Finding Text
Program: 14.872 - Capital Funds Criteria: 2 CFR 200.305 requires PHAs to minimize the time federal funds are drawn down to expenditure. The Capital Fund Program provides guidelines of three business days from draw down to expenditure to minimize the interest accrued by the PHA. 24 CFR 905.310 states the PHA shall initiate a fund requisition from HUD only when funds are due and payable, unless HUD approves another payment schedule as authorized by 2 CFR 200.305. Condition: The Housing Authority had drawn down Capital Funds and did not expend within three days. Cause: The Housing Authority was not aware that Capital Funds drawn needed to be expended within three days. Questioned Costs: Not applicable. Effect: The Housing Authority is not in compliance with cash management requirements. Prior Year Finding: N/A Information: Isolated instance. Recommendation: Traditionally we would recommend that the Housing Authority implements appropriate controls over voucher draws to ensure compliance with Public Housing Capital Fund cash management requirements. We recognize that the Capital Funds have been fully expended as of June 30, 2025, so the recommendation does not apply. When receiving Capital Funds in the future, we recommend to follow this recommendation. Management’s Response: Management concurs with the recommendation to implement timely LOCCS fundings that coincides with our normal accounting cycle when receiving Capital Funds in the future.