Finding Text
2022-007 ? SPECIAL TESTS AND PROVISIONS ? CAPITAL FUNDS FOR OPERATING COSTS Significant Deficiency / Other Matter U.S. Department of Housing and Urban Development CFDA #: 14.872 ? Public Housing Capital Fund CRITERIA A PHA may use Capital Funds for operating costs only if it is included in the CFP 5-Year Action Plan that is approved by the PHA Board of Commissioners and HUD, and limited as described in paragraphs (l)(1) and (2) of this section. Capital Funds identified in the CFP 5-Year Action Plan to be transferred to operations are obligated once the funds have been budgeted and drawn down by the PHA. Once such transfer of funds occurs, the PHA must follow the requirements of 24 CFR part 990 with respect to those funds. CONDITION The Authority had obligated capital funds related to operations (BLI 1406) prior to voucher request date for these draws. CAUSE Management was unaware of this requirement. EFFECT The Authority had obligated funds for operations prior to the voucher request date of these draws. QUESTIONED COSTS None Identified. CONTEXT The Authority had three open capital fund grants during fiscal year 2022 (Capital Fund years 2020-2022). The Authority drew down funds for operating costs under capital fund years 2020 and 2021. Total capital fund draws for operating costs under these two grants during 2022 aggregated $1,061,999. REPEAT FINDING Not a repeat finding. RECOMMENDATION The Authority should obligate the funds in LOCCS after the date of the voucher request. AUDITEE?S RESPONSE AND PLANNED CORRECTIVE ACTION See Corrective Action Plan.