SHREWSBURY, Mass. – Although a state audit released on Friday identified the Shrewsbury Housing Authority as operating with reserves below recommended levels, Chairman of the Authority Richard Ricker the problem has since been fixed.
The audit found that the Shrewsbury Housing Authority's operating reserve, experiencing three years of decline, held a $12,688 negative balance in Fiscal Year 2010, $156,127 below its minimum level. This does not comply with state guidelines which require the agencies to retain at least 20 percent of its fiscal year budgeted expenditures in an operating reserve
"The negative balance was a result of a previous accounting error that caused us to spend money from the reserves," Ricker said. "We normally wouldn't do that."
Ricker said the authority has since switched accountants and brought up their reserves, by raising rents and with help from a small state grant. They also cut back on expenses and didn't do any capital improvements to the authority's properties last year.
"A correctly calculated operating reserve is not just an indicator of an entity's financial status," said State Auditor Suzanne Bump in her release of the audits. "Significantly underfunded operating reserves raise serious concerns about the authorities' ability to address emergency situations that arise."
Ricker noted that Shrewsbury's housing authority is one of only a few in the state which doesn't receive state funds.
"We're completely self-sufficient," Ricker said. "We don't get money from the state to cover operating costs."
Ricker said the housing authority is like any business in that it seeks to keep money in the reserves to cover emergencies, but sometimes it is not possible to save as operating costs increase.
"If an emergency had occurred, we wouldn't have been able to address it," Ricker said. "That's why we built up our reserves."