Finding 571007 (2024-002)

2024-002 Drawing of Capital Funds Criteria Per 24 CFR 200.05, Housing Authorities are to minimize the time federal funds are drawn down to expenditure. Additionally 24 CFR 905.310 states that PHA shall initiate a fund requisition from HUD only when funds are due and payable, unless HUD approves another payment schedule. Condition Management did not follow the 3 day rule. Context During a RAD conversion, management drew down CFP funds to provide funding for RAD tax credit property. Instead of providing all funds to the RAD development within 3 days management held onto the funds. Cause Management was unaware of the 3 day requirement on RAD development funds drawn down. Effect The Authority is not in compliance with Cash Management rules relating to the Capital Fund Program. Recommendations The Authority needs to understand and comply with Public Housing Capital Fund Program's cash management rules. Management Views Management agrees.