housing authority of st. james parishapp1.lla.la.gov/publicreports.nsf/d5bc93ec2b933b6a... ·...

Housing Authority of the Parish of St JamesLutcher, Louisiana

Annual Financial ReportAs of and for the Year Ended September 30,2007

Under provisions of state law, this report is a publicdocument. Acopy of the report has been submitted tothe entity and other appropriate public officials, Thereport is available for public inspection at the BatonRouge office of the Legislative Auditor and, whereappropriate, at the office of the parish clerk of court.

Release Date tf//£/A$_

Housing Authority of the Parish of St. JamesTable of Contents

Statement Page

INDEPENDENT AUDITORS1 REPORT 1-2

REQUIRED SUPPLEMENTAL INFORMATION 3Management's Discussion and Analysis (MD&A) 4-11

BASIC FINANCIAL STATEMENTSENTERPRISE FUNDS

Balance Sheet A 12-13Statement of Revenues, Expenses, and Changes in Fund Net Assets B 14Statement of Cash Flows C 15

Notes to the Financial StatementsIndex 16Notes 17-22

SUPPLEMENTAL INFORMATIONCompensation Paid Board Members 23Financial Data Schedule 24-27

OTHER REPORTS REQUIRED BY GOVERNMENT AUDITING STANDARDS ANDBY OFFICE OF MANAGEMENT AND BUDGET (OMB1 CIRCULAR A-I33

Report on Internal Control Over Financial Reporting and on ComplianceAnd Other Matters Based on an Audit of Financial Statements Performedin Accordance With Government Auditing Standards 28-29

Report on Compliance With Requirements Applicable to Each Major Program andon Internal Control Over Compliance in Accordance With OMB Circular A-133 30-31

Schedule of Expenditures of Federal Awards 32Notes to the Schedule of Expenditures of Federal Awards 33Schedule of Findings and Questioned Costs 34-35

OTHER INFORMATIONSummary Schedule of Prior Year Audit Findings 36Corrective Action Plan for Current-Year findings and Questioned Costs 37Management Letter 38-39Status of Prior Year Management Letter Items 40

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ALLEN, GREEN & WILLIAMSON, LLP

ErwtU Altai, OPA(Rctind) 1963 - 2000

CERTIFIED PUBLIC ACCOUNTANTSP.O. Box 6075

Monroe, LA 7121 1-6075

Toll-free: (888) 741-0205

www.allengreencpa.com

INDEPENDENT AUDITORS' REPORT

Board of CommissionersHousing Authority of the Parish of St. JamesLutcher, Louisiana

Basic Financial Statements We have audited the accompanying basic financial statements of the Housing Authorityof the Parish of St James, as of and for the year ended September 30,2007, as listed in the table of contents. Thesefinancial statements are the responsibility of the Housing Authority's management. Our responsibility is to express anopinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in the United States of America,and the standards applicable to financial audits contained in Government Auditing Standards, issued by theComptroller General of the United States. Those standards require that we plan and perform the audit to obtainreasonable assurance about whether the financial statements are free of material misstatement An audit includesconsideration of internal control over financial reporting as a basis for designing audit procedures that are appropriatein the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Housing Authority'sinternal control over financial reporting. Accordingly, we express no such opinion. An audit also includesexamining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing theaccounting principles used and significant estimates made by management, as well as evaluating the overall financialstatement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respectivefinancial position of the Housing Authority as of September 30,2007, and the changes in its financial position and itscash flows for the year then ended in conformity with accounting principles generally accepted in the United States ofAmerica.

In accordance with Government Auditing Standards, we have also issued our report dated March 31,2008, on ourconsideration of the Housing Authority's internal control over financial reporting and on our tests of its compliancewith certain provisions of laws, regulations, contracts and grant agreements and other matters. The purpose of thatreport is to describe the scope of our testing of internal control over financial reporting and compliance and the resultsof that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. Thatreport is an integral part of an audit performed in accordance with Government Auditing Standards and should beconsidered in assessing the results of our audit.

Required Supplemental Information The Management's Discussion and Analysis is not a required part of the basicfinancial statements but is supplementary information required by the Governmental Accounting Standards Board.We have applied certain limited procedures, which consisted principally of inquiries of management regarding themethods of measurement and presentation of the required supplemental information. However, we did not audit theinformation and express no opinion on it.

1Also Located in Alexandria and Shreveport, Louisiana

Member American Institute of Certified Public Accountants,. Society of Louisiana Certified Public Accountants andAmerican Institute of Certified Public Accountants Division for CPA Firms

Equal Opportunity Employer

Supplemental Information Our audit was conducted for the purpose of forming an opinion on the financialstatements. The accompanying information identified in the table of contents as other supplemental information ispresented for purposes of additional analysis and is not a required part of the basic financial statements. Also, theschedule of expenditures of federal awards, which is required by U. S. Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations is presented for the purpose of additionalanalysis and is not a required part of the basic financial statements. Such information has been subjected to theauditing procedures applied in the audit of the basic financial statements and, in our opinion, is fairly stated, in allmaterial respects, in relation to the basic financial statements taken as a whole.

Other Information Also, the accompanying other information, as listed in the table of contents, is presented forpurposes of additional analysis and is not a required part of the basic financial statements of the Housing Authority.Such information has not been subjected to the auditing procedures applied in the audit of the basic financialstatements and, accordingly, we express no opinion on it.

r


Monroe, LouisianaMarch 31,2008

Housing Authority of the Parish of St James

REQUIRED SUPPLEMENTAL INFORMATION

MANAGEMENT'S DISCUSSIONAND ANALYSIS (MD&A)


Management's Discussion and Analysis (MD&A)September 30,2007

The St. James Parish Housing Authority hereinafter referred to as '*the Authority" management's discussion andanalysis is designed to (a) assist the reader in focusing on significant financial issues; (b) provide an overview of theAuthority's financial activity; (c) identify changes in the Authority's financial position; and, (d) identify individualfund issues or concerns.

Since the Management's Discussion and Analysis (MD&A) is designed to focus on the current years activities,resulting changes and currently known facts, please read it in conjunction with the Authority's financial statements.

FINANCIAL HIGHLIGHTS

• The Authority's Net Assets increased by $179,418 during 2007. Net Assets were $3,507,742 and$3,687,160 for 2006 and 2007, respectively.

• Revenues decreased $43,824, $1,766,853 and $1,723,029 for 2006 and 2007, respectively.

• The total expenses for all Authority programs increased by $22,624. Total expenses were $1,520,987 and$1,543,611 for 2006 and 2007, respectively.



USING THIS ANNUAL REPORT

The Report includes three major sections, the "Management's Discussion and Analysis (MD&A)", "BasicFinancial Statements", and "Other Required Supplementary Information":

MD&A

- Management's Discussionand Analysis ~

Basic Financial Statements

~ Authority-wide Financial Statements -~ Notes to Financial Statements ~

Other Required Supplementary Information

~ No supplementary information required other than the MD&A-

The primary focus of the Authority's financial statements is on the Authority as a whole as much as the majorindividual funds. Both perspectives allow the user to address relevant questions, broaden a oasis for comparison (yearto year or Authority to Authority) and enhance the Authority's accountability.

Authority-Wide Financial Statements

The Authority-wide financial statements are designed to be corporate-lOce in that all business type activities areconsolidated columns for the entire Authority.

ITiese Statements include a Balance Sheet which reports all financial and capital resources for the Authority. Thestatement is presented in the format where assets equals liabilities plus ''Net Assets", formerly known as equity.Assets and liabilities are presented in order of liquidity, and are classified as "Current" (convertible into cash withinone year), and "Non-current".



The focus of the Balance Sheet (the "Unrestricted Net Assets") is designed to represent the net available liquid (non-capital) assets, net of liabilities, for the entire Authority. Net Assets (formerly equity) are reported in three broadcategories:

Net Assets. Invested in Capital Assets. Net of Related Debt This component of Net Assets consists of all CapitalAssets, reduced by the outstanding balances of any bonds, mortgages, notes or other borrowings that are attributableto the acquisition, construction, or improvement of those assets.

Restricted Net Assets: This component ofNet Assets consists of restricted assets, when constraints are placed on theasset by creditors (such as debt covenants), grantors, contributors, laws, regulations, etc.

Unrestricted Net Assets: Consists of Net Assets that do not meet the definition of "Net Assets Invested in CapitalAssets, Net of Related Debt", or "Restricted Net Assets".

The Authority-wide financial statements also include a Statement of Revenues. Expenses and Changes in Fund NetAssets (similar to an Income Statement). This Statement includes Operating Revenues, such as rental income,Operating Expenses, such as administrative, utilities, and maintenance, and depreciation, and Non-Operating Revenueand Expenses, such as capital grant revenue, investment income and interest expense.

The focus of the Statement of Revenues, Expenses and Changes in Fund Net Assets is the "Change in Net Assets",which is similar to Net Income or Loss.

Finally, a Statement of Cash Flows is included, which discloses net cash provided by, or used for operating activities,non-capital financing activities, and from capital and related financing activities.

Fund Financial Statements

The Authority uses the Enterprise fund basis for accounting, which utilizes the full accrual basis. The Enterprisemethod of accounting is similar to accounting used by the private sector for accounting.

The Authority's Programs

Conventional Public Housing - Under the Conventional Public Housing Program, the Authority rents units mat itowns to low-income households. The Conventional Public Housing Program is operated under an AnnualContributions Contract (ACC) with HUD, and HUD provides Operating Subsidy and Capital Grant funding to enablethe PHA to provide the housing at a rent that is based upon 30% of household income. The Conventional PublicHousing Program also includes the Capital Fund Program, which is the primary funding source for physical andmanagement improvements to the Authority's properties. The TANF program is also included here.

The TANF Program is a grant program funded by the Louisiana Department of Education mat is intended to provideafter school learning activities.



AUTHORITY-WIDE STATEMENTS

Statement of Net Assets

The following table reflects the condensed Statement of Net Assets compared to prior year. The Authority is engagedonly in Business-Type Activities.

TABLE 1

STATEMENT OF NET ASSETS

2007 2006 Variance

Current AssetsRestricted current assetsCapital Assets

Total Assets

Current LiabilitiesCurrent liabilities payable from currentrestricted assetsLong-Term Liabilities

Total Liabilities

Net Assets:Invested in Capital Assets,

. Net of Related DebtRestrictedUnrestrictedTotal Net Assets

$1,174,02231,388

2.5903063.795.716

46,26831^88

30.900108.556

2,590,3060

1.096.854$3.687.160

$ 874,49631,780

2.718.0263.624J02

59,60331,780

25.177116.560

2,718,0260

789.716$3.507.742

5 299,526(392)

(127.720)171.414

(13,335)(392)

5.723(8.004)

(127,720)0

307,138$ 179.418



Major Factors Affecting the Statement of Net Assets

Cuirent and restricted assets increased by $171,414 as of September 30,2007. Liabilities decreased by $8,004.

Net capital assets were reduced by $127,720. The components of capital assets changed, including about $287,778 ofacquisitions, net of dispositions, minus $415,498 in depreciation. For more information see Table 4 below.

Table 2 presents details on the change in Unrestricted Net Assets.

TABLE2

CHANGE OF UNRESTRICTED NET ASSETS

Unrestricted Net Assets as of September 30,2006 $ 789.716

Results from Operations 179,418

Adjustments:Depreciation (1) 415,498Funding Provided for Capital Grants (2) (261,445)

Miscellaneous (26.333)

Adjusted Results from Operations 127.720

Unrestricted Net Assets as of September 30,2007 $1_096.8S4

(1) Depreciation is treated as an expense and reduces the results of operations but does not have an impact onUnrestricted Net Assets

(2) Funding provided for capital grant hard costs, pursuant to GASB 33, is reported as revenue. However, therevenue is absorbed by the associated capital expenditures and therefore does not increase Unrestricted NetAssets.

While the results of operations are a significant measure of the Authority's activities, the analysis of the changes inUnrestricted Net Assets provides a clearer measure in financial well being.



TABLE3

STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS

The following schedule compares the revenues and expenses for the current and previous fiscal year. TheAuthority is engaged only in Business-Type Activities.

Variance

93,27297,723

(125,578)

2007 2006

Revenues

Tenant Revenue-Rents and Other $ 431,530 $ 338,258 $Operating Subsidies and Grants 967,662 869,939Capital Grants 261,445 387,023Other Revenues 62.392 171.633

Total Revenue 1.723.029 L766.853 (43.824)

ExpensesAdministrative 423,869 331,010 92,859Tenant Services 65,657 53,588 12,069Utilities 137,985 150,545 (12,560)Maintenance 289,594 288,889 705General 192,264 212,653 (20,389)Non-routine maintenance 18,744 31,220 (12,476)Depreciation 415.498 453.082 (37.584)

Total Expenses 1.543.611 L520.987 22.624

Net Increase (Decrease) S 179.418 $ 245.866 $ (66.448)

Major Factors Affecting the Statement of Revenue, Expenses and Changes In Net Assets

Revenues decreased by 43,824, mainly due to a decrease in Capital Fund Program capital grant revenues and adecrease in revenues recognized for fire loss insurance proceeds from fiscal year 2006 to fiscal year 2007. Operatingsubsidies increased by almost the same amount as the increases in the tenant rents due to an increase in rents chargedto tenants and an increase in HUD subsidy from fiscal year 2006 to fiscal Year 2007. Expenses decreased from 2006to 2007 with the exceptions of administrative, tenant services, and maintenance. The increase of $92,859 inadministrative expenses is mainly due to salary increases for current employees and increases in employee benefitpremiums. Maintenance expenses increased $705 due to the increase in material expenses for the ongoing workinvolved with me routine unit turnaround of the many vacant units of the Housing Authority. Tenant servicesexpenses also increased due to an increase in the costs associated with the TANF program.



CAPITAL ASSETS AND DEBT ADMINISTRATION

Capital Assets

As of the end of 2007, the Authority had $2,590,306 invested in a variety of capital assets as reflected in thefollowing schedule.

TABLE4

CAPITAL ASSETS AT YEAR-END(NET OF DEPRECIATION)

2007 2006

Land and land rights $ 554,522 $ 554,522

Buildings 10,343,164 10,081,720

Equipment - Administrative 283,091 256,756

Equipment - Dwelling 79,591 96,993

Accumulated Depreciation (8.670.062t (&27L96S)

Total $2.590.306 $ 2.718.026

The capital assets increased for buildings by $261,444 and for administrative equipment by $26,335. Dwellingequipment decreased by $17,402 as aresutt of dispositions. Accumulated depreciation also increased by $398,097,due to current year depreciation expense, net of disposals.

10

Housing Authority of the Parish of St. James


The following reconciliation summarizes the change in capital assets.

TABLES

CHANGE EN CAPITAL ASSETS

BusinessType

Activities

Beginning Balance $2,718,026

Additions, Net of Retirements 287,778

Depreciation and Amortization 415.498

Ending Balance $2.590.306

Debt

Other than routine payables and other accrued liabilities, the Authority did not have debt outstanding as of September30,2006 or 2007.

ECONOMIC FACTORS

Significant economic factors affecting the Authority are as follows:

* Federal funding provided by Congress to the Department of Housing and Urban Development• Local labor supply and demand, which can affect salary and wage rates• Local inflationary, recessionary and employment trends, which can affect resident incomes and therefore

the amount of rental income• Inflationary pressure on utility rates, supplies and other costs

FINANCIAL CONTACT

The individual to be contacted regarding this report is Dana Groover, of the St James Parish Housing Authority, at(225) 869-3278. Specific requests may be submitted to the St. James Parish Housing Authority, 2627 North KingAvenue, Lutcher, Louisiana, 70071.

11

Housing Authority of the Parish of St. JamesLutcher, Louisiana

ENTERPRISE FUNDSBalance Sheet

September 30,2007Statement A

ASSETS

Current Assets

Cash and cash equivalentsInvestments

Accounts receivableAccrued interest receivablePrepaid Items and other assets

Restricted AssetsResident deposits

884,020112,604

162,3810

15,017

31.368

Total Current Assets 1,205,410

Capital Assets

Land, buildings, and equipment (net) 2.590.306

TOTAL ASSETS $ 3.795.716

12

(CONTINUED)


ENTERPRISE FUNDSBalance Sheet

September 30,2007Statement A

LIABILITIES AND FUND EQUITYLIABILITIESCurrent Liabilities

Accounts payableDeferred revenueCurrent portion of compensated absences payable

Current Liabilities Payable From Current Restricted Assets

Deposits due others

Total Current Liabilities

Noncurrent LiabilitiesCompensated absences payable

Total Liabilities

NET ASSETS

Invested in capital assets, net of related debtRestricted

Unrestricted

NET ASSETS

TOTAL LIABILITIES AND NET ASSETS

$ 39,609389

6,270

31.388

77.656

30.900

108.556

2,590,306

01.096.854

3.687.160

$ 3.795.716

(CONCLUDED)

THE NOTES TO THE FINANCIAL STATEMENTS ARE AN INTEGRAL PART OF THIS STATEMENT.

13


ENTERPRISE FUNDSStatement of Revenues, Expenses,and Changes in Fund Net Assets

For the Year Ended September 30,2007Statement B

OPERATING REVENUES

Dwelling rentalFederal grantsOther income

Total operating revenues

OPERATING EXPENSESAdministrationTenant services

UtilitiesOrdinary maintenance & operationsGeneral expensesNonroutine maintenanceDepreciation and amortization

Total operating expenses

Income (toss) from Operations

NONOPERATING REVENUES (EXPENSES)

Interest earningsMiscellaneous revenue (expense)

Total nonoperating revenues (expenses)

Net income (Loss) before capital contributions

Capital contributions

Change in net assets

NET ASSETS AT BEGINNING OF YEAR

NET ASSETS AT END OF YEAR

431,530987,66250.688

1.449.880

423,66965,657

137,985289,594

192,26418,744

415.498

1.543.611

f 93.731)

11,112592

11.704

(82,027)

261.445

179,418

3.507.742

3.687.160


14


ENTERPRISE FUNDSStatement of Cash Flows

For the Year Ended September 30,2007

CASH FLOWS FROM OPERATING ACTIVITIES

Rental receipts

Other receipts

Payments to vendors

Payments to employees

Federal grantsNET CASH PROVIDED (USED) BY OPERATING ACTIVITIES

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES

Purchase fixed assets

Sale of fixed assetsCapital contributions

NET CASH PROVIDED (USED) BY CAPITAL AND RELATED FINANCING ACTIVITIES

CASH FLOW FROM INVESTING ACTIVITIES:Purchase of investments

Interest and dividends

NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR

Statement C

420,738

103,655

(830,768)

(317,206)

928.185

304.604

(290,119)

2.933261.445

(25.7411

(5.123)

11.293

6.170

285,033

630.37fi

CASH AND CASH EQUIVALENTS AT END OF YEAR

Reconciliation to the Balance SheetCash and cash equivalentsRestricted deposits

Total cash and cash equivalents

RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED (USED) BY

OPERATING ACTIVITIES

Operating Income (loss)

Adjustments to reconcile operating income to net cash provided (used) by operating activities:

Depreciation expense

Change in assets and liabilities:

Receivables, net

Prepaid items

Accounts payables

Compensated absencesDeferred revenueDeposits due others

NET CASH PROVIDED BY OPERATING ACTIVITIES


91S.4Q8

884,02031.388915.408

(93,731)

415,498

(25,252)16,09314,9958,429

(31,036)(3921

304.604

15

Housing Authority of the Parish of St. JamesNotes to the Financial Statements

September 30,2007

INDEXPage

NOTE 1-SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 17

A. REPORTING ENTITY 17

B. FUNDS 17

C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING 18

D. INVESTMENTS 18

E. CASH AND CASH EQUIVALENTS 18

F. INVENTORY AND PREPAID ITEMS 19

G. CAPITAL ASSETS 19

H. COMPENSATED ABSENCES 19

I. RESTRICTED NET ASSETS 19

J. USE OF ESTIMATES : . 19

NOTE 2 - DEPOSITS AND INVESTMENTS 19

NOTE 3-RECEIVABLES , 20

NOTE 4-CAPITAL ASSETS 20

NOTE 5-RETIREMENTSYSTEM 21

NOTE 6-ACCOUNTS PAY ABLE 21

NOTE 7-COMPENSATED ABSENCES. 21

NOTE 8 - COMMITMENTS AND CONTINGENCIES 21

NOTE 9-RISKMANAGEMENT , 22

NOTE 10 - ECONOMIC DEPENDENCY 22

NOTE 11 - INSURANCE RECOVERY 22

NOTE 12 - SUBSEQUENT EVENTS 22

16

Housing Authority of the Parish of St JamesNotes to the Financial Statements

September 30,2007

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The accompanying financialstatements of the Housing Authority of the Parish of St James (the Housing Authority) have been prepared inconformity with accounting principles generally accepted in the United States of America (GAAP) as applied togovernmental units. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting bodyfor establishing governmental accounting and financial reporting principles.

A. REPORTING ENTITY Housing authorities are chartered as public corporations under the laws LSA-R.S.40:391 of the state of Louisiana for the purpose of providing safe and sanitary dwelling accommodations. Thiscreation was contingent upon the local governing body of the city or parish declaring a need for the HousingAuthority to function in such city or parish. The Housing Authority is governed by a five-member board ofcommissioners.

The Housing Authority has the following units:# of Units

PHA Owned Housing 316

GASB Statement 14 establishes criteria for determining the governmental reporting entity and component units matshould be included within the reporting entity. Under provisions of this Statement, the Housing Authority isconsidered & primary government, since it is a special purpose government that has a separate governing body, islegally separate, and is fiscally independent of other state or local governments. As used in GASB Statement 14,fiscally independent means that the Housing Authority may, without the approval or consent of another governmentalentity, determine or modify its own budget, set rates or charges, and issue bonded debt

GASB Statement No. 14 defines a related organization as an organization for which a primary government isaccountable because that government appoints a voting majority of the board, but is not financially accountable.According to this definition, the Housing Authority is a related organization of St James Parish since the parishappoints a voting majority of the Housing Authority's governing board The parish is not financially accountable forthe Housing Authority as it cannot impose its will on the Housing Authority and mere is no potential for the HousingAuthority to provide financial benefit to, or impose financial burdens on the parish. Accordingly, the HousingAuthority is not a component unit of the financial reporting entity of St James Parish.

Certain units of local government over which the Housing Authority exercises no oversight responsibility, such as theschool board, parish police jury, other independently elected parish officials, and municipalities within the parish, areexcluded from the accompanying financial statements. These units of government are considered separate reportingentities and issue financial statements separate from those of the Housing Authority. In addition, the accompanyingfinancial statements do not include various resident associations which are legally separate entities.

B. FUNDS Hie accounts of the Housing Authority are organized and operated on the basis of funds. A fund is anindependent fiscal and accounting entity with a self-balancing set of accounts. Fund accounting segregates fundsaccording to their intended purpose and is used to aid management in demonstrating compliance with finance-relatedlegal and contractual provisions. The minimum number of funds are maintained consistent with legal and managerialrequirements.

The funds of the Housing Authority are classified as proprietary.

17


September 30,2007

Proprietary funds account for activities similar to those found in the private sector, where the determination of netincome is necessary or useful to sound financial administration. Proprietary funds differ from governmental funds inthat their focus is on income measurement, which, together with the maintenance of equity, is an important financialindicator. The general fund accounts for the transactions of the public housing low rent program, drug eliminationprogram, temporary assistance to needy families, and the capital fund program.

C. MEASUREMENT FOCUS AND BASIS OF ACCOUNTING Proprietary funds are accounted for on the flowof economic resources measurement focus and the accrual basis of accounting. Under this method, revenues arerecorded when earned and expenses are recorded at the time the liabilities are incurred. With this measurement focus,all assets and all liabilities associated with the operation of these funds are included on the balance sheet TheHousing Authority has elected, pursuant to GASB Statement No. 20, to apply all GASB pronouncements and onlyFASB pronouncements issued before November 30,1989.

Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues andexpenses generally result from providing services and producing and delivering goods in connection with aproprietary funds' principal ongoing operations. The principal operating revenues of the Housing Authority's fundsare rent and maintenance charges to residents and administration fees earned. Operating expenses for proprietaryfunds include the administrative costs of providing the service. All revenues and expenses not meeting mis definitionare reported as non-operating revenues and expenses.

D. INVESTMENTS Investments are limited by R.S. 33:2955 and the HousmgAumorirysinwstment policy. If theoriginal maturities of investments exceed 90 days, they are classified as investments; however, if the originalmaturities are 90 days or less, they are classified as cash equivalents.

The investments are reflected at fair value except for the following which are required/permitted as per GASBStatement No. 31:

1. Investments in nonparticipatins interest-earning contracts, such as nonnegotiable certificates of deposit withredemption terms mat do not consider market rates, are reported using a cost-based measure.

2. The Housing Authority reports at amortized cost money market investments and participating interest-earninginvestment contracts that have a remaining maturity at time of purchase of one year or less.Definitions:

Interest-earning investment contract include time deposits with financial institutions (such as certificates ofdeposit), repurchase agreements, and guaranteed investment contracts.

Money market investments are short-term, highly liquid debt instruments that include U. S. Treasury obligations.

E. CASH AND CASH EQUIVALENTS Cash includes amounts in demand deposits and interest-bearing demanddeposits. Cash equivalents include amounts in time deposits and cash with fiscal agent Under state law, the HousingAuthority may deposit funds in demand deposits, interest-bearing demand deposits, money market accounts, or timedeposits with state banks organized under Louisiana law and national banks having their principal offices inLouisiana.

18


September 30,2007

F. INVENTORY AND PREPAID ITEMS AH inventory items are valued at cost using first-in, first-out method.Inventory is recorded using the consumption method.

Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items.

G. CAPITAL ASSETS Capital assets are recorded at historical cost and depreciated over their estimated useful lives(excluding salvage value). Donated capital assets are recorded at their estimated fair value at the date of donation.Estimated useful life is management's estimate of how long the asset is expected to meet service demands. Straightline depreciation is used based on the following estimated useful lives:

Site improvements 10.0 yearsOriginal development costs 27.5 yearsEquipment 5.0 years

FL COMPENSATED ABSENCES The Housing Authority follows Louisiana Civil Service regulations foraccumulated annual and sick leave. Employees may accumulate up to 300 hours of annual leave which may bereceived upon termination or retirement Sick leave hours accumulate, but the employee is not paid for mem if notused by his/her retirement or termination date.

L IPSTRICTED NET ASSETS Net assets are reported as restricted when constraints placed on net assets use areeither:

Externally imposed by creditors (such as debt covenants), grantors, contributors, or laws or regulations of othergovernments or imposed by law through constitutional provisions or enabling legislation.

It is the Housing Authority's policy to first apply restricted resources when an expense is incurred for purposes forwhich bom restricted and unrestricted resources are available.

J. USE OF ESTIMATES The preparation of financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to make estimates and assumptions mataffect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of thefinancial statement and the reported amounts of revenues and expenses during the reporting period. Actual resultscould differ from those estimates.

NOTE 2 - DEPOSITS AND INVESTMENTS At September 30,2007, the Housing Authority has cash and cashequivalents of $1,028,012 as follows:

Deposits are stated at cost, which approximates fair value. Under state law, these deposits (or the resulting bankbalances) must be secured by federal deposit insurance or the pledge of securities owned by me fiscal agent bank.The fair value of the pledged securities plus the federal deposit insurance must at all times equal the amount ondeposit with the fiscal agent These securities are held in the name of the pledging fiscal agent bank hi a holding orcustodial bank that is mutually acceptable to both parties.

Interest Rate Risk: The Housing Authority's policy does not address interest rate risk.

19


September 30,2007

Custodial Credit Risk: At year end, the Housing Authority's carrying amount of deposits was $1,028,012 (whichincludes restricted cash of $31,388 for tenant security deposits and $112,604 reported as investments) and the bankbalance was $985,319. Of the bank balance, $300,000 was covered by federal depository insurance or by collateralheld by the Housing Authority's agent in the Housing Authority's name (G ASB Category 1). The remaining balancewas collateralized with securities held by the pledging financial institution's trust department or agent but not in theHousing Authority's name (GASB Category 3) except for $12,604 which was not secured. Even though the pledgedsecurities are considered uncollateralized (Category 3) under the provisions of GASB Statement No. 3, LouisianaRevised Statue 39:1229 imposes a statutory requirement on the custodial bank to advertise and sell pledged securitieswithin 10 days of being notified by me Housing Authority that the fiscal agent has failed to pay deposited funds upondemand. The Housing Authority's policy does not address custodial credit risk.

NOTE 3 - RECEIVABLES The receivables net of allowance for doubtful accounts at September 30,2007, are asfollows:

Class of ReceivablesTenants, net of allowance of $1,332Fraud Recovery, net of allowance of $8,176HUDTANF

Total

10,7366,059

104,32541,261

$ 162,381

NOTE 4 - CAPITAL ASSETS The changes and balances at September 30,2007 in capital assets are as follows:

Governmental activitiesCapital asset not being depreciated

LandConstruction in progressTotal capital assets not being depreciated

Capita] assets being depreciatedBuildings & improvementsFurniture and equipmentTotal capital assets being depreciated

Less accumulated depreciationBuildings & improvementsFurniture and equipment

Total accumulated depreciation

Total capital assets being depreciated, net

Capital assets, net

BalanceBeginning

$ 554,522

554,522

10,081,720353,749

10,435,469

7,958,957313,008

8,271,965

2,163,504

Additions Deletions

$ - $

.

261,44428,675

290,119

390,26625,232

415,498

(125,379)

-

-

19,74219,742

17,40117,401

2,341

BalanceEnding

$ 554,522

554,522

10,343,164362,682

10,705,846

8,349,223320,839

8,670,062

2,035,784

$ 2,718.026 $ (125,379) $

20


September 30,2007

NOTE 5 - RETIREMENT SYSTEM The Housing Authority participates in the Housing Renewal Local AgencyRetirement Plan. The Housing Authority provides pension benefits for all of its full-time employees through adefined contribution plan. AH regular and full-time employees are eligible to participate in the plan on the first day ofthe month after completing six months of continuous and uninterrupted employment.

Under a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investmentearnings. The employer is required to make monthly contributions equal to 8.5 percent of each participant's basic(excludes overtime) compensation. The covered employee contributes 6 percent of basic compensation. The HousingAuthority's contribution for each employee and income allocated to the employee's account are fully vested after fiveyears of continuous service. The Housing Authority's contributions and interest forfeited by employees who leaveemployment before five years of service are used to offset future contributions of the Housing Authority.

The Housing Authority's total payroll for year ended September 30,2007, was $524,966. The Housing Authority'scontributions were calculated using the base salary amount of $ 170,066. The Housing Authority made the requiredcontributions of $14,456 and the covered employees made the required contributions of $10,204 for the year endedSeptember 30, 2007.

NOTE 6 - ACCOUNTS PAYABLE The account payables balances at September 30,2007, are as follows:

Vendors

Salaries

Utilities

Total

NOTE 7 - COMPENSATED ABSENCES At September 30,2007, employees of the Housing Authority haveaccumulated and vested $37,170 of employee leave benefits, which was computed in accordance with GASBCodification Section C60. These amounts are recorded as liabilities in the funds from which payment will be made.Following is a summary of the compensated absence transactions for the year:

Balance, Beginning $28,741

Additions 14,699

Deductions 6.270

Balance, Ending $37.170

Amount Due in One Year $ 6,270

NOTE 8 -COMMITMENTS AND CONTINGENCIES

Litigation At September 30, 2007, the Housing Authority was not involved in any litigation that would have amaterial impact on the financial statements.

Construction Projects There are certain major construction projects in progress at September 30,2007. Theseprojects are being funded by HUD. Funds are requested periodically as the cost is incurred.

21

Housing Authority of the Parish of St* JamesNotes to the Financial Statements

September 30,2007

Grant Disallowances The Housing Authority participates in a number of state and federally assisted grant programs.The programs are subject to compliance audits under the single audit approach. Such audits could lead to requests forreimbursement by the grantor agency for expenditures disallowed under terms of the grants,

NOTE 9 - RISK MANAGEMENT The Housing Authority is exposed to various risks of loss related to torts; theftof, damage to and destruction of assets; errors and omissions; and natural disasters for which the Housing Authoritycarries commercial insurance.

NOTE 10 - ECONOMIC DEPENDENCY Statement of Financial Accounting Standard (SFAS) No. 14 requiresdisclosure in financial statements of a situation where one entity provides more than 10% of the audited entity'srevenues. The Department of Housing and Urban Development provided $1,130,691 to the Housing Authority, whichrepresents approximately 67% of the Housing Authority's total revenue for the year.

NOTE 11 - INSURANCE RECOVERY Included in other income is $24,602 of insurance proceeds for a burnedunit.

NOTE 12 - SUBSEQUENT EVENT The Housing Authority will not be receiving TANF 2007 grant and the TANFprogram will be closed out once the TANF 2006 grant is fully expended.

22


COMPENSATION PAID BOARD MEMBERS

The members of the Board of Commissioners serve without compensation. The members of the Board ofCommissioners are as follows:

Ronald Dabney, Chairman

Florian Oubre, Vice Chairman

Lois Jones-Moore

Leo McQueen

Wayne Alexis

23

Housing Authority of the Parish of St. JamesFinancial Data Schedule


PHA: LA092 FYED: 09/30/2007

LineItem Account DescriptionNo.

Ill Cash-Unrestricted114 Cash - Tenant Security Deposits100 Total Cash

122 Accounts Receivable - HUD Other Projects124 Accounts Receivable - Other Government126 Accounts Receivable - Tenants - Dwelling Rents

126.1 Allowance for Doubtful Accounts - Dwelling Rents126.2 Allowance for Doubtfol Accounts - Other

128 Fraud Recovery128.1 Allowance for Doubtful Accounts - Fraud

120 Total Receivables, net of allowances for doubtfiil accounts

131 Investments - Unrestricted142 Prepaid Expenses and Other Assets144 Interprogram Due From150 Total Current Assets

161 Land162 Buildings163 Furniture, Equipment & Machinery - Dwellings164 Furniture, Equipment & Machinery - Administration165 Leasehold Improvements166 Accumulated Depreciation160 Total Fixed Assets, Net of Accumulated Depreciation

180 Total Non-Current Assets

190 Total Assets

Low RentPublic

Housing$884,020$31,388

$915,408

$0$0

$12,068($1,332)

$0$14,235($8,176)

$16,795

$112,604$15,017

$105,925$1,165,749

$554,522$9,802,639

$79,591$283,091

$0($8,588,102)$2,131,741

$2,131,741

$3,297,490

PublicHousing

Capital FundProgram

$0$0$0

$104,325$0$0$0$0$0$0

$104,325

$0$0$0

$104,325

$0$540,525

$0$0$0

($81,960)$458,565

$458,565

$562,890

TemporaryAssistancefor NeedyFamilies

$0$0$0

$0$41,261

$0$0$0$0$0

$41,261

$0$0$0

$41,261

$0$0$0$0$0$0$0

$0

$41,261

Total$884,020$31,388

$915,408

$104,325$41,261$12,068($1,332)

$0$14,235($8,176)

$162.381

$112,604$15,017

$105,925$1,311,335

$554,522$10,343,164

$79,591$283,091

$0($8,670,062)$2,590,306

$2,590,306

$3,901,641(continued)

24


For die Year Ended September 30,2007

PHA: LA092 FYED: 09/30/2007


312 Accounts Payable <= 90 Days321 Accrued Wage/Payroll Taxes Payable322 Accrued Compensated Absences - Current Portion341 Tenant Security Deposits342 Deferred Revenues347 interprogram Due To310 Total Current Liabilities

354 Accrued Compensated Absences - Non Current350 Total Noncurrent Liabilities

300 Total Liabilities

508 Total Contributed Capital

508.1 Invested in Capital Assets, Net of Related Debt511 Total Reserved Fund Balance

511.1 Restricted Net Assets512.1 Unrestricted Net Assets

513 Total Equity/Net Assets

600 Total Liabilities and Equity/Net Assets

Low RentPublic

Housing$27,818$4,889$6,270

$31,388$389

$0$70,754

$30,900$30,900

$101,654

$0

$2,131,741$0

$0$1,064,095$3,195,836

$3,297,490

PublicHousing

Capital FundProgram

$0$6,902

$0$0$0

$97,423$104,325

$0$0

$104,325

$0

$458,565$0

$0$0

$458,565

$562,890


$0$0$0$0$0

$8,502$8,502

$0$0

$8,502

$0

$0$0

$0$32,759$32,759

$41,261

Total$27,818$11,791$6,270

$31,388$389

$105,925$183,581

$30,900$30,900

$214,481

$0

$2,590,306$0

$0$1,096,854$3,687,160

$3,901,641(continued)

25



PHA: IA092 FYED: 09/30/2007


703 Net Tenant Rental Revenue704 Tenant Revenue - Other705 Total Tenant Revenue

706 HUD PHA Operating Grants706.1 Capital Grants

70S Other Government Grants711 Investment Income - Unrestricted714 Fraud Recovery715 Other Revenue716 Gain/Loss on Sale of Fixed Assets700 Total Revenue

911 Administrative Salaries912 Auditing Fees914 Compensated Absences915 Employee Benefit Contributions - Administrative916 Other Operating - Administrative921 Tenant Services • Salaries923 Employee Benefit Contributions - Tenant Services924 Tenant Services - Other931 Water932 Electricity933 Gas941 Ordinary Maintenance and Operations - Labor

942 Ordinary Maintenance and Operations - Materials and Other943 Ordinary Maintenance and Operations - Contract Costs945 Employee Benefit Contributions - Ordinary Maintenance961 Insurance Premiums964 Bad Debt - Tenant Rents969 Total Operating Expenses

970 Excess Operating Revenue over Operating Expenses

Low RentPublicHousing$412,344$19,186$431,530

$733,616$0$0

$11,112$15,047$35,641$592

$1,227,538

$123,668$18,000$27,303$47,352$119,115

$0$0$0

$79,867$55,988$2,130$61,197

$54,768$103,001$23,429$178,411$13,853$908,082

$319,456

PublicHousing

Capital FundProgram

$0$0$0

$135,630$261,445

$0$0$0$0$0

$397,075

$64,717$0$0

$4,815$18,899

$0$0$0$0$0$0$0

$47,199$0$0$0$0

$135,630

$261,445


$0$0$0

$0$0

$98,416$0$0$0$0

$98,416

$0$0$0$0$0

$51,900$4,085$9,672

$0$0$0$0

$0$0$0$0$0

$65,657

$32,759

Total$412,344$19,186$431,530

$869,246$261,445$98,416$11,112$15,047$35,641$592

$1,723,029

$188,385$18,000$27,303$52,167$138,014$51,900$4,085$9,672$79,867$55,988$2,130$61,197

$101,967$103,001$23,429$178,411$13,853

$1,109,369

$613,660(continued)

26



PHA: LA092 FYED: 09/30/2007


972 Casualty Losses - Non-Capitalized974 Depreciation Expense975 Fraud Losses900 Total Expenses

1010 Total Other Financing Sources (Uses)

Excess (Deficiency) of Total Revenue Over (Under) Total1000 Expenses

1102 Debt Principal Payments - Enterprise Funds1103 Beginning Equity

Prior Period Adjustments, Equity Transfers and Correction of1104 Errors1120 Unit Months Available1121 Number of Unit Months Leased

Low RentPublic

Housing$16,588

$361,446$2,156

$1,288,272

PublicHousing

Capital FundProgram

$0$54,052

$0$189,682


$0$0$0

$65,657

Total$16,588

$415,498$2J56

$1,543,611

$0 $0 $0

($60,734) $207,393 $32,759

$0$2,953,422

$303,148$3,056$3,038

$0$554,320

($303,148)$0$0

$0$0

$0$0$0

$0

$179,418

$0$3,056$3,038

(concluded)

27

_ ._._ r _ _ _ Tim Green, CPAALLEN, GREEN & WILLIAMSON, LLP M^wn^a-ACERTIFIED PUBLIC ACCOUNTANTS

P.O. Box 6075 DiaoeFeracbo^CPAMonroe, LA 71211-6075 Amy Tynes, CPA

2414 Ferrand Street Phone: (318)388-4422 AJmee Buchanan, CPAMonroe, LA 71201 Fax: (318) 3B8-4664 Ange Williamson, O»A

Cindy Thomason, CPAThe CPA.

Never Underestimate lvalue?1 ToNree: (888)741-0205www.allengreencpa.com E™M L Aim, CM.

(Kctinrf) 1963 - 2000

Report on Internal Control Over Financial Reporting and on Complianceand Other Matters Based on an Audit of Financial Statements

Performed in Accordance With Government Auditing Standards


We have audited the financial statements of the Housing Authority of the Parish of St James, as of and for the yearended September 30,2007, and have issued our report thereon dated March 31,2008. We conducted our audit inaccordance with auditing standards generally accepted in the United States of America and the standards applicable tofinancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial ReportingIn planning and performing our audit, we considered the Housing Authority's internal control over financial reportingas a basis for designing our auditing procedures for the purpose of expressing our opinion on the financial statements,but not for the purpose of expressing an opinion on the effectiveness of the Housing Authority's internal control overfinancial reporting. Accordingly, we do not express an opinion on the effectiveness of the Housing Authority'sinternal control over financial reporting.

A control deficiency exists when the design or operation of a control does not allow management or employees, in thenormal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. Asignificant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity'sability to initiate, authorize, record, process, or report financial data reliably in accordance with generally acceptedaccounting principles such that there is more than a remote likelihood mat a misstatement of the entity's financialstatements mat is more than inconsequential will not be prevented or detected by the entity's internal control.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more than aremote likelihood that a material misstatement of the financial statements will not be prevented or detected by theentity's internal control.

Our consideration of internal control over financial reporting was for the limited purpose described in me firstparagraph of this section and would not necessarily identify all deficiencies in internal control mat might besignificant deficiencies or material weaknesses. We did not identity any deficiencies in internal control over financialreporting that we consider to be material weaknesses, as defined above.

Compliance and Other MattersAs part of obtaining reasonable assurance about whether the Housing Authority's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts and

28Also Located in Alexandria and Sarcveport, Louisiana

Member. American Institute of Certified Public Accountants, Society of Louisiana Certified Public Accountants andAmerican Institute of Certified Public Accountants Division for CPA Finns


grant agreements, noncompliance with which could have a direct and material effect on the determination of financialstatement amounts. However, providing an opinion on compliance with those provisions was not an objective of ouraudit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances ofnoncompliance or other matters that are required to be reported under Government Auditing Standards.

We noted certain matters that we reported to management of the Housing Authority in a separate letter dated March31,2008.

This report is intended solely for the information and use of the Board, management, federal awarding agencies, andpass-through entities and is not intended to be and should not be used by anyone other than these specified parties.Although the intended use of these reports may be limited, under Louisiana Revised Statute 24:513 this report isdistributed by the Louisiana Legislative Auditor as a public document.

fALLEN, GREEN & WILLIAMSON, LLP


29

Tim Green, CPA


<?/X»» f> A""\3 / f U A I< I I, f M J\V' *V

CEKTIRED PUBLIC ACCOUNTANTSP.O. Box6075 DianeFcrscbofi;CPA

Monroe, LA 71211-6075 A - t̂1^ ^^2414 Fenand Street Phone:(318)388-4422 *' "n—i-Monroe. LA 71201 Fax: (318)388-4664

Toll-free: (888)741-0205www.allengreencpa.com

(Hdirad) 1963-2000

Report on Compliance With Requirements Applicable toEach Major Program and on Internal Control Over

Compliance in Accordance With OMB Circular A-133


ComplianceWe have audited the compliance of the Housing Authority of the Parish of St. James, Lutcher, Louisiana, with thetypes of compliance requirements described in the U. S. Office of Management and Budget (OMB) Circular A-133Compliance Supplement that are applicable to each of its major federal programs for the year ended September 30,2007. The Housing Authority's major federal programs are identified in the summary of auditors' results section ofthe accompanying schedule of findings and questioned costs. Compliance with the requirements of laws, regulations,contracts, and grants applicable to each of its major federal programs is the responsibility of the Housing Authority'smanagement Our responsibility is to express an opinion on the Housing Authority's compliance based on our audit

We conducted our audit of compliance in accordance with auditing standards generally accepted in the United Statesof America; the standards applicable to financial audits contained in Government Auditing Standards, issued by theComptroller General of the United States; and OMB Circular A-133. Audits of States, Local Governments, andNon-Profit Organizations. Those standards and OMB Circular A-l 33 require that we plan and perform the audit toobtain reasonable assurance about whether noncompliance with the types of compliance requirements referred toabove that could have a direct and material effect on a major federal program occurred. An audit includes examining,on a test basis, evidence about the Housing Authority's compliance with those requirements and performing suchother procedures as we considered necessary m the circumstances. We believe that our audit provides a reasonablebasis for our opinion. Our audit does not provide a legal determination on the Housing Authority's compliance withthose requirements.

In our opinion, the Housing Authority complied, in all material respects, with the requirements referred to above thatare applicable to each of its major federal programs for the year ended September 30,2007. However, the results ofour auditing procedures disclosed an instance of noncompliance with those requirements, which are required to bereported in accordance with OMB Circular A-133 and which are described in the accompanying Schedule of Findingsand Questioned Costs as item 07-F1.

Internal Control Over ComplianceThe management of the Housing Authority is responsible for establishing and maintaining effective internal controlover compliance with requirements of laws, regulations, contracts, and grants applicable to federal programs. Inplanning and performing our audit, we considered the Housing Authority's internal control over compliance with therequirements that could have a direct and material effect on a major federal program in order to determine ourauditing procedures for the purpose of expressing our opinion on compliance, but not for the purpose of expressing anopinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on theeffectiveness of the Housing Authority's internal control over compliance.


Member American Institute of Certified Public Accountant*. Society of Louisiana Certified Public Accountants andAmerican Institute of Certified Puttie Accountants Division for CPA Finns


Our consideration of internal control over compliance was for the limited purpose described in the precedingparagraph and would not necessarily identity all deficiencies in the entity's internal control that might be significantdeficiencies or material weaknesses as defined below. However, as discussed below, we identified certaindeficiencies in internal control over compliance that we consider to be significant deficiencies.

A control deficiency in an entity's internal control over compliance exists when the design or operation of a controldoes not allow management or employees, in the normal course of performing their assigned functions, to prevent ordetect noncompliance with a type of compliance requirement of a federal program on a timely basis. A significantdeficiency is a control deficiency, or combination of control deficiencies, that adversely affects the entity's ability toadminister a federal program such that there is more than a remote likelihood that noncompliance with a type ofcompliance requirement of a federal program that is more than inconsequential will not be prevented or detected bythe entity's internal control. We consider the deficiencies in internal control over compliance described in theaccompanying schedule of findings and questioned costs as item 07-F1 to be significant deficiency.

A material weakness is a significant deficiency, or combination of significant deficiencies, that results in more man aremote likelihood that material noncompliance with a type of compliance requirement of a federal program will not beprevented or detected by the Housing Authority's internal control We did not consider any of the deficienciesdescribed in the accompanying schedule of findings and questioned costs to be material weaknesses.

The Housing Authority's response to the findings identified in our audit are described in the accompanying scheduleof findings and questioned costs. We did not audit the Housing Authority's response and, accordingly, we expressno opinion on it.

This report is intended solely for the information and use of the Board, management, federal awarding agencies, andpass-through entities and is not intended to be and should not be used by anyone other than these specified parties.Although the intended use of these reports may be limited, under Louisiana Revised Statute 24:513 this report isdistributed by the Louisiana Legislative Auditor as a public document.



31

Housing Authority of the Parish of St JamesSchedule of Expenditures of Federal Awards


FEDERAL GRANTOR/PASS-THROUGH GRANTOR/PROGRAM NAMEUnited States Department of Health & Human Services

Passed Through Louisiana Department of Social Services:Temporary Assistance for Needy Families

United States Department of Housing and Urban DevelopmentDirect Programs

Public and Indian HousingOperating Subsidy

Public Housing Capita] Fund ProgramTotal

CFDANumber

93.558

Pass-throughGrantor No. Expenditures

N/A $ 98,416

14.85014.872

FW-2007FW-2007

733,616397.075

$1.229.107

32

Housing Authority of the Parish of SL JamesNotes to the Schedule of Expenditures of Federal Awards


NOTE 1 - GENERAL The accompanying Schedule of Expenditures of Federal Awards presents the activity of allfederal awards programs of the Housing Authority. The Housing Authority reporting entity is defined in Note 1 to theHousing Authority's financial statements. Federal awards received directly from federal agencies, as well as federalawards passed through other government agencies, is included on the schedule.

NOTE 2 - BASIS OF ACCOUNTING The accompanying Schedule of Expenditures of Federal Awards ispresented using the accrual basis of accounting, which is described in Note 1 to the Housing Authority's financialstatements.

NOTE 3 - RELATIONSHIP TO FINANCIAL STATEMENTS Federal awards revenues are reported in meHousing Authority's financial statements as follows:

Non operating revenues - federal grants $ 967,662Capital contributions 261.445

NOTE 4 - RELATIONSHIP TO FEDERAL FINANCIAL REPORTS Amounts reported in the accompanyingschedule agree with the amounts reported in the related federal financial reports except for changes made to reflectamounts in accordance with accounting principles generally accepted in the United States of America.

NOTE 5 - FEDERAL AWARDS For those funds mat have matching revenues and state funding, federalexpenditures were determined by deducting matching revenues from total expenditures. In accordance with HUDNotice PIH 98-14, "federal awards" do not include the Housing Authority operating income from rents or investments(or other non-federal sources). In addition, debt service annual contribution payments made by HUD directly to fiscalagents for holders of the Housing Authority bonds or for the Housing Authority notes held by the federal financingbank (FFB), are not considered when determining if the Single Audit Act "federal awards expended" threshold is metby the Housing Authority in a fiscal year. In addition, the entire amount of operating subsidy received during thefiscal year is considered to be "expended" during the fiscal year.

33

Housing Authority of the Parish of St JamesSchedule of Findings and Questioned Costs

As of and for the Year Ended September 30,2007

PARTI- Summary of the Auditors'Results

Financial statement audit

i. The type of audit report issued was unqualified.

ii. There were no significant deficiencies required to be disclosed by Government Auditing Standards issuedby the Comptroller General of the United States of America.

iii. There were no instances of noncompliance considered material, as defined by the Government AuditingStandards, to the financial statement.

Audit of federal awards

iv. There was a significant deficiency required to be disclosed by OMB Circular A-133. The significantdeficiency was not considered to be a material weakness.

v. The type of report the auditor issued on compliance for major programs was unqualified.

vl The audit disclosed one audit finding which the auditor is required to report under OMB Circular A-l 33,Section .510(a).

vii. The major federal program is:

CFDA #14.850 Public Housing

viii. Hie dollar threshold used to distinguish between Type A and Type B programs as described in OMBCircular A-133, Section .520(b) was $300,000.

ix. The auditee does qualify as a low-risk auditee under OMB Circular A-133, Section ,530.

34

Housing Authority of the Parish of St. JamesSchedule of Findings and Questioned Costs

As of and for the Year Ended September 30,2007

PART DI- Findings and questioned costs for federal awards which are required to be reported under OMBNo. A-133 Section 510(a):

Reference # and title; 07-F1 Test of Resident Files

Entity-wide or program/department specific: This finding relates to Public and Indian Housing program, CFDA#14.850 for the grant year 2007.

Criteria or specific requirement: The Housing Authority must re-examine family income and composition at leastonce every 12 months and adjust the rent charges. The Housing Authority must also determine income eligibility andcalculate the tenant's rent payment. The Housing Authority is required to submit form 5005 8 electronically to HUDeach time the Housing Authority has an admission or re-examination. The resident files must contain the form 50058as well as the following pertinent information: social security numbers, birth certificates (or valid documentation ofbirth dates), and third party verification of income.

Condition found: In testing 15 resident files, the following exceptions were noted:1 instance noted where the date of birth did not agree with support1 instance noted where the utility allowance used in rent calculation was incorrect1 instance noted in where wage income was not included in the rent calculation

Possible asserted effect (cause and effect):

Cause; Tlie Housing Authority's errors appear to be keypunch errors, lack of adequate documentation andmiscalculations,

Effect: Some resident files do not meet federal guidelines.

Recommendations to prevent future occurrences: The Housing Authority should establish monitoring proceduresto ensure that information in resident files is adequate, agrees to form 50058, and that income calculation is correct

35

Housing Authority of the Parish of St JamesSummary Schedule of Prior Year Audit FindingsAs of and for the Year Ended September 30,2007

Referenced and title: 06-F1 Test of Resident Files

Origination Pate: September 30,2006.

Condition found: The Housing Authority must re-examine family income and composition at least once every 12months and adjust the total rent as necessary according to 24 CFR sections 5.617 and 960.209. Changes in the rentcalculation resulting from the re-examination should be reflected on the rental register.

The Housing Authority is required to submit HUD Form 50058 electronically to HUD each time the HousingAuthority has an admission or re-examination. The resident files must contain the Form 50058 as well as thefollowing pertinent information: social security cards, bird) certificates (or valid documentation of birth dates) andthird parry verifications of income, child care expenses and medical expenses. Also, resident files should have HDDForm 9886 in the file and the form should be signed annually by all adults in the household.

In testing 15 resident files, the following exceptions were noted:

7 instances where the name was misspelled or incorrect2 instances where the social security number does not agree with support4 instances where there was no supporting documentation for the social security number2 instances where there was no support for date of birth2 instances where a household member over 18 did not sign the 98863 instances where resident's income were not verified by third parties1 instance where medical expenses was not verified by third party3 instances where the computation of income was incorrect1 instance where rent charge does not agree with rent roll.

Corrective action taken: This item has not been cleared; see finding 07-F1.

Contact person responsible for corrective action:Dana Groover, Executive Director Telephone: 225-869-3278Housing Authority of the Parish of St James Fax: 225-869-8552P.O. Box 280Lutcher, LA 70071

Anticipated Completion Pate: Implementation is in progress and will be ongoing effective 03/28/2008.

36

Housing Authority of the Parish of St JamesCorrective Action Plan for Current-Year Findings and Questioned Costs

September 30,2007

Reference # and title: 07-F1 Test of Resident Files

Federal program & specific federal award identification: This finding relates to the Public and IndianHousing program, CFDA #14.850 for the 2007 Award Year.

Condition found: The Housing Authority must re-examine family income and composition at least onceevery 12 months and adjust the rent charges. The Housing Authority must also determine income eligibilityand calculate the tenant's rent payment Hie Housing Authority is required to submit form 50058electronically to HUD each time the Housing Authority has an admission or re-examination. The resident filesmust contain the form 50058 as well as the following pertinent information: social security numbers, birthcertificates (or valid documentation of birth dates), and third parry verification of income.

In testing 15 resident files, the following exceptions were noted:1 instance noted where the date of birth did not agree with support1 instance noted where the utility allowance used in rent calculation was incorrect1 instance noted in where wage income was not included in the rent calculation

Corrective action planned:In addition to last year's explanation; staff has been reorganized and has been undergoing intensive in-house aswell as off site training on rent calculations and required data for proper file maintenance. Implementation ofQuality control of files was delayed due to training and the implementation of Asset Management This year'sfinding is considerably reduced from last year and we are confident mat the files will be improved during theupcoming fiscal year where this finding can be cleared. Quality control will be ongoing and staff is workingdiligently to correct previous files errors and to avoid future ones. The errors are mistakes in data entry for themost part that were carried over from the application entry; therefore, quality control is necessary as it relates tothe application process as well.

Person responsible for corrective action:Dana GrooverSt James Housing Authority Phone: 225-869-3278P. O. Box 280 Fax: 225-869-8552Lutcher,LA 70071

Anticipated completion date: Implementation is in progress and will be ongoing effective 03/28/2008.

37

Tt*CPA. «.New Undere&lrmtBTiK VMueT

ALLEN, GREEN & WILLIAMSON, LLPCERTIFIED PUBLIC ACCOUNTANTS

P. O. Box 6075Monroe, LA 712! 1-6075

2414FerrandStreet Phone: (318)388-4422Monroe, LA 71201 Fax: (318)388-4664

TotWrw. (888)741-0205www.allengreencpa.com

Tim Green CPAMargie Williamson, CPA

Diane Feracboff, CPA

Aimee Buchanan, CPAAngie Williamson, CPACindy Ttomason, CPA

EnusiI.Alkn.CPARetired (1963-2000)

Management Letter

Board MembersHousing Authority of the Parish of St. JamesLutcher, Louisiana

In planning and performing our audit of the financial statements of the Housing Authority of the Parish of St.James for the year ended September 30,2007, we considered the Housing Authority's internal control to planour auditing procedures for the purpose of expressing our opinion on the financial statements and not toprovide assurance on the internal control.

However, during our audit, we noted certain matters involving internal control that is presented for yourconsideration. This letter does not affect our report dated March 31,2008, on the financial statements of theHousing Authority. We will review the status of these comments during our next audit engagement. Ourcomments and recommendations, which have been discussed with appropriate members of management, areintended to improve the internal control or result in other operating efficiencies. We will be pleased to discussthese comments in further detail at your convenience, to perform any additional study of these matters, or toassist you in implementing the recommendations. Management's responses have also been included. We haveperformed no audit work to verify the content of the response.

07-M1 Vendor Disbursements

Condition; Effective internal control should include vendor expenses having original documentation (check,invoice.) and paying invoices in a timely manner. The following was noted from a test of 49 vendordisbursements:

- One exception in which the invoice was not paid timely- One instance in which the invoice was not properly approved- Two instances in which the Housing Authority was unable to locate the voided check

Recommendation: Procedures for disbursing funds should be followed for all disbursements.

Managements Response: The Executive Director has issued a memorandum to the purchasing and/oraccounts payable clerk as it relates to timely processing of invoices that includes policy statement as well ascorrective actions steps to avoid late payment of invoices. Many times invoices arc delayed due to researchand/or recouping of receipts for back up purposes. To avoid this, staff is directed to initiate recovery ofnecessary back up within two days of receipt of invoice and all anticipated delays should be reported to theExecutive Director so that a management decision can be made to ensure adequate and timely payment of allinvoices to include but not be limited to telephone calls to vendors to clear up discrepancies and/or extension


Member American Institute of Certified Public Accountants, Society of Louisiana Certified Public Accountants andAmerican Institute of Certified Public Accountants Division for CPA Firms


without penalty in writing, in cases where mail is delayed which is sometimes the case.

The invoice that was not properly approved was an oversight by management when approving invoices and itwas subsequently not caught by the accounts payable clerk who is to review all invoices prior to processing forpayment. A memorandum was issued to the accounts payable clerk reminding her of the policy and process toreview all back up for signatures, receipts, etc. prior to payment as a quality assurance back up to avoid this inthe future.

The two checks that could not be located were checks that have not yet cleared the bank and was brought toour attention by the Fee Accountant to research with the bank and possibly void. Once the bank indicated theyhad not cleared, the Executive Director made the decision to void the checks. However, for future situationsand because this is a cause for concern, we will not void checks without having the voided check in thesystem. One of the checks was a check written to an agency employee as a reimbursement; however, afterreviewing the receipt she submitted she determined she had submitted the receipt in error and could not locatethe check and through a memorandum to the Executive Director it was explained and noted in the file. Thecheck still to this date has not cleared the bank and was subsequently voided from our system.

Included immediately following this letter is a Status of Prior Management Letter Item. This information hasnot been audited by Allen, Green & Williamson, LLP, and no opinion is expressed. However, we did follow-up on the prior management letter item and performed procedures to assess the reasonableness of the Status ofPrior Management Letter Item prepared by Management, and we would report, as a current-year managementletter item when Allen, Green & Williamson, LLP, concludes that the Status of Prior Management Letter Itemmaterially misrepresents the status of any prior management letter item.

This report is intended solely for the information and use of the Board, management, federal awardingagencies, and pass-through entities and is not intended to be and should not be used by anyone other than thesespecified parties. Although the intended use of this letter may be limited, under Louisiana Revised Statute24:5 1 3, this report is distributed by the Legislative Auditor as a public document.



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St. James Housing AuthorityStatus of Prior Year Management Letter Items

September 30,2007

06-M1 Issuance of 1099's

Condition: The PHA did not issue any 1099's for the period tested.

Recommendation: All vendors who are paid more than $600 and are not a corporation should receive a 1099.The Housing Authority should update its listing each year to help ensure that all necessary vendors are sent1099's.

Managements Response: This item has been cleared.

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