Report Program income of $31,724 for FL0199L4D001407 to HUD.

Provide supporting documentation to show that participant 87487 from FL0431L4D001403 was chronically homeless or reimburse its Program $15,756.

Perform onsite monitoring of the subrecipient that administered project FL0431L4D001403 to ensure that participants are eligible and annual income re-certifications are performed.

Review the issues identified in this audit report and if appropriate, pursue administrative sanctions against the board of directors for the violations cited in this report.

Provide documentation to show that payments for work totaling $716,693 complied with applicable building codes or reimburse the project from nonproject funds for payments that did not comply with the codes and take action to bring the work up to code.

Provide documentation to support payments totaling $163,885 or reimburse the project from nonproject funds for payments that it cannot support.

Develop and implement written procedures to ensure that it obtains written cost estimates as required and maintains complete documentation to support expenditures and that contractors performing or managing construction, removal, repair, or improvement work are properly licensed as required.

Reimburse the project $296,787 from nonproject funds for the ineligible legal expenses.

Reimburse HUD $3,892 from nonproject funds for the overpayment of housing assistance.

Correct the errors in the tenant files identified during the audit.

Investigate the 14 loans with unpaid mortgage amounts totaling $3,035,819, and require the lenders to obtain the borrowers consent, reinstate the insurance coverage, or take other action as appropriate given the facts of each particular loan.

Remind lenders that voluntary termination is not the correct termination type to record third-party sales and that borrower consent is required to terminate insurance, even if the loans are indemnified.

Improve its procedures for detecting and sanctioning improper voluntary terminations.

Update Handbook 4000.1 to require the voluntary termination of insurance consent form to include an explanation that voluntary termination differs from mortgage insurance premium cancellation and the disclosure of any outstanding partial claims to put $285,215 to better use.

We recommend that HUD’s Deputy Assistant Secretary for Public Housing Investments direct staff to determine whether the nine PHAs that were classified as troubled or physically substandard have public housing developments that are subject to the required conversion requirements to support whether potentially distressed projects should be converted to tenant-based rental assistance. If conversion is required, ensure that it is accomplished timely, thereby ensuring that up to $75,540,916 is used effectively for other projects that are cost effective and have long term viability and ensuring that residents receive other rental assistance. Footnote: The $75 million cited as funds to be put to better use is based on an analysis of available data. We recognize that the 131 PHAs cited in this report, including the 9 PHAs that comprise the $75 million figure, may not have projects with at least 250 units on one or more contiguous sites that have vacancy rates of 12 percent or more. However, the data did not allow us to calculate vacancy rates for each group of contiguous units, and HUD could not provide a reasonable, supported method to identify projects subject to required conversion. To address this recommendation, HUD will need to determine whether these PHAs have projects that are subject to required conversion.

We recommend that HUD’s Deputy Assistant Secretary for Public Housing Investments direct staff to develop and implement policies and procedures with the Office of Field Operations regarding identification of potentially distressed projects and monitoring and enforcement of the required conversion program.

We recommend that the Program Center Coordinator, Office of Public Housing, Oklahoma City, OK, require the Authority to repay $12,739 from non-Federal funds to its Section 8 program for ineligible payments based on incorrect housing assistance payment calculations, incorrect payment standards and utility allowances, and unreported income.

We recommend that the Program Center Coordinator, Office of Public Housing, Oklahoma City, OK, require the Authority to support or repay $28,574 from non-Federal funds to its Section 8 program for unsupported payments based on questionable income calculations.

We recommend that the Program Center Coordinator, Office of Public Housing, Oklahoma City, OK, require the Authority to strengthen its compliance with requirements by implementing a quality control system that would require management to review a sample number of income calculations, ensure staff follow-up on income discrepancies and document their analysis.

We recommend that the Program Center Coordinator, Office of Public Housing, Oklahoma City, OK, require the Authority to implement policies and procedures to monitor the EIV income discrepancy reports each quarter to minimize subsidy payment errors.