Housing Authorities
Entity Determination in Accordance with GASB Statement 14
Prepared by Georgia Department of Audits and Accounts

Entity:  Housing Authority

A Housing Authority should be reported as a related organization and should be disclosed as such in the notes because the Authority is legally separate, the primary government appoints a voting majority of the Authorities board, there is no indication that the city or county can impose its will on the Authority, and the Authority does not provide a financial benefit to, or impose a financial burden on, the primary government.

Basis for Conclusion

1.  Is the entity legally separate?
An organization has separate legal standing if it is created as a body corporate or a body corporate and politic, or if it otherwise possesses the corporate powers that would distinguish it as being legally separate from the primary government.  Generally, corporate powers give an organization the capacity to have a name; the right to sue and be sued in its own name without recourse to a state or local governmental unit; and the right to buy, sell, lease, and mortgage property in its own name.
Housing authorities were created by legislative act in each city and each county as a public body corporate and politic [OCGA 8-3-4 & 8-3-30].  The authorities are " activated" by action of the city or county governing body.  They are created for the purpose of providing safe and sanitary dwelling accommodations for persons of low income.


 Housing Authorities are legally separate.

2.  Does the primary government appoint a voting majority of the entity's board?
If a primary government appoints a simple majority of the organization's governing board, it usually has a voting majority unless financial decisions require the approval of more than a simple majority.  The primary government's appointment authority should be substantive.   In most instances, legal provisions for appointment of an organization's officials also provide for continuing appointment authority.  However, in the absence of continuing appointment authority, the ability of a primary government to unilaterally abolish an organization also provides the basis for ongoing accountability.
The mayor or governing body appoints the commissioners of the authority, which consist of at least one "resident" commissioner [OCGA 8-3-50].
 Municipality or county appoints a voting majority of the authority's board.

3.  Is the primary government able to impose its will on the entity?

A primary government has the ability to impose its will on an organization if it can significantly influence the programs, projects, activities, or level of services performed or provided by the organization.  The existence of any one of the following conditions clearly indicates that a primary government has the ability to impose its will on an organization:
a.  the ability to remove appointed members of the organization's governing board at will;
b.  the ability to modify or approve the budget of the organization;
c.  the ability to modify or approve rate or fee changes affecting revenues;
d.  the ability to veto, overrule, or modify the decisions (other than those in b and c) of the organization's governing body;
e.  the ability to appoint, hire, reassign, or dismiss those persons responsible for the day-to-day operations (management) of the organization.
There is no evidence that the city or county can influence or control the operations and decisions of the authority.  The authority does not operate for profit and the statutes do not entitle the authority to receive financial assistance from the city or county.
Other items in the statutes indicate that the authority operates independently and without imposition of will by the municipal corporation as outlined in GASB 2100.125:
The authority has the powers necessary to prepare, carry out, acquire, lease, and operate housing projects; to sue and be sued; to incorporate one or more nonprofit corporations as subsidiary corporations of the authority; and generally, to carry out and effectuate the purposes and provisions of the laws creating the authorities [OCGA 8-3-30].
The authority may employ a secretary, technical experts, and such other officers, agents, and employees, permanent and temporary, as it may require; and it may determine their qualifications, duties, and compensations [OCGA 8-3-51 (c)].
Commissioners may only be removed by the governing body of the city or county for inefficiency or neglect of duty or misconduct in office [OCGA 8-3-53].


 Municipal corporations are not able to impose their will on the authority.
4.  Is there a financial benefit/burden relationship?
If a primary government appoints a voting majority of an organization's officials and there is a potential for that organization either to provide specific financial benefits to or to impose specific financial burdens on the primary government, the primary government is financially accountable for that organization.  An organization has a financial benefit or burden relationship with the primary government if any one of these conditions exists:
1.   The primary government is legally entitled to or can otherwise access the organization's resources.
2.   The primary government is legally obligated or has otherwise assumed the obligation to finance the deficits of, or provide financial support to, the organization.
3.   The primary government is obligated in some manner for the debt of the organization.
There is nothing in the statutes that would create a financial benefit or burden between the authority and municipal corporation.
OCGA 8-3-30 (a)(10) provides for the assets of any subsidiary corporation of the authority to revert to the city or the county, as applicable, upon dissolution of the subsidiary corporation (failing reversion to the authority or to any successor to the authority).  However, "a residual interest in the net assets of an organizaiton in the event of dissolution is not equivalent to being entitled to its resources" [GASB 2100.128].
Debts of the authority are not concidered debts of the city/county [OCGA 8-3-71].


 A financial benefit/burden relationship does not exist.
Based on the above conclusions the Housing Authorities are related organizations [GASB 2600.131] and should be disclosed as such in the notes.  The city/county appoints the authority's governing board but is not financially accountable for the authority.  There is no indication that the city/county can impose its will on the authority.  Removal of the authority's commissioners is not at the discretion of the city/county; they can only be removed for just cause.  The city/county is not entitled to receive profits or income from the authority and is not obligated for its debts.