Audit Report

Washington State Auditor’s Office

Financial Statements and Federal Single Audit Report






Housing Authority of the County of King
(King County Housing Authority)



Audit Period
July 1, 2007 through December 31, 2008


Report No. 1002161

Issue Date
September 28, 2009





Washington State Auditor
Brian Sonntag



September 28, 2009


Board of Commissioners
King County Housing Authority
Tukwila, Washington


Report on Financial Statements and Federal Single Audit

Please find attached our report on the King County Housing Authority’s financial statements and
compliance with federal laws and regulations.

We are issuing this report in order to provide information on the Housing Authority’s financial
condition.

Sincerely,

BRIAN SONNTAG, CGFM
STATE AUDITOR


Insurance Building, P.O. Box 40021  Olympia, Washington 98504-0021  (360) 902-0370  TDD Relay (800) 833-6388
FAX (360) 753-0646  http://www.sao.wa.gov
Table of Contents

King County Housing Authority
July 1, 2007 through December 31, 2008


Federal Summary ....................................................................................................................... 1
Independent Auditor’s Report on Internal Control over Financial Reporting and on
Compliance and Other Matters in Accordance with Government Auditing
Standards ........................ 3
Independent Auditor’s Report on Compliance with Requirements Applicable to each
Major Program and Internal Control over Compliance in Accordance with OMB
Circular A-133 ................................................................................................................. 5
Independent Auditor’s Report on Financial Statements ............................... 7
Financial Section ......................... 9



Federal Summary

King County Housing Authority
July 1, 2007 through December 31, 2008


The results of our audit of the King County Housing Authority are summarized below in
accordance with U.S. Office of Management and Budget Circular A-133.

FINANCIAL STATEMENTS

An unqualified opinion was issued on the financial statements of the business-type activities and
the aggregate discretely presented component units.

Internal Control Over Financial Reporting:

Significant Deficiencies: We reported no deficiencies in the design or operation of
internal control over financial reporting that we consider to be significant deficiencies.

Material Weaknesses: We identified no significant deficiencies that we consider to be
material weaknesses.

We noted no instances of noncompliance that were material to the financial statements of the
Housing Authority.

FEDERAL AWARDS

Internal Control Over Major Programs:

Significant Deficiencies: We reported no deficiencies in the design or operation of
internal control over major federal programs that we consider to be significant
deficiencies.

Material Weaknesses: We identified no significant deficiencies that we consider to be
material weaknesses.

We issued an unqualified opinion on the Housing Authority’s compliance with requirements
applicable to its major federal programs.

We reported no findings that are required to be disclosed under OMB Circular A-133.


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Washington State Auditor's Office
1
Identification of Major Programs:

The following were major programs during the period under audit:

CFDA No. Program Title

14.850 Public and Indian Housing
14.871 Housing Choice Vouchers
14.881 Moving to Work Demonstration Program

The dollar threshold used to distinguish between Type A and Type B programs, as prescribed
by OMB Circular A-133, was $3,000,000.

The Housing Authority qualified as a low-risk auditee under OMB Circular A-133.


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Washington State Auditor's Office
2
Independent Auditor’s Report on Internal
Control over Financial Reporting and on
Compliance and Other Matters in Accordance
with Government Auditing Standards

King County Housing Authority
July 1, 2008 through December 31, 2008


Board of Commissioners
King County Housing Authority
Tukwila, Washington


We have audited the financial statements of the business-type activities and the aggregate
discretely presented component units of the King County Housing Authority, King County,
Washington, as of and for the 18 months ended December 31, 2008, which collectively
comprise the Housing Authority‘s basic financial statements, and have issued our report thereon
dated September 4, 2009. Our report was modified to include a reference to other auditors.

We conducted our audit in accordance with auditing standards generally accepted in the United
States of America and the standards applicable to the financial audits contained in Government
Auditing Standards, issued by the Comptroller General of the United States. Other auditors
audited the financial statements of the discretely presented component units. Those financial
statements were not audited in accordance with Government Auditing Standards.

INTERNAL CONTROL OVER FINANCIAL REPORTING

In planning and performing our audit, we considered the Housing Authority’s internal control
over financial reporting as a basis for designing our auditing procedures for the purpose of
expressing our opinions on the financial statements, but not for the purpose of expressing an
opinion on the effectiveness of the Housing Authority’s internal control over financial reporting.
Accordingly, we do not express an opinion on the effectiveness of the Housing Authority’s
internal control over financial reporting.

A control deficiency exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent or detect misstatements on a timely basis. A significant deficiency is a control
deficiency, or combination of control deficiencies, that adversely affects the Housing Authority's
ability to initiate, authorize, record, process or report financial data reliably in accordance with
generally accepted accounting principles such that there is more than a remote likelihood that a
misstatement of the Housing Authority's financial statements that is more than inconsequential
will not be prevented or detected by the Housing Authority's internal control.

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Washington State Auditor's Office
3
A material weakness is a significant deficiency, or combination of significant deficiencies, that
results in more than a remote likelihood that a material misstatement of the financial statements
will not be prevented or detected by the entity’s internal control.

Our consideration of internal control over financial reporting was for the limited purpose
described in the first paragraph of this section and would not necessarily identify all deficiencies
in internal control that might be significant deficiencies or material weaknesses. We did not
identify any deficiencies in internal control over financial reporting that we consider to be
material weaknesses, as defined above.

COMPLIANCE AND OTHER MATTERS

As part of obtaining reasonable assurance about whether the Housing Authority’s financial
statements are free of material misstatement, we performed tests of the Housing Authority’s
compliance with certain provisions of laws, regulations, contracts and grant agreements,
noncompliance with which could have a direct and material effect on the determination of
financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit, and accordingly, we do not express such an
opinion.

The results of our tests disclosed no instances of noncompliance or other matters that are
required to be reported under Government Auditing Standards.

This report is intended for the information and use of management, the Board of
Commissioners, federal awarding agencies and pass-through enti