Finding Text
Finding SA2020-008: Capital Funds for Operating Costs
AL number: 14.872
AL Title: Public Housing Capital Fund
Name of Federal Agency: Department of Housing and Urban Development
Federal Award Identification number and year: CA010 (2020)
Criteria: 24 CFR section 905 required Public Housing Authorities (PHA) transferred capital funds to
operations under BLI 1406 are not considered obligated until the PHA has both budgeted and drawn
down the funds. Funds must be budgeted under BLI 1406 (Operations), and a voucher request must be
submitted in LOCCS. The amount reported in LOCCS must match the amount recorded in the PHA's
accounting system.
Condition: During our audit, we noted Authority recorded capital fund transfer in its general ledger
that didn’t align with the LOCCS.
Cause: We understand that the staff overseeing the federal awards during fiscal year 2020 are no longer
with the Authority, and therefore, the staff overseeing the federal awards subsequent to the fiscal year
were unable to provide properly explanation.
Effect: The Housing Authority is not compliance with the requirements as stated in 24 CFR section 905.
Recommendation: The Housing Authority should ensure that all obligations of Capital Funds for
operations (BLI 1406) are recorded in its accounting system based on the actual voucher request in
LOCCS. Staff should be trained and keep track of the requirements align with the compliance.
Management Response: The Authority understands and accepts the recommendation to retain
documentation for Capital Fund drawdowns. The City and Authority staff have implemented a process
of providing a form that is reviewed and approved by the Authority Director before drawdowns are
processed in eLOCCS. This process also ensures the separation of duties of funding requests, cash
handling, and reporting.