Finding 1076700 (2023-002)

Finding No. 2023-002: Obligation Requirement for Capital Fund Program Drawdowns (Significant Deficiency Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Capital Fund Program Federal Assistance Listing Number: 14.872 Compliance Requirement: Special Tests and Provisions Criteria: Per HUD regulations, Capital Fund Program costs are required to be obligated within 24 months of the execution of the grant with documentation showing the funds were truly obligated. Condition: The Authority did not have adequate controls over the obligation process, resulting in Capital Funds obligated in HUD’s eLOCCS without obligating the funds. Context: The Authority had two Capital Fund grants with obligation deadlines during the year, and both did not have the proper documentation. Effect: The Authority did not appropriately obligate the CFP funds by the deadline. Cause: The Authority did not have the appropriate controls over the obligation process to obligate the funds by the deadline. Recommendation: The Authority should review and enhance its policies, procedures, and internal controls to ensure that funds are obligated in a timely manner. Views of Responsible Officials: The Authority agrees with the finding.