Pay the project $620,937 in uncollected rent from non-project funds.

Pay the project from non-project funds $162,462 in lease agreement charges not deposited into Cypress Meadows’ bank account.

Remove Skyline Crest Enterprises, LLC, as the operator and replace it with a HUD-approved independent operator.

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.

Ensure that all payments to Federal employees are included in HUD’s periodic risk assessment cycle.

Establish and implement procedures and controls, in coordination with FHA, to ensure that FHA information reported in the AFR is accurate and consistent with supporting documents.

Develop and implement steps to ensure that the description of corrective actions highlights current efforts and key milestones for ongoing efforts and explain in the AFR how it specifically tailored its corrective actions to better reflect the unique processes, procedures, and risks involved with RHAP as required by OMB.

Develop and implement steps to ensure that adequate disclosures are made when future-year reduction targets for improper payments reported in the AFR are higher than the current-year improper payment estimates.