Denham Springs Housing Authority

Section Eight Housing Program-CDFA#14.871 Finding 2024-001-Utility Allowances Need Updating- Special Tests Criteria and Condition Federal regulations require that utility allowances be reviewed annually. If any category increases more than 10% since the last rate change, the allowances should be revised. Context The allowances have not been reviewed since early in 2023. Cause Apparent oversight. Effect There is a possibility that the allowances were not timely adjusted, which would have affected the Housing Assistance Payments and the tenant rent. Questioned Costs None Recommendation The allowances should be reviewed and adjusted if necessary. View of Responsible Official We will comply with the auditor’s recommendation.

Section Eight Housing Program-CDFA#14.871 Finding 2024-002-Late Filing of Report-Reporting Criteria and Condition State law requires the annual audit report be filed no later than six months after fiscal year end with the Louisiana Legislative Auditor. Context The audit report was not timely filed by the due date with the Legislative Auditor. Cause The fee accountant did not timely deliver the accounting records to the auditor in time to allow the auditor to complete the audit. The Executive Director has been periodically hospitalized, and had difficulty in timely delivering accounting records to the fee accountant. Effect State law was not timely complied with. Questioned Costs None Recommendation The authority should timely deliver the accounting records to the auditor. View of Responsible Official We will comply with the auditor’s recommendation.

Housing Choice Voucher Program #14.871-Special Tests 2021-001-Lack of Adequate Quality Control Review Criteria and Specific Requirement The Authority should have documented internal control over compliance of the tenant file functions and waiting lists that are sufficient to detect errors or oversights. Condition Found In the current year, we reviewed fifteen tenant files during our audit. In five of the fifteen, the September 2021 Housing Assistance Payment (HAP) actually paid to the landlord was an incorrect amount. The correct amount was determined by reviewing the correctness of the last HUD 50058 prepared and in effect before the payment of the September HAPs. Of the five errors noted above, the net effect that there was an underpayment of 3.1%. Total HAP payments for the year, net of ports, was $798,558. If the 3.1% noted error rate applied to the total HAPs paid for the entire year, total HAPs were underpaid by $24,754 ($798,558 time 3.1%). Statement of Auditing Standards (SAS) #115 dictates that either ?inadequate design of controls over the preparation of the financial statements? or ?absent or inadequate segregation of duties within a significant account or process? are defined by the Standard is defined as at least a significant deficiency, if not a material weakness. An independent quality control was performed and documented during the year. However, the review was not sufficient to detect the above errors noted during the independent audit. Cause The quality control of the tenant files should be expanded and made sufficient to timely detect errors as noted above, and to timely correct any noted errors. Effect The likelihood was not reduced to an acceptable level that material non-compliance could be timely detected. Recommendation The Authority should perform and document quality control on the tenant files on a continual, representative basis. Origination Date and prior year reference The audit finding in the prior year was that a documented quality control review of the HCV tenant files was not performed. Views of Responsible Official I am Fred Banks, Executive Director and Designated Person to answer this finding. We will follow the auditor?s recommendations.

Housing Choice Voucher Program #14.871-Special Tests 2020-001-Lack of Segregation of Duties Criteria and Specific Requirement The Authority should have properly documented internal controls over compliance functions over the waiting list and tenant file functions. Condition Found Statement of Auditing Standards (SAS) #115 dictates that either ?inadequate design of controls over the preparation of the financial statements? or ?absent or inadequate segregation of duties within a significant account or process? are defined by the Standard is at least a significant deficiency, if not a material weakness. The documentation of the Authority?s internal controls is inadequate. Cause In recent years, the Authority has utilized a qualified person with another Authority to perform SEMAP related quality control procedures. This was not done in the current year. Effect The likelihood is not reduced to an acceptable level that material non-compliance could occur and be timely detected. During our review of the tenant files, we noted only a couple of immaterial exceptions. Recommendation The Authority should perform and document quality control on the tenant files on a continual, representable basis. Origination Date and prior year reference This is the first year of the audit finding. Views of Responsible Official I am Fred Banks, Executive Director and Designated Person to answer this finding. We will follow the auditor?s recommendations. COVID-19 effects is why we did not obtain the documented quality control review this year.