Audit 363766

Finding 2024-002: Capital Grant – Cash Management Material Weakness/Noncompliance Criteria – The Authority is required to follow 2 CFR Part 200 of the Compliance Supplement as it relates to Cash Management Requirements of Federal Programs. This section requires the Authority to follow procedures to minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement. HUD has established the maximum time to be generally three working days in the time elapsing between the drawdown and disbursement of funds under Modernization Programs. Condition - During our audit we noted the Authority had requested funds for the 2021 and 2023 Capital Grant Fund Program but had not expended the funds within the three-day time constraint as described above. As of December 31, 2024 the Authority had an unearned revenue balance of $27,001 in the 2021 grant and $7,975 in the 2023 grant which indicates the Authority had requested funds that had not been expended as of December 31, 2024. In addition, we noted in the 2021 grant, the $27,001 was intended by Management to be budgeted and used for operations however, the capital grant budget was not revised and therefore was recorded as unearned as of December 31, 2024. Cause - The Authority did not monitor the funds advanced to the general ledger to ensure the funds had been expended and drawn down properly. Effect or Potential Effect: Effect – The Authority is in noncompliance with Cash Management Requirements of OMB and HUD. Recommendation – We recommend the Authority review the procedures in place to ensure the funds requested from HUD are disbursed within the requirements established. In addition, the expenditure date has passed on the 2021 grant so the budget cannot be modified in EPIC for these funds to be reflected as used for operations. The Authority should consult with HUD and obtain approval for the funds to be used for operations. View of Responsible Official: Management agrees with the finding.

Finding 2024-002: Capital Grant – Cash Management Material Weakness/Noncompliance Criteria – The Authority is required to follow 2 CFR Part 200 of the Compliance Supplement as it relates to Cash Management Requirements of Federal Programs. This section requires the Authority to follow procedures to minimize the time elapsing between the transfer of funds from the U.S. Treasury and the disbursement. HUD has established the maximum time to be generally three working days in the time elapsing between the drawdown and disbursement of funds under Modernization Programs. Condition - During our audit we noted the Authority had requested funds for the 2021 and 2023 Capital Grant Fund Program but had not expended the funds within the three-day time constraint as described above. As of December 31, 2024 the Authority had an unearned revenue balance of $27,001 in the 2021 grant and $7,975 in the 2023 grant which indicates the Authority had requested funds that had not been expended as of December 31, 2024. In addition, we noted in the 2021 grant, the $27,001 was intended by Management to be budgeted and used for operations however, the capital grant budget was not revised and therefore was recorded as unearned as of December 31, 2024. Cause - The Authority did not monitor the funds advanced to the general ledger to ensure the funds had been expended and drawn down properly. Effect or Potential Effect: Effect – The Authority is in noncompliance with Cash Management Requirements of OMB and HUD. Recommendation – We recommend the Authority review the procedures in place to ensure the funds requested from HUD are disbursed within the requirements established. In addition, the expenditure date has passed on the 2021 grant so the budget cannot be modified in EPIC for these funds to be reflected as used for operations. The Authority should consult with HUD and obtain approval for the funds to be used for operations. View of Responsible Official: Management agrees with the finding.