Finding 1079141 (2023-001)

Finding 2023-001: Federal Program Funds Utilized for Non-Federal Programs (Material Weakness, Material Noncompliance) Federal Agency: U.S. Department of Housing and Urban Development Federal Program Title: Public and Indian Housing Federal Assistance Listing Number: 14.850 Compliance Requirement: Allowable Costs Criteria: Federal guidelines, HUD regulations, and specific grant provisions mandate that federal funds are not commingled with other federally funded programs and that the funds for one program not be utilized to pay for the costs of another program. Condition: Based on the balance of the Public Housing interfund receivable, it appears that funds from Public Housing have been used to subsidize the Central Office Cost Center (COCC). Context: As of June 30, 2023, Public Housing had an interfund receivable of $1,768,943. Effect: The Authority risks violating federal funding regulations as it is unable to identify a nonfederal source to cover the costs of operations and avoid using other program’s cash flow to cover the costs of operating the COCC. Cause: The Authority does not have enough cash on hand to adequately fund the COCC’s operations. Recommendation: The Authority should locate additional sources of non-federal funds or reduce costs sufficiently so that the program can have enough cash to cover ongoing operations. Repeat Finding: This is a repeat finding. Views of Responsible Officials: The Authority agrees with the finding.