Audit 357842

Capital Fund-CDFA#14.872 and Low Rent Program-CDFA#14.850 Finding 2024-001-Support for Disbursements Lacking – Allowable Costs Criteria and Condition Expenses must be supported by adequate documentation which supports that the expense was necessary and properly classified, and the individual(s) that utilized the expenditure (example-who used the airline ticket, the explanation of the purpose of the travel, the seminar registration, etc. Another example-food was purchased by which individual, the business justification for the meal purchased). Context We reviewed the adequate documentation of disbursements on a test basis. We noted the following: (a)-We noted $47,106 of expenses that in our opinion are not adequately supported. Total credit card payments were $71,736. We reviewed $20,939 of the $71,736. 72% were not supported. Interpolating the 72% to the total, we calculate that approximately $20,086 of credit card payments were not supported. This $20,086 is part of the noted $47,106. (b)We noted an additional $6,770 that was expended for what appears are personal items. If purchased for the authority, we deem these expenses as unnecessary and excessive. (c)-The authority contracted and paid monthly payments on 36-month payment agreements for cell phones for each employee, plus two tablets management claims were used by the participants in the tenant services program ($525 was also paid for walkie talkies and a CB radio). Management claims that each employee also has a personal cell phone and that the employees understand that the business cell phones should not be used for business. (d)-$12,951 of rental car expenses were paid to one rental car company. Of this total, $3,275 was unsupported and included in the $47,106 noted in (a). (e)-$50,000 was budgeted for Tenant Participation Activities. $86,366 was charged to this account. Management represents that an indeterminate part of the food separate from tenant services and employee benefits and snacks charged to this account was for the board of commissioners, although most were for children and their counselors in after school activities. State law prohibits food and drinks purchased for the board, except for exacting circumstances, of which these do not appear to qualify. Cause Based on prior audits and conversations with management, the latter understands the federal regulations for expenditures. We do not know the cause. Effect It appears that federal regulations were not complied with. Recommendation (a) Vouchers should not be prepared for payment unless a clerk reviews the support and determines the support is adequate. This should be done even if the E.D. presents an amount for payment. The clerk should check 100% of the detail of credit card payments for support. The clerk’s review should be noted on the voucher, such as signature or initials and date. If the clerk initially prepares the voucher, the E.D. should note that she reviewed the detail. In addition, the authorized co-signer should not sign payments unless the support for the payment is reviewed and determined to be adequate. Again, this includes all of the detail for credit card payments. (b) If any purchases are made that appear to be personal, such as purses, the specific business purpose needs to be noted. (c) A cell phone policy needs to be adopted. One can be obtained from a neighboring authority. The E.D. should review the calls each month on each employee cell phone. Unless the business purpose of the call is clear, the calls should be considered personal. A calculation of the personal versus business calls should be made. Employees should reimburse the authority promptly for the personal percentage, or the amount withheld from salary checks. (d) Rental car charges need to be detailed for business purpose. (e) Expenses for Tenant Participation Activities should not exceed the budgeted amount. View of Responsible Official We will follow the auditor’s recommendation.

Capital Fund-CDFA#14.872 Finding 2024-002-Procurement Policy and Federal Regulations Not Followed-Procurement Context The authority spent a minimum of $145,992 in the audit year for air conditioning/heating services. It appears that no effort was made to obtain other quotes. Federal regulations 200.320 require price quotations be obtained from an adequate number of qualified sources for this level of expenditures. Louisiana State Bid law, R.S. 38.2212.1 requires three or more quotes be obtained. Effect The authority did not exercise due diligence to assure that the most favorable prices were obtained for these services. The authority should note in the advertisement that price is only one factor to be considered in the award. Cause In February 2018, the authority performed the necessary steps to advertise, obtain and evaluate the quotes for air conditioning/heating work. This RFP extended services for multiple years. However, for the 2023-2024 year, the time was past due for the authority to re-perform procedures to obtain other quotes for these services. Questioned Costs None Recommendation The authority’s Procurement Policy, federal and state regulations should be complied with. View of Responsible Official We will comply with the auditor’s recommendation. Criteria and Condition The Procurement Policy and federal regulations should be complied with when procuring goods and services.

Low Rent Program-CDFA#14.850 and Capital Fund Program-CDFA#14.872 Finding 2024-004- Federal and State Law Not Complied With Context The earliest accounting records that we received as the auditor was January 24, 2025, which was after the state filing deadline. We did not receive the information requested from Management until much later. It appears that management is not timely sending the accounting records to the fee accountant to allow the latter to process the accounting information. Cause Management understands the deadline. We do not know the cause. Effect Federal and State law were not complied with. In addition, audit findings, if any, are not timely reviewed by the board, since the audit report is not timely finalized. Recommendation Accounting records should be delivered to the fee accountant by at least the 20th of the following month, although earlier would be better. This will allow the fee accountant to timely prepare the accounting information. View of Responsible Official We will follow the auditor’s recommendation. Criteria and Condition Louisiana state law requires that the audit report be filed no later than six months after fiscal year end. In this situation, the deadline was December 31, 2024. Federal law requires the report to be filed no later than nine months after year-end, or March 31, 2025.

Capital Fund-CDFA#14.872 and Low Rent Program-CDFA#14.850 Finding 2024-001-Support for Disbursements Lacking – Allowable Costs Criteria and Condition Expenses must be supported by adequate documentation which supports that the expense was necessary and properly classified, and the individual(s) that utilized the expenditure (example-who used the airline ticket, the explanation of the purpose of the travel, the seminar registration, etc. Another example-food was purchased by which individual, the business justification for the meal purchased). Context We reviewed the adequate documentation of disbursements on a test basis. We noted the following: (a)-We noted $47,106 of expenses that in our opinion are not adequately supported. Total credit card payments were $71,736. We reviewed $20,939 of the $71,736. 72% were not supported. Interpolating the 72% to the total, we calculate that approximately $20,086 of credit card payments were not supported. This $20,086 is part of the noted $47,106. (b)We noted an additional $6,770 that was expended for what appears are personal items. If purchased for the authority, we deem these expenses as unnecessary and excessive. (c)-The authority contracted and paid monthly payments on 36-month payment agreements for cell phones for each employee, plus two tablets management claims were used by the participants in the tenant services program ($525 was also paid for walkie talkies and a CB radio). Management claims that each employee also has a personal cell phone and that the employees understand that the business cell phones should not be used for business. (d)-$12,951 of rental car expenses were paid to one rental car company. Of this total, $3,275 was unsupported and included in the $47,106 noted in (a). (e)-$50,000 was budgeted for Tenant Participation Activities. $86,366 was charged to this account. Management represents that an indeterminate part of the food separate from tenant services and employee benefits and snacks charged to this account was for the board of commissioners, although most were for children and their counselors in after school activities. State law prohibits food and drinks purchased for the board, except for exacting circumstances, of which these do not appear to qualify. Cause Based on prior audits and conversations with management, the latter understands the federal regulations for expenditures. We do not know the cause. Effect It appears that federal regulations were not complied with. Recommendation (a) Vouchers should not be prepared for payment unless a clerk reviews the support and determines the support is adequate. This should be done even if the E.D. presents an amount for payment. The clerk should check 100% of the detail of credit card payments for support. The clerk’s review should be noted on the voucher, such as signature or initials and date. If the clerk initially prepares the voucher, the E.D. should note that she reviewed the detail. In addition, the authorized co-signer should not sign payments unless the support for the payment is reviewed and determined to be adequate. Again, this includes all of the detail for credit card payments. (b) If any purchases are made that appear to be personal, such as purses, the specific business purpose needs to be noted. (c) A cell phone policy needs to be adopted. One can be obtained from a neighboring authority. The E.D. should review the calls each month on each employee cell phone. Unless the business purpose of the call is clear, the calls should be considered personal. A calculation of the personal versus business calls should be made. Employees should reimburse the authority promptly for the personal percentage, or the amount withheld from salary checks. (d) Rental car charges need to be detailed for business purpose. (e) Expenses for Tenant Participation Activities should not exceed the budgeted amount. View of Responsible Official We will follow the auditor’s recommendation.

Capital Fund-CDFA#14.872 Finding 2024-002-Procurement Policy and Federal Regulations Not Followed-Procurement Context The authority spent a minimum of $145,992 in the audit year for air conditioning/heating services. It appears that no effort was made to obtain other quotes. Federal regulations 200.320 require price quotations be obtained from an adequate number of qualified sources for this level of expenditures. Louisiana State Bid law, R.S. 38.2212.1 requires three or more quotes be obtained. Effect The authority did not exercise due diligence to assure that the most favorable prices were obtained for these services. The authority should note in the advertisement that price is only one factor to be considered in the award. Cause In February 2018, the authority performed the necessary steps to advertise, obtain and evaluate the quotes for air conditioning/heating work. This RFP extended services for multiple years. However, for the 2023-2024 year, the time was past due for the authority to re-perform procedures to obtain other quotes for these services. Questioned Costs None Recommendation The authority’s Procurement Policy, federal and state regulations should be complied with. View of Responsible Official We will comply with the auditor’s recommendation. Criteria and Condition The Procurement Policy and federal regulations should be complied with when procuring goods and services.

Low Rent Program-CDFA#14.850 and Capital Fund Program-CDFA#14.872 Finding 2024-004- Federal and State Law Not Complied With Context The earliest accounting records that we received as the auditor was January 24, 2025, which was after the state filing deadline. We did not receive the information requested from Management until much later. It appears that management is not timely sending the accounting records to the fee accountant to allow the latter to process the accounting information. Cause Management understands the deadline. We do not know the cause. Effect Federal and State law were not complied with. In addition, audit findings, if any, are not timely reviewed by the board, since the audit report is not timely finalized. Recommendation Accounting records should be delivered to the fee accountant by at least the 20th of the following month, although earlier would be better. This will allow the fee accountant to timely prepare the accounting information. View of Responsible Official We will follow the auditor’s recommendation. Criteria and Condition Louisiana state law requires that the audit report be filed no later than six months after fiscal year end. In this situation, the deadline was December 31, 2024. Federal law requires the report to be filed no later than nine months after year-end, or March 31, 2025.