Finding Text
Finding 2025-006: Financial Condition Public Housing Program, Assistance Listing #14.850 Material Weakness Criteria: The Public Housing Program has limited revenue resources, and the financial condition should be monitored closely to ensure the Agency can continue to operate in an effective and efficient manner. Condition: During our audit for the year ended September 30, 2025, we noted the Agency continues to report an operating loss from operations before the recording of depreciation. Below is a table that depicts the loss during the respective years. This table does not include any funds used for operations from the capital funds: Year Ended 9/30/25 $ (32,739) Year Ended 9/30/24 $ (41,946) Year Ended 9/30/23 $ 96,094 Year Ended 9/30/22 $ 122,181 Unrestricted net position represents the amount available to be used to meet the Agency’s ongoing obligations to creditors, requirements for cash outlays in the next fiscal year as well as the financial capacity to sustain operations. Below is a table that depicts the changes in the unrestricted net position during the respective years: Unrestricted Net Position as of 9/30/25 $ 31,511 Unrestricted Net Position as of 9/30/24 $ 88,304 Unrestricted Net Position as of 9/30/23 $ 196,775 Unrestricted Net Position as of 9/30/22 $ 174,793 Cause: The Agency is incurring operating and capital costs that exceed the resources available, which is not conducive to sound fiscal policy. Effect or Potential Effect: The effect of this could result in the future declining financial condition of the Agency and could jeopardize the financial viability of the Housing Agency after this year if the expenses continue to exceed revenues as indicated previously. Recommendation: We recommend the Agency review the operating expenses and determine which areas could be reduced. In addition, the Board should take a proactive role in monitoring the financial condition of the Agency. The Board should refrain from approving a budget deficit and should be approved based on available financial resources. View of Responsible Official: Management agrees with the Finding.