Finding 1241519 (2025-002)

Material Weakness Repeat Finding
Requirement
H
Questioned Costs
-
Year
2025
Accepted
2026-11-02

AI Summary

  • Core Issue: The Authority obligated capital funds for operations before submitting the required voucher requests, violating HUD guidelines.
  • Impacted Requirements: Funds must be budgeted and drawn down in accordance with 24 CFR Section 905.314(I) to ensure proper obligation.
  • Recommended Follow-Up: Implement a tracking system for grant deadlines and obligation dates to improve compliance and avoid repeat findings.

Finding Text

2025 -002 – PERIOD OF PERFORMANCE Material Weakness/Material Noncompliance U.S. Department of Housing and Urban Development ALN #: 14.872 – Public Housing Capital Fund Criteria Capital Funds identified in the PHA's CFP 5-Year Action Plan to be transferred to operations are obligated by the PHA once the funds have been budgeted and drawn down by the PHA. Capital Funds transferred to operations (BLI 1406) are not considered obligated until the PHA has budgeted and drawn down the funds. To meet this requirement, the funds must be budgeted in line BLI 1406 (Operations) and the PHA must submit the voucher request in LOCCS. (24 CFR Section 905.314(I)). Condition The Authority had obligated capital funds related to operations (BLI 1406) for Capital Fund years 2020, 2022, and 2023 prior to the voucher request date for these draws. Cause Funds were drawn down before the Authority submitted voucher requests. Effect The Authority had obligated funds for operations prior to the voucher request date of these draws. This inhibits HUD’s review of outstanding obligations and expenditures for the Capital Fund Program. Questioned Costs Possible questioned costs - $958,028, representing the Accounts Payable, Other Government. Context The Authority had five open capital fund grants during fiscal year 2025 (Capital Fund years 2020-2025). The Authority obligated funding for 2020, 2022, and 2023 Capital Funds before submitting voucher requests. Repeat Finding Repeated from Finding 2024-005. Recommendation We recommend the Authority strengthen its grant management procedures by implementing a tracking system for grant deadlines and obligation dates. AUDITEE’S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.

Corrective Action Plan

Funds in 1406 will be drawn down directly after obligation.

Categories

HUD Housing Programs

Other Findings in this Audit

  • 1241518 2025-001
    Material Weakness Repeat
  • 1241520 2025-003
    Material Weakness Repeat

Programs in Audit

ALN Program Name Expenditures
14.871 SECTION 8 HOUSING CHOICE VOUCHERS $10.40M
14.850 PUBLIC HOUSING OPERATING FUND $4.01M
14.872 PUBLIC HOUSING CAPITAL FUND $1.32M
14.896 FAMILY SELF-SUFFICIENCY PROGRAM $177,046
14.870 RESIDENT OPPORTUNITY AND SUPPORTIVE SERVICES - SERVICE COORDINATORS $59,573