Finding 394371 (2023-001)

U.S DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT Finding 2023-001: Allowable Activities / Allowable Costs Public Housing #14.850 Statement of Condition and Criteria Audit reporting of interfund receivable balances owed to the Public Housing program from the State and Local program indicated potential unallowable uses of program funds. Public housing operating funds are to be used for project-specific operating costs and are further precluded from use as temporary loans to other programs. Cause Cash management procedures do not always allow for sufficient cash reserves to cover interfund balances. Effect or Potential Effect Public housing funds were used for other programs which could remain unpaid if the receiving program has a cash flow shortfall as had occurred as of the fiscal year end. Question Costs: $67,198 Recommendation We recommend the Authority reconcile and settle interfund balances on a monthly basis. In addition, we recommend the Authority establish controls to restrict interfund transactions for which there is no certainty of reimbursement before the accounting period cutoff. Management’s Response Management agrees with the finding and corrective action is in progress as detailed in the Corrective Action Plan.