We recommend that the Chief Financial Officer determine whether the revised and completed transactions totaling $496,913,235 and made more than a year after the original voucher entry were GAAP violations. If the transactions were violations, appropriate actions should be taken, including but not limited to adjusting the transactions in LOCCS and HUD’s financial statements.

We recommend that the Chief Financial Officer enter a 24-month expiration term into LOCCS for Disaster Recovery funding provided by the 2017 Act and monitor to ensure that expenses are not entered before or after the grant period.

We recommend that the Chief Financial Officer require CPD to enter into a separate grant agreement for each grantee’s round of disaster funding for funding provided by the 2017 and 2018 Acts.

We recommend that the Chief Financial Officer require CPD to monitor the detailed voucher transactions in the DRGR system to ensure that grantees appropriately record transactions.

We recommend that the Chief Financial Officer require CPD to prohibit grantees from revising completed vouchers in the DRGR system and require adjustments to be entered as new vouchers into the DRGR system, which will ensure that LOCCS records and tracks revisions.

Implement a repeatable and sustainable process to prepare timely and accurate quarterly financial statement notes, including third and fourth quarter notes within the OMB required timeframe.

Establish policies and procedures for recording the budget authority apportioned to HUD during a continuing resolution, including both the proprietary and budgetary transactions.

Ensure that the budget execution policies and procedures are properly delegated, assigned, and communicated to the personnel fulfilling these responsibilities.

Ensure that the budget execution procedures executed internally by OCFO Budget are consistent with those established by ARC.

Develop and implement policies and procedures to ensure that intragovernmental differences identified with U.S. Treasury’s General Fund are resolved on a timely basis with corrective action plans.

Work with PIH to develop and implement a consistent and reasonable methodology for determining the PIH prepayment that (1) allows for timely recording of financial events, (2) complies with GAAP, and (3) provides an adequate audit trail until the cash management process is automated.

Develop and implement procedures to ensure that the methodology is reevaluated by PIH and OCFO annually and any changes do not compromise (1) the audit trial, (2) compliance with GAAP, or (3) the accuracy of the balance.

Reopen recommendation 2016-FO-0003-002-A, “Evaluate the IHBG investment process and implement a proper accounting treatment in accordance with Federal GAAP.”

Reopen recommendation 2016-FO-0003-002-B, “Work with the Office of Native American Programs to calculate the amounts advanced to grantees and restate HUD’s financial statements to recognize the prepayments on the financial statements.”

Reopen recommendation 2016-FO-0003-002-C, “Develop standard operating procedures for routinely obtaining information on grantee investment activity and accurately reporting amounts in HUD’s general ledger and financial statements.”

Remove the waiver concerning the completion and submission of the SF-425 by CPD’s grantees and implement a process to collect SF-425 information electronically. This process should begin with initial (and ongoing) grant documentation containing specific requirements stating that the Federal Financial Report should be properly completed and required to be submitted quarterly, semiannually, or annually (depending on the grant type and applicable program requirements).

During the implementation process of the waiver removal and collection of SF-425 data, ensure that CPD verifies the accuracy of the accrual data collected from the grantees and provided to its contractor conducting the validation methodology and retain documentation showing that it has independently verified that the contractors resulting accrual estimation information is accurate.

Develop and implement a formal process to (1) track and age the suspense accounts by individual transaction detail, (2) perform regular monitoring of all suspense (clearing) accounts, and (3) promptly research transactions entered into the suspense accounts to ensure that they are posted to the appropriate TAS within 60 days.

Implement an information system or system application that can produce HUD’s consolidated financial statement notes accurately and in a timely manner.

Establish and implement policies and procedures that require identification and performance of complementary controls and periodic evaluation of established complementary controls to ensure that they continue to address financial and operational risks and document, assign, and communicate user complementary controls roles and responsibilities.