We performed a capacity review to assess the Rochester Housing Authority’s (Authority) administration of its capital funding program. The Authority was awarded $5.9 million in capital funds under the Recovery Act. Our review determined that the Authority had weaknesses in its financial controls that if left unaddressed could lead to its having a diminished capacity to effectively administer its supplemental Recovery Act funds. Specifically, the Authority (1) charged ineligible and unsupported expenses to its capital fund program; (2) failed to reimburse eligible expenses from its capital fund program; and (3) inaccurately allocated employee payroll expenses charged to its capital fund program. Except for these issues, Authority officials demonstrated a positive attitude toward establishing and implementing additional financial controls, their procurement controls comply with regulations and their capital program outputs are in accordance with their established plans. Thus, overall, the Authority had the capacity to effectively administer its capital fund program supplemental funds provided under the Recovery Act according to applicable requirements.