Support that the contract modification totaling $4,899 for contract number M-1449 was reasonable. The amount that cannot be shown to be reasonable should be reimbursed to its Capital Fund program from non-Federal funds.

Implement adequate procedures and controls to ensure that it complies with HUD’s procurement requirements.

Ensure that its staff is properly trained and familiar with HUD’s requirements to ensure that documentation necessary to support the reasonableness of contract costs is obtained and maintained.

Implement adequate procedures and controls to ensure that capital funds are drawn down and disbursed in accordance with HUD’s requirements.

Implement adequate procedures and controls to ensure that it properly reports its expenditures and disbursements in LOCCS in accordance with HUD’s requirements.

Require the 12 grantees to correct their action plans to ensure that they comply with program requirements and submit the corrected plans to HUD for review or require the grantees to repay HUD from non-Federal funds for any amount of the $7,779,450 they received that they cannot support.

Require the Housing Authority of Brevard County to repay $1,520 in ineligible escrow funds to HUD from non-Federal funds for the program participant that exceeded allowable contract terms of the FSS program.

Monitor the grantees’ efforts to improve the accuracy and completeness of the PIC program data to ensure that program outcomes reported to Congress are accurately supported.

Develop and implement a plan to monitor grantee FSS programs, including to ensure that escrow accounts are calculated correctly.

Develop and implement policies and procedures to ensure that documentation is maintained by grantees to support program participants’ contractual agreements.

We recommend that the Deputy Assistant Secretary for REAC require REAC to develop and implement written policies and procedures requiring REAC to (1) select a sample of inspector candidates, (2) require the sampled inspector candidates to provide written documentation supporting their minimum qualifications, (3) verify the written documentation provided by the inspector candidates, and (4) document the completion of the verification and method(s) used to verify the documentation.

We recommend that the Deputy Assistant Secretary for REAC require REAC to ensure that the nine contract inspectors, who did not meet the minimum requirements to begin the training, receive specialized training in residential or commercial building for electrical; heating, ventilation, and air conditioning; masonry; plumbing; and carpentry, as applicable.

We recommend that the Deputy Assistant Secretary for REAC require REAC to develop, use, and document an electronic checklist for each contract inspector’s file to ensure that inspectors (1) obtain and maintain the required insurance, and (2) have approved background checks before conducting inspections. In addition, support that the three sampled inspectors meet the minimum insurance limits for the current effective periods.

We recommend that the Deputy Assistant Secretary for REAC require REAC to execute administrative action related to outside standards determinations for five inspectors.

We recommend that the Deputy Assistant Secretary for REAC require REAC to develop and implement processes and procedures, in accordance with its system security plan and the HUD Handbook, Information Technology Security Policy, to ensure that annual assessments and continuous monitoring of the security controls are performed and that security control failures are prevented and corrected when identified.

We recommend that the Deputy Assistant Secretary for REAC require REAC to establish and implement written processes and procedures to verify the accuracy of the unit numbers sampled and entered for inspection by the inspector, which could include requiring (1) inspectors to upload a picture of the rent roll to the data collection device, (2) housing agencies to maintain a copy of the rent roll used, and (3) inspectors and public housing agencies to sign a certification stating that the units were inspected in accordance with the sample generated by the data collection device.

Develop and implement internal policies and procedures to ensure that approved underwriters are accurately maintained and kept current in the origination systems for the Section 184 program.

Develop a comprehensive plan to continue to seek indemnification statutory authority, including consideration to include indemnification authority language in draft regulations currently being considered. Until statutory authority is obtained, develop and implement internal policies and procedures for the voluntary indemnification process, to include a voluntary indemnification agreement, followup procedures, and resolution procedures. Procedures should be revised once statutory authority is obtained.

Develop and implement internal ONAP and OLG policies and procedures for the audit resolution process, complementing HUD Handbook 2000.06, to include management oversight and review of documents prepared and submitted to evidence that corrective actions have been adequately developed and fully implemented.

Support line item expenditures for the administrative contract expense fund for fiscal years 2015 to 2018. OLG should repay the U.S. Department of the Treasury for any expenditures that cannot be supported.