Finding Text
Per the ACC, funds are not fungible between programs except as approved by HUD (PHAs may use Operating Funds as outlined by sections 9(e), 9(g) and 9(l) of the 1937 Act, as amended (42 USC 1437d(j), 42 USC 1437g, and 42 USC 3535(d)), This precludes PHAs from using Operating Funds to provide temporary loans to other programs within the PHA through inter-fund inter-program transactions (Due To/Due From) or to external affiliates such as to Discretely Presented Component Units (DCUs) through affiliate receivable/payable transactions. It also precludes PHAs from using Operating Funds to temporarily cover or support non-Public Housing program activities through central payor type arrangements. During our audit we noted that the Authority's LIPH program (Program) provided non-fungible funds to other non-LIPH programs to cover short-term cash shortages for various projects. Authority are using LIPH funds to cover a tax credit deal until the deal closes and can pay back LIPH. Client has the cash in nonfederal funds to pay for these expenses from the sale of land but chose not to use those funds to cover the costs. The Authority did not use the proceeds from the sale of land to cover the development costs. As a result, the Program was owed $391,229 as of fiscal year-end. Additionally, the net effect of noncompliance was $391,229 used for unallowable being used on unallowable costs and activities.