Assess whether prior-year financial statements need to be restated to correct the impact of the presentation error in the allocation of reestimates identified in fiscal year 2017.

We recommend that the Southwest Region Director of Multifamily Housing require Villa Main Apartments owner to repay HUD $534,741 for 39 subsidized units with ineligible “ghost” tenants.

We recommend that the Southwest Region Director of Multifamily Housing require Villa Main Apartments owner to provide support that the subsidized 43 units without annual physical inspections, without required EIV reports, or with missing files were eligible or repay HUD $1,095,364 for those subsidies.

We recommend that the Southwest Region Director of Multifamily Housing require Villa Main Apartments owner to implement appropriate controls to ensure tenants are eligible, housing assistance subsidies are accurate, and that units are inspected as required.

We further recommend that the Southwest Region Director of Multifamily Housing verify that the owner is providing oversight to its onsite staff and its recently implemented quality control program is working as designed and in accordance with HUD requirements.

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 Villa Main qualify for the program and live in the subsidized units.

Implement procedures to ensure that deficiencies identified during the REAC inspections have been corrected and meet industry standards.

Ensure that timely physical condition inspections of all Section 232 program facilities are performed. (This expands on the Office of Evaluation’s third recommendation in report number 2017-OE-0011.)

Reimplement the REAC physical condition inspections for the SNFs that were exempted from routine physical inspections by 24 CFR 200.855.

Track and ensure that Volunteers returns to the Treasury any funds recovered through the ongoing litigation pertaining to the Yabucoa housing project.

Deobligate and recapture $1,440,165 in undrawn Section 202 funds assigned to the project.

Require Volunteers to reimburse to the United States Treasury $140,000 from non-Federal funds for ineligible project construction costs charged to the Section 202 project.

Return to the Puerto Rico Department of Housing $1,057,467, plus any interest earned, for the duplicate special escrow fund payments it received.

Conduct onsite management reviews of the projects to supplement the onsite use restriction agreement compliance monitoring reviews to ensure that the projects are operated in accordance with HUD’s requirements.

Work with the Office of Multifamily Asset Management and Portfolio Oversight to develop and issue guidance on requirements in the grant and use agreements that would benefit the grantees’ board members and staff of the projects’ management agents.

The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.

The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.

The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.

The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.

The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.