Conduct a complete analysis of existing procedures to strengthen controls over debt collection, including HUD’s Treasury Reports of Receivables reporting, resulting in funds to be put to better use of $3,247,078. Controls should include additional procedures for ensuring that DOJ approval is obtained when required, that all appropriate means of collection have been pursued (including referral to Treasury when required), and that all closed debts are tracked and were properly authorized for collection termination or forgiveness. The analysis should also include a review of HUD’s Treasury Reports on Receivables, and any other available records to verify that all closed debts were properly approved for collection termination or forgiveness when required. For any identified debts that were not properly approved, the Departmental Claims Collection Officer should coordinate with applicable program offices to obtain appropriate documentation to approve collection termination or reinstate the debt and resume collections.

Determine legal sufficiency and if legally sufficient, pursue civil and administrative remedies, civil money penalties, or both against Venta, its principals, or both for incorrectly certifying to the eligibility for FHA mortgage insurance or that due diligence was exercised during the origination of FHA loans.

Acknowledge that $250,000 of the $1,025,000 in the attached settlement represents an amount due HUD, less the U.S. Department of Justice’s (DOJ) civil debt collection fees.

Acknowledge that $2.93 million in the attached settlement agreement represents an amount due HUD, less DOJ’s civil debt collection fees. (Footnote 2 - DOJ’s 1994 Appropriation Act (Public Law 103-121) authorized DOJ to retain up to 3 percent of all amounts collected as the result of its civil debt collection litigation activities.)

Acknowledge that $41 million of the $89,274,944 in the attached settlement represents an amount due HUD, less DOJ’s civil debt collection fees.

Take appropriate administrative sanctions, including suspension, limited denial of participation, or debarment, against the commissioners.

Acknowledge that the attached settlement agreement for $10,000 represents an amount due HUD.

Determine legal sufficiency and if legally sufficient, pursue civil and administrative remedies against Cypress Meadows, LLC; Skyline Crest Enterprises, LLC; the project’s owner; or all three for inappropriately disbursing funds in violation of the project’s regulatory agreement, operating lease agreement, and HUD requirements.

Pursue appropriate civil money penalties and administrative actions, up to and including debarment, against Cypress Meadows LLC; Skyline Crest Enterprises LLC; the project’s owner; or all three for violating the project’s regulatory agreement, operating lease agreement, and HUD requirements.

Review the issues identified in this audit report and if appropriate, pursue administrative sanctions against the board of directors for the violations cited in this report.

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.

Disclose in the AFR the results of HUD’s review concerning its current performance against program-specific improper payment reduction targets to promote transparency.

We recommend that the Director, Departmental Enforcement Center take appropriate administrative sanctions, including suspension, limited denial of participation, or debarment against the executive director.

We recommend that the Director, Departmental Enforcement Center seek civil money penalties, as appropriate, against the executive director.

We recommend that the Associate General Counsel for Program Enforcement determine legal sufficiency and, if legally sufficient, pursue remedies under the Program Fraud Civil Remedies Act against the executive director.

Acknowledge that the judgment awarded $10,373,998 against the former president and founder of MDR Mortgage to the U.S. Government, of which HUD’s loss totaled $3,452,499.

Acknowledge that $45 million in the attached settlement agreement represents an amount due HUD, less the Department of Justice’s civil debt collection fees.