LOUISIANA HOUSING CORPORATIONState Government

During the audit we noted the Corporation lacked adequate internal controls and had insufficient staffing over the financial and accounting processes. This resulted in errors, mispostings, untimely reconciliations, and a lack of understanding of the nature and accounting treatment of certain transactions. Effective internal controls over financial reporting require the Corporation to maintain staff with the skill and experience to ensure transactions are recorded accurately, and financial accounts are reconciled timely and accurately. Without proper internal controls there is an increased risk that errors and omissions could occur and remain undetected. This condition could lead to inaccurate financial reporting and potential noncompliance with applicable laws and regulations. We recommend that the Corporation strengthen its internal control environment by evaluating staffing levels, providing training to existing staff, and developing and implementing policies and procedures to ensure timely reconciliations, accurate transaction recording, and ongoing management review.

2024-01 Late Submission of Audit Report to LLA and Federal Audit Clearinghouse Condition: The audit for the fiscal year ended December 31, 2024 was not submitted to the Louisiana Legislative Auditor within nine months after year end as required by the audit contract with the Louisiana Legislative Auditor. The audit is required to be submitted to the Criteria: Per LSA-R.S.24.513, audit reports must be submitted within the time frame noted in the audit contract. Timely submission ensures compliance with the contract with the Louisiana Legislative Auditor. Cause: The delay in submission was primarily due to staff turnover for the fiscal year ended. Effect: Late submission of the audit report resulted in noncompliance with the contract with the Louisiana Legislative Auditor. Recommendation: We recommend management implement controls to ensure timely audit completion and submission, including: establishing a clear timeline with milestones for audit preparation and review and ensuring financial records are prepared and reconciled well in advance of the audit period. Management Response: Management concurs with this finding. Steps will be taken to ensure future audit reports are submitted on time.

Finding 2024-02 – Untimely Submission of HUD Reports Federal Agency: U.S. Department of Housing and Urban Development (HUD) Federal Programs: • Section 8 Housing Choice Voucher Program — Assistance Listing No. 14.871 • Mainstream Voucher Program — Assistance Listing No. 14.879 • Emergency Housing Voucher Program — Assistance Listing No. 14.EHV Compliance Requirement: Reporting Type of Finding: Noncompliance and Significant Deficiency in Internal Control over Compliance Criteria: In accordance with 2 CFR §200.328(b)(1), recipients of federal awards must submit performance, financial, and program reports by the due dates prescribed by the awarding agency. HUD’s program guidance further specifies that required submissions such as the Financial Data Schedule (FDS) must be filed electronically by their respective deadlines. Timely submission of these reports enables HUD to evaluate the Authority’s financial condition, compliance with program regulations, and overall performance in administering the Housing Choice Voucher (HCV) Programs. Condition: During our testing of compliance with reporting requirements, we noted the following exceptions:  The unaudited Financial Statements were submitted late  The Financial Data Schedule (FDS) was submitted beyond HUD’s required submission deadline. As a result, the Authority did not fully comply with HUD’s timeliness standards for required reporting. Questioned Costs: None. Cause: The delays were primarily attributed to staff turnover and insufficient internal monitoring of submission deadlines. Failure to submit required reports on time may hinder HUD’s ability to perform timely oversight of the Authority’s operations. Persistent delays could adversely affect the Authority’s designation status or potentially impacting eligibility for certain incentives or future funding opportunities. Identification as a Repeat Finding: ☐ Yes ☑ No Recommendation: We recommend the Authority strengthen internal controls over compliance with reporting requirements by: 1. Establishing a comprehensive reporting calendar that includes all HUD submission deadlines and responsible personnel. 2. Implementing an internal review checklist that requires supervisory sign-off before each submission. 3. Setting up automated deadline reminders within the Authority’s email or compliance tracking system. 4. Providing cross-training to ensure backup staff can complete and file reports in the absence of primary personnel. These actions will promote accountability, ensure timeliness, and reduce the risk of future noncompliance. Managements Response: Management concurs with the finding. The Authority has developed a Compliance Reporting Schedule listing all required HUD submissions, their due dates, and the responsible staff. Calendar reminders and verification checkpoints have been implemented to ensure timely submissions. In addition, the Authority will conduct quarterly internal audits to confirm adherence to HUD reporting requirements. Management anticipates full corrective action by December 2025.

Finding 2024-03 – Untimely Submission of audit report to Federal Audit Clearinghouse Criteria: In accordance with the Uniform Guidance the Authority is required to submit their audit report to the Federal Audit Clearinghouse within nine months subsequent to the Authority’s fiscal year end. Condition: The Authority did not submit their audit to the Federal Audit Clearinghouse within nine months subsequent to the Authority’s year end. Effect: This resulted in non compliance with the Uniform Guidance. Questioned Costs: None. Cause: The delays were primarily attributed to staff turnover and insufficient internal monitoring of submission deadlines. Recommendation: We recommend the Authority strengthen internal controls over compliance with reporting requirements by: 1. Establishing a comprehensive reporting calendar that includes the Uniform Guidance submission deadlines and responsible personnel. 2. Implementing an internal review checklist that requires supervisory sign-off before each submission. 3. Setting up automated deadline reminders within the Authority’s email or compliance tracking system. 4. Providing cross-training to ensure backup staff can complete and file reports in the absence of primary personnel. Managements Response: Management concurs with the finding. The Authority has developed a Compliance Reporting Schedule listing all required federal reporting submissions, their due dates, and the responsible staff. Calendar reminders and verification checkpoints have been implemented to ensure timely submissions. In addition, the Authority will conduct quarterly internal audits to confirm adherence to HUD reporting requirements. Management anticipates full corrective action by December 2025.

Subrecipient Monitoring and Eligibility (Low-Income Home Energy Assistance Program) During the testing of the Low-Income Home Energy Assistance Program (LIHEAP), we were unable to verify that adequate subrecipient monitoring was completed during fiscal year 2023. Subrecipients are responsible for determining eligibility for new applicants; therefore, subrecipient monitoring is required to ensure eligibility verification is completed. Per discussion with Corporation management, on-going monitoring was completed remotely by the Corporation through the available reporting system utilized by subrecipients, by performing desk reviews, budget tracking, and review of supporting documentation. However, monitoring procedures were not properly documented. In addition, annual on-site monitoring of subrecipients was not performed for fiscal year 2023. It is our understanding that the Corporation has resumed on-site monitoring during August 2023. Not performing and documenting adequate subrecipient monitoring could result in noncompliance with the grant agreement. In addition, not performing and documenting adequate subrecipient monitoring could result ineligible recipients receiving assistance, or recipients receiving inaccurate benefit amounts. We recommend the Corporation review the process for performing and documenting completion of subrecipient monitoring, which includes eligibility verification of program participants, to ensure subrecipients are in compliance with grant requirements.

Subrecipient Monitoring and Eligibility (Low-Income Household Water Assistance Program) During the testing of the Low-Income Household Water Assistance Program (LIHWAP), we were unable to verify that adequate subrecipient monitoring was completed during fiscal year 2023. Subrecipients are responsible for determining eligibility for new applicants; therefore, subrecipient monitoring is required to ensure eligibility verification is completed. Per discussion with Corporation management, on-going monitoring was completed remotely by the Corporation through the available reporting system utilized by subrecipients, by performing desk reviews, budget tracking, and review of supporting documentation. However, monitoring procedures were not properly documented. In addition, annual on-site monitoring of subrecipients was not performed for fiscal year 2023. It is our understanding that the Corporation has resumed on-site monitoring during August 2023. Not performing and documenting adequate subrecipient monitoring could result in noncompliance with the grant agreement. In addition, not performing and documenting adequate subrecipient monitoring could result in ineligible recipients receiving assistance, or recipients receiving inaccurate benefit amounts. We recommend the Corporation review the process for performing and documenting completion of subrecipient monitoring, which includes eligibility verification of program participants, to ensure subrecipients are in compliance with grant requirements.

During the testing of the HOME Investment Partnerships Program, we were unable to determine that income eligibility verification was completed and reviewed by management for a number of Tenant Based Rental Assistance recipients tested. Per discussion with Corporation management, tenant income was verified; however, the determination of recipient eligibility was not properly documented. The Corporation should document the verification of income to ensure that the eligibility determination was performed and reviewed by management. Not properly documenting verification of recipient eligibility could result in ineligible recipients receiving assistance in addition to noncompliance with the grant agreement. We recommend the Corporation review and evaluate the process for verification and approval of applicant eligibility to ensure compliance with the grant.

During the testing of the Continuum of Care grant, we noted the Corporation?s records did not include verification of the eligibility and value of the cash match as provided by Medicaid in partnership with the Louisiana Department of Health (LDH) for the grant. The Corporation required that LDH submit quarterly reports to the Corporation in order for the Corporation to monitor compliance with the matching requirements. Not reviewing the matching documentation timely could result in noncompliance with the grant requirements. In order to ensure compliance with the grant, quarterly reviews should be submitted by LDH and reviewed timely by the Corporation?s management. We recommend the Corporation review and evaluate the matching documentation provided by Louisiana Department of Health on a quarterly basis to ensure compliance with the grant?s matching requirement.

During the audit we noted a number of accounts that were not properly reconciled to the general ledger. Not properly reconciling the accounts to the general ledger could result in errors occurring in financial reporting and not be detected timely. In order to ensure accurate financial reporting, the Authority should accurately post transactions to its proper accounts and reconcile to the general ledger on a timely basis.We recommend transactions be posted accurately and reconciled on a timely basis to the general ledger; and review of the reconciliations be performed by management.