Establish internal control procedures around the borrowings process to include verifying sufficient borrowing authority exists within the SF 132, prior to executing the borrowing request. Such verification should also be included as part of the borrowing review and approval controls.

Receive a final opinion from HUD’s Office of the Chief Financial Officer’s Appropriation Law Division on whether FHA was in violation of the Antideficiency Act.

Implement procedures to enhance the review of all journal entries recorded in the general ledger by requiring a two-level review that includes the review of source documents for the journal entry (for example, the OMB approved SF 132).

Strengthen controls over the preparation of the SF 132 to the SF 133 reconciliation by preparing such reconciliations (1) first, with the unadjusted trial balance and later, with the adjusted trial balance and (2) at the fund level, with detailed documentation of differences, and with sufficient detailed explanations that describe the general ledger impact of the differences.

Perform a thorough review of the SF 132 to SF 133 reconciliations and work with Financial Analysis and Controls Division and other divisions and groups to resolve material reconciling items timely.

Coordinate with the Deputy Assistant Secretary for Single Family Housing and HUD’s Office of the Chief Procurement Office (OCPO) in developing effective communication channels between FHA’s NSC and OFAR, and in developing effective monitoring controls to ensure the timely identification and remediation of issues, such as unprocessed documentation and inaccurate records, which may impact the balances reported within FHA’s financial statements.

Develop effective detective controls to ensure HECM loan receivables are accurate and complete, exist, and FHA appropriately holds or controls the rights to any collateral property in connection with the receivable.

Develop and implement procedures to review the reasonableness of the amounts included in the Missing Documents Report before recording the reclassification entry. Include steps to be followed if the amounts in the report do not appear reasonable.

Coordinate with the NSC to take all the actions necessary required by HUD Handbook 4000.1 to ensure that FHA’s interests are protected with respect to the partial claims for which FHA has not received the original promissory note and recorded mortgage.

Coordinate with the NSC to conduct a detailed review of the HECM assigned notes portfolio to identify and record all default events that have occurred to date and initiate collection proceedings in accordance with the applicable HUD Handbooks.

Coordinate with the NSC and the OCPO to determine whether the information technology system could be enhanced to track the annual payment of state property taxes for the HECM portfolio.

Implement written procedures to ensure consistency among field offices in reviewing spending issues, potentially preventing up to an estimated $47 million in annual CoC recaptures.

Design and implement a training program and other development tools to help grantees. The goal of such training would be to provide ideas and other development tools to help the CoCs better provide assistance with implementation of their grants and monitoring of their grantees, including assistance with developing outreach strategies, partnering with community providers, financial budgeting, and best practices. The training should focus on the needs of first-year grantees and CPD should take steps to encourage participation.

Use the fraud risk inventory to enhance program-specific fraud risk assessments for the HOME program.

Use the fraud risk inventory to enhance program-specific fraud risk assessments for the PBRA program.

Consider allowing grantees additional time to spend the program funding on eligible activities to meet the 80 percent spending deadline.

Consider streamlining program requirements to help grantees promptly use program funds to assist those impacted by the pandemic or for activities that prepare for, prevent, or respond to the coronavirus.

Provide adequate documentation to support that the $2,588,362 in CDBG-DR funds for three unsupported project and program management services expenditures cited in this report was spent for supported, necessary, and reasonable costs. Any amount for which adequate support cannot be provided should be repaid from non-Federal funds.

Update its procurement policy to clearly define the process, which includes timing and the procurement types, for conducting an independent cost estimate and a price analysis.

Provide training to State staff to ensure that it understands and follows (1) requirements to maintain adequate documentation to support that program disbursements are eligible and reasonable and (2) procurement requirements, including independent cost estimates, cost analyses, proposal scoring, and the timely checking of the SAM data for contractors’ eligibility.