Inform all travel cardholders and approving officials about specific travel program requirements and repercussions for disregarding these requirements.

Verify with ARC on a regular basis that all travel cardholders have completed their training as required.

Require justification and approval for selecting a nonrefundable rate in the travel system comments section.

Generate a periodic monitoring report that would identify employees who did not use their government travel card when required and send this report to employees’ supervisors and the Assistant Secretary of related program offices for proper action.

Require justification and approval in the travel system comments section when requesting lodging expense reimbursement to the traveler’s bank account.

Update HUD’s travel card policy to require approving officials’ review of travel documents for appropriate methods of payment and work with the Office of Employee Labor Relations and the Office of the Chief Human Capital Officer to prescribe disciplinary actions for not using the government travel card when required.

Inform all HUD travel cardholders and approving officials about the mandatory use of the government travel card and disciplinary actions for not using it.

Follow up with the 19 employees identified as failing to use their government travel card and coordinate with the related program offices to ensure these employees receive training, counseling or other appropriate disciplinary action, if necessary, on the mandatory use of the government travel card.

Ensure that the HECM cash flow model assumptions capture all valid assignments or provide an analysis showing that the model results are not biased due to the exclusion of valid HECM assignments.

Document and implement policies and procedures to ensure that data observations for key assumptions that are inconsistent with FHA’s understanding of program operations are researched and further analyzed and that all results are concurrently documented and included in the model documentation.

Update the posting models to ensure that refunds relating to payments made in prior years are properly recorded in accordance with OMB Circular A-11.

Correct the programming error in the HERMIT system to ensure that the correct insurance-in-force balances are reported on the note disclosures.

Develop policies and procedures to ensure that the line items in the required note disclosures are understood, properly calculated, and properly disclosed in the financial statements in accordance with OMB Circular A-136.

Implement adequate procedures and controls to ensure that all required data are complete, accurate, and reported in a timely manner. These procedures and controls should include but not be limited to ensuring that all transactions are recorded and reported within the proper period and listing the source of each of the data elements, including how to obtain the source documentation from HUD’s various program offices or systems.

Implement adequate procedures and controls to ensure that all data elements are traceable to the source documentation.

Revise internal DATA Act policy and procedure documents to resolve inconsistencies to ensure full, appropriate, and consistent implementation of the DATA Act.

Require lenders to obtain the borrowers’ consent to verify the existence of delinquent Federal taxes with the IRS during loan origination and deny any applicant with delinquent Federal tax debt and no payment plan or a noncompliant payment plan or an applicant refusing to provide consent from receiving FHA insurance to put at least $6.1 billion to better use by avoiding potential future costs to the FHA insurance fund.

Status

The Office of Single Family Housing will need additional tax information to complete the planned action. In July 2024, Single Family Housing proposed closing the recommendation with no action because the primary action discussed would require Congressional authorization, and another option discussed would place an undue burden on borrowers and lenders and was not practical. OIG disagreed with the request. Single Family maintains that without an automated solution from the Internal Revenue Service (IRS), it is not practical for individual borrowers and/or lenders to manually check tax status with the IRS. However, OIG’s position is that action is required since delinquent tax debtors are ineligible for FHA loans under existing FHA and Office of Management and Budget (OMB) guidelines.

Analysis

To fully address this recommendation, HUD will need to provide evidence that it established a method of borrower consent to verify the existence of delinquent federal taxes.

Implementation of this rule should result in HUD putting $6.1 billion to better use.

Revise HUD handbooks for forward and reverse mortgages to reflect that tax liens and judgments are no longer reported on credit reports.

Revise HUD handbooks for forward and reverse mortgages for uniformity in the treatment of delinquent tax debt and the existence of payment plans as only the forward mortgage handbook requires 3 months of payments.

Reimburse the project $17,761 from nonproject funds for the project operating funds disbursed for ineligible expenses.