We recommend that the Deputy Assistant Secretary for Single Family Housing require MB Financial to update its quality control plan to include the specific procedures to be used when reviewing rejected loan applications.

Put all project bank accounts in the name of the project.

Separate all owner bank accounts from the project’s bank accounts.

Develop and implement controls over the distinction between project funds and owner funds. These controls should include policies related to when the owner is allowed to take project funds owed to the owner.

Take HUD-approved training related to operating and maintaining a multifamily project.

Repay the project’s operating account from nonproject funds for the $142,805 spent on ineligible expenses.

Provide support for the $12,355 in project funds spent to pay individuals who were not on the payroll and for services provided for project operations. For any portion of this amount that is not supported, the owner should repay the project operating account using nonproject funds.

Obtain training on the eligible use of project funds.

Develop and implement detailed policies and procedures for procurement, travel, and the use of its credit cards. These controls should comply with HUD regulations regarding procurement and other disbursement documentation requirements.

Submit any outstanding audited financial statements.

Review the audited financial statements and determine the amount of outstanding mortgage payments due.

Work with the local multifamily office to make any outstanding mortgage payments or devise a plan to bring the property current through the use of available funds.

Develop and implement policies and procedures to ensure that the certified public accountant submits audited financial statements by the required HUD deadline.

Maintain separate books of account and submit audited financial statements solely for the project.

Reimburse the project’s operating account $50,400 from the reserve for replacement account.

Receive training on the proper use of its reserve for replacement account.

Develop and implement policies and procedures for the use of reserve for replacement funds, which ensure that the project does not use operating funds for any items that qualify for the use of reserve for replacement funds.

Reimburse its program $373,860 ($302,638 in ineligible housing assistance payments $63,643 in associated administrative fees $7,579 in program funds paid to the contractor) from non-Federal funds for the inappropriate payments cited in this finding.

Seek retroactive approval or reimburse its program $358,237 ($339,908 in housing assistance payments $18,329 in program funds paid to the contractor) for the housing quality standards inspections of units owned by entities substantially controlled by the Authority, completed by contractors that Read More

Implement adequate procedures and controls to ensure that the Authority complies with HUD’s requirements for program conflicts of interest, including but not limited to ensuring that (1) its staff does not complete inspections for units owned by entities substantially controlled by the Authority Read More