Audit 415581

2025 -001 – CASH MANAGEMENT Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.872 – Public Housing Capital Fund Criteria For recipients and subrecipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the pass-through Authority and the disbursement of funds by the recipient or subrecipient regardless of whether the payment is made by electronic funds transfer or by other means. (2 CFR 200.305 (b)) 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 after the deposit of the funds into the PHA’s bank account. (HUD Capital Fund Guidebook; Section 7.9) Condition We selected a sample of 5 drawdowns of capital funds from ELOCCs during the year. We identified 1 instance in which the Authority did not process payment to the vendor within 3 business days of receiving the funds. For the year ended December 31, 2025, draw down of capital funds in excess of immediate cash requirements which remained undisbursed resulted in a payable of $956,028. Cause The Authority does not have sufficient procedures in place to coordinate the timing of drawdowns with disbursement schedules. Effect The Authority requested and received federal funds in amounts that exceeded its immediate cash requirements. As a result, federal cash was held for extended periods before being disbursed for program expenditures, which is not consistent with the cash management requirements of 2 CFR 200.305. Questioned Costs Questioned costs - $958,028, representing the Accounts Payable, Other Government. Context The Authority had 13 drawdowns of capital funds during the year. We selected a sample of 5 drawdowns during the year. This was not a statistically valid sample. Repeat Finding Repeated from finding 2024-003. Recommendation We recommend that the Authority utilize the reimbursement method and process payment to the vendor before requisitioning funds from ELOCCs. Auditee’s Response And Planned Corrective Action See Corrective Action Plan.

2025 -002 – PERIOD OF PERFORMANCE Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.872 – Public Housing Capital Fund Criteria Capital Funds identified in the PHA's CFP 5-Year Action Plan to be transferred to operations are obligated by the PHA once the funds have been budgeted and drawn down by the PHA. Capital Funds transferred to operations (BLI 1406) are not considered obligated until the PHA has budgeted and drawn down the funds. To meet this requirement, the funds must be budgeted in line BLI 1406 (Operations) and the PHA must submit the voucher request in LOCCS. (24 CFR Section 905.314(I)). Condition The Authority had obligated capital funds related to operations (BLI 1406) for Capital Fund years 2020, 2022, and 2023 prior to the voucher request date for these draws. Cause Funds were drawn down before the Authority submitted voucher requests. Effect The Authority had obligated funds for operations prior to the voucher request date of these draws. This inhibits HUD’s review of outstanding obligations and expenditures for the Capital Fund Program. Questioned Costs Possible questioned costs - $958,028, representing the Accounts Payable, Other Government. Context The Authority had five open capital fund grants during fiscal year 2025 (Capital Fund years 2020-2025). The Authority obligated funding for 2020, 2022, and 2023 Capital Funds before submitting voucher requests. Repeat Finding Repeated from Finding 2024-005. Recommendation We recommend the Authority strengthen its grant management procedures by implementing a tracking system for grant deadlines and obligation dates. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

2025 -003 – Procurement, Suspension and Debarment Significant Deficiency / Other Matter U.S. Department of Housing and Urban Development ALN #: 14.872 – Public Housing Capital Fund Criteria For any amounts above the Petty Cash ceiling, but not exceeding $250,000 in accordance with revisions to 2CFR 200.67 and 2 CFR 200.88, the Authority may use small purchase procedures. Under small purchase procedures, the Authority shall obtain a reasonable number of quotes (preferably three); however, for purchases of less than $10,000, per NDAA Section 806 also known as Micro Purchases, only one quote is required provided the quote is reasonable. Condition We identified 4 instances in which sufficient documentation was not maintained to support the procurement of a vendor. Cause The Authority had not fully completed the process of implementing their corrective action plan from the prior year. Effect The Authority has not ensured that it is receiving the most competitive prices or rates for services that have been procured, which may have resulted in unnecessary additional costs to the Authority. Questioned Costs Known Questioned Costs - $897,084, representing the aggregate payments to these four vendors. Context All purchases are required to be made in accordance with the Authority’s procurement policy. There were approximately 72 vendors paid in excess of the micro purchase threshold. We selected a sample of 8 vendors. This was not a statistically valid sample. Repeat Finding Repeated from Finding 2024-004. Recommendation We recommend that the Authority continue with their corrective action plan from the prior year. Auditee’s Response and Planned Corrective Action See Corrective Action Plan.