Finding Text
Capital Fund-CDFA#14.872 2022-002-Capital Fund Deadlines Not Met-Period of Performance and Reporting Criteria or Specific Requirement (a)-24 CFR Section 905 requires that at least 90% of the annual CFP grant be obligated within 2 years and fully expended within 4 years from the date that the funds were made available. (b)-24 CFR Section 905 also requires that the Actual Modernization Cost Certificate (AMCC) and the accompanying final, attached costs breakdown be issued no later than twelve months after the expenditure deadline. Condition Found (a)-HUD notified the Authority by letter that an insufficient amount of the CFP 2018 program was drawn down by the obligation deadline of May 28, 2022. We noted previously that the current E.D. did not start until May 25, 2022. (b)-As of the year end of this audit, September 30, 2022, the 2016 CFP program had been closed at least for four years. The AMCC and final costs breakdown have not been issued. Cause Unknown. Effect Federal regulations were not complied with. In addition, the sooner the funds are drawn down, if not spent, they are invested. The sooner the funds are invested, the more interest income there is earned. Recommendation CFP funds should be timely obligated. This involves contracted amounts, not just an oral agreement or understanding. CFP funds should be timely expended. AMCCs and the final attached costs breakdowns should be issued on a timely basis. Per the HUD letter, HUD is offering the Authority an opportunity to minimize the penalty for missing the obligation deadline if the PHA obligates 90% of the CFP that is in non-compliance, by May 28, 2023. The Authority should make sure it does this, if it has not already. Origination Date The finding originated in the year ended September 30, 2020. View of Responsible Official We will comply with the auditor?s recommendation.