We recommend that the Director of HUD’s New York Office of Public and Indian Housing require the Authority to obtain retroactive approval from HUD for the $61,545 in property disposition proceeds used for Rental Assistance Demonstration conversion costs or reimburse its Operating Fund from non-Federal funds for any amount for which it does not obtain approval.

We recommend that the Director of HUD’s New York Office of Public and Indian Housing require the Authority to reimburse its Operating Fund from non-Federal funds for $11,173 spent on ineligible activities funded by $369 in property disposition proceeds and $10,804 in tenant participation funds.

We recommend that the Director of HUD’s New York Office of Public and Indian Housing require the Authority to strengthen its controls to ensure that $1,074,979 in remaining property disposition proceeds and any outstanding loans and other funds to be repaid will be put to better use as intended to benefit the Authority’s residents. These controls include controls to ensure that proceeds are used in accordance with the HUD-approved disposition application, adequate supporting documentation is maintained, and the source and use of funds is properly recorded in the Authority’s books and records and reported to HUD.

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.

Develop and implement an inspection process for the Section 232 program that better reflects those properties’ physical conditions and how those properties differ from other properties REAC inspects (for example, multifamily properties).

Ensure that all areas of the properties are inspected, including the roofs and all buildings located on the property that is insured by HUD.

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.

Repay the Housing Choice Voucher program from non-Federal funds the $281,929 in ineligible retroactive housing assistance payments.

Develop and implement internal control procedures to ensure that housing assistance funds appropriated for 1 calendar year are not used to make retroactive housing assistance payments for prior years.

Repay the Housing Choice Voucher program from non-Federal funds the $32,682 in ineligible housing assistance overpayments made due to program errors.

Develop and implement internal control procedures to ensure that housing assistance payments resulting from errors of Authority officials are covered by the Authority’s administrative fees.

Develop and implement internal control procedures to ensure that housing assistance payments are not made to owners without a properly executed lease and housing assistance payments contract.

Develop and implement internal controls to ensure that housing assistance payments discontinue once a program participant is absorbed into another public housing agency’s program or leaves the program.