Criteria - The Public Housing Operating Fund (Assistance Listing 14.850) requires Public Housing Authorities to accurately report utility consumption and costs on Form HUD-52722 as part of the calculation of formula income and expenses. The Utility Expense Level (UEL), a primary component of the annual operating subsidy grant revenue provided to Authorities, relies on precise and complete utility data. In accordance with 24 CFR § 990.170 and § 990.325, Authorities must aggregate utility costs and consumption from invoices, maintain all supporting records by utility type and project for each 12-month period ending June 30th, and ensure that Form HUD-52722 accurately reflects all current and historic utility cost and consumption data, with records developed and maintained satisfactorily to HUD requirements. Condition - During our testing of the utility cost and consumption data used to support the UEL calculation, we noted that the actual electricity cost for the period July 1, 2023 through June 30, 2024, as supported by the Authority’s utility invoices and ledger, was $16,078. However, the amount reported on Line 16 (Electricity) of Form HUD-52722 was $108,229. Cause - The discrepancy occurred due to a manual input error whereby the Authority entered the combined electricity consumption amount for both AMP 1 and AMP 2 into the AMP 2 section of Form HUD-52722, rather than reporting only the electricity consumption specific to AMP 2. Effect - The Authority’s electricity cost was overstated of $92,151 which may lead to an incorrect determination of the Operating Fund subsidy by HUD. Questioned Costs - Questioned costs are undetermined pending HUD review and recalculation of the subsidy based on corrected data. Statistical Sampling - The sample was not intended to be, and was not, a statistically valid sample. Recommendation - We recommend that management strengthen internal controls over the aggregation, review, and reporting of utility cost and consumption data to ensure accuracy in future submissions. All supporting documentation should be thoroughly reviewed and reconciled prior to completing Form HUD-52722, and management should consider implementing an independent review process for data entry to minimize the risk of manual input errors. Additionally, management should submit corrected utility data to HUD and consult with the local field office regarding any necessary subsidy adjustments. Management’s Response - (a) Comments on the finding and recommendation - The Authority agrees with the finding. The Authority also agrees with the recommendation. Please see below for additional comments and action taken. (b) Action taken - The Authority will implement a formal reconciliation process for all utility cost reporting submitted on Form HUD - 52722. Prior to future submissions, the Authority will ensure all reported amounts are independently verified and reconciled to the utility tracking spreadsheet and supporting invoices. (c) Planned implementation date - The Authority plans to implement procedures during the year ending March 31, 2026 to resolve the reported finding.