Finding 58137 (2022-001)

Section III Federal Awards Findings US Department of Housing and Urban Development Significant Deficiency Program Name: Public Housing Capital Fund ALN Number: 14.872 2022-001 Description: Special Tests Criteria: The Authority receives federal funding from the U.S. Department of Housing and Urban Development (HUD) under two programs. A portion of the Authority?s federal funding is received under the Capital Fund Program (CFP). The CFP provides financial assistance to public housing authorities to make improvements to existing public housing units. Compliance with regard to this finding can be found at 24CFR905.104. Condition and Context: Per 24CFR905.104, all HUD approvals required in this part must be in writing and from an official designated to grant such approval. Prior to receiving HUD's written approval of the Authorities budget change request. The Authority requested and received a disbursement of 1480 "General Capital Activity" funds and treated these funds as if they were 1406 "Operation" funds. Cause: The cause of this noncompliance is due to the lack of understanding when funds can be disbursed to the Authority. Effect: The effect of this noncompliance is the potential for HUD to impose sanctions on the PHA, which can be found at 24CFR905.804. Recommendations: Management should obtain written HUD approval of any budget change before requesting funds from the updated budget. Management Views: Management agrees. See CAP