Audit 367530

2024-001 – HUD CAPITAL FUND PROGRAM (CFDA #14.872) REPORTING Federal Program Name: Capital Fund Program Assistance Listing Number: 14.872 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Reporting Criteria: Per 24 CFR 905.324 – Data Reporting Requirements, PHAs must submit required Capital Fund Program data in the format prescribed by HUD, including: • Annual Statement / Performance and Evaluation Report (Form HUD 50075.1) – submitted for each open Capital Fund grant to identify planned work activities, budgets, and quantities, and updated at least annually to reflect progress and any reprogramming. • Actual Modernization Cost Certificate (Form HUD 53001) – submitted at the closeout of each Capital Fund grant to certify the final actual costs for all work items, in accordance with the HUD grant agreement and Capital Fund closeout procedures. These forms must be current, accurate, HUD approved, and submitted via the Energy and Performance Information Center (EPIC) before the obligation, expenditure, or closeout of funds. Condition: The 2021 Capital Fund Program grant was completed, but the PHA did not submit Form HUD 53001 to HUD to close out the grant. Additionally, for the 2022, 2023, and 2024 Capital Fund Program grants, the PHA did not prepare or update Form HUD 50075.1 in EPIC to reflect actual progress and expenditures. Cause: Staff turnover and lack of familiarity with EPIC reporting deadlines contributed to the oversight. Effect: The PHA is out of compliance with HUD Capital Fund Program reporting requirements. Repeat Finding: No Recommendation: We recommend the PHA immediately complete and submit HUD 53001 for the 2021 grant to HUD for closeout. Additionally, the PHA should prepare and submit HUD 50075.1 for the 2022, 2023, and 2024 grants, ensuring they reflect actual expenditures and progress.

2024-002 – HUD CAPITAL FUND PROGRAM (CFDA #14.872) DRAWDOWNS Federal Program Name: Capital Fund Program Assistance Listing Number: 14.872 Federal Agency: U.S. Department of Housing and Urban Development Compliance Requirement: Cash Management Criteria: Per HUD Capital Fund Program guidance and 2 CFR 200.305(b) (Cash Management), PHAs must minimize the time between the drawdown of federal funds and disbursement to vendors. HUD guidance further states: “Once funds are disbursed, i.e., transferred from LOCCS to the PHA’s bank account, the PHA must pay the applicable bill(s) within 3 business days. PHAs cannot expend nonfederal funds first to pay the applicable bills and then use Capital Funds to reimburse themselves.” Condition: During our testing of Capital Fund drawdowns, we identified three drawdown transactions where the PHA did not comply with the 3-day rule. In each case, vendor payments were made prior to funds being received. Cause: Oversight Effect: The PHA is not in compliance with HUD’s cash management rules for Capital Fund drawdowns. Repeat Finding: No Recommendation: We recommend the PHA establish procedures requiring that Capital Fund related vendor invoices not be paid until drawdowns have occurred.

2024-003 – RURAL RENTAL HOUSING LOANS (CFDA #10.415) REPORTING Federal Program Name: Rural Rental Housing Loans Assistance Listing Number: 10.415 Federal Agency: U.S. Department of Agriculture Compliance Requirement: Reporting Criteria: 7 CFR section 3560 requires that Forms RD 3560-07 (Multi Family Housing Project Budget/Utility Allowance) and RD 3560-10 (Multi Family Housing Balance Sheet) be submitted within 90 days of year-end. Condition: The Authority did not submit the required forms for 2023. Cause: Due to management changes, the Authority did not complete the required reporting. Effect: Noncompliance with 7 CFR section 3560. Repeat Finding: No. Recommendation: We recommend that the Authority implement procedures to ensure that the reports are submitted on a timely basis.