Audit 412424

2025-001 – Cash Management and Period-of-Performance (Material Non-Compliance, Material Weakness) Capital Fund Program – Assistance Listing No. 14.872; Grant Period – Fiscal Year-End December 31, 2025 Criteria: 2 CFR §200.305 requires housing authorities to minimize the time between when federal funds are drawn down, to when the applicable funds are expended. The Capital Fund Program provides guidelines of 3 business days from draw-down of federal funds until expenditure of the federal funds. 24 CFR 905.310 states that the PHA shall initiate a fund requisition from HUD only when funds are due and payable, unless HUD approves another payment schedule. Additionally, housing authorities must expend 100% of a Capital Fund grant within 48 months of the date the funds are made available (24 CFR Section 905.314). This 48-month period is the applicable grant’s ‘period-of-performance. Condition: On January 27, 2025, the Authority drew down a Capital Fund grant voucher of $372,824 from its Capital Grant #IL01P051501-21. The period-of-performance of this grant ended on February 22, 2025. The Authority was unable to support this grant draw-down with applicable grant expenditures incurred prior to or within 3 subsequent business days. Additionally, the Authority was unable to support this grant draw-down with applicable grant expenditures incurred prior to the period-of-performance end date of February 22, 2025. Questioned Costs – None Cause: Personnel turnover led to a failure to adequately monitor the grant funding availability dates of this grant, relative to the progress of modernization projects approved under this grant. Effect: Non-compliance with federal ‘cash management’ and ‘period-of-performance’ requirements. Recommendation: We recommend that the Authority monitor modernization activity against grant funding availability dates regularly. Additionally, we recommend that the Authority execute procedures requiring each Capital Fund grant funding request to be supported by immediate, documented, and eligible expenditures in accordance with HUD’s requirements. Management’s Response: The Authority will monitor modernization activity against grant funding availability dates regularly. Additionally, the Authority will execute procedures requiring each Capital Fund grant funding request to be supported by immediate, documented, and eligible expenditures in accordance with HUD’s requirements. The Executive Director has assumed the responsibility of executing this corrective action as of September 18, 2026.