REPORT DIGEST ILLINOIS HOUSING DEVELOPMENT AUTHORITY FINANCIAL AUDIT FOR THE YEAR ENDED: JUNE 30, 2012 Release Date:  December 20, 2012 Summary of Findings: Total this audit: 1 Total last audit:  3 Repeated from last audit: 1 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 SYNOPSIS • The Authority has loan balances in the multi-family program recorded in their financial statements that should be removed due to the loans being uncollectible. FINDINGS, CONCLUSIONS, AND RECOMMENDATIONS LOAN RECEIVABLE ALLOWANCE FOR LOAN LOSS BALANCES OVERSTATED The Illinois Housing Development Authority (Authority) has loan balances in the multi-family program recorded in their financial statements that should be removed due to the loans being uncollectible. During our audit of the Authority’s allowance for loan loss estimate, we noted 36 loans totaling approximately $7.4 million were recorded on the Authority’s financial statements for which a 100% allowance reserve was recorded.  The Authority anticipates that most of these loans will ultimately be written off. (Finding 1, Page 71) This finding was first reported in 2008. We recommended that the Authority work with the Attorney General’s Office to get approval to write-off the uncollectible loan balances. Authority officials concurred with the recommendation and stated that they have instituted regular meetings between staff in the Legal, Accounting, Loan & Portfolio Management and Multifamily departments to collaboratively review the documents required for a write-off request submission to the Attorney General’s Office.  Authority management believes this additional level of monitoring will assist the Authority in attaining a higher rate of approval on first time submission requests. (For the previous Authority response, see Digest footnote #1.) AUDITORS’ OPINION Our auditors state the June 30, 2012 financial statements of the Illinois Housing Development Authority are presented fairly in all material respects. WILLIAM G. HOLLAND Auditor General WGH:TLK:rt SPECIAL ASSISTANT AUDITORS McGladrey LLP were our Special Assistant Auditors for this engagement. DIGEST FOOTNOTES  #1 –Loan Receivable Balance and Allowance for Loan Loss  Balance Overstated – Previous Authority Response The Authority concurs with the recommendation and continues to work with the Attorney General’s Office to acquire timely approvals of submitted loan writeoff requests. The Authority has established contact with the Chief Litigation Officer responsible for approving such requests and continues to work with the office to provide additional information if requested in order for approval to be granted for writeoff of uncollectible amounts. Based on the timelines provided to us by the Attorney General’s office for reviewing and approving such requests the Authority believes that the process for approval will prove to be more efficient so that uncollectible loan balances can be written off in a timely manner.