Finding Text
U.S. Department of Housing and Urban Development
Program Name: Public Housing Capital Fund
Federal Assistance Listing Number: 14.872
Significant Deficiency, Nonmaterial Noncompliance – Special Test – Obligation and Expenditure Verification
Finding 2023-001
Criteria or Specific Requirement: Per 24 CFR 905.306(a) a Public Housing Agency (PHA) shall obligate capital fund grants no later than 24 months after the funds become available to the PHA.
Per 24 CFR 905.306(f) a PHA shall expend capital fund grants no later than 48 months after the funds become available to the PHA.
Condition: Only $70,000 of the $596,704 for the 2021 public housing capital fund grant obligations reported in LOCCS were obligated by the February 22, 2023 deadline.
Additionally, the 2017 public housing capital fund grant has approximately $14,516 that was not expended within the 48-month requirement.
Questioned Costs: None.
Effect: By not having the funds fully obligated or expended by the required deadline, the Federal government could suspend or stop future payments until the noncompliance is remediated.
Cause: Management did not ensure obligations were fully met prior to the 24-month deadline. Additionally, management did not ensure amounts were expended within the 48-month deadline.
Recommendation: We recommend management implement controls to ensure capital grants are fully obligated by contractual agreements and expended within the required deadlines.
Views of Responsible Officials: Management agrees with the finding and is implementing procedures to correct this which is further discussed in the Corrective Action Plan.
Corrective Action Plan: See Corrective Action Plan prepared by the Authority.