We recommend that the Deputy Assistant Secretary instruct the Authority to develop detailed procedures to ensure that the corrective action tracking process is consistently followed to ensure proper resolution.

We recommend that the Deputy Assistant Secretary instruct the Authority to develop and implement policies and detailed procedures to establish the CMU’s responsibilities related to verifying that the CDBG-DR activity meets the stated national objective.

We recommend that the Deputy Assistant Secretary instruct the Authority to develop and implement policies and detailed procedures to identify the risk analysis process for monitoring all CDBG-DR-funded activities during the course of the activity and require that the monitoring files document the basis for why an activity is or is not monitored.

We recommend that the Deputy Assistant Secretary instruct the Authority to train the CMU staff on the newly developed policies and procedures and obtain technical assistance from HUD as needed.

We recommend that the Director for HUD’s Office of Disaster Recovery require grantees to support or repay to its program $2,551,375, from nonfederal funds, for the 9 vouchers that did not have adequate supporting documentation for expenditures.

We recommend that the Director for HUD’s Office of Disaster Recovery work with its grantee to resolve or correct program income balances for the three grants that had program income balances outstanding.

We recommend that the Director for HUD’s Office of Disaster Recovery develop and implement controls to ensure that program income balance discrepancies are identified and corrected.

We recommend that the Director for HUD’s Office of Disaster Recovery develop and implement controls to ensure that untimely FFRs are identified and corrected.

We recommend that the Director for HUD’s Office of Disaster Recovery establish a mechanism to train grantees and HUD staff on existing guidance regarding supporting documentation for expenditures, FFRs, and program income balances on a recurring basis. Additionally, provide guidance and establish recurring training for HUD staff to monitor grantees for program income and submission of the FFRs..

We recommend that the Director for HUD’s Office of Disaster Recovery implement quality control procedures to ensure that HUD staff completes the action plan and QPR checklists.

We recommend that the Director for HUD’s Office of Disaster Recovery develop and implement controls to ensure that grantees’ policies and procedures related to program income are adequate.

We recommend that the Director for HUD’s Office of Disaster Recovery provide training to grantees regarding the reporting, tracking, and expenditure of program income.

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.

Update its policy and procedures to define its authority for marketing troubled issuer portfolios and the conditions that must exist to extinguish issuers using rapid relocation.

Corrective Action Taken

As of February 2024, HUD addressed this recommendation in a Management Decision by providing the updated extinguishment SOP, the Rapid Relocation Process Flow, and the Rapid Relocation Extinguishment Process Steps, updated to include the conditions that must be present to execute an extinguishment using rapid relocation. We believe that these guidance enhancements will help Ginnie Mae to reduce exposure to risk when facilitating a sale and transfer of a troubled issuer’s portfolio and ensure that it sells portfolios with limited loss to the Government and with minimal disruption to the mortgage market.

Update its policy and procedures to define what type of information Ginnie Mae may disclose and how it will handle protected information before extinguishment.

Corrective Action Taken

Ginnie Mae provided the updated SOP to clarify data and information handling through all phases of the termination/extinguishment process. Specifically, the updated procedures state that Ginnie Mae does not disclose Issuer or portfolio information within the Rapid Relo process. Ginnie Mae provided clarity in this enhancement that will reduce exposure to risk when facilitating a sale and transfer of a troubled issuer’s portfolio and ensure that it sells portfolios with limited loss to the Government and with minimal disruption to the mortgage market.