Review the two loans in our sample that did not receive appropriate servicing and take administrative actions if appropriate.

Require the transaction specialist contractor to change its application review process to prevent incomplete applications from being considered during vacant loan sales and that recommendations to approve applications are supported by written analysis.

Implement improved verification checks to prevent participation of restricted entities.

Implement an improved process to review and update program controls before each sale to achieve its mission objectives.

Develop a standard operating procedure for the monthly transaction review that aligns with the HUD policy and includes specific procedures on how to (1) identify and review common transactions that raise the level of risk in the program (for example, personal use purchases, other prohibited purchases, unauthorized purchases or services, split purchases, fraudulent purchases, FAR violation purchases, etc.), (2) methodically select transactions for investigation, and (3) follow up on identified potential improper transactions, including record-keeping requirements.

Develop and fully implement a departmentwide policy for the monthly transaction review process that requires program office participation and timely completion of the review and certification.

Update OCFO’s travel card monitoring procedures to obtain, review, and monitor the IBA Use report on a regular basis to ensure compliance with purchases required to be made on the government travel card.

Work with PRDOH to determine whether its current method of measuring how many applicants purchased their home through the program is the best way to measure the HBA program’s impact.

Based on the results of recommendation 1A, update the HBA guidelines and the Puerto Rico disaster recovery action plan.

Instruct PRDOH and PRHFA to develop and implement clear and consistent guidelines and procedures that establish a verifiable methodology for determining the amount of financial awards granted to eligible HBA participants.

Include, as part of the revised procedures, a requirement to document within each case in SSP a detailed (1) calculation of the household income and (2) the analysis and computations conducted by the PRHFA underwriter for determining the amount of the financial assistance award.

Instruct PRDOH and PRHFA to provide training and guidance to participating lending institutions related to the updated guidelines and procedures for determining the financial award granted to HBA participants to ensure that program funds are distributed in an equitable manner.

We recommend that HUD require the City to reassess the eight infrastructure projects still in the design or planning phase to determine whether the City can complete the projects or how the remaining funds could be best used within the 6 years remaining for the grant period to ensure that the City is protected from future storm and rain events.

We recommend that HUD require the City to for the $14,683,335 originally budgeted for the Milneburg and Microgrid projects, work with HUD to (1) determine whether its planned action plan amendment would constitute the need to submit a substantial action plan amendment, (2) ensure that any modifications in its action plan amendment would lessen the susceptibility of rain and flood events within the Gentilly area, and (3) require that any activities pursued under the action plan amendment could reasonably be expected to be completed by the September 30, 2029, deadline.

We recommend that HUD require the City to review the number and type of positions for its National Disaster Resilience staff that are responsible for the oversight and completion of infrastructure projects and ensure that it has the appropriate staffing levels to complete adequate monitoring and oversight of the projects.

We recommend that HUD require the City to revise its risk assessment plan and process to ensure that monitoring is regularly conducted for its infrastructure projects through project completion, including establishing a monitoring schedule to ensure the progression and completion of the infrastructure projects.

We recommend that HUD require the City to develop and submit to HUD for approval an updated planning and administration budget and staffing plan, after reassessing the infrastructure projects in recommendation 1A, to complete the National Disaster Resilience projects with the funds and within the timeframe remaining.

We recommend that HUD require the City to analyze the method used to charge planning and administration costs to ensure that all costs are applied to the correct costs category and are valid charges to the National Disaster Resilience grant.

We recommend that HUD require the City to review misallocated planning and administration funds and reallocate any mistakenly allocated funds to the correct National Disaster Resilience project or grant activity. This measure could make available additional funds for program oversight.

We recommend that HUD require the City to develop a plan for how the City will continue to fulfill the required monitoring and oversight responsibilities of the National Disaster Resilience programs and projects if it runs out of planning and administration funds before it completes these programs and projects.