Consider OIG’s fraud risk inventory to improve CPD’s own fraud risk assessments and develop a program-specific fraud risk map and compendium.

Implement efforts to increase the awareness of fraud at all levels (headquarters, field offices, grantees, subrecipients, etc.), including but not limited to regularly publishing articles on known fraud schemes and identified instances of fraud in periodic newsletters or on CPD’s intranet website, providing recurring fraud risk trainings to HUD employees and grantees and working with OIG to develop materials to support fraud awareness.

Develop and implement a fraud risk checklist or other instrument as part of CPD’s monitoring oversight requirements, to be completed as part of each remote and onsite monitoring review.

Develop and implement a fraud analytics strategy using available data, including but not limited to data and information collected during the grantee risk assessment and monitoring processes, to begin conducting data analyses to identify potential fraud risks for further review.

Coordinate with CPD program staff to clarify the (1) roles and responsibilities of the CRO, HCCRT, and CPD’s risk management staff with regard to identifying, assessing, and mitigating fraud risks and (2) purpose and role of HUD’s ERM processes and program office risk management processes with regard to identifying, assessing, and mitigating fraud risks.

We recommend that the Director of HUD’s Houston Office of Public Housing require the Authority to reimburse its Public Housing Operating Fund $5,000 from non-Federal funds for the unrecovered remaining balance of the $20,000 that was paid to the attorney.

We recommend that the Director of HUD’s Houston Office of Public Housing require the Authority to ensure that no Federal funds are used to pay the remaining legal services invoices totaling $24,250, which will result in these funds being put to better use.

We recommend that the Director of HUD’s Houston Office of Public Housing require the Authority to update its policies to ensure the future commissioners obtain training on Texas’ Open Meetings Act requirements and HUD’s training for commissioners within 90 days after appointment, which will ensure that future commissioners understand the requirements for board meetings and procurement actions.

We also recommend that the Director of HUD’s Houston Office of Public Housing evaluate the reported actions the three commissioners took when procuring the legal services contract and, if warranted, pursue administrative sanctions or other corrective actions.

We recommend that Director of the Houston Office of Public Housing require the Authority to Reimburse its low-rent operating fund $2,172 from non-Federal funds for the ineligible travel, training, and credit card expenditures.

We recommend that Director of the Houston Office of Public Housing require the Authority to reimburse its low-rent operating fund $4,469 from its Housing Choice Voucher Program fund for the expenses that should have been paid from its Housing Choice Voucher Program fund.

We recommend that Director of the Houston Office of Public Housing require the Authority to reimburse its Housing Choice Voucher Program fund $704 from non-Federal funds for the ineligible travel and training expenditures.

We recommend that Director of the Houston Office of Public Housing require the Authority to support or repay $31,327 to its low-rent operating fund from non-Federal funds for the various unsupported expenditures.

We recommend that Director of the Houston Office of Public Housing require the Authority to support or repay $584 to its Housing Choice Voucher Program fund from non-Federal funds for the unsupported travel, training, and phone expenses paid with Housing Choice Voucher Program funds.

We recommend that Director of the Houston Office of Public Housing require the Authority to update and implement its policies and procedures, including creating a policy for recording expenses, a cost allocation plan, and a travel policy, to ensure that the Authority appropriately pays and accurately reports its costs.

We recommend that the Director of the Houston Office of Public Housing require the Authority’s new board to complete HUD’s “Lead the Way” online training and Texas’ Open Meetings Act training.

We recommend that the Director of the Houston Office of Public Housing require the Authority’s new board to review the board minutes during our audit period, determine which board decisions were invalid, and take action to address the invalid decisions.

We recommend that the Director of the Houston Office of Public Housing require the Authority’s new board to revise its bylaws to agree with the Texas Open Meetings Act.

Establish and implement a plan to assist public housing agencies in optimizing leasing potential to maximize the number of assisted families and prevent additional vouchers from becoming unfunded. The plan should include but not be limited to (1) addressing the circumstances that prevent public housing agencies from leasing vouchers and assessing whether legislative, policy, or funding changes are needed to optimize voucher use and (2) establishing timeframes to lease vouchers for those public housing agencies that can lease vouchers and determining appropriate corrective actions for those public housing agencies that do not increase their leasing to prevent additional vouchers from becoming unfunded.

Create and implement a knowledge management strategy, such as developing standard operating procedures, reference sheets, and program office fact sheets.

Corrective Action Taken

HUD established and implemented a plan for the unused and unfunded vouchers, aiming to mitigate or prevent additional vouchers from becoming unused and unfunded. PIH's plan included the following, among other actions:

• Determining the scope of HUD's statutory and regulatory authority to offset and reallocate vouchers.
• Issuing Office of Public and Indian Housing Notice 2020-29, titled Guidance for Running an Optimized Housing Choice Voucher Program.
• Continuing the work of HUD's landlord taskforce, engaging in listening sessions with major PHA industry groups, and conducting outreach to increase landlord participation in the HCV Program.
• Developing research by HUD's Office of Policy Development and Research on the best methods for adjusting fair market rents and addressing specific challenges in local communities to increase utilization in the HCV Program.