Implement a process and procedure to ensure a complete and accurate Missing Documents Report is submitted to the General Ledger Division for recording a monthly reclassification entry between HECM loans receivable and accounts receivable.

Develop a process to (1) monitor receipt of original first notes and mortgages and recorded assignments, (2) follow up with mortgagees who fail to submit documents by the required deadline, and (3) initiate repurchase requests for HECM mortgagees who fail to meet assignment requirements.

Implement procedures to (a) ensure all HECM loan terminations are accurately reported, (b) prevent HECM terminated loans from being included in the loans receivable balance, and (c) prevent inspections and tax payments on HECM terminated loans.

Implement comprehensive controls to (a) identify all Single Family partial claims related to terminated first mortgages, (b) update the system record of partial claims that will become due and payable when the refinanced mortgages are terminated, and (c) remove partial claims related to terminated mortgages from SMART.

Implement an enhanced review process to ensure the receipt of partial claim documents is accurately marked in SMART so that the Missing Documents Report will be accurate.

Determine which report accurately reflects the status of partial claims without original documentation, certify the completeness and accuracy of the identified report, and provide the report to the General Ledger Division for the reclassification entry.

Transmittal of Independent Public Accountant’s Audit Report on the Federal Housing Administration’s Fiscal Year 2025 Financial Statements

Record journal entries to reclassify the HECM cases with missing original first notes for more than 90 days from loans receivable to accounts receivable.
 

Ensure the report provided by the NSC to reclassify partial claims from loans receivable to account receivable is appropriate for financial reporting and document the decision.
 

Implement a procedure to test journal entry posting models and their effect on the financial statements and related note disclosures when there are program changes requiring new journal entries.

Develop a standard operating procedure that details the rationale, calculation, and underlying support needed for the amounts and narrative descriptions in the financial statement note disclosures, including borrowing authority.

Implement quality control checks that reconcile financial statement disclosure amounts to the general ledger and other supporting documentation as part of the financial statements review and approval process.
 

Provide support to show that the performance history element was factored as part of the grantees’ capacity to manage the grants awarded through the 2025 NOFO.

Reevaluate ‘High Risk’ designation criteria as part of the SOP update and reimplement its updated ‘High Risk’ criteria to reflect how grantees will be designated as ‘High Risk’ within the program. In addition, train OLHCHH staff on the new ‘High Risk’ designation criteria stated in the SOP.

Notify grantees of HUD’s updated ‘High Risk’ designation criteria and HUD’s expectations when designated as ‘High Risk.’

Provide assistance to the nine identified ‘High Risk’ grantees that will help meet established performance benchmarks to be completed by the end of the respective grants in 2026.

Recapture $3,775,916 in undisbursed grant funds not used to meet agreed-upon performance benchmarks for the two identified ‘High Risk’ grantees whose period of performance ended in June and July 2025, respectively. In addition, identify those grantees that received 2020 through 2022 LBPHC and LHRD grants with a period of performance that ended on or before December 31, 2025, to determine whether agreed-upon performance benchmarks were met by that date, and take appropriate actions that include recapturing undisbursed grant funds.

Consider grantees’ suggestions to improve training sessions, technical assistance, and communication of information that grantees can use to help meet agreed-upon performance benchmarks. In addition, provide documentation to support the guidance OLHCHH plans to share with grantees to ensure agreed-upon performance benchmarks are met.

Reassess, establish, and incorporate a maximum review period of grantee-submitted QPRs into an SOP. Inform staff of the review period to ensure consistency and understanding of HUD’s expectations of the time to review grantee-submitted QPRs. In addition, establish formal guidance and implement internal controls to monitor and track the timely review of QPRs.

Update its QC plan and related processes and procedures to align with requirements for loan selection, including documenting how loan selections were determined.