As part of the Office of the Inspector General’s (OIG) directive to determine whether safeguards exist to ensure that American Recovery and Reinvestment Act of 2009 (Recovery Act) funds are used for their intended purposes, we audited the Dallas Housing Authority’s (Authority) Recovery Act Public Housing Capital Fund formula grant (grant). Our objective was to evaluate the Authority’s capacity in the areas of internal controls, eligibility, financial controls, procurement, and output/outcomes in administering its grant. Overall, the Authority demonstrated capacity to administer its grant in accordance with requirements. However, the Authority should address the issues identified in the report to help ensure it fully expends its grant funds on eligible activities within Recovery Act deadlines. Our recommendations included the U. S. Department of Housing and Urban Development working with the Authority to resolve documentation requirements for administration and management improvements expense categories and requiring the Authority to revise its budget and reallocate $280,000 in budgeted funds to other eligible activities.