The annual audit of the Lafayette Housing Authority was released by the Legislative Auditor on Monday, and it noted several issues.
According to the audit, the assets of the Housing Authority exceeded its liabilities at the close of the most recent fiscal year by $19,586,049 (net position). Of this amount, $12,571,694 (unrestricted net position) may be used to meet the government’s ongoing obligations to citizens and creditors.
The audit also noted that, as of the close of the 2024 fiscal year, the Housing Authority’s enterprise funds reported combined ending net position $19,586,049, an increase of $3,239,376. Approximately 71% of this total amount is available for spending at the Housing Authority’s discretion (unrestricted net position).
Here's the legislative auditor's summary of the findings in the audit:
In his report, the independent auditor noted that authority officials discovered a check written to a landlord had been intercepted by an unauthorized party, altered, and cashed through the agency’s bank. Of the $16,738.24 lost, the authority was able to recover $4,106.76. In addition, the auditor found the authority failed to file its financial statements with the Legislative Auditor’s office within the required time frame, failed to maintain its Housing Voucher Cluster tenant files as required by the U.S. Department of Housing and Development (HUD), and failed to conduct biennial quality control re-inspections on units leased to families, also as required by HUD.
You can read the full audit for yourself, by scrolling down.
Here are the details, and management's response, to the findings mentioned in the LLA's summary:
Stolen check: A check issued by the Authority was fraudulently endorsed and cashed by an individual who is not an authorized payee. The transaction was processed by the bank without proper verification of the endorser’s identity or authorization. The Authority’s bank reconciliation procedures revealed the theft in a timely manner. The vulnerability of a paper check to fraudulent manipulation and insufficient verification procedures by the financial institution during check negotiation caused the check to be cashed by an unauthorized third party. The Authority suffered a financial loss in the amount of $16,738 due to the unauthorized disbursement.
The auditor also noted that this loss was not reported to the Legislative Auditor or the local district attorney.
In response, Management says "the Authority has implemented Positive Pay with the financial institution and have implemented Direct Deposit with the landlords associated with the Authority in order to further strengthen controls related to disbursements.
The Authority failed to file its financial statements with the LLA on time: The Authority’s annual audited financial statements were not filed timely for the fiscal year ended September 30, 2024. In 2020, the Authority hired a CPA to perform their financial audit, and the CPA did not complete the audit. The Authority had to engage a new CPA to perform the incomplete audit. This caused the Authority to get behind on submissions and they are currently attempting to get caught up.
In their response, management noted that "the Authority has changed auditors and Executive Director for the 2024 fiscal year end audit and continues to take necessary actions to ensure that their annual financial statement audit is completed and submitted within six months of the close of their fiscal year."
The Authority failed to maintain its Housing Voucher Cluster tenant files as required by HUD: Housing Voucher Cluster tenant files are not being maintained with complete and accurate information. Information such as applications for admission or continued occupancy, HUD-9886 Authorization for the Release of Information/Privacy Act Notice, and support for rent calculations were either not filled out appropriately or were missing from the Housing Voucher Cluster tenant files.
In their response, management pledged to "strengthen controls over record keeping and maintenance of tenant files with an increased emphasis on timely and appropriate documentation ensuring compliance with all HUD requirements."
The Authority failed to conduct biennial quality control re-inspections on units leased to families, also as required by HUD: Quality control re-inspections on units leased to families were not conducted at least biennially (within a two-year period) on 2 of 32 Housing Voucher Cluster tenants tested. Public Housing Authorities must inspect the unit leased to a family at least biennially to determine if the unit meets Housing Quality Standards and the Public Housing Authority must conduct quality control re-inspections.
In their response, management says they "will strengthen controls over timely performance and appropriate documentation of all required inspections and re-inspections in accordance with quality control standards."
Here's the audit:
