Michigan City Housing Authority told to repay 2021 capital funds; potential loss about $513,000
Loading...
Summary
HUD identified a Section 9(j) obligation lapse for the authority's 2021 capital fund grant; HUD will recapture the amount from future grants (about $513,000). The authority is exploring appeal options and is also working through HUD monitoring findings from 2024.
The Michigan City Housing Authority learned at its Feb. 19 meeting that HUD has flagged a Section 9(j) violation for the authority’s 2021 capital fund grant because the funds were not obligated under contract by the Feb. 22, 2023 deadline.
Executive Director said HUD will recapture the un-obligated 2021 capital fund amount from future capital fund grants, meaning the authority stands to lose about $513,000 from its 2025 capital fund allocation unless an appeal succeeds. The ED said staff sent a copy of a letter to attorney Harris to explore possible appeal routes but made no promise that an appeal will be granted.
The ED also briefed the board on ongoing HUD monitoring: 54 audit findings were issued in March 2024 and 31 of those findings have been closed to date. The ED said many outstanding findings should be resolved once the authority updates its Administrative Plan and ACOP and presents it to the board for approval in March. Staff noted procurement training and a newly hired procurement and contractor manager as steps intended to reduce future compliance risk.
Board discussion noted the seriousness of capital fund obligation rules and emphasized the need for timely procurement and contracting to prevent future recaptures.
