Finding Text
2020-016 Misappropriation of Federal Funds - Improper Allocation of Housing Authority Funds and Staff
Criteria:
A Housing Authority is required to maintain a cost sharing agreement with a component unit for any costs incurred by the Housing Authority on behalf of the component unit.
Condition:
The Fayetteville Housing Authority has incurred direct costs on behalf of the FHA Development, Inc. Furthermore, it was observed at the time of our audit that Fayetteville Housing Authority maintenance staff were performing work on the FHA Development, Inc. properties.
Questioned Costs:
Unknown
Effect:
Federal money received by the Fayetteville Housing Authority from the federal sources was misappropriated to subsidize the operations of the FHA Development, Inc.
Cause:
Lack of oversight by Fayetteville Housing Authority management.
Recommendation:
We recommend that the Fayetteville Housing Authority discontinue incurring expenses on behalf of the FHA Development, Inc. and discontinue utilizing Fayetteville Housing Authority staff time on the FHA Development, Inc. properties until the proper cost sharing agreement is in place.