Kingsville Housing Authority

According to PHA Accounting Brief #14 Due To/Due From relationships should not be reported under accrual accounting simply from the result of a PHA using a common checking or working capital account. Because of the basic nature of most Federal and state programs, resources from one program cannot be used to support the costs of another program. HUD views Due To’s and Due From’s reported in a PHA’s Federal programs as possible indicators of non-compliance.The Authority has interfund receivables and payables that have not been repaid as of fiscal year end. This results in certain programs having a negative cash balance as of fiscal year end. The Authority reported a material ($1,720,758 in total, $454,155 in HCV program) amount of interfund receivables and payables, which is a significant red flag for HUD reviewers. The Authority was not effectively monitoring and managing interfund program balances in order to ensure that programs were not spending funds that they do not have. The use of Due to/ Due From transactions reported in the Authority's financials net to some programs having negative cash balances, which could signify to HUD that one or more programs have used resources to cover the costs of another program. The Housing Authority should expand it's controls over cash reconciliations to include a step to verify if a program, fund or component unit is accurate along with the entire cash pool. Also interfund should be repaid monthly at a minimum. Management agrees with the finding, see Management's Corrective Action Plan.