Finding Text
2025-006 Delinquent Payments in Lieu of Taxes Criteria: Per 24 CFR 990.190 and Section 6(d) of the United States Housing Act of 1937, Public Housing Authorities are required to make Payments in Lieu of Taxes (PILOT) to the local governing body. PILOT is generally calculated as 10% of shelter rents (net tenant rental revenue less utilities) or a lesser amount as prescribed by state law, local agreement, or due to non-performance by the local body. PHAs must pay or properly accrue these obligations in a timely manner and maintain supporting documentation. Condition: During the audit period, the housing authority had not paid PILOT for two years. As of the fiscal year end, the Housing Authority owed approximately $67,748 in unpaid PILOT. No waiver or agreement reducing/eliminating the PILOT obligation was obtained from the local governing body. Questioned Costs: $67,748 Effect: Noncompliance with HUD regulations and the local cooperation agreement. Cause: Prior management did not prioritize the payments and did not pursue a formal waiver where potentially available. Recommendation: Immediately pay all outstanding PILOT amounts or obtain a formal written waiver from the appropriate local governing body.