Finding Text
Finding 2025-001: 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 Housing Operating Fund Federal Assistance Listing Number: 14.850 Compliance Requirement: Allowable Activities 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 Blended Component Unit (BCU). Context: As of March 31, 2025, Public Housing had an interfund receivable of $603,867. Effect: The Authority risks violating federal funding regulations as it is unable to identify a non-federal source to cover the costs of operations and avoid using other program’s cash flow to cover the costs associated with operating the BCU. Cause: The Authority does not have enough non-federal cash on hand to adequately fund the BCU’s operations. Recommendation: The Authority should locate additional sources of non-federal funds or reduce costs sufficiently so that the BCU can have enough cash to cover ongoing operations and repay the Public Housing program. Repeat Finding: This is not a repeat finding. Views of Responsible Officials: The Authority agrees with the finding.