Determine whether the Board of Commissioners (Board) and Executive Director (Director) provided adequate oversight of Binghamton Housing Authority (Authority) financial operations.
The Board and Director did not provide adequate oversight of financial operations. The Board did not adopt written policies and the Director did not develop proper internal controls over cash disbursements and electronic payments or financial system user access. As a result:
- Job duties were either not properly separated or not adequately separated for rent receipts and cash disbursements.
- Payments totaling approximately $152,000 (22 percent) of what we tested were not approved by anyone other than the employee initiating the charge.
- Financial system user access was not properly administered; all nine users had access to all of the financial modules in the system. Therefore, a user could make unauthorized changes to cover inappropriate transactions without detection.
- Errors or irregularities could occur and remain undetected and uncorrected.
- Develop adequate internal controls and separate job duties or implement compensating controls.
- Assign financial system user access rights based on job duties.
Officials generally agreed with our recommendations and have initiated corrective action.