Finding Text
US Department of Housing and Urban Development Direct Award Program Name Public Housing Capital Fund "Internal Control" Material Weakness B Allowable Cost ALN(s) 14.872 2025-002 Housing Quality Standards Inspection/HQS Enforcement Criteria The Authority receives federal funding from the U.S. Department of Housing and Urban Development (HUD) under two programs. A portion of the Authority’s federal funding is received under the Capital Fund Program (CFP). The CFP provides financial assistance to public housing authorities to make improvements to existing public housing units. Compliance with regard to this finding can be found at 24CFR905.202. Condition Per 24CFR905.202(j), any cost that HUD has determined on a case-by-case basis is considered ineligible to be funded with Capital Funds. Context We discovered that during the fiscal year ending December 31, 2025, the Authority purchased a maintenance vehcile using eLOCC Budet Line Item 1480 "General Capital Activity". HUD has issued guidance saying this is considered operation cost and CFP 1480 BLI cannot be used to purchase a maintenance vehicle. Cause The cause of this noncompliance is due to lack of understanding on the part of management for what is allowable and unallowable. Effect The effect of this noncompliance is the potential for HUD to impose sanctions on the PHA, which can be found at 24CFR905.804. Recommendations Management should review 24CF905.200 and 24CFR905.202 to familiarize themselves with the eligible activities for the program and ensure future compliance with these requirements. Questioned Costs The entire CFP draw of $75,941.25 is questioned cost. Management Views Management agrees with the finding