In accordance with our goal to review funds provided under the American Recovery and Reinvestment Act of 2009, we audited the Housing Authority of the City of Las Cruces Public Housing Capital Fund Stimulus (formula) Recovery Act-funded activities. Specifically, our objectives were to determine whether the Authority (1) properly followed Recovery Act rules and regulations when obligating and expending its Recovery Act formula grant funds, (2) properly followed the environmental requirements for Recovery Act activities, and (3) accurately reported its Recovery Act activities.

The Authority properly obligated and expended its Recovery Act funds. It met the required deadlines and properly supported its obligations and expenditures. However, it did not properly follow environmental requirements before performing Recovery Act activities. Fortunately, the activities performed using Recovery Act funds were categorically excluded, meaning no further assessments were required. Further, the Authority did not accurately report on its Recovery Act funded activities. These exceptions occurred because the Authority did not understand the requirements. As a result, the proper environmental review of the Recovery Act activities was not performed, and the Authority's Federal reporting was incorrect and incomplete.

We recommend that the U. S. Department of Housing and Urban Development's (HUD) field office program center coordinator of the Office of Public Housing require the Authority and the City of Las Cruces to establish a process to ensure that future projects have the proper environmental review performed in a timely manner. We also recommend that HUD provide guidance to the Authority and assist it in correcting the information submitted to FederalReporting.gov.