Develop and implement written policies and procedures for the management of the project, including but not limited to financial policies for cash disbursements, cash receipts, and documentation requirements.

Create and implement policies and procedures or change program regulations to prevent multifamily housing properties from charging more for Section 8 units than for comparable non-Section 8 units. For the 25 properties reviewed, this measure would prevent as much as $3,144,894 of Section 8 funds from subsidizing non-Section 8 units in the next year.

Investigate the 14 loans with unpaid mortgage amounts totaling $3,035,819, and require the lenders to obtain the borrowers consent, reinstate the insurance coverage, or take other action as appropriate given the facts of each particular loan.

Remind lenders that voluntary termination is not the correct termination type to record third-party sales and that borrower consent is required to terminate insurance, even if the loans are indemnified.

Improve its procedures for detecting and sanctioning improper voluntary terminations.

Update Handbook 4000.1 to require the voluntary termination of insurance consent form to include an explanation that voluntary termination differs from mortgage insurance premium cancellation and the disclosure of any outstanding partial claims to put $285,215 to better use.

Provide documentation to show that prices paid for purchases of products and services totaling $970,381 were fair and reasonable or reimburse the project from nonproject funds for any amounts that were not fair and reasonable.

Provide documentation to show that payments for work totaling $716,693 complied with applicable building codes or reimburse the project from nonproject funds for payments that did not comply with the codes and take action to bring the work up to code.

Provide documentation to support payments totaling $163,885 or reimburse the project from nonproject funds for payments that it cannot support.

Develop and implement written procedures to ensure that it obtains written cost estimates as required and maintains complete documentation to support expenditures and that contractors performing or managing construction, removal, repair, or improvement work are properly licensed as required.

Reimburse the project $296,787 from nonproject funds for the ineligible legal expenses.

Reimburse HUD $3,892 from nonproject funds for the overpayment of housing assistance.

Correct the errors in the tenant files identified during the audit.

Develop and implement adequate controls over payments for services that are part of the management fee.

Amend and resubmit the management agreements and the management certifications for HUD approval and ensure that the agreements do not conflict with the management certifications.

Identify all unallowable fees and reimburse from non-project funds.

Pay the project $282,578 from non-project funds for the fair value of the commercial rent not collected from the lessees.

Request approval from HUD to lease the commercial space. If HUD approves the request, then execute a lease at fair market rent thereby increasing the project’s rent revenue by at least $36,858 per year.

Request approval from HUD for the $31,769 in project operating funds spent on building improvements or repay the project from nonproject funds for any amount not approved.

Provide documentation to show that the $39,920 paid to replace an air conditioning system was fair and reasonable or repay the project from nonproject funds any amount determined not to be fair and reasonable (excluding any amount repaid as a result of recommendation 1C).