyers ................ 65 2250.1 Investment Income . Homebuyers Ownership 66 2250.2 Investment Income . Homebuyers Ownership 67 2251.1 Investment Income . Homebuyers Nonroutine 68 2251.2 Investment Income - Homebuyers Nonroutine Reserve. Unapplied .............. Reserve . Applied ................ ( Maintenance Reserve . Unapplied , . , .... Maintenance Reserve. Applied ......... ( 1 ) 69 2290 Other ................................... 67 70 231 1 Permanent Notes . HUD ......................... 71 2321 Series “A” Notes and Bonds Issued ....... 72 2322 Series “A” Notes and Bonds Retired ...... ( ) 73 2331 Series “D” Notes and Bonds Issued ....... 74 2332 Series “B” Notes and Bonds Retired ....... ( ) 75 2341 Yew Housing Agency Bonds Issued ....... 76 2342 New Housing Agency Bonds Retired ....... ( 1 77 235 1 Other Notes Payable to HLD /Deferred) ................. Contract Awards . Contra ......................... 791 1800 Less: Uncompleted Contracts ...................... FIXED LIABILITIES i CONTRACT AWARDS 781 1810 81 2810 Unreserved Surplus ................ (1,025,870) 80 TOTAL LIABILITIES SURPLUS 82 2820 Operating Reserve . Locally Owned Projects ... 83 2821 Operating Reserve . Leased Projects ....... 84 7-823 Operating Reserve. Homeownership Projects . . 85 2824 Operating Reserve - Section 23 HAP Projects . . 86 2825 Contingency Reserve - Unfunded Sect. 23 HAPProj. 87 2826 Operating Reserve . Section 8 HAP Projects ... 88 2827 Project Account-Unfunded-Sect.8HAPProjects . 622,176 89 j 29,811 Total Surplus from Operations (373,883) 406,995 ...................... 901 2840 Cumulative HUD Annual Contributions .................. 91’ 2850 Cumulative Donations .......................... .-( 19,W.U 92 2855 Cumulative Proceeds from Sale of Dwellings ............... 93 2856 Cumulative Contributions by Homebuyers for Property .......... 94 7,860 Book Value of Projects Conveyed by HUD ... 95 2870 Less: Contract Payments to HUD ........ c 1 96 2880 Development Cost . Undeveloped Projects ................ ( 1 97 2890 Book Vaiue of Capital Assets Con.veyed to Homebuyers ......... ( 1 __ 13, 172 ; 9s TOTAL SURPLUS AND LIABILITIES -PREPARE o 8 Y lsigmrurei APPROVED BY (Signorurel TITLE DATE TITLE DATE e 0 111. RECOMMENDATIONS . 0 e RECOMMENDATIONS FOR IMPROVEMENT IN ACCOUNTING AND REPORTING PROCEDURES AND MANAGEMENT PROCEDURES As part of our review, we made an evaluation of proce- dures followed in accounting, management and internal control. Not all weaknesses would have come to our attention because of the limited scope of our review. We make the following commeni and suggestions in the areas listed below: GENERAL We have noted that certain suggested improvements by the previous auditors and HUD representatives have been made. The5 changes will help in the administration and accounting for the continuing HUD programs, CONVERSION CHART OF ACCOUNTS The conversion chart of accounts does not show HUD accoun numbers adjacent to city account numbers. A revision should be made to show HUD account numbers. This is required by HUD and is most helpful for preparation of HUD reports and assistance in HUD audits. PREPARATION OF HUD YEAR END REPORTS HUD year end reports have been prepared on incorrect report forms. The finance department should prepare the annual report forms as they require an advanced expertise in accountinc theory. The annual report forms are due 20 days after the fisc; year end of June 30th and should be sent as per our instruction: for filing the June 30, 1979 annual report forms. The correct forms are as follows: e (Continued) -1- e 0 I i. , 1) Balance Sheet - HUD Form 52595 2) 3) Operating Statement - HUD Form 52682 Voucher For Payment of Annual Contributions - KUD Form 52681 The executive director of the Carlsbad Housing Authority should be familiar with the content of the report forms as he must approve them and they are an important management tool for the operation of the program. YEAR END CLOSING ENTRIES HUD year end closing entries are very complex, and are no The format of the entries should be retained The year end closing entries easily memorized. by the general ledger accountant. are shown in the attached schedule. BOOKING OF CONTRIBUTIONS Prepaid annual contributions received are incorrectly booked to a revenue account. they are prepaid by HUD and not earned as of the receipt date. HUD requires that these funds be booked to account 2210 - Prepai Annual Contributions. When funds are received from HUD, INTERNAL CONTROL A review of cash disbursement transactions indicated some payments to owners of leased dwellings were supported by a photc copy of the recurring monthly rent paid to owners schedule. The lower portion of the photocopy included the original approval fc the first month the schedule was used. A photocopy is an accep- table document for recurring payments of this nature, however, the approval cannot be part of the photocopy. Each month, (Continued) - 2- 0 0 t v the person responsible for approving the payments must date and sign the schedule indicating reapproval. ACCOUNTING PROCEDURE QUESTIONS The city does not have a current list of HUD personnel to contact regarding accounting questions. When questions arise as to the proper way to present financial information on HUD forms or the proper way to record a transaction, Ted Rivera, the Chief HUD Accountant should be called at (415) 556-7316 at the San Francisco Regional Office. He will answer your questions and refer you to the publication in which that answer could be founc Financial questions might also be referred to Roxie Goodman at the Assisted Housing Management Branch in Los Angeles. supply forms, publications, information and referrals as require She can BOOKING OF ADJUSTING JOURNAL ENTRIES The independent auditor's adjusting journal entries for Auditor's adjustments for a particular year June 30, 1978 were incorrectly booked into the accounts of the subsequent year. which are booked to the accounts of a subsequent year must not be booked to income and expense accounts, rather only to balance sheet accounts. The preferred way to have booked those journal entries and future journal entries would be to book all income and expense account entries to the unreserved surplus account. SUBSIDIARY ACCOUNT BALANCES Subsidiary account balances for accounts receivable - tenants and tenant security deposits are not reconciled to general ledger control on a regular basis. deposits have all been transferred to the owners of the units as The tenant security (Continued) -3- 0 a . * * of August 1, 1980. This was part of the relinquishment of managerial duties to the owners of the units. The accounts receivable from the tenants must be analyzed for uncollectible amounts and reconciled to the general ledger control account. CASH REQUIREMENTS Cash balances and required monthly cash data is not beinc submitted to HUD accompanying the HUD Form 52663 - Request for Partial Payment. The HUD letter of February 22, 1978 requestir and showing the required format should be referred to and this data should be submitted as instructed in that letter. - 4- c, tt -4 4 a a, k xxx X xx X x! Q .ri A a Q) c a5: .rl +Ja X F; X 30 X x0 0 !3k rdc, 0 m xi : i2E GI z cm &W z UH Zrn HO E+! 4 mv t-i xa FL? z L4 p: a4 w 2* C gi I gl g rdm b4 ul I t-i u +4 a Om rd a34 G4-J 3 I -4 0 ria A Gkn [4 fd*rl M E 3ddrd e ?Qk - k OaJQ - QII r\l c,m I Q o== Ea a,c T-rr a Gw * mo a0 rd rdu Ill a a, kkc, lJ7 krl -i--lom orbc hl urd "N uaa, 63 u &E a, -4 c uua, k h c c ccc -id ON -i+ 0 4 .ri *ri -?-I 0 lg a -iEi 444 EUk a ma, 3 .ri 3 !Jl wo 5: E a3 z QWc, r7 rdrl - v- h 4: - o=== h 7 .1 IIII OW 0000 U-iJ moww rna oriohl 0 a,a,a,a U.-l cccc 03 -1 -ri .ri -4 riririri E u \ a rio ii CD oom C ohlooo Or- orioori rim t- * 9 c + . IV. SUGGESTED RESPONSES TO HUD FINANCIAL FINDINGS c * 9 Y * z RESPONSES TO HUD FINANCIAL FINDINGS YOU should respond to the April 15, 1980 Financial Management Review by Roxie Goodman of the Los Angeles area office with the following statements: Finding # 1 - The Housing Authority has corrected the file copies of these forms to agree with the HUD findings. Cash on hand, invested cash and monthly cash need data will be submitted in the future in accordance with the HUD February 22, 1978 letter. Finding # 2 - A revised HUD Form 52681 is being prepared and submitted to HUD. Some numbers are different than the findings of HUD due to the results of a review of the detail prior to the preparation of the revised reports. cular differences were discussed with Roxie Goodman by telephon on or about June 16, 1980. These parti- Finding # 6 - Revised HUD Forms 52673 for June 30, 1979 an( 1980 are being prepared and will be submitted shortly.