2018 LHA AUDIT

MANAGEMENT STATEMENT

We have provided a copy of our audit report dated July 2, 2019, for the year ended December 31, 2018, which was audited by Eide Bailly, LLP. In addition to the audit report, we have also provided the readers with some additional details that relate to our financial statements. This document is intended to provide additional detailed narrative regarding the operations of the agency in 2018.  This narrative was prepared by Lori Mora, Chief Executive Office and the audits were approved by the Board of Directors on July 16, 2019.

 

  • In 2018 the LHA received additional funding for the Housing Choice Voucher Program from HUD-Held Reserves totaling $141,366; thus, increasing the restricted cash at year end.  These funds were not fully expended in 2018 and thus recaptured by HUD in mid-2019. 

  • In 2017 the LHA received a substantial developer’s fee from the rehabilitation of the Suites Supportive Housing community. Consequently, in 2018 operating revenues decreased by $1,259,652 because those funds were recorded in 2017, not 2018. 

  • Our 2018 audit shows that operating expenses increased by $873,913 as compared to 2017.  The increase was due to an increase in administrative salaries and other administrative expenses as compared to the prior year.  This increase is due, in large part, to shifting allocations as delineated below:

    • In 2017 the LHA had development projects underway which allowed for some salary expense to be allocated to the Longmont Housing Development Corporation. In 2018, those projects were either completed or in construction phase and no longer required development oversight. Consequently, that salary expense was allocated directly to the Authority in 2018 instead of to the development organization.

    • In 2018 the Authority transitioned staff. During the process an interim executive director was contracted.  This expense was non-recurring and recorded as administrative salary in 2018. 

    • In 2018 GASB Statement No. 75 was instituted which requires the Authority to account for and report the agency’s proportionate share of the other post-employment health care benefit.  The reflection of this requirement is recorded as administrative salary.

    • Additional non-reoccurring expenses included the use of staffing agencies to fulfil ongoing and temporary staffing needs. These expenses are non-recurring and recorded as other administrative expenses.

    • The Suites Apartments LLLP is a permanent supportive housing community. Per the Tenant Services Agreement implemented on September 5, 2018, Agreed Services at the property are the responsibility of the Authority.  The Partnership may reimburse for the costs incurred by the Authority for these services at year-end solely from cash flow.  At the end of 2018 the property did not cash flow positively; therefore, expenses were not reimbursed to the Authority.  Agreed Services expenses are recorded as administrative expenses.

    • In 2018, the Authority required legal services to respond to various issues. Legal services were expensed to other administrative expenses.

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