Finding Text
CFDA No.: 14.872 and 14.850 Agency: U.S. Department of Housing and Urban Development Criteria: Public Housing Authorities (PHA) are required to implement project-based practices related to their operating subsidy and capital grant. This includes making proper and timely requisitions of funding from the grants. Condition: We noted that management of the Authority did not, in all instances, make timely requisitions from its operating and capital grants. Additionally, when requisitions were made, the amounts were not calculated in accordance with HUD guidelines. Context: During our audit, we noted that the amounts drawn down for the operating grant and the capital grant were calculated incorrectly. The calculation used was not in conformity with HUD regulations. Additionally, we noted that management did not make these requisitions in a timely manner. Effect: Management and the Board were not in compliance with the HUD regulations. This noncompliance could have resulted in the Authority not receiving that total amount of grant funding to which it was entitled. Cause: Due to a change in management at the Authority, and due to a lack of training by the accounting personnel on accounting and the grant requisition process, grant funding was neither properly nor timely requisitioned for the year ended June 30, 2024. Questioned costs: None identified. Repeat finding: This is a repeat finding. Recommendation: We recommend that management of the Authority work with its newly retained fee accountant to better establish policies and procedures to ensure compliance with the grant requisition processes. Management’s response: The Authority has had some staff turnover over the past several years. A new executive director and a new account clerk were both hired within the past several years. Management is evaluating its processes and procedures related to grant requisitions and is planning on implementing procedures to ensure grants are requisitioned in the future. Additionally, management plant to work with its newly hired fee accountant in the future to ensure grant funds are properly requisitioned.