The director of the Wallingford Housing Authority in Connecticut is facing possible removal after a board-approved forensic audit that found irregularities in the WHA's financial records. According to the audit has taken longer than expected, partly because the auditors found glaring holes in the financial records. The report indicates that the WHA failed to make full use of its financial software's "general ledger" function, resulting in gaps of ledger activity in 2006 and 2007. When ledger information is missing, an investigating auditor has no choice but to suspect that someone is trying to hide something. Without that information, there may be no way to know for sure.
The WHA runs 317 rental units in low to moderate-income areas and has an annual budget of $1.5 million. Some of that money comes from state grants and federal assistance programs, which could mean criminal charges and possible removal of executive director, Stephen Nere, whose salary is $100,000 a year. He has been the WHA director for 26 years.
When I read this article it made me wonder if such a disaster could have been avoided if they had been using Microsoft Dynamics GP as their ERP system? Maybe not, because even with the best ERP systems, there is always room for human “error”. But Microsoft Dynamics GP does have strict GAAP compliant audit trailsthat make it easy to trace which entries are made by whom and when. And unlike some other systems, you cannot simply delete records from Microsoft Dynamics GP. A complete audit trail is kept showing the original record and the adjustment made.
If there is no activity in the general ledger that probably means someone chose not to use it. When receivables and payables were entered into the sub ledger they likely didn’t get posted all the way through to the General Ledger. Sounds fishy to me but I personally could not say why this would happen (although I guess the auditors in this case will find out.)
We recommend to our clients a tool called . This tool looks for entries that don’t balance between the sub ledger and the general ledger. So if the Wallingford Housing Authority had been using this tool, they would at least have been alerted to the problem earlier.
I have no idea what kind of accounting software the Wallingford Housing Authority uses. My guess is that it is some kind of complicated industry specific software or something designed for government/municipality needs. But is a great software solution for Housing Authorities.
This would not be the first time a company or government organization has faced the heat because of its inability to account for missing funds and other big problems with their financial records. With a good ERP system like Microsoft Dynamics GP, companies can often avoid an embarrassing and costly debacle.
If you are looking for a strong ERP system with strict audit controls,
By CAL Business Solutions,
