Head Start Financial and Special Reporting Grant No(s): 06HE000754-01, 06CH011990-04, 06CH011990-03, 06CH011990-05 06HP000184-05, 06HP000522-01 Criteria: DHHS regulations and grant awards set the criteria for DHHS Financial Reports. These reports are due quarterly, semi-annually, and annually from Head Start grantees. Financial Reports must be submitted and reviewed within a certain timeframe based upon the end of the budget period. DHHS regulations and grant awards set the criteria for DHHS Annual Special Reports (OMB No. 4040-0016). This report is due annually from Head Start grantees. Annual Special Reports must be submitted and reviewed within a certain timeframe based upon the end of the budget period. Reports should be supported by applicable accounting and performance records. Condition: Of the reports selected for testing: • One SF-425 Annual Financial Reports had a submission deadline of February 28, 2025 and was submitted on June 13, 2025. • One SF-429 Real Property Status Report and SF-429A General Reporting report was due May 31, 2025 and was submitted on January 21, 2026. Universe/Population: The universe/population for Financial Reporting is one SF-425 Semi-Annual Financial Report, one SF-425 Annual Financial Report, and one SF-425 Final Reports. EA selected one of the two SF-425 Semi-Annual Financial Reports, one of the three SF-425 Annual Financial Reports, and the only SF-425 Final Report for testing of reporting compliance requirements applicable to the program. The universe/population for Special Reporting is three annual SF-429 Real Property Status Reports and SF-429A General Reporting (OMB No. 4040-0016). EA selected one of the annual Special Reports for testing of reporting compliance requirements. Cause: Jefferson Parish lacks an established control monitoring timely submission of Financial and Special Reports. Effect: Failure to comply with the reporting requirements may result in sanctions, including: temporary withholding of cash payments, whole or partial suspension of the Federal award, suspension, debarment or limited denial of participation in Department of Health and Human Services programs pursuant to 45 CFR 75.971. Questioned Costs: None determined. Identification of a repeat finding: This is a repeat finding from the previous audit, 2024-005. Recommendation: Jefferson Parish should establish a formalized control to monitor timely submission of Financial and Special Reports. View of Responsible Officials: Management acknowledges this repeat finding and the importance of full compliance with federal reporting requirements. While progress has been made, additional monitoring is still necessary to fully remediate this issue. As part of these efforts, Jefferson Parish has established a process to monitor the timely submission of reports in compliance with federal requirements. While this is a repeat finding, the prior finding was identified midway through the 2025 fiscal year, so we expect that this finding to be resolved for the fiscal year 2026. Management considers the corrective action to be substantially implemented. Ongoing review has been put into place to confirm continued compliance. Chief Administrative Assistant Nicole Thompson will continue to monitor the submission of timely reports in compliance with federal requirements.
Housing Choice Voucher Cluster: Inadequate Documentation Supporting Eligibility, HAP Payments, and HUD-50058 Reporting United States Department of Housing and Urban Development (HUD) – 14.871 Housing Choice Vouchers and 14.879 Mainstream Voucher Program Grant No(s): None Criteria: Under 2 CFR 200.303, a recipient must establish, document, and maintain effective internal control over each federal award that provides reasonable assurance that the recipient manages the award in compliance with federal statutes, regulations, and the terms and conditions of the award. The recipient must also evaluate and monitor compliance and take prompt action when noncompliance is identified. Under 2 CFR 200.403(g), costs charged to a federal award must be adequately documented to be allowable. Under 2 CFR 200.334, the recipient must retain federal-award records, including financial records and supporting documentation, for the applicable retention period. The Housing Choice Voucher program regulations further require a public housing agency to: • Maintain complete and accurate program records in accordance with HUD requirements in a manner permitting a speedy and effective audit; retain the executed lease, Housing Assistance Payment (HAP) contract, and family application; and retain required participant income data, HUD reports, financial support, and rent-reasonableness documentation. 24 CFR 982.158. • Conduct a reexamination of family income and composition at least annually and, subject to specified exceptions, obtain and document third-party verification or document why third-party verification was unavailable. 24 CFR 982.516. • Enter into and retain a HAP contract in the form required by HUD and determine the monthly HAP amount in accordance with HUD requirements. 24 CFR 982.451. • Determine that the initial rent to the owner is reasonable and redetermine reasonable rent in the circumstances specified by HUD, including before an increase in rent to the owner. 24 CFR 982.507. • Electronically submit required family data to HUD through Form HUD-50058 and retain the forms and supporting documentation for the required period. 24 CFR 908.101 and 908.104. Condition: The Parish’s Housing Services Development District (HSDD) (the grant administrator) could not provide all documentation requested to support participant-related eligibility determinations, HAP payments, rent-reasonableness determinations, and HUD-50058 reporting. Activities allowed or unallowed; allowable costs and cost principles - We tested 40 expenditures, consisting of 37 HAP payments and three non-HAP expenditures. For 7 of the 37 HAP payments tested, or 18.9%, the Parish could not provide evidence of an appropriately executed and approved HAP contract or the income-verification documentation supporting the HAP amount. Eligibility, reporting, and special tests and provisions - EA selected 60 participants from the 2025 monthly HAP registers. Eighteen of the 60 participant files tested, or 30%, had one or more exceptions. The exceptions comprised 59 compliance exceptions and 32 internal-control exceptions across the testing attributes, including: • 17 participant files lacked the participant’s authorization to release information and verify income. • 18 participant files lacked third-party support for income, assets, deductions, or other relevant eligibility factors. • 16 participant files lacked documentation supporting the annual reexamination of income and family composition. • 5 participant files lacked documentation supporting a required rent-reasonableness determination. • 1 participant file contained an inconsistency among the HAP contract, HAP register, and Form HUD-50058. • 2 participant files had exceptions involving the submission of Form HUD-50058 or the agreement of key reported information to supporting records. • 14 participant files lacked evidence that the relevant eligibility factors and HAP amounts were reviewed and approved by the Program Director or authorized case manager. • 17 participant files lacked required supporting documentation maintained with or as part of the participant’s HAP records. The exception totals above represent individual failed attributes and are not additional participant files. Certain attributes also affect more than one compliance area. Cause: The Parish’s controls over the retention, transfer, and maintenance of participant records were not designed or operating effectively to ensure that required supporting documentation was complete, retained, and readily available for compliance and audit purposes. Effect: The Parish did not maintain all required program records to the auditors, and the affected HAP expenditures were not adequately supported by the records made available for audit and are therefore deemed to be noncompliant with program regulations and the Uniform Guidance. The documentation deficiencies increase the risk that ineligible participants could receive assistance, HAP amounts could be calculated incorrectly, and participant information reported to HUD could be inaccurate. The unsupported amounts may be subject to disallowance or other corrective action based on HUD’s final management decision. Questioned Costs: Known questioned costs totaled $15,714, representing the HAP payments associated with 18 unique participant files for which the documentation available at the time of the audit was insufficient to support compliance. 7 of these participants were also included in the allowable cost sample. Accordingly, amounts appearing in both the allowable costs and participant-file samples were included only once. Known questioned costs exclude exceptions related solely to internal control or reporting that did not affect the amount expended. Identification of a repeat finding: This is not a repeat finding. Recommendation: We recommend that the Parish: 1. Perform and document a comprehensive search of its retained paper and electronic records for the participant files identified during the audit and provide any recovered documentation to HUD or other appropriate oversight officials as part of resolving the finding. 2. Work with the former vendor to reconcile the inventory of electronic records transferred to the Parish and obtain any required records that were not included in the original transfer. 3. Resolve questioned costs and any required corrective action in accordance with HUD’s final management decision. 4. Implement a centralized document-management process that addresses record retention, indexing, retrieval, backup, and completeness checks. 5. Establish formal vendor-transition procedures requiring an inventory and reconciliation of electronic and paper records before termination of a service contract. 6. Require supervisory review of participant files for documentation applicable to the transaction type before initial or adjusted HAP payments are approved. 7. Train program personnel on the documentation and retention requirements applicable to new admissions, annual reexaminations, interim actions, changes in unit or ownership, rent increases, and other participant actions. View of Responsible Officials: HSDD management is committed to strengthening internal controls over participant eligibility documentation, HAP payment support, annual reexaminations, rent-reasonableness determinations, and HUD-50058 reporting. These efforts will include reviewing the identified exceptions, working to retrieve any outstanding documentation from prior records or service providers, enhancing supervisory oversight, and providing additional training to program personnel. HSDD management recognizes the documentation deficiencies identified during the audit, the absence of supporting documentation does not necessarily establish that the underlying participants were ineligible or that HAP payments were improperly calculated. Accordingly, management intends to review the identified exceptions and work with the appropriate parties to resolve questioned costs in accordance with HUD's final management decision. HSDD management, specifically its Director Dorian Rawles, remains committed to implementing corrective actions designed to improve documentation retention, strengthen program compliance, and reduce the likelihood of similar findings in future reporting periods.