Pursue collection or recapture $248,514 ($115,335 $133,179) from the applicable public housing agencies for the overpayment of category 2b portability set-aside funds and special administrative fees cited in this finding.

Distribute $35,189 to the applicable public housing agencies for the underpayment of special administrative fees for portability cited in this finding.

Review the calculations and distributions of funds for the 2019 category 2b portability set-aside and special administrative fees for portability to ensure that the spreadsheet errors did not carry forward from the previous calculations.

Request indemnification for the 7 of the 11 loans that had material underwriting deficiencies (appendix D). The unpaid balance for these loans is $1.3 million and the estimated potential loss to HUD is $607,598.

Require the lender to develop and implement enhanced policies and procedures to ensure electronic signatures from borrowers are properly supported.

Require the lender to fully implement its quality control plan with respect to reverifications and provide HUD with periodic reports for 12 months to ensure that it conducts its quality control reviews in accordance with the requirements.

Put $256,824 to better use by cancelling the project-based voucher housing assistance payments contract resulting from the RAD conversion. The Authority should work with HUD and the owner to protect the tenancy of the affected tenants at the time of contract cancellation.

Reimburse its Section 8 program $138,925 in associated administrative fees from non-Federal funds for the improper issuance of tenant protection assistance and an improper conversion to the project-based voucher program.

Develop and implement procedures to ensure that forms HUD-50059 and or tenant profiles is received from HUD before providing tenant protection assistance resulting from a completed housing conversion action.

Provide adequate training to staff associated with administering tenant protection and project-based vouchers to help address its lack of familiarity with requirements and ensure compliance with program requirements.

Develop and implement procedures for executing Section 8 Project-Based Voucher Program housing assistance payments contracts related to RAD conversions.

Develop and implement an action plan that includes sufficient policies, procedures, and controls that address households living in multifamily housing units having a sufficient supply of safe drinking water […]

Status

In April 2022, HUD created draft standard operating procedures to address lead in the water of its multifamily housing units. On May 11, 2023, HUD published its National Standards for the Physical Inspection of Real Estate (NSPIRE) regulations that addressed lead in the water. Further, on June 30, 2023, HUD published its Implementation of National Standards for the Physical Inspection of Real Estate Administrative Procedures, which requires property owners and agents to provide information about water supply providers and water safety alerts, if applicable, prior to the commencement of a Real Estate Assessment Center (REAC) inspection. As a result, the Office of Multifamily Housing is revising its procedures and consulting with the Office of Lead Hazard Control and Healthy Homes (OLHCHH). As of February 2025, the OIG was waiting for additional information from the Office of Multifamily Housing demonstrating whether it has addressed the recommendation.

Analysis

To fully address this recommendation, the Office of Multifamily Housing must provide evidence of an action plan that includes its procedures that address households living in multifamily units to ensure that they have a sufficient supply of safe drinking water.

Implementation of this recommendation will enable HUD to have sufficient oversight and control activities in place to ensure households living in multifamily housing have a sufficient supply of safe drinking water.

Develop and implement an action plan that includes sufficient policies, procedures, and controls that address households living in assisted units having a sufficient supply of safe drinking water. Such policies, procedures, and controls should include but not be limited to (1) developing and implementing internal procedures to be notified, and share with public housing agencies, when the public water systems’ water exceeds the Environmental Protection Agency’s lead action level and (2) revising HUD’s applicable regulations, providing guidance to public housing agencies and Housing Choice Voucher Program landlords, and taking appropriate actions so that households living in assisted units have a sufficient supply of safe drinking water.

Evaluate the risk that employee benefit contributions expensed at PHAs may be unreasonable and, if determined necessary, establish and implement controls to reduce or eliminate the evaluated risk.

Develop and implement additional guidance to ensure that PHAs enter accurate employee benefit data into FASS-PH.

Require the Englewood Apartments’ owner to repay HUD from non-project funds the projected $377,108 in housing assistance payments for tenants who were not eligible for assistance.

Require Englewood Apartments to support that $24,295 in unsupported housing assistance payments was eligible and accurate. Englewood Apartments’ owner should repay any subsidy overpayments to HUD from non-project sources. Further, the owner should reimburse tenants for overcharged rents or enter into a repayment agreement with tenants who were undercharged due to nondisclosure of income.

Require the Englewood Apartments’ owner to implement appropriate controls, including a formalized process, to use when conducting initial certifications and interim and annual recertifications to ensure that tenants are eligible, housing assistance payments are accurate, and tenant files contain all required documentation to comply with HUD’s and its own requirements. In addition, the updated controls should ensure a layer of management oversight to review all certifications before final approval until such time as onsite management is trained and has been proven to follow HUD’s and its own requirements.

Ensure that the owner, management agent, and staff complete training to ensure that they understand their duties, including HUD’s and local tenant eligibility and certification requirements.

Monitor Englewood Apartments to ensure that its staff properly maintains tenant files and completes required certifications in accordance with HUD’s and its own requirements.