REPORT DIGEST

ILLINOIS HOUSING AUTHORITY, LLC

FINANCIAL AUDIT AND COMPLIANCE EXAMINATION
FOR THE YEAR ENDED: JUNE 30, 2012



Release Date:  December 20, 2012


Summary of Findings:
Total this audit: 3
Total last audit:  n/a
Repeated from last audit: n/a

State of Illinois, Office of the Auditor General
WILLIAM G. HOLLAND, AUDITOR GENERAL

To obtain a copy of the Report contact:
Office of the Auditor General, Iles Park Plaza, 740 E.
Ash Street, Springfield, IL 62703
(217)    782-6046 or TTY (888) 261-2887

This Report Digest and Full Report are also available on
the worldwide web at www.auditor.illinois.gov

INTRODUCTION

The Illinois Housing Authority, LLC was organized on
August 10, 2011 and is a component unit of the Illinois
Housing Development Authority, a body politic and
corporate of the State of Illinois.

SYNOPSIS

• The Illinois Housing Authority, LLC disclosed in their
June 30, 2012 financial statements that they did not
have a formal policy addressing custodial credit risk.

• The Illinois Housing Authority, LLC did not instruct
its property agent to transfer any excess funds related
to property operations into a bank account controlled by
or in the name of the LLC.

FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS

NO FORMAL POLICY ADDRESSING CUSTODIAL CREDIT RISK

The Illinois Housing Authority, LLC (LLC) disclosed in
their June 30, 2012 financial statements that they did
not have a formal policy addressing custodial credit
risk.

The LLC’s financial statements are prepared in
accordance with generally accepted accounting principles
(principles). The Governmental Accounting Standards
Board (GASB) established those principles.  GASB
Statement No. 40, Deposit and Investment Risk
Disclosures, requires disclosure information regarding
deposits and investments that are subject to various
risks, with custodial credit risk  being one of those
risks.  (Finding 1, Page 9)

We recommended that the LLC develop a formal policy to
address custodial credit risk as it relates to cash
balances and investments.

LLC management concurred with the recommendation.

NEED TO TRANSFER EXCESS FUNDS

The Illinois Housing Authority, LLC (LLC) did not
instruct its property agent to transfer any excess funds
related to property operations into a bank account
controlled by or in the name of the LLC.

During our audit of the LLC, we noted that their
property agent was managing three bank accounts on
behalf of the LLC.  These three bank accounts had a
total balance of $1,073,000 as of June 30, 2012.  None
of these bank accounts were in the name of the LLC and
none of them were in interest bearing accounts.  There
was not a process or procedure to instruct the property
agent to transfer any excess funds that were not
required to operate the property to an account
controlled by or in the name of the LLC. (Finding 2,
Page 10)

We recommended that the LLC implement procedures to
ensure any excess funds are transferred to the LLC to a
bank account in their name.

LLC management concurred with the recommendation and
stated that they will create procedures that will allow
it to track property cash flows and instruct as
necessary, the agent to transfer any excess funds not
required for use by the property to a bank account
controlled by the LLC.

OTHER FINDING

The remaining finding is reportedly being given
attention by the LLC.  We will review the LLC’s progress
towards the implementation of our recommendations in our
next engagement.

AUDITORS’ OPINION

Our auditors state the June 30, 2012 financial
statements of the Illinois Housing Authority, LLC are
presented fairly in all material respects.

WILLIAM G. HOLLAND
Auditor General

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SPECIAL ASSISTANT AUDITORS

McGladrey LLP was our Special Assistant Auditors for
this engagement.