Develop and implement policies and procedures to ensure that relevant personnel are routinely and regularly trained on the grant closeout process.

Work with the Authority to determine whether the buildings represent an imminent threat to public safety from physical deterioration and whether activities to control the situation would be exempt under the Part 58 environmental review process or excluded under the Part 50 environmental review process. If it qualifies, require the Authority to immediately take actions necessary to control the imminent threat to public safety before the full environmental review is done.

Determine whether it would be beneficial for HUD to conduct a Part 50 environmental review of the development or if the Authority should conduct a Part 58 environmental review, and implement the decision to ensure that the environmental review is conducted as soon as possible as required under the action plan.

Continue to provide training and technical assistance to ensure that the Authority understands relevant requirements for the various asset repositioning options, including milestone and disposition requirements.

Provide certifications and supporting documentation to show that it has identified and addressed urgent health and safety issues at the development, such as flooded stairwells, accessible crawlspaces, and unsecured windows and doors.

Develop and implement written policies and procedures and controls for the FHA refund process to address the deficiencies identified in the audit report. These should include (1) controls to ensure that the website for the public listing of all unpaid refunds is complete, (2) controls to ensure that refund applications are sent only to the homeowners who requested them, (3) controls to ensure that refund applications are sent to all homeowners on the loan after loan termination, and (4) a formal monitoring framework for tracking the status of refunds.

Obtain the required approvals under the Paperwork Reduction Act for the insert document mailed with the refund application and the Tracer Found Case form.

Revise its methodology to identify slow spenders, including appropriate baselines and the definition of slow spenders.

Update its policies and procedures for tracking expenditures related to slow-spending grantees, including steps for assisting the grantees to expedite spending (including the grantee’s steps or actions to address slow spending), identifying the reasons for the delays with the grant, and documenting the outcome of its efforts.

Corrective Action Taken

CPD updated guidance addressing grantee slow spending through technical assistance, including actions grant managers can take when grantee expenditures do not appear to be “on pace” to meet the expenditure deadlines, and demonstrated it is providing technical assistance to grantees during monitoring. CPD also issued an additional Standard Monitoring Findings and Corrective Actions Guide for its staff to promote a consistent framework for crafting monitoring findings and the corrective actions needed to resolve identified deficiencies and prevent future occurrences. This new resource provides general guidance and examples for presenting Finding components in monitoring reports for fourteen topics including, “Failure to Meet Timeliness of Expenditures Requirements.

Resolve or remediate outstanding flags for grants B-12-MT-01-0001, B-13-MS-36-0002, B-16-MH-48-0001, and B-16-DL-12-0001 in DRGR.

Require updated projections for grants B-12-MT-01-0001, B-13-MS-36-0002, and B-16-DL-12-0001 and provide assistance to the grantees to ensure that the expenditure deadlines will be met.

Update its policies and procedures to require grantees to identify the reason for variances between the actual and projected expenditures to enhance CPD’s oversight.

Update monitoring exhibit 6-1 to include (1) reasons for differences between actual and estimated projections and (2) a question to determine whether the grantee is meeting the timelines established and if the timelines are not met, providing reasons.

Update policies and procedures to require CPD staff to sufficiently document its basis for conclusions to meet the monitoring handbook and QPR checklist requirements and intentions.

Consider suggestions made by grantees to assist with the progress of spending funds and provide support for the guidance it plans to share with grantees based on these suggestions. (See bullets under Grantees Generally Considered CPD’s Assistance With the Progress of Their Grants Helpful.)

We recommend that the Director of the Office of Block Grant Assistance require the Texas GLO to include milestones and appropriate consequences for not meeting those milestones in future subrecipient agreements to ensure that expenditure deadlines remain on track. Implementing this recommendation could assist the Texas GLO in avoiding possible future litigation based on the lack of required benchmarks in its contracts.

We recommend that the Director of the Office of Block Grant Assistance require the Texas GLO to provide its plan to ensure that processes are in place to assist those participants transitioning from the City’s programs to the Texas GLO’s programs.

With HUD’s approval of action plan amendment 8, we recommend that the Director of the Office of Block Grant Assistance require the Texas GLO to provide its plan to continuously monitor the City’s pace and performance in its remaining Hurricane Harvey CDBG-DR program and take appropriate action to ensure that program goals are met. The plan should include a process for repurposing additional grant funds, if necessary, to avoid potential recapture due to the City’s inability to meet the expenditure deadline established under its subrecipient agreement with the Texas GLO and to allow the Texas GLO to meet the expenditure deadline for its grant award.

With HUD’s approval of action plan amendment 8, we recommend that the Director of the Office of Block Grant Assistance require the Texas GLO to set performance and financial milestones, including approval of the City’s projects and obligation and expenditure of funds, for all programs and activities funded under the City’s subrecipient agreement through the remainder of the contract and deadlines for the City to achieve those milestones. This requirement would include the Texas GLO’s (1) providing its plan to continually assess whether the City is meeting the established milestones within the prescribed period; (2) taking appropriate action as outlined in the subrecipient agreement for any missed deadlines; and (3) if necessary, determining whether programs need to be combined or eliminated from the subrecipient agreement.

With HUD’s approval of action plan amendment 8, we recommend that the Director of the Office of Block Grant Assistance require the Texas GLO to provide its plan to ensure that the City will comply with the Texas GLO’s program guidelines and required onsite technical assistance and supportive services. This plan would include (1) precise instructions and deadlines for submitting or resubmitting program and implementation guidelines, (2) terms for settling technical assistance and supportive services disagreements, and (3) appropriate consequences for noncompliance with the requirements the Texas GLO imposes.