There is a .htaccess file needed in the same directory as the directory file. The .htaccess file is included, but some FTP programs/operating systems have issues with such filenames. The included text file, dothtaccess.txt covers the topic as well.

The contents of the .htaccess file should look like this

<Files directory>
ForceType application/x-httpd-php
#SetHandler application/x-httpd-php
#SetHandler application/x-httpd-php5
#ForceType x-httpd-php
</Files>

Depending on your version of Apache you may need to use a different syntax by toggling the commented lines in the .htacess file. (note you likely wont see the 3 newer variations in your .htacess file)

If you download/upload the file in order to edit it, be sure it is uploaded in ASCII mode.

If you have access to it, the directives within the .htaccess file can be put in your apache config file, normally /etc/httpd.conf then the .htacess file is not needed.

An httpd.conf entry might look like this...
<VirtualHost>
ServerName www.mysite.com
DocumentRoot /var/www/html/username
<Directory /var/www/html/username>
Allow from all
AllowOverride All
Order allow,deny
</Directory>
<Files directory>
ForceType application/x-httpd-php
</Files>
</VirtualHost>