Implement additional procedures and controls to ensure that documentation is obtained to support that the limited clientele national objective was met.

Obtain training or technical assistance on CDBG program requirements.

Determine legal sufficiency and if legally sufficient, pursue civil and administrative remedies against Cypress Meadows, LLC; Skyline Crest Enterprises, LLC; the project’s owner; or all three for inappropriately disbursing funds in violation of the project’s regulatory agreement, operating lease agreement, and HUD requirements.

Pursue appropriate civil money penalties and administrative actions, up to and including debarment, against Cypress Meadows LLC; Skyline Crest Enterprises LLC; the project’s owner; or all three for violating the project’s regulatory agreement, operating lease agreement, and HUD requirements.

Repay the project from non-project funds $263,289 for ineligible salary expenses.

Remove $283,307 in ineligible accrued salary fees payable from its financial statements and records and ensure that these expenses are not accrued or paid for with project funds.

Repay the project from non-project funds $110,710 for ineligible offsite accounting expenses.

Remove $129,416 in ineligible accrued offsite accounting fees payable from its financial statements and records and ensure that these expenses are not accrued or paid for with project funds.

Repay the project from non-project funds $99,160 for ineligible personal health insurance expenses of the owner.

Repay the project from non-project funds $4,179 for excessive bank fees.

Repay the project from non-project funds $1,352 for expenses related to the identity-of-interest hair salon.

Obtain approval from HUD for a lease agreement with the hair salon.

Provide documentation to support that $65,232 in disbursements was used on reasonable and necessary operating expenses or repay the project from non-project funds.

Pay the project $620,937 in uncollected rent from non-project funds.

Pay the project from non-project funds $162,462 in lease agreement charges not deposited into Cypress Meadows’ bank account.

Remove Skyline Crest Enterprises, LLC, as the operator and replace it with a HUD-approved independent operator.

Develop and implement written policies and procedures for the management of the project, including but not limited to financial policies for cash disbursements, cash receipts, and documentation requirements.

Create and implement policies and procedures or change program regulations to prevent multifamily housing properties from charging more for Section 8 units than for comparable non-Section 8 units. For the 25 properties reviewed, this measure would prevent as much as $3,144,894 of Section 8 funds from subsidizing non-Section 8 units in the next year.

Deobligate $542,289 in fiscal year 2015 capital funds in HUD’s system until binding agreements are executed for eligible and reasonable purposes, or coordinate with HUD for terminating its funding.

Reclassify $398,022 in fiscal year 2016 capital funds as authorized in HUD’s system to an eligible and reasonable activity, or coordinate with HUD for terminating its funding.