Audit 415722

Program: 14.872 - Public Housing Capital Fund Requirement: Capital Funds transferred to operations are not considered obligated until the PHA has budgeted and drawn down the funds. The voucher request date must occur before those funds are reported as obligated in LOCCS under the Obligation & Expenditure tab. Condition: The Housing Authority obligated funds before the 7/10/2025 operations draw occurred. Cause: The PHA employee in charge of draws was unaware of the criteria that the voucher request date for operations draws must occur before those funds are reported as obligated in LOCCS under the Obligation & Expenditure tab. Questioned Costs: None Effect: The Housing Authority recorded obligations that were not supported by a reimbursable cost. Prior Year Finding: This was not a prior year finding.Information: Sampling was not applicable to this finding and systemic problem. Recommendation: We recommend that the Housing Authority obligates funds for operations draws when they are drawn. Management’s Response: Management now knows that the voucher request date must occur on or before the date obligated in ELOCCS. They will implement that procedure when working in Capital Fund.

Program: 14.872 - Public Housing Capital Fund Requirement: 2 CFR 200.305 requires PHAs to minimize the time federal funds are drawn down to expenditure. The Capital Fund Program provides guidelines of three business days from draw down to expenditure to minimize the interest accrued by the PHA. 24 CFR 905.310 states the PHA 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. Condition: The Housing Authority had drawn down Capital Funds and did not expend within three days. Cause: The PHA employee in charge of draws was unaware of the criteria that the draw needed to be expended within three days. Questioned Costs: $155,268 Effect: The Housing Authority is not in compliance with cash management requirements. Prior Year Finding: This was not a prior year finding. Information: Sampling was not applicable to this finding and systemic problem. Recommendation: It is recommended that the Housing Authority implements appropriate controls over voucher draws to ensure compliance with Public Housing Capital Fund cash management requirements. Management’s Response: Management will draw down Capital Funds on the date the check is written to avoid drawing down too early.