Financial Mismanagement Uncovered in Audit of the Weymouth Housing Authority
BOSTON, MA — An audit of the Weymouth Housing Authority issued by State Auditor Suzanne Bump today revealed the past administration’s numerous poor financial management practices.
“When taken together, the many faults we uncovered call into question the previous Authority’s ability to properly manage resources to benefit the lives of the residents they serve,” said Auditor Bump. “The current administration has been cooperative with our audit process and is using our findings to improve its operations.”
Areas of criticism included board oversight, credit card use, relationships with related non-profits, vacancy turnover and rent collection, excessive payments to a tenant association, and more. For example:
- The Authority’s Board of Commissioners is supposed to approve all expenditures to ensure money is spent properly and accurately, but for three months the Authority’s expenditures exceeded amounts authorized by its board by $224,980. The Authority does not require any written approval from the board to make expenditures beyond what is approved, and totals of expenditures approved by the board were kept in pencil and could easily be changed. These policies give little assurance that board members actually approved all payments.
- The Authority lacks a policy to regulate credit card use. Of the 268 credit card transactions sampled by auditors, approximately 75% were missing documentation justifying their business nature, totaling $53,906 in unsupported purchases.
- Auditor Bump questioned the Authority’s relationship with the South Suburban Affordable Housing, Inc. (SSAHI), a related non-profit with an established purpose of preserving and producing affordable housing in the Town of Weymouth. Leadership for the SSAHI during the audit period was comprised of the Authority’s former executive director and two Authority board members, but it has no paid employees. Interviews conducted during the audit found that Authority staff spent significant time working for the non-profit while being paid by the Authority. Additionally, the Authority provided office space, equipment, and access to telephones to the SSAHI without an agreement for cost reimbursement. Auditor Bump recommended that the Authority consult with the Department of Housing and Community Development on methods for handling cost reimbursements for these services.
- A prior audit from 2009 criticized the Authority’s vacancy turnover and rent collection procedures. For example, the Authority took, on average, 63 days to re-rent units. State guidelines call for a maximum 21-day turnover rate. Today’s audit showed that the Authority took an average of 131 days to prepare vacant units for occupancy, resulting in a lost opportunity to earn potential rental income. The Authority’s rent collection procedures also were highlighted in today’s audit. Nearly $100,000 in rent from vacated tenants has not been collected, and the Authority lacks a policy for refunding money to vacated tenants who left with a positive balance.
- The audit also revealed that the Authority made excessive payments to a tenant association. The maximum yearly amount that the Authority is allowed to give the tenants association under state guidelines is $567, but from 2007 through 2010 the Authority paid an average of $30,195 per year, totaling $120,779. Auditors found that these funds were used in part to furnish and operate a computer room at the Lake Manor apartment complex. Auditor Bump suggested that the overpayment of $118,511 to the tenants association could have been better utilized for needed maintenance of vacant units.
Other findings included in today’s audit of the Weymouth Housing Authority included:
- Procurement of goods without soliciting competitive bids
- Noncompliance with the state sanitary code
- Improper management of modernization contracts
- Structural deficiencies in the Authority’s administrative offices
- Poor management of employee timesheets
- Inadequate security procedures for tenant and employee information.
Auditor Bump has called on the Weymouth Housing Authority to update its policies and procedures to comply with state regulations and thereby enable it to better provide affordable, decent, safe, and healthy housing to citizens of Weymouth. The Authority has responded positively to all findings and is pursuing implementation of all of Auditor Bump’s recommendations.
Audit Report: Weymouth Housing Authority