Finding Text
2021-015 Misappropriation of Capital Fund Reserve for Emergencies and Natural Disasters
Federal Awards:
14-872 Capital Fund Program
Criteria:
Housing Authorities are permitted to expend federal funds in accordance with the agreements stated forth in the awards
and not for any other purpose.
Condition:
On September 1, 2017, the Fayetteville Housing Authority requested emergency funding from the Capital Fund Reserve for Emergencies and Natural Disaster Funds for the replacement of HVAC piping, domestic water piping and sewer line piping at the Fayetteville Housing Authority's Hillcrest Towers, in the amount of $3,810,271. The Fayetteville Housing Authority had two years to fully expend the grant. Fayetteville Housing Authority may not use this funding for any other purpose other than the replacement of HVAC piping, domestic water piping and sewer line piping at Hillcrest Towers. Fayetteville Housing Authority may not use this funding to pay for deferred maintenance or the cost of operations. The Fayetteville Housing Authority used some of the funding designated for HVAC piping, domestic water piping and sewer line piping for relocation costs, food allowances and other Fayetteville Housing Authority expenses for Fayetteville Housing Authority tenants misplaced by the repairs taking place at Hillcrest Towers.
Questioned Costs:
Cannot be determined, due to incomplete information.
Effect:
The Fayetteville Housing Authority misused federal funding.
Cause:
Lack of oversight by prior Fayetteville Housing Authority Management.
Recommendation:
We recommend the Fayetteville Housing Authority review all expenditures related to the Emergency Grant and ensure
that those expenditures were only for the replacement of HVAC piping, domestic water piping and sewer line piping.
If expenditures are not related to the replacement of piping, the Fayetteville Housing Authority should make
arrangement to repay those funds to the funding agency.