We recommend that the Deputy Assistant Secretary for Single Family Housing update its COVID-19 Resources for Homeowners webpage to include relevant information on the U.S. Department of the Treasury’s Homeowner Assistance Fund.

We recommend that the Deputy Assistant Secretary for Single Family Housing work with the Office of Public Affairs, Office of Housing Counseling, and other offices within HUD to develop a detailed communication strategy for how and when it plans to use websites, letters, and other methods to proactively notify homeowners about relief programs, protections, and loss mitigation options during disasters and national emergencies. The strategy could include processes to ensure that (1) key information is provided or made available in a timely manner and kept up-to-date, (2) information is communicated clearly and consistently across mediums, and is linked together when possible, and (3) letters are mailed to struggling homeowners when needed. It could also articulate the methods HUD will use to reach homeowners without internet access.

Establish change management and periodic reviews of control activities to ensure regulatory changes, such as Fiscal Service updates to the USSGL, are identified, analyzed, and assessed for potential needed changes to FHA’s established processes.

Establish and ensure appropriate and effective communication protocols between OFAR, FHA, and HUD’s Office of Budget to ensure (1) funding type is clearly indicated within the SF 132 and clear communications are made in differentiating between definite and indefinite borrowing authority, (2) legislative changes in FHA’s borrowing authority are vetted with OMB to ensure appropriate treatment, and (3) – draft SF-133s are reviewed and vetted with HUD and FHA’s budget officers prior to OFAR’s finalization with Treasury and OMB.

Establish internal control procedures around the borrowings process to include verifying sufficient borrowing authority exists within the SF 132, prior to executing the borrowing request. Such verification should also be included as part of the borrowing review and approval controls.

Receive a final opinion from HUD’s Office of the Chief Financial Officer’s Appropriation Law Division on whether FHA was in violation of the Antideficiency Act.

Implement procedures to enhance the review of all journal entries recorded in the general ledger by requiring a two-level review that includes the review of source documents for the journal entry (for example, the OMB approved SF 132).

Strengthen controls over the preparation of the SF 132 to the SF 133 reconciliation by preparing such reconciliations (1) first, with the unadjusted trial balance and later, with the adjusted trial balance and (2) at the fund level, with detailed documentation of differences, and with sufficient detailed explanations that describe the general ledger impact of the differences.

Perform a thorough review of the SF 132 to SF 133 reconciliations and work with Financial Analysis and Controls Division and other divisions and groups to resolve material reconciling items timely.

Coordinate with the Deputy Assistant Secretary for Single Family Housing and HUD’s Office of the Chief Procurement Office (OCPO) in developing effective communication channels between FHA’s NSC and OFAR, and in developing effective monitoring controls to ensure the timely identification and remediation of issues, such as unprocessed documentation and inaccurate records, which may impact the balances reported within FHA’s financial statements.

Develop effective detective controls to ensure HECM loan receivables are accurate and complete, exist, and FHA appropriately holds or controls the rights to any collateral property in connection with the receivable.

Develop and implement procedures to review the reasonableness of the amounts included in the Missing Documents Report before recording the reclassification entry. Include steps to be followed if the amounts in the report do not appear reasonable.

Coordinate with the NSC to take all the actions necessary required by HUD Handbook 4000.1 to ensure that FHA’s interests are protected with respect to the partial claims for which FHA has not received the original promissory note and recorded mortgage.

Coordinate with the NSC to conduct a detailed review of the HECM assigned notes portfolio to identify and record all default events that have occurred to date and initiate collection proceedings in accordance with the applicable HUD Handbooks.

Coordinate with the NSC and the OCPO to determine whether the information technology system could be enhanced to track the annual payment of state property taxes for the HECM portfolio.

Consider conducting an analysis of staffing resources needed to manage the REO and notes sales on tribal trust properties program and adjust staffing accordingly.

In conjunction with corrective actions being taken on previous audits, revise ONAP’s internal policy and procedures to include detailed written policies and procedures for the marketing, preservation, and sale of defaulted loan notes and REO properties on tribal trust and other restricted lands.

Work with the Office of the Chief Information Officer to develop an electronic solution, such as a new module in Native Advantage or one similar to FHA’s P260 tracking system, to track the sale of defaulted loan notes and REO properties on tribal trust and other restricted lands. While the solution is being developed, HUD should put controls into place to ensure that manual systems used to track defaulted loans and REO properties are complete and accurate.

We recommend that the General Deputy Assistant Secretary for Public and Indian Housing require the Real Estate Assessment Center in coordination with the Office of Field Operations to develop and implement a plan to manage lead-based paint and lead-based paint hazards in public housing.

Requires the REAC in coordination with OFO to determine the number of developments and associated units that contain lead-based paint and lead-based paint hazards.

Status

In May 2023, HUD published a final rule establishing a new approach to defining and assessing housing quality: The National Standards for the Physical Inspection of Real Estate. Public Housing regulations were amended, and Public Housing program participants were required to comply with this final rule and use the NSPIRE standards starting July 1, 2023. The Real Estate Assessment Center and Office of Field Operations will collaborate with the Office of Lead Hazard Control and Healthy Homes, the Office of Policy Development and Research, and a statistician to evaluate data collected under the NSPIRE inspection program to estimate the number of public housing developments and associated units that contain lead-based paint and lead-based paint hazards. As of November 2024, PIH reported that inspections have had a slow start due to procurement delays. Additionally, the NSPIRE system did not get the requested functionality to collect lead inspections. The final action target date is March 31, 2025.

Analysis

To address this recommendation, HUD will need to provide evidence that it collected and evaluated data under NSPIRE and estimated the number of public housing developments and associated units that contain lead-based paint and lead-based paint hazards.

Implementation of this recommendation will assist HUD in working with PHAs to address the public housing units that contain lead-based paint and lead-based paint hazards and help HUD’s oversight of units in need of hazard reduction.