We recommend that HUD’s Deputy Assistant Secretary for Grant Programs require the City to reimburse its program $1,198 from non-Federal funds for overpaid wages due to billing and payroll errors.

We recommend that HUD’s Deputy Assistant Secretary for Grant Programs require the City to pay $544 in unpaid wages to the subcontractors of the affected employees and submit evidence that these employees have been paid.

We recommend that HUD’s Deputy Assistant Secretary for Grant Programs require the City to provide training to its staff to help ensure compliance with applicable cost principle, procurement, and Davis-Bacon requirements.

We recommend that HUD’s Deputy Assistant Secretary for Grant Programs require the City to provide documentation showing that it has strengthened its invoice review process to ensure that costs are eligible and supported before disbursing Disaster Recovery funds.

We recommend that HUD’s Deputy Assistant Secretary for Grant Programs require the City to provide documentation showing that payments made under the Rockaway Boardwalk construction management services contract complied with Davis-Bacon and Related Acts requirements and that restitution is made to affected workers for any underpayments identified.

Require that the current or future lender ensure that the project uses a contractor that is proven to be qualified and capable of completing the project.

Implement a change to regulations at 24 CFR Part 203 to require curtailment of preforeclosure interest and other costs that are caused by lender servicing delays, resulting in $413,513,975 in funds to be put to better use. This should include updating or seeking statutory authority to update HUD’s regulations as necessary and coordinating with HUD’s Office of Finance and Budget, well before any changes go through departmental clearance, to ensure that planned curtailment requirements can be consistently enforced through the claims process.

Follow up on the 15 properties in our sample to ensure that the code enforcement violations have been corrected, that the necessary documentation has been gathered and retained in the code enforcement file for the property, and that the code enforcement process has been completed.

Provide documentation to support $671,838 in code enforcement costs or repay the program from non-Federal funds for any amount that it cannot support.

Develop and implement policies and procedures to ensure that its Block Grant-funded code enforcement activities comply with HUD requirements, including documentation requirements, thereby ensuring that funds totaling $301,866 can be put to better use.

Provide documentation to support $1 million in community policing salary costs or repay the program from non-Federal funds for any amount that it cannot support.

Develop and implement policies and procedures to ensure that Block Grant-funded community policing salaries and benefits comply with HUD requirements, including documentation requirements, thereby ensuring that funds totaling $295,935 are put to better use.

Update and revise the CPD Notice to further improve the code enforcement guidance.

Provide mandatory training on the revised Notice to the local field offices and to grantees that use CDBG funds for the code enforcement program to ensure compliance with requirements.

Ensure that the updated and revised notice is issued with the appropriate clearance.

We recommend that HUD’s Deputy Assistant Secretary for Housing Counseling identify additional housing counseling agencies that were classified as reapproved when it had not completed a performance review upon expiration of the approved period and determine whether they are properly qualified to provide counseling services to consumers.

We recommend that HUD’s Deputy Assistant Secretary for Housing Counseling obtain and provide documentation for the four housing counseling agency reapprovals and the three housing counseling agency voucher approvals to show that the $1,310,719 in Housing Counseling Grant funds5 disbursed was for eligible and supported costs or repay from non-Federal funds any amount that cannot be supported.

We recommend that HUD’s Deputy Assistant Secretary for Housing Counseling update its policies and procedures to ensure consistency and adequacy of the agency approval, performance review, voucher approval, and termination and posttermination processes. Specifically, the updates should ensure that the deficiencies identified in this report are acknowledged and corrected going forward, including (1) updating the Housing Counseling Program handbook and developing or updating standard operating procedures for each of the key processes and (2) implementing controls to ensure that staff perform work properly and consistently, and maintain significant documentation provided by agencies, along with any analysis performed during reviews.

We recommend that HUD’s Deputy Assistant Secretary for Housing Counseling ensure that the new Housing Counseling Agency Management System provides HUD with the ability to adequately oversee the work of its staff and track important housing counseling agency milestones, including HUD approval expirations and required terminations.

Obtain HUD approval of policies and procedures before executing its subrecipient agreements and ensure that its finalized policies and procedures include but not limited to financial management, procurement, duplication of benefits, and monitoring.