Audit 412419

2025-002 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 45 transactions in its Capital Fund Program for grants ranging from CFP 2019-2023. 22 out of the 45 transactions made during the year 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: We will ensure all future eligible Capital Fund draws are made within 3 business days of expenditures.

2025-003 Noncompliance with Period of Performance (Public Housing Capital Fund ALN 14.872) Criteria: Federal Code of Regulations, CFR § 905.314 (l) requires the Authority to first drawdown Budget Line item 1406 Operations before amounts are obligated. Condition: During the year, the Authority made three Operations draws from CFP 2019, 2020, and CFP 2021 in the amounts of $15,000 for each grant. The Operations draw for CFP 2020 was made after amounts were reported as obligated in ELOCCS. CFP 2020 was reported as 100% obligated on February 6, 2025. However, the BLI 1406 draw did not occur until 11/26/2025. The operations draws from CFP 2019 and CFP 2021 were made before the amounts were reported as obligated. Questioned Costs: None. Effect: The Authority did not properly follow the requirements of CFR § 905.314 (l). Cause: The Authority did not have an adequate understanding of the Capital Fund Program requirements as related to Operations Budget Line Item 1406 draws. Recommendation: The Authority’s staff should familiarize themselves with Capital Fund Program reporting requirements. Management Response: Management will ensure that all future BLI 1406 draws will occur before the amount are reported as obligated in ELOCCS.