Finding Text
Finding 2023-002 Voucher Requests and Obligation of Funds
Federal Agency: U.S. Department of Housing and Urban Development (HUD)
Federal Program Title: Public Housing Capital Fund Program
Assistance Listing Number: 14.872
Federal Award Identification Number and Year: WI39P011501-18
Award Period: April 1, 2022 – March 31, 2023
Type of Finding:
• Material Weakness in Internal Control over Compliance
• Material Noncompliance
Compliance Requirements: Special Tests and Provisions – Capital Funds for Operating Costs
Criteria or specific requirement: Per 24 CFR 905.108 “Obligation” Capital Funds identified in the Public Housing Authority’s (PHA) Capital Fund Program (CFP) 5-Year Action Plan to be transferred to operations are obligated by the PHA once the funds have been budgeted and drawn down by the PHA. The voucher request date must occur before those funds are reported as obligated in LOCCS under the Obligation & Expenditure tab (24 CFR section 905.314(1)). The CDA should have internal controls designed to ensure compliance with those provisions.
Condition: During our testing, we noted the CDA did not have adequate internal controls designed to ensure all of the steps for obligation, including draw downs and voucher requests, were performed timely.
Questioned costs: None
Context: During our testing of the four draw downs, it was noted that two vouchers were not requested timely. One voucher draw was after the obligation end date however no extension of the obligation end date was requested. The second voucher draw occurred after the funds were reported as obligated in LOCCS. These draws violated 24 CFR 905 Public Housing Capital Fund Program regulations.
Cause: No internal control in place to ensure timely submission of obligation and draw down of funds.
Effect: The CDA will be subject to a 1/12 penalty on a future Capital Fund grant since it was noncompliant for one month with the statutory requirement for one of the draws made.
Repeat Finding: No
Recommendation: We recommend the CDA design controls to ensure timely submission of obligation and draw down of funds.
Views of responsible officials: We agree with the finding of 2023-002 – Voucher Requests and Obligation of Funds.