State Audits Authority

A recent audit by the New York State comptroller’s office of the East Hampton Housing Authority, covering 2015 and part of 2016, is critical of a number of the authority’s financial practices and calls for  better oversight and tighter controls.

The housing authority is an autonomous agency created under state law. Its 2015 operating expenses were $745,802. The authority manages three affordable housing complexes with a total of 93 units in East Hampton Town — the Accabonac and Springs-Fireplace Apartments in East Hampton and the Avallone Apartments in Montauk. A new project in Amagansett with 40 units is planned.

While the authority’s funding comes primarily from the Department of Housing and Urban Development as well as from rents, the agency often works hand in hand with the East Hampton Town Housing Department.

In a March 10 letter in response to the audit, Arthur Goldman, the chairman of the Housing Authority’s board of directors, said the board would meet to discuss each item in the auditors’ report, and that a corrective plan for increasing security and oversight and improving recordkeeping would be submitted to the comptroller within 45 days.

Among the issues cited in the comptroller’s report were a failure to separate responsibility for cash receipt, cash disbursement, and bank reconciliation, a lack of consistent review of transactions in the authority’s various bank accounts, and a practice of keeping signed blank checks on hand for use in emergencies. While the checks issued, auditors said, “all appeared to be for appropriate authority purposes,” having them on hand “increases the risk of unauthorized payments.”