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2024 -003 – CASH MANAGEMENT Significant Deficiency / Other Matter U.S. Department of Housing and Urban Development ALN #: 14.872 – Public Housing Capital Fund CRITERIA For recipients and subrecipients other than States, payment methods must minimize the time elapsing between the transfer of funds from the Federal agency or the pass-through entity and the disbursement of funds by the recipient or subrecipient regardless of whether the payment is made by electronic funds transfer or by other means. (2 CFR 200.305 (b)) Once funds are disbursed, i.e. transferred from LOCCS to the PHA’s bank account, the PHA must pay the applicable bill(s) within 3 business days after the deposit of the funds into the PHA’s bank account. (HUD Capital Fund Guidebook; Section 7.9) CONDITION We selected a sample of 4 drawdowns of capital funds from ELOCCs during the year. We identified 1 instance in which the Authority did not process payment to the vendor within 3 business days of receiving the funds. CAUSE The Authority does not have sufficient procedures in place to coordinate the timing of drawdowns with disbursement schedules. EFFECT Federal funds were held in excess of immediate cash requirements, which is not in compliance with Uniform Guidance cash management requirements. QUESTIONED COSTS None Identified. CONTEXT The Authority had 8 drawdowns of capital funds during the year. We selected a sample of 4 drawdowns during the year. This was not a statistically valid sample. REPEAT FINDING Not a repeat finding. RECOMMENDATION We recommend that the Authority utilize the reimbursement method and process payment to the vendor before requisitioning funds from ELOCCs. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.