We audited the Housing Authority of the City of Pottsville, PA’s (Authority) capital fund grant that it received under the American Recovery and Reinvestment Act of 2009 (Recovery Act). On March 18, 2009, the U.S. Department of Housing and Urban Development (HUD) awarded the Authority a $992,895 grant under the Recovery Act for its public housing capital fund program. Our audit objective was to determine whether the Authority administered its grant funds provided under the Recovery Act according to Recovery Act requirements and applicable HUD rules and regulations. Overall, the Authority administered its grant funds in accordance with the requirements of the Recovery Act and HUD rules and regulations. Specifically, it (1) used grant funds for eligible activities included in its annual plan or 5-year action plan, (2) obligated and expended grant funds within established deadlines, (3) received and disbursed grant funds in a timely manner, (4) effectively monitored and reported on its grant funds, and (5) generally procured goods and services in accordance with applicable HUD requirements. However, it did not prepare independent cost estimates before soliciting bids for its grant-funded activities. We recommend that HUD require the Authority to develop and implement controls to ensure that it creates independent cost estimates as required and documents them in its contract files.