CORRECTIVE ACTION PLAN March 21, 2013

Our Response to Recommendations 1-7 will be given in the same order and so identified. 1. Since all expenses were approved under the existing TRAVEL POLICY (attached as Exhibit A) which requires that such be authorized by the Executive Director, recorded and signed by the traveler, Executive Director, Chairman or Vice-Chairman of the Board (in cases where one or more of these officers is also a traveler, the practice has been to have one of the other non-traveling officers sign off on it), there was no violation of this policy and no reason to ask any individuals to reimburse the Authority for any funds expended under it. All of our policies are subject to HUD review and approval. In response to the suggestion that we strengthen the travel policy, however, we have instituted a pre-approval form (application for funding) stating the purpose, dates and projected costs of travel, to be authorized by one of the listed Agency or Board Officers, or (supposing a case where all those listed under the policy are involved) by another, non-traveling Board member. The same form then doubles as a post-travel approval form with the appropriate Board Officer/administrator authorization. In our exit interview the auditors mentioned that the absence of such a form was the main reason for designating that particular set of expenses as questionable. Now that we have adopted and already used the new form in response to the first recommendation, we presume the procedure is now satisfactory. Further analysis of the travel reimbursements, totaling $11,689, identified in the audit report as questionable reveals that the payments for travel of the Executive Director and Chairman of the Board during the period examined were all charged to, and paid out of, non-federal funds, i.e., monies earned by the SSHA through its own activities. Only the expenses of Ms. Peterson ($1,818) were charged to federal funds. Her travel was necessary because as the individual at SSHA who runs the scholarship programs (Bollinger, Home Depot, and Freedom and Civil Rights Scholarships), available to residents and their families, she was required by PHADA which administers those funds to attend a training session available at the same conference the E.D. and Board Chair were attending. The suggestion that we could have saved that amount by not sending her for the certification training would have meant that we would then have been unable to participate in these scholarship programs and our residents denied

the opportunities afforded them for self-improvement through further education. Past practice has been that those funded for travel report out at the next Board meeting on the results of their travel and in some cases extensive written reports have also been submitted for circulation to the Board. This practice will be continued. It has never been the policy or practice to reimburse anyone for travel or per diem expenses for spouses, nor has any such payment ever been made. The per diem rate for room and board for purposes of reimbursement is set by the federal government and varies by location. 2. Bringing vendor invoices to the full Board for approval, as suggested by the audit report, would result in delays in payment to vendors which, in turn, would count against us in the PHAS (Public Housing Assessment System) scores used by HUD to designate different Authorities as troubled, performing, or high performing. As an Authority which has consistently been rated as a high performer for the past six years, this has enabled us to earn an additional share of 5% of each years Capital Fund allotment from HUD for modernization of our facilities. This is a significant amount of money for us as federal funding has steadily shrunk over the years, and we are reluctant to jeopardize our standing with HUD, which regards our record of timely payments to vendors as part of our commitment to being a positive contributor to the local community. (The most recent notice of our PHAS scores, dated Nov. 7, 2012, is attached as Exhibit B.) But in order to strengthen the oversight function of the Board as recommended, we have since instituted a practice whereby the Vice-Chair of the Board reviews all invoices on a weekly basis, prior to payment, after the Executive Director has reviewed them to certify receipt of goods or services detailed in each invoice and initialed his approval and directed the CFO to charge the appropriate budget. Any additional Board members who care to, may also share in this weekly review process at any time. Security has also been enhanced, as per the recommendation of the audit team from OSC, by keeping the supply of blank checks and checksigning machine under lock and key in the office of the CFO and the nameplates in a separate location under lock and key in the Office of the Executive Director so that neither can use them together without the others knowledge and consent. 3. As noted in our original response to the draft audit report, this is a moot point since any connection with J&M Auto was discontinued by December, 2011, well before the audit was begun.

4. We have since updated the position title of Cindy Gaugler to reflect the recommendation of the audit team that since she in fact serves as our Chief Financial Officer, this should be reflected in her job title. Her new title is Director of Finance. We shall bring other title changes to the Board, where necessary, for approval this spring. 5. The recommendation that in future negotiations we should align the Directors salary with industry comparables and Federal requirements appears to flow from the auditors assumption that the suggested guidelines floated by HUD in August, 2011, which involved salary caps for Executive Directors of different sized PHAs would become permanent HUD policy. To date this has not happened, and the guidelines have provoked all manner of controversy nationwide, including the threat of litigation by the national organization of PHA professionals (PHADA). Thus far these guidelines have not been implemented by HUD, nor even been publicly reaffirmed. SSHA policy on Executive Director salary and compensation was set by an agreement between the Saratoga Springs City Council and the Board of Commissioners of the SSHA in 1981 comparability with Saratoga School District Principals. Since no single principal was singled out in that agreement (there are, today, seven principals), we assume that the idea at the time was that our Executive Director would be compensated somewhere within the range of all the existing principals salaries. If now we revert to this criterion of comparability, which has been our policy since 1981 and remains our policy to this day, we find that the latest figures available from the official New York State Website, <SeeThroughNY::Payroll-Schools>, for 2012* are as follows: Caroline Street Elementary - $160,306 Lake Avenue Elementary - $147,512 Dorothy Nolan Elementary - $130,540 Division Street Elementary - $122,882 Greenfield Elementary - $97,926 Saratoga Springs High School - $117,550 *No figures are given for Geyser Road Elementary, whose principal is an interim appointment while the search for a permanent appointment is being conducted. By this criterion of comparability, the only criterion mentioned in our policy and stated clearly in the Personnel Policies and Procedures Handbook of the SSHA, Mr Spychalskis salary of $144,921 for 2012 is well within the range of the salaries listed above. (See Exhibit C) We agree to utilize professional consultants familiar with the public housing industry, in addition to our own legal counsel, to advise us on contract details in the future as per the audit recommendation. In terms of

suggested modifications to the Executive Directors current contract provisions, we shall secure advice of counsel and address these issues in Executive Session of the Board before the end of this fiscal year. HUD, incidentally, recommends multi-year rolling contracts to keep superior employees in a highly competitive field. 7. Besides securing the checks and signing-machine in separate locations under separate individuals control, we have enhanced the payroll oversight process by having the Executive Director and Facilities Manager verify their respective payrolls, then, together with the Chair or Vice-Chair of the Board, review time-sheets and verify payroll checks prepared by the CFO every Friday morning, prior to distribution to the employees. We trust that the above speaks to all the recommendations made in the OSC Audit Report. Approved, by vote of the Board of Commissioners this 21st day of March, 2013. Signed:_____________ ________________ SSHA Board Chair, Dr. Eric J. Weller