We audited the Housing Authority of Baltimore City’s (Authority) administration of its Public Housing Capital Fund grants that it received under the American Recovery and Reinvestment Act of 2009 (Recovery Act). We selected the Authority for audit because it received a $32.7 million formula grant, which was the largest formula grant awarded in the State of Maryland. Our audit objective was to determine whether the Authority administered capital funds provided under the Recovery Act according to the requirements of the Recovery Act and applicable U.S. Department of Housing and Urban Development (HUD) rules and regulations. We found that the Authority generally administered its grant funds in accordance with the requirements of the Recovery Act and applicable HUD rules and regulations. We recommended that HUD require the Authority to properly record a $19,000 transaction on its books, strengthen controls for maintaining documentation to support cell phone expenditures and recording transactions in its general ledger, and track the performance of its energy conservation program, report performance annually, and identify funds it will use to repay the funds it borrowed to implement energy conservation measures if the projected savings from implementing the measures are not realized.