Implement improved verification checks to prevent participation of restricted entities.

Implement an improved process to review and update program controls before each sale to achieve its mission objectives.

Develop a standard operating procedure for the monthly transaction review that aligns with the HUD policy and includes specific procedures on how to (1) identify and review common transactions that raise the level of risk in the program (for example, personal use purchases, other prohibited purchases, unauthorized purchases or services, split purchases, fraudulent purchases, FAR violation purchases, etc.), (2) methodically select transactions for investigation, and (3) follow up on identified potential improper transactions, including record-keeping requirements.

Develop and fully implement a departmentwide policy for the monthly transaction review process that requires program office participation and timely completion of the review and certification.

Update OCFO’s travel card monitoring procedures to obtain, review, and monitor the IBA Use report on a regular basis to ensure compliance with purchases required to be made on the government travel card.

Work with PRDOH to determine whether its current method of measuring how many applicants purchased their home through the program is the best way to measure the HBA program’s impact.

Based on the results of recommendation 1A, update the HBA guidelines and the Puerto Rico disaster recovery action plan.

Instruct PRDOH and PRHFA to develop and implement clear and consistent guidelines and procedures that establish a verifiable methodology for determining the amount of financial awards granted to eligible HBA participants.

Include, as part of the revised procedures, a requirement to document within each case in SSP a detailed (1) calculation of the household income and (2) the analysis and computations conducted by the PRHFA underwriter for determining the amount of the financial assistance award.

Instruct PRDOH and PRHFA to provide training and guidance to participating lending institutions related to the updated guidelines and procedures for determining the financial award granted to HBA participants to ensure that program funds are distributed in an equitable manner.

We recommend that HUD’s Deputy Assistant Secretary for Enforcement require the Commission to update its intake policy and procedure to clarify which inquiries are to be recorded in HEMS.

We recommend that HUD’s Deputy Assistant Secretary for Enforcement require the Commission to develop an internal agency intake training guide, distribute it to all agency housing staff members, and ensure that all intake staff members participate in HUD-approved training related to intake.

We recommend that HUD’s Deputy Assistant Secretary for Enforcement require the Commission to implement a record retention policy to ensure that decisions on inquiries are sufficiently supported.

We recommend that HUD’s Deputy Assistant Secretary for Enforcement require the Commission to implement a plan to ensure that it has sufficient staff to meet its obligations under FHAP cooperative agreement.

We recommend that HUD’s Deputy Assistant Secretary for Enforcement require the Commission to implement a system to better track the intake and processing of potential fair housing inquiries.

Develop and implement adequate procedures and controls to ensure that (1) staff issues notices of violation and default within 15 calendar days of the inspection report release date and (2) the Office of Multifamily Asset Management and Portfolio Oversight is made aware when notices are not issued within 15 calendar days after the inspection report release date and takes action as appropriate to ensure that future notices are issued in a timely manner. 

Corrective Action

HUD’s Office of Multifamily Housing created procedures to identify failed inspections and notify the appropriate field office that a property in their portfolio had recently failed inspection. The procedures included a timeline for issuing a Notice of Violation/Notice of Default to the owner of the property. Implementation of the recommendation ensures that multifamily property owners are notified of deficiencies in a timely manner to take corrective actions.

Include language in future notices of violation and default clearly stating that owners are required to inspect all units (including vacant units), common areas, grounds, building systems, and sites as part of the owner survey and require owners to include sufficient detail in the surveys to show (1) when the survey was conducted and (2) that the survey was a complete survey of the project.

Corrective Action

HUD’s Office of Multifamily Housing updated the language in the template document to be used in future notices of violation and default, clearly stating that owners are required to inspect all units (including vacant units), common areas, grounds, building systems, and sites as part of the owner survey and require owners to include sufficient detail in the surveys to show (1) when the survey was conducted and (2) that the survey was a complete survey of the project. Specifically, HUD notified all Asset Management Division Directors informing them of the updates to the templates and instructed them to use the templates. The implementation of this recommendation has the potential to positively and directly impact the health and safety of families.

Develop and implement adequate policies, procedures, and controls to ensure that owner certifications and surveys and other relevant documents related to properties that fail inspections or are noted as having EHS deficiencies are maintained and retrievable from an easily accessible location.

Develop and implement adequate controls to ensure that HUD staff with the appropriate level of authority approves extensions to the notices of violation and default cure periods in writing and that documentation is maintained to support such approvals.

Modify the queries used to generate the schedules of properties that accompany the reports to Congress to consider a larger range of dates to ensure that properties that failed consecutive inspections are appropriately identified on all applicable schedules.