The Office of the State auditor has released its report on the Wellesley Housing Authority (WHA) and it was not impressed with the WHA‘s record keeping from January 1, 2014 through December 31, 2016. The State also said that regarding inventory, they extended the audit into May 2017.
The State listed findings related to administrative expenses; annual unit inspections; tenant eligibility; applicant waiting lists; procurement of goods and services; board governance; inventory of fixed assets; compliance with applicable reporting requirements; and the Authority’s management agreement with the Needham Housing Authority. It also put forth recommendations. Once the State made the Town aware of the findings, Wellesley was given the opportunity to respond. From there, the State responded to the Town. It all makes for some lively reading of the “you say this, I say that” variety.
Here are the six findings and the recommendations:
1: Deficiencies in the Wellesley Housing Authority’s inventory process resulted in unaccounted-for assets
Specifically the State says the WHA didn’t maintain a complete and up-to-date list of its inventory of refrigerators and ranges, conduct an annual inventory of these assets, or ensure that all information on its inventory list regarding these assets was complete and accurate. The report says, “The lack of a complete and up-to-date inventory list creates an undue risk of undetected loss, theft, or misuse and could result in inaccurate asset values in the Authority’s accounting records.”
Unsurprisingly, the State recommends that the WHA’s formal written policies and procedures be updated and an inventory of all ranges and refrigerators be conducted.
In its response, Wellesley said the system broke down when two former employees did not follow protocol for ordering and receiving appliances. The State stuck by its finding saying that “…the Authority’s inventory policy is deficient and should be updated to identify the staff member/s who will be responsible for monitoring the inventory process and performing year-end reconciliations of inventory records.”
2: The Wellesley Housing Authority did not properly administer the procurement of $113,206 of appliances and water heaters.
During the audit period, the WHA purchased refrigerators, ranges, and water heaters totaling $113,206 without using a competitive procurement process. The State says that as a result, the WHA may have spent more than necessary for these items.
Once again, the State recommended that the WHA update its formal written procurement policies and procedures, which require it to use competitive procurement, as far as possible, for goods and services.
Wellesley pushed back on this one saying, “We respectfully disagree with this finding for a couple of reasons. In January of 2016, [the] Facilities and Modernization Director . . . undertook an exercise to obtain quotes from various vendors for refrigerator purchases. He successfully obtained quotes from Sears ($529.99 per unit), Frigidaire ($579.00 per unit) and Jarvis Appliances ($478.00 per unit). The quote offered by Jarvis Appliance was the lowest we obtained. Jarvis is a local appliance dealer and the Housing Authority has done business with them for some time now due to their low prices and very good customer service. Additionally, we are not certain on a year-to-year basis how many refrigerators, stoves, or water heaters we require as it varies considerably. WHA does not have adequate storage space to carry out a bulk order. We need to do these orders on an as needed basis. With respect to water heaters, these get replaced usually on an emergency basis. It simply is not practical to perform procurement in emergency situations; and indeed public entities are allowed to respond to emergency situations to safeguard resident or public safety or well being without adherence to the procurement policy.”
The State, however, was intractable in its demands for documentation and updated procurement policies and basically accused the WHA of poor planning saying, “Although the Authority asserts that it is not certain from year to year how many refrigerators, stoves, or water heaters it will require…it prepares an annual budget that identifies a specific amount of money it has for purchasing these items. In its budgets during our audit period, the Authority anticipated significant appliance and water heater expenses during each fiscal year. The Authority exceeded its budgeted estimates [Read more…]