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.

Acknowledge that $42,600,000 of the $65,000,000 in the attached settlement agreement represents an amount due HUD, less DOJ’s civil debt collection fees.

Acknowledge that $1,670,000 in the attached settlement represents an amount due HUD less DOJ’s civil debt collection fees.

Determine legal sufficiency and if legally sufficient, pursue civil and administrative remedies, civil money penalties, or both against RMS, its principals, or both for incorrectly certifying to the eligibility for FHA mortgage insurance or that due diligence was exercised during the origination of FHA loans.

Support or reimburse its ESG program participants $705 from non-Federal funds for the inadequately supported pay request.

Support or reimburse HUD $13,058 from non-Federal funds for the drawdowns after program grant expiration.

Implement adequate policies and procedures to ensure that payments to subrecipients are issued in accordance with HUD’s requirements.

Provide adequate training to staff associated with the administration of the ESG program to ensure compliance with HUD’s requirements, including timely drawdowns.

Implement adequate policies and procedures for conducting complete and consistent monitoring of subrecipients’ matching requirements, including confirming eligibility and existence of matching funds to ensure compliance with HUD’s requirements.

Support that it met its $526,170 matching contribution requirement associated with the more than $2.1 million in program funds it drew down for supportive services and administrative expenses. If Travelers Aid cannot provide sufficient support, it should reimburse HUD $1,776,381 from non-Federal funds.

Support or reimburse HUD from non-Federal funds for the $305,936 in program administrative funds for which it did not provide sufficient documentation to support that the funds were used for eligible administrative expenses associated with the project for which the funds were drawn.