Eagle Pass Housing Authority Board approves 2013 Audit Report
By: Jose G. Landa, Copyright 2014, Eagle Pass Business Journal, Inc.
The Eagle Pass Housing Authority (EPHA) Board of Commissioners held their monthly regular monthly meeting on Tuesday, April 24, 2014, after an almost three months absence without a regular meeting, approving the EPHA’s Financial Statements and Audit for the 2012-2013 Fiscal Year ending June 30, 2013.
Roxie Samaniego, CPA and auditing partner for White, Samaniego and Campbell, LLP of El Paso, Texas presented the EPHA’s Financial Statements and Audit for 2012-2013 Fiscal Year ending June 30, 2013 to the Commissioners.
“Where I want to start is the independent auditor’s opinion letter. This audit does have an unqualified opinion, which is a clean opinion. We have no reservations regarding the financial statements. That is the best opinion that you as an entity can get. That is one of the first things that state and federal and local governments are going to look for,” said Samaniego.
Samaniego then discussed the EPHA’s financial statement and position and balance sheets, summarizing the EPHA working capital ratios.
“One of the things I look for is your working capital ratios, your current assets to your current liabilities. That means do we have enough in the next 12 months to pay what we owe in the next 12 months. In your case, you have eight (8) and a half times what you need to have to pay what is owed in the next 12 months. When we look at your total net assets it is at $8.6 million dollars. This number indicates net assets at the end of June 30 1013,” added Samaniego.
Samaniego then broke down the EPHA net assets as $5.6 million dollars invested into capital assets. “That is largely in part in building and equipment and land as well,” said Samaniego.
The EPHA unrestricted funds are at $2.6 million dollars in accordance to the independent auditors report. Those funds fall within the scope of the different programs that currently exist within the EPHA and its services. These funds are what usually are used to carry on the operations of the Eagle Pass Housing Authority. Restricted funds which are to be used for a particular purpose are currently at 4%.
Samaniego then went on to discuss revenue and expenses throughout the 2012-2013 fiscal year. “When you look at this report some of the large changes are from the Housing and Urban Development (HUD) operating grants. This is typically like that, as the biggest amount of funds are coming from HUD grants,” said Samaniego.
HUD funding through different grants accounted for 69% of the funding available for the operating year. The EPHA tenant revenue accounts for only 19% of revenues. Those are the two largest revenue generators for the EPHA.
“Capital grants are also dependent on the year and what can be accessed and those numbers can be large quantities. But for fiscal year 2013 there was a great decrease due to unavailability of those grants and their funds,” said Samaniego.
The funding was down $450,000 from the previous year. This was in part to cuts stemming from the federal sequestration caused by Congress. “Due to 2013 sequestration funding reductions and the total 2012 Congressional appropriations, the Authority’s operating subsidy provided by HUD for the Low Rent Housing Program was prorated to 81.865 for the calendar year 2013,” said Samaniego. Total expenses were up for the 2012-2013 fiscal year by $226,000 from the previous year.
Samaniego explained that some of the main issues in an increase in expenses were in part due to increase insurance rates and other operating increases such as maintenance to properties.
The overall net position for the EPHA was down $360,000 in 2013 a 4% decrease, when the previous year it was up $300,000 dollars.
Samaniego also discussed the EPHA single audit that must also be performed since the EPHA is a governmental entity that receives over $500,000 in funding from the government.
The first report was for the internal control in auditing government standards. This report had no deficiencies to be noted and reported on in the EPHA financial statements.
The second report was on major grant programs that are in use by the EPHA. This report was also found in compliance as no major issues were found to have to report to HUD on the grant programs that were checked.
Eagle Pass Housing Authority Chairperson Ana M. Gonzalez suddenly interrupted and asked Samaniego if she could touch basis on certain losses experienced by the EPHA. “We did have some losses, right ma’am attributed to several things that will be discussed during the executive portion of the meeting,” said Chairperson Gonzalez.
“I want to make sure that you exemplify this was all during the past Administration. The amount of money that she signified here, administration increased by $83,000, due mainly to an increase in administrative salaries and benefits. Those people are no longer getting that amount of money or no longer here. Then you have the general protection expenses (Police Department) of $62,251 and then you have the loss of monies done by the PHA’s as that was the time when the turnarounds was not conducted on a timely basis. There was a loss of between $45,000 to $47,000,” said Chairperson Gonzalez.
Gonzalez then stated that all of those losses were being signaled out in the 2012-2013 Audit reports.
EPHA Executive Director Mary Velasquez concurred with Gonzalez. “Another major decrease that I would like for you to be aware of is the decrease of $453,000 in the use of Capital Grant Awards. In that year we only used $266,000 in capital projects. So that was a substantial decrease,” said Velasquez. “They were not used?” asked Chairperson Gonzalez. Velasquez replied that it wasn’t that they were not used, it was just fewer projects were executed. “In comparison to 2011 there were $900,000 that were spent on capital projects used,” added Velasquez. “But that money is still good?” asked Chairperson Gonzalez.
“ Yes, it has been awarded by HUD, but it is not yet in our hands,” answered Velasquez.
Samaniego then asked if the Commissioners had any other questions.
“Yes, what have you heard as far as the voucher system. I talked to the lady who is in charge of Texas, Oklahoma, Arizona, blah blah blah and she said that there lot of changes coming about because the federal government will be lowering the amount of money given to these particular programs. Because their idea is too eventually let private companies come in and take over. They no longer want to sustain and expend money into these programs in the future. They don’t know yet how they are going to do it. Have you heard anything? asked Chairperson Gonzalez.
“Your insight is the same as what we have. Right now everyone is getting ready for trainings, following any new rules, newsletters all of that coming forward but nothing new to add to what you just have said,” said Samaniego.
Samaniego then touched basis on why the 2012-2013 was being presented at this time citing that the management changes and other situations coming from the changes was the reason why the Audit had been pushed back.
The EPHA 2013 Audit was required to be turned in to HUD’s REACT Office by no later than March 31, 2014 and since the EPHA Board of Commissioners had only approved it at the April 24th Board meeting, it will be considered as having been filed late with HUD’s REACT Office.
After a brief discussion the EPHA Board of Commissioners adjourned into executive session to discuss other issues pertaining to the 2012-2013 Audit report, in accordance to Executive Session pursuant to section 551.0712 of the Texas Government Code.
Upon returning into Open Session, a motion was made by EPHA Board Commissioner Pete Venegas to accept the 2012-2013 Audit and financial statements and accounting principles for 2012-2013 ending on June 30, 2013 as presented by White, Samaniego and Cambell, LLP, Independent Auditors. The motion was seconded by newly appointed EPHA Board Commissioner and Vice-Chariperson Rolando Salinas and approved unanimously by the Commissioners.
According to the Financial Statements and Audit of EPHA’s 2012-2013 Fiscal Year ending June 30, 2013 presented by Roxie Samaniego, CPA, does not state that the EPHA suffered any losses, but rather that they were decreases in revenues due to a decrease of federal funding from HUD as a result of sequestration by Congress of the federal budget and other funding decreases from the federal government (HUD) to Housing Assistance Programs.
