Schroeder’s BMHA plan more than just an audit

bmhaProposal would set up continuous, objective auditing function at troubled agency

Buffalo Comptroller Mark Schroeder’s plan to restore public confidence in the Buffalo Municipal Housing Authority includes the implementation of a continuous auditing function performed by a qualified, independent and objective firm.

“Let’s be clear – the housing authority is not going to fix itself.  The elected officials in our city need to step up and make this agency accountable to taxpayers and public housing residents,” said Schroeder.  “I have a plan to do it, which will ultimately reduce costs and increase revenue at the B.M.H.A.”

After a qualified firm of Certified Public Accountants is selected through a public bidding process, Schroeder said the outside auditors would perform a risk assessment that would guide their future audit reports.

“The auditors would identify the highest risk areas and conduct two or three targeted audits per year,” Schroeder said.  “My staff would work closely with them throughout the process.  But we can’t wait around – there has been no internal audit function at the agency for the past six years.  We are starting from scratch, so we need to hit the ground running.”

Schroeder said many public entities hire firms to assist with internal auditing.  It’s a cost effective approach because it uses highly qualified and experienced auditors on a year-round – but not full-time – basis.

“Even more importantly, it brings in an objective and independent set of eyes – people that are not employed by the organization that they are auditing,” said Schroeder.

The comptroller said he was encouraged to hear that Common Council President Darius Pridgen supports the idea.  Schroeder said that he agrees with Pridgen that the housing authority should pay for the cost of the outside auditors.

“While we may not have direct control over the housing authority, as elected officials we must use our influence and any powers given to us by the city charter to bring accountability to public housing.  The B.M.H.A. board doesn’t answer to the people – but we do.”

The one person with the most influence over the B.M.H.A. board, Mayor Byron Brown – who appoints the majority of its members – has not responded to a letter Schroeder wrote him proposing the idea.  However, Brown has publicly used the existence of a one-time, soon-to-be-released audit by the federal government as a reason to withhold support for Schroeder’s proposal. 

“Audit reports by the Department of Housing and Urban Development tend to be narrow in focus, looking at certain programs and the use of federal funds, not necessarily the same areas our plan would target,” said Schroeder.  “It has been reported that H.U.D. Inspector General’s audit could be released soon, so we will certainly use it as a resource.  But my plan would be based on financial risk, and will review all expenditures and revenue at the agency.”

Schroeder said the audit will more than pay for itself by improving controls at the housing authority.

  “From purchasing to payroll, these audits will create savings, as well as boost revenue, on an on-going basis,” he said.  “That means more money to improve conditions at Buffalo’s public housing developments.”

Schroeder has had success with similar initiatives as the city’s fiscal watchdog.

“We hired a firm to help us with a street light and electricity audit, and it ended up yielding a million-dollar refund from National Grid,” he said.  “We won’t know what we will find at the housing authority until we begin this process. But for an agency with a nearly $40 million budget, I guarantee you we will find something.”

Schroeder’s proposal will be discussed at the Common Council’s finance committee on Tuesday, September 11, at 10 a.m. in the council chambers at City Hall.