Document DEC decisions and any penalties awarded in iREMS for each affected property for any ORCF referrals to the DEC about unauthorized loans.

Flag any borrowers in APPS for each unpaid penalty to ensure that HUD appropriately evaluates the risks associated with doing business with these principals.

Develop and implement written policies to ensure that any changes to the expenditure and draw deadlines for the ESG program are provided in a formal document, such as a CPD notice. In this case, implementing these controls would provide clear guidelines to the grantee and help prevent the disbursement of $1,933,693 that was drawn after the draw deadline.

Provide support to show that the performance history element was factored as part of the grantees’ capacity to manage the grants awarded through the 2025 NOFO.

Recapture $3,775,916 in undisbursed grant funds not used to meet agreed-upon performance benchmarks for the two identified ‘High Risk’ grantees whose period of performance ended in June and July 2025, respectively. In addition, identify those grantees that received 2020 through 2022 LBPHC and LHRD grants with a period of performance that ended on or before December 31, 2025, to determine whether agreed-upon performance benchmarks were met by that date, and take appropriate actions that include recapturing undisbursed grant funds.

Require the State to include in its procurement policy a reference to the New York State law which limits a State waiver of policies to 30 days unless renewed and to ensure that it clearly states whether the law affects the Governor’s 2012 waiver. Further, if it does not affect the 2012 waiver, require the State to take action to limit the use of that waiver to ensure full and open competition.
 

Require the State to implement a control, including documenting exceptions, to ensure that all contracts that exceed 5 years are approved by the Corporation.

Require the State to implement a control to ensure that it follows its mini bid process to ensure that it obtains the best services for the best price or document those exceptions and have the Corporation’s approval for them.

Require the State to implement a control to ensure that it follows its procurement policy and limits contract terms to 1 year unless it has the Corporation’s approval and it documents those exceptions.

Revise its procurement policies, practices, and controls to ensure that it executes and renews contracts in a timely manner to prevent lapses and backdating of agreements.

Revise its procurement policies to include requiring Corporation oversight for material changes in an agreement’s scope or amount.

Revise its ethics, conflict-of-interest and contractor certification policies and forms to address issues that can arise, including when using embedded consultants.

Create and implement a policy that documents how it handles and addresses conflict of interest complaints.

Implement a process, in conjunction with the Office of Recapitalization, to ensure that the reserve for replacement requirements in HUD’s business documents, such as the RAD conversion commitment, HAP contract, and operating agreement, are consistent for converted projects.

Deobligate the 101 program obligations totaling $1,967,991.45 identified for deobligation during the fiscal year 2024 OOR that had not been deobligated as of February 28, 2025.

More clearly define successful prepurchase and postpurchase homeownership counseling outcomes and use these definitions to help establish performance metrics and benchmarks for HUD’s Office of Housing Counseling and HUD-approved housing counseling agencies. This should include the types of successful outcomes under the Homeownership Initiative Grant, as well as other positive outcomes for clients that do not involve immediate homeownership.

We recommend that HUD’s General Deputy Assistant Secretary for Community Planning and Development implement training on civil rights monitoring reviews. Additionally, CPD should ensure that training on civil rights monitoring reviews is regularly provided to CPD staff.

We recommend that HUD’s General Deputy Assistant Secretary for Community Planning and Development implement updated guidance and protocols for monitoring civil rights compliance and require CPD staff to incorporate civil rights monitoring into the risk analysis process.

We recommend that HUD’s General Deputy Assistant Secretary for Community Planning and Development develop guidance clarifying the use of the exhibit for on-site, hybrid, and remote monitoring to ensure a full review of grantees’ compliance with civil rights requirements, and incorporate this guidance into the training developed as a result of recommendation 1A.

We recommend that HUD’s Deputy Assistant Secretary for Multifamily Housing implement training at the regional level to provide instruction on and stress the importance of monitoring civil rights compliance as part of the MORs.