Record indemnification agreement data in its system for the 34 loans for which the lender properly executed an indemnification agreement before endorsement and HUD had not recorded the agreement in its system to put up to $3,493,636 to better use by avoiding potential losses.

Review and correct indemnification agreement data in HUD’s computer systems as needed for all agreements currently classified as having 2-year terms and all agreements related to 2-year agreements contained on its SharePoint site to ensure that its systems contain accurate data for monitoring and enforcement of agreements. This recommendation includes but is not limited to reviewing the agreement number, agreement term, billing lender, expiration date, refinance indicator, and source indicator.

Update indemnification agreements or obtain updated indemnification agreements for the 30 loans for which the indemnification agreements had incorrect or missing information or were not signed by HUD and upload them to its SharePoint site so that such agreements are properly executed and can be traced to HUD’s computer systems for future use.

Consider evaluating whether and how a similar policy for disasters or emergencies or a permanent version of the policy could be used to manage risk to the insurance fund while increasing lender participation. This should include further studying lenders’ use of the policy and the long-term performance of loans endorsed under it. It could also include reviewing the compliance, guidance, and process issues identified during this audit and through the resolution of the other recommendations to refine any future endorsement policies related to forbearance.

We recommend that the Acting Deputy Assistant Secretary for Single Family Housing coordinate with OCPO to require that the contracting officers and CORs be involved in the development, implementation, and documentation of the FSM QASPs for their FSM contracts to ensure that performance statements, acceptable quality levels, and deviation percentages are aligned with the contracts’ requirements in the performance work statement, the performance requirement summary, and the contractor’s quality control plan.

We recommend that the Acting Deputy Assistant Secretary for Single Family Housing coordinate with OCPO to require the contracting officers and CORs to monitor contractor performance to ensure that evidence is maintained and documented in the contract files for each performance statement completed in the FSM QASPs and that contractor quality control report deliverables resolve problems identified by the Government during reviews conducted in accordance with the QASP for its future FSM contracts.

We recommend that the Acting Deputy Assistant Secretary for Single Family Housing require the CORs to ensure that contractor past performance evaluations are prepared at least annually and as required by HUD policy to ensure that reporting of contractors is completed properly and in a timely manner for contract options and in CPARS.

Provide technical assistance to the State and the staff to ensure that they understand the requirements for conducting a monitoring review in accordance with regulations.

Instruct the State to update and implement the CDBG-DR standard operating procedures, which clearly outline what activities, including the frequency, will be reviewed by its monitoring and internal audit function.

Instruct the State to conduct monitoring reviews of its CDBG-DR HIM activities and subrecipients that satisfy monitoring requirements.

Work with the State to develop and implement policies and procedures to ensure that monitoring is conducted remotely in the event that it cannot be conducted onsite.

Instruct the State to update and implement policies and procedures to ensure that the results of the CDBG-DR internal audits are shared by the State’s Commissioner with CDBG-DR program staff to allow for the resolution of any findings and required corrective actions.

Monitor the State’s CDBG-DR program to ensure that performance expectations are achieved.

Complete and update the system security plans for GMP and DRGR and issue an SSN justification memorandum.

Identify and provide additional role-based training, guidance, and instructions to CPD employees on how to appropriately handle and safeguard PII encountered during monitoring.

Reinforce the use and admissibility of photographs and videos for evidence collection while remote monitoring.

Identify strategic opportunities to use remote monitoring early in the FY to maximize its responsibility to oversee and monitor its grantees and then use remote monitoring when those opportunities arise.

We recommend that the Director of CPD’s Office of Disaster Recovery review the one grantee with a grant totaling $666,666 that did not meet the overall LMI requirement and address the noncompliance.

We recommend that the Director of CPD’s Office of Disaster Recovery update DRGR’s QPR to include information on the progress towards compliance with the overall LMI benefit based on the total amount of the grant.

We recommend that the Director of CPD’s Office of Disaster Recovery adopt LMI benchmarking to ensure that grantees budget adequate funds to LMI at significant milestones in the grant lifecycle.