Audit 410616

CFR section 200.305 requires Public Housing Authorities (PHA) to minimize the time federal funds are drawn down to expenditure. The Public Housing Capital Fund provides guidelines of three business days from draw down to expenditure to minimize the interest accrued by the PHA. Per review of all Public Housing Capital Fund funding received by the Authority we noted $1,024,894 of received funding identified as not being expensed within three business days of being received. 2 CFR Subpart F § 200.510(b) requires the auditee to prepare a Schedule of Expenditures of Federal Awards (the Schedule) for the period covered by the County’s financial statements which must include the total federal awards expended as determined in accordance with § 200.502. At a minimum, the schedule must: (1) List individual Federal programs by Federal agency. (2) For Federal awards received as a subrecipient, the name of the pass-through entity and identifying number assigned by the pass-through entity must be included. (3) Provide total Federal awards expended for each individual Federal program and the AL number or other identifying number when the AL information is not available. (4) Include the total amount provided to subrecipients from each Federal program. (5) For loan or loan guarantee programs described in § 200.502 Basis for determining Federal awards expended, paragraph (b), identify in the notes to the schedule the balances outstanding at the end of the audit period. (6) Include notes that describe the significant accounting policies used in preparing the schedule and note whether or not the auditee has elected to use the 10 percent de minimis cost rate as covered in § 200.414 Indirect (F&A) costs. Errors and omissions were noted related to various programs on the Authority’s 2025 schedule, including a $816,389 overstatement of expenditures for the Public Housing Capital Fund program. We recommend the Authority implement increased training on the requirements of not drawing down Public Housing Capital Fund funding until either an allowable expenditure has occurred or will occur within three days after the funding was received. We recommend the Authority implement increased training on the requirements for preparing the Schedule of Expenditures of Federal Awards. We also recommend a greater number of quality control reviews to identify errors before requesting funds and preparing the Schedule of Expenditures of Federal Awards.