By GABRIELLA DRAGONE
PATERSON, NJ – The Independent Audit Report for the Paterson Housing Authority’s fiscal year ending March 31, 2021, was approved by the Board of Commissions last month. The findings show a positive result for the Housing Authority.
“I was extremely satisfied to inherit an audit yielding positive results,” Paula Alford, who took over as chair of the Paterson Housing Authority’s Board of Commissioners in February said. “The PHA is a financially strong agency, according to the audit, and I am excited about what’s to come.”
The auditor conducted three types of audits, one on the Authority’s financial statements, one in accordance with government auditing standards and also a uniform guidance audit. The first audit represents if the Authority presents fairly their financial position. The auditors gave an unmodified opinion on the financial statements, which is the highest level of assurance that an auditor can give, saying that the financial statements present fairly in accordance with generally accepted accounting principles.
“So that was a positive outcome,” Richard Larsen, the auditor said. “All these audits are required by law because the Paterson Housing Authority incurred expenses in excess of $750,000 of federal money. That’s why we have these types of audits.”
During the fiscal year, the Authority spent an excess of $36.5 million of federal expenditures, which is why the Authority has three types of audits.
The second audit that is in accordance with government auditing standards required the auditors to document and test the internal control structure over financial reporting, or what the processes are the Authority has in place to safeguard the authority assets.
“We document how they process cash disbursements, cash receipts, are they following procurement rules and regulations in the State of New Jersey, how they process payroll and things like that,” Larsen said. “We test those processes, and we’re looking for weaknesses in those systems.”
A weakness could be where someone may have overridden a control and done something, or releasing a check where it shouldn’t have been released. Luckily, the auditor did not identify any of those deficiencies in internal control that they consider to be a material weakness. Another positive outcome.
The last audit, in accordance with the uniform guidance, is one in which the Authority’s compliance with laws and regulations that relate to their major federal programs at the Authority is tested.
“When you receive federal grants and subsidies, there are a lot of compliance requirements that come along with those funds,” Larsen said. “So, we’re testing to make sure that the Authority is following those rules and regulations, and they’re maintaining compliance with all those rules and regulations.”
The program that was tested was the Housing Choice Voucher Program, and it was discovered that the Authority and the program is being operated within the Authority’s financial means. The audit also showed that the Authority has very strong liquidity, meaning that they are able to pay their bills on time.
“They [the Authority] have very strong financial statements,” Larsen said. “They’ve done a nice job of cleaning up findings in the past and have done a real nice job addressing those issues and fixing them.”
“The findings of these audits are a credit to the entire team at the Paterson Housing Authority,” Irma Gorham, PHA’s Executive Director said. “They also show that the members of the Board of Commissioners are exceeding the critical responsibility placed in them to make sure our finances, the public’s dollars, are spent wisely.”