We recommend that the Deputy Assistant Secretary for REAC require REAC to develop and implement processes and procedures, in accordance with its system security plan and the HUD Handbook, Information Technology Security Policy, to ensure that annual assessments and continuous monitoring of the security controls are performed and that security control failures are prevented and corrected when identified.

We recommend that the Deputy Assistant Secretary for REAC require REAC to establish and implement written processes and procedures to verify the accuracy of the unit numbers sampled and entered for inspection by the inspector, which could include requiring (1) inspectors to upload a picture of the rent roll to the data collection device, (2) housing agencies to maintain a copy of the rent roll used, and (3) inspectors and public housing agencies to sign a certification stating that the units were inspected in accordance with the sample generated by the data collection device.

Acknowledge the settlement amount of $149,500,000 and that $115,000,000 of the settlement represents restitution due HUD less DOJ’s civil debt collection fees.

Develop and implement internal ONAP and OLG policies and procedures for the audit resolution process, complementing HUD Handbook 2000.06, to include management oversight and review of documents prepared and submitted to evidence that corrective actions have been adequately developed and fully implemented.

Develop and implement a comprehensive plan to use unobligated administrative contract expense funds.

Consider adding additional OLG staff, including a full time director to provide additional leadership and management oversight.

We recommend that HUD’s Office of General Counsel, Office of Program Enforcement, acknowledge that the $40,000 in the settlement agreement represents an amount due HUD.

Obtain the required depository agreements for two5 grantees to ensure that they invest program funds in investment securities for use in carrying out affordable housing activities in accordance with PIH Notices 2014-21, section 4, and 2015-08, section 7.

Strengthen monitoring controls to ensure that current and future grantees maintain the required depository agreements before allowing them to invest program funds in investment securities for use toward affordable housing activities.

Update HUD’s Indian Housing Block Grant Recipient Self-Monitoring Guidebook to replace the expired requirement for investing program funds with PIH Notice 2015-08 and ensure that the Guidebook is updated with the latest requirements to ensure that grantees remain compliant with program requirements.

Develop and implement controls and procedures to ensure that HUD’s underwriters properly evaluate the creditworthiness of management agents when underwriting future loans.

Designate an unclaimed asset recovery official as required by the Treasury Financial Manual.

Work with Treasury to identify and obtain reimbursement for FHA’s and Ginnie Mae’s portion of the $1.9 million in HUD funds that Treasury collected.

Establish and implement policies and procedures to ensure that all of its unclaimed funds are claimed and the money is appropriately routed to put $2.2 million to better use. At a minimum, these policies and procedures should address what constitutes FHA and Ginnie Mae funds, ensure that these funds are returned to FHA or Ginnie Mae as appropriate, and include policies to claim co-owned funds with any appropriate thresholds or limitations.

We recommend that the Southwest Region Director of Multifamily Housing require the Eastwood Terrace Apartments owner to support that the subsidies for 77 tenants and units with income discrepancies, missing EIV reports, missing income verifications, missing annual certifications and missing signatures are supported and accurate or repay HUD $1,865,344 for those subsidies. Repayment must be from non-project funds.

We recommend that the Southwest Region Director of Multifamily Housing require the Eastwood Terrace Apartments owner to ensure tenants are housed in the correct unit size.

We recommend that the Southwest Region Director of Multifamily Housing require the Eastwood Terrace Apartments owner to ensure annual inspections are performed in a timely manner and in accordance with HUD requirements.

We recommend that the Southwest Region Director of Multifamily Housing require the Eastwood Terrace Apartments owner to ensure that its new property management agent is providing oversight to its onsite staff and that its recently implemented quality control program is working as designed and in accordance with HUD requirements.

We recommend that the Southwest Region Director of Multifamily Housing require the Eastwood Terrace Apartments owner to maintain tenant files in a manner that ensures they contain the correct records and all required documentation.

Support that the converted units met HUD’s housing quality standards or reimburse its program $1,206,046 from non-Federal funds ($1,053,618 in housing assistance payments $152,428 in administrative fees).