Audit 367476

2024-001 Noncompliance with Period of Performance (Public Housing Capital Fund ALN 14.872) Criteria: Federal Code of Regulations, CFR § 905.306, requires the Authority to obligate funds in ELOCCS when a binding agreement (executed by all parties) for work that will result in outlays of Capital Funds. Condition: During the year, the Authority made Budget Line Item 1480 – General Capital Activity draws from CFP grants 2020-2022. The General Capital Activity Draws were not reported accurately based upon the underlying expenditures and/or binding contracts in ELOCCS. Questioned Costs: None. Effect: The Authority did not properly follow the requirements of CFR § 905.306. Cause: The Authority did not have an adequate understanding of the Capital Fund Program requirements as related to reporting of Obligations and Expenditures in ELOCCS. Recommendation: The Authority’s staff should familiarize themselves with Capital Fund Program reporting requirements. Management Response: Management was unaware of the proper CFP reporting requirements related to obligations and expenditures in ELOCCS.

2024-002 Noncompliance with Cash Management (Public Housing Capital Fund ALN 14.872) Criteria: Federal Code of Regulations, 2 CFR § 200.305 requires the Authority to maintain both written procedures that minimize the time elapsing between the transfer of funds from HUD and disbursement of those funds for eligible costs and financial management systems that meet the standards for fund control and accountability. Advance payments to the Authority must be limited to the minimum amounts needed and be timed with actual, immediate cash requirements of the Authority in its Capital Fund Program. Furthermore, in accordance with 2 CFR § 905.310, the Authority shall initiate a fund requisition from HUD only when funds are due and payable, unless HUD approves another payment schedule as authorized by 2 CFR 200.305. The Capital Fund Program rules provide guidelines of 3 business days from drawdown to expenditure. Condition: During the year, the Authority had 12 transactions in its Capital Fund Program for grants ranging from CFP 2020-2022 that did not adhere to the requirements to minimize the time federal funds were drawn down to expenditures of 3 business days. Questioned Costs: None. Effect: The Authority did not properly follow the requirements of 2 CFR § 200.305 and 905.310. Cause: The Authority did not have an adequate understanding of the Capital Fund Program requirements as related to Cash Management. Recommendation: The Authority’s staff should familiarize themselves with Capital Fund Program rules and guidelines in relation to Cash Management. Management Response: Management was unaware of the Cash Management rules and guidelines of the Authority’s Capital Fund Program. We will ensure all future eligible Capital Fund draws are made within 3 business days of expenditures.

2024-003 Noncompliance with Special Tests and Provisions- HUD Form 52722 Utilities Expense Level (Public Housing Program ALN 14.850) Criteria: Federal Code of Regulations, Part 5 (24 CFR § 990.175) requires the Authority to report actual utility consumption by utility type for its Public Housing Program. Condition: The Authority included gas costs for its Section 8 New Construction program in the amounts reported for the period July 1, 2022 through June 30, 2023 in the Authority’s Public Housing Form 52722. The amount of Gas expense included that should not have been totaled $16,770. Questioned Costs: $18,565 Effect: The Authority did not properly report actual utility consumption which resulted in the Authority being overfunded by $18,565 for calendar year 2024. Cause: The Authority did not properly allocate the cost of gas to its Section 8 New Construction program during the Authority’s fiscal year 2023. Recommendation: The Authority should implement a review process whereby the Operating Subsidy calculation is reviewed by an appropriate Staff before calculation is submitted to HUD to ensure actual costs are correctly reported. Management Response: Operating Subsidy calculations will be reviewed by an appropriate Staff of the Authority before calculations are submitted to HUD to ensure accurate reporting.