Finding Text
2024-002 Budget Line Item Improper Expenditures (Public Housing Capital Fund - ALN 14.872) –
Noncompliance
Finding: Funds for Capital Funds Project Number TN40P075501-22 were transferred from Budget
Line Item (BLI) 1480, General Capital Activity to BLI 1406, Operations and subsequently expended
for general capital activity without amending the 5-Year Action Plan/budget.
Criteria: The Authority should amend their 5-Year Action Plan/budget for any changes made during
any given year per HUD compliance requirements.
Cause: The Authority's Executive Director drew down funds remaining in Capital Funds Project
Number TN40P075501-22 (CFP-22) to close out the project. To do this the Authority amended the
budget to move the line item from General Capital Activity to Operations per HUD requirements. The
Authority subsequently spent the funds on General Capital Activity and not for Operations as
budgeted, and no additional amendment was made to the Budget in the Authority's 5-Year Action
Plan.
Effect: Funds expended were not spent in compliance with the Authority's 5-Year Action plan.
Recommendation: All changes to the manner in which Capital Fund Project monies are spent need
to be approved by HUD in the budget amendment process.
Management’s Response: We concur with this finding.