Finding 1137856 (2024-001)

Criteria: Federal Code of Regulations, CFR § 905.314 (l) requires the Authority to first drawdown Budget Line item 1406 Operations before amounts are obligated. Furthermore, per CFR § 905.306, the Authority is required to Obligate funds in ELOCCS when a binding agreement (executed by all parties) for work that will result in outlays of Capital Funds. Condition: During the year, the Authority made two Operations draws from CFP 2021 and CFP 2022 in the amounts of $1,639 and $51,572, respectively. The Operations draws were made after amounts were reported as obligated in ELOCCS. Furthermore, the Authority also made Budget Line Item 1480 – General Capital Activity draws from CFP grants 2023 during the fiscal year. The General Capital Activity Draws for CFP 2023 grant were not reported accurately as obligated based upon the underlying binding contracts. The contract for kitchen cabinets and bathroom upgrades under CFP 2023 was obligated before contract was signed. Questioned Costs: None. Effect: The Authority did not properly follow the requirements of CFR § 905.314 (l) and 905.306. Cause: The Authority did not have an adequate understanding of the Capital Fund Program requirements as related to Operations Budget Line Item 1406 draws and reporting of Obligations and Expenditures in ELOCCS. Recommendation: The Authority’s staff should familiarize themselves with Capital Fund Program reporting requirements. Management Response: Management was unaware of the proper CFP reporting requirements for its capital fund program.