Review and update the project’s internal transfer waiting list to include the applicants’ move-in dates, and the project’s external waiting list to include notations showing the reasons why applicants were not admitted into the project’s program and why applicants were bypassed.

Develop and implement adequate procedures and controls to ensure that the project complies with HUD’s requirements and its own policies regarding the management of its waiting list.

Acknowledge that $2.93 million in the attached settlement agreement represents an amount due HUD, less DOJ’s civil debt collection fees. (Footnote 2 - DOJ’s 1994 Appropriation Act (Public Law 103-121) authorized DOJ to retain up to 3 percent of all amounts collected as the result of its civil debt collection litigation activities.)

Acknowledge that $41 million of the $89,274,944 in the attached settlement represents an amount due HUD, less DOJ’s civil debt collection fees.

Implement adequate procedures and controls to ensure that it properly monitors the listing brokers to ensure compliance with its contract. The procedures and controls should include but not limited to performing quality control reviews and supervisory review of its brokers, and maintaining documentation of its quality control reviews and corrective actions.

Update its quality control plan to include the performance of physical inspections of the properties in its inventory.

Complete the rulemaking process for HUD’s single-family note sales program.

Develop and implement formal procedures and guidance for the note sales program.

We recommend that the Southwest Region Director of Multifamily Housing require Beverly Place’s owner to repay HUD $574,930 for subsidized units that were not occupied by qualified tenants. Repayment must be from non-Federal funds.

We recommend that the Southwest Region Director of Multifamily Housing require Beverly Place’s owner to provide support to show that the subsidies for 11 tenants with falsified income were accurate or repay HUD $150,082 for those subsidies. Repayment must be from non-Federal funds.

We recommend that the Southwest Region Director of Multifamily Housing require Beverly Place’s owner to provide support to show that the subsidies for 18 tenants without files or without adequate income documentation in their files were accurate or repay HUD $77,621 for those subsidies. Repayment must be from non-Federal funds.

We further recommend that the Southwest Region Director of Multifamily Housing require its contract administrator for Beverly Place to verify that the owner’s recently implemented quality control program is working as designed.

We further recommend that the Southwest Region Director of Multifamily Housing ensure that the project-based contract administrator’s review process includes steps to obtain reasonable assurance that tenants being reported as subsidized at Beverly Place live in the subsidized units.

Take appropriate administrative sanctions, including suspension, limited denial of participation, or debarment, against the commissioners.

Acknowledge that the attached settlement agreement for $10,000 represents an amount due HUD.

Determine legal sufficiency and if legally sufficient, pursue civil and administrative remedies against Cypress Meadows, LLC; Skyline Crest Enterprises, LLC; the project’s owner; or all three for inappropriately disbursing funds in violation of the project’s regulatory agreement, operating lease agreement, and HUD requirements.

Pursue appropriate civil money penalties and administrative actions, up to and including debarment, against Cypress Meadows LLC; Skyline Crest Enterprises LLC; the project’s owner; or all three for violating the project’s regulatory agreement, operating lease agreement, and HUD requirements.

Repay the project from non-project funds $263,289 for ineligible salary expenses.

Remove $283,307 in ineligible accrued salary fees payable from its financial statements and records and ensure that these expenses are not accrued or paid for with project funds.

Repay the project from non-project funds $110,710 for ineligible offsite accounting expenses.