Work with the project’s owner and Greystone for the owner to develop an action plan to bring the owner current on the project’s mortgage, reserve for replacements, and taxes and insurance to prevent a claim to HUD on the mortgage.

Certify and provide supporting documentation showing that the identified deficiencies have been corrected for the 8 of 109 properties cited in this audit report.

Reimburse HUD $19,280 in ineligible management fees for 20 properties for which initial services were improperly performed before promotion to ready-to-show status.

Reimburse HUD $6,525 in ineligible routine inspection fees for 93 properties that contained property preservation and protection deficiencies.

Improve its quality control procedures to accurately track and conduct reviews in a manner that ensures all properties in its active inventory comply with HUD’s and its own requirements to prevent $594,000 in monthly routine inspection fees from being spent over the next year for properties that are not adequately maintained. The quality control procedures should include but not limited to continued training of BLM’s staff and subcontractors on properly identifying and addressing property deficiencies; maintaining sufficient documentation of its monthly quality control reviews and corrective actions; verifying that the datestamped photographs were for the corresponding inspection dates; and regularly updating its tracking mechanism for desktop reviews of inspections to ensure that it conducts desktop reviews for properties that are still in its inventory.

Assess BLM’s performance under the area 4P contract at least quarterly to determine whether it has improved its performance. If its performance does not improve, HUD in coordination with the Office of the Chief Procurement Officer should determine whether BLM has defaulted on its contract and take the appropriate actions.

Recalculate the commitment requirement as a result of the City improperly committing HOME funds for activities 5455, 5456, 5058, 5059, 5173, 5174, and 4652 and determine the cumulative effect on the City’s overall commitment requirement. Any overpayments should be recaptured or reduced in the HOME Investment Trust Fund account.

Require the City to establish and implement controls and procedures to ensure compliance with requirements for commitments entered into HUD’s information system. This includes but is not limited to controls and procedures to ensure that valid commitment entries and all HOME contracts and agreements are properly executed.

We recommend that the Deputy Assistant Secretary for Grant Programs issue guidance reminding grantees of the requirement to properly report the addresses of assisted properties in IDIS and properly calculate and report program income from the disposition of these properties.

We recommend that the Deputy Assistant Secretary for Grant Programs instruct the Los Angeles, CA, field office to require the County of Los Angeles to reclassify program income to the activity ID in IDIS that generated the income, ensuring that the $300,330 in program income is properly accounted for.

We recommend that the Deputy Assistant Secretary for Grant Programs instruct the Milwaukee, WI, field office to document that no portion of the four State of Wisconsin’s activities reviewed is currently subject to the change of use requirements or remind the State of Wisconsin that the portions of the activities related to the voluntary grant reductions are still subject to the change of use requirements.

Update the terms in the purchase agreement to ensure that the agreements define “extenuating circumstance” in reference to foreclosure avoidance, establish how long stabilization outcomes can continue to be reported as planned, and establish financial or other penalties to hold purchasers accountable in instances of nonreporting and noncompliance.

Direct the applicable lenders to provide evidence that the properties for the 1,383 FHA-insured loans not included in our sample had a safe and potable water source, or that the appraisers had not notified the lender of the water quality issue on their appraisals. If the lenders cannot provide this evidence, HUD should direct them to perform water testing and any necessary remediation to ensure that the properties have a safe and potable water source, or indemnify HUD against future loss.

Take appropriate administrative action against the lenders or appraisers for any cases in which it finds that they did not take appropriate steps to ensure that properties had a safe and potable water source.

Develop and implement additional guidance to advise lenders and appraisers when water testing is required for properties serviced by a public water system which has issued a public notice of water contamination.

Develop and implement policies and procedures to ensure that appraisers comply with guidance implemented to resolve recommendation 1C, including penalties for failure to comply, thereby ensuring that at least $238,090,214 million is put to better use.

Consider requiring water testing for all FHA-insured properties.

Review the Authority’s non-Sound Families Initiative project-based voucher projects to determine whether it executed the agreement with the owners of new construction projects.

Assist the Authority in obtaining any training needs identified by the review in recommendation 1A.

Require the Authority to submit evidence and its board of directors to certify to the Director of the Seattle Office of Public Housing that it has complied with regulatory requirements for each step of the project-based voucher process for each new project-based voucher project until such time as the Director of the Seattle Office of Public Housing believes the Authority understands and is consistently complying with the requirements.