DALLAS, TX - The auditing firm that gave the Dallas Housing Authority a clean bill of financial health, after others found serious deficiencies, has been disciplined by regulators and criticized by the federal government for its auditing work. The Alabama State Board of Public Accountancy investigated Yeager & Boyd LLP, and in August reached a settlement with firm partner Robert Boyd. In it, he agreed to make "improvements in his policies and procedures for auditing housing authority clients."
The Alabama investigation stemmed from a 66-page report by the U.S. Department of Housing and Urban Development that said the firm failed to meet professional auditing standards. That report was based on reviews of Yeager & Boyd audits of housing agencies in places including Detroit; Cook County, Ill.; and Gary, Ind. The president and CEO of the Dallas Housing Authority said she had been unaware of the Alabama disciplinary action or the critical HUD report before she was asked about it by a reporter last week.
Ann Lott said Friday she plans to discuss the matter with the agency's board of commissioners. "I've got to make sure there's nothing about this that would cast any cloud on their credibility," Ms. Lott said of Birmingham-based Yeager & Boyd. She said she was pleased with the firm's work because of its understanding of housing authorities. Mr. Boyd said Friday he disputes HUD's findings and can disprove them. He said he signed the settlement with the state of Alabama to confirm what the firm already does: strive to improve its procedures and send staff to continuing education courses. The settlement also included a $1,100 payment to cover the state board's administrative costs.
The DHA hired Yeager & Boyd to audit its 2006 books following three years of independent audits by multinational firms Grant Thornton and KPMG. Those firms found recurring problems, including inaccurate bookkeeping, inadequate documentation and a lack of safeguards to prevent mistakes or fraud. Yeager & Boyd's audit, released within weeks of the firm's Alabama settlement, found that DHA had dramatically improved.
Concerns over the 2005 independent audit nearly led to the termination of Ms. Lott's employment contract. Most recently, Mayor Tom Leppert has given Ms. Lott until June to fix accounting problems at DHA cited in a separate, federal audit. Mr. Leppert appoints the agency's five-member board, which hires the director. HUD provides most of the funding for the Dallas Housing Authority, which has an annual budget of more than $250 million and provides affordable housing to about 60,000 area residents. The housing authority paid Yeager & Boyd $217,000 to conduct the 2006 annual audit. The firm's contract also includes work on the upcoming 2007 audit.
Yeager & Boyd has 25 years of experience auditing public housing authorities, according to its bid proposal to DHA. The firm said it performs at least 65 audits a year and 90 percent of them involve public housing authorities. Those include the housing authorities in Maricopa County, Ariz.; Mobile, Ala.; and Chattanooga, Tenn. But the firm's work raised concerns at HUD. The federal agency sent its report to the Alabama State Board of Public Accountancy, which opened an investigation in October 2006. "We generally found that they were not adhering to generally accepted accounting practices," HUD spokesman Brian Sullivan said.
HUD's report, which examined several Yeager & Boyd audits of public housing authorities, stated that the firm did not adequately look for fraud in an audit and failed to check whether programs were in compliance with HUD requirements. It also stated the firm took shortcuts in planning and conducting an audit. Mr. Boyd said his firm sent a response to HUD that disproved the findings. He said his firm's documents show that aud
Source: Dallas Morning News