We recommend that HUD’s Chief Financial Officer investigate the facts surrounding the potential Antideficiency Act violation involving the $7,787,675 in rent credits and make a formal determination. If it is determined that a violation occurred, the Chief Financial Officer should develop corrective action plans or internal process improvements as necessary, take disciplinary actions as appropriate, and report the identified violations to the oversight authorities including the HUD Secretary, the President, OMB, Congress and the Comptroller General.

Prepare a white paper regarding the accounting treatment for each type of funding disbursed under the HCVP, to include a comparison of the qualities the funding embodies against the qualities that are necessary for it to be considered a prepayment versus an expense according to generally accepted accounting principles. The Chief Financial Officer should work with PIH to gather the information necessary to complete this analysis and have PIH review it to ensure the accuracy of the program information used.

Develop and implement a policy that requires OCFO to review all new program notices, new regulations, and new types of funding and evaluate each against the accounting standards and current accounting treatment (as documented in white papers or other forms) to determine whether OCFO’s treatment complies with generally accepted accounting principles and if not, propose changes. The policy should include formal designation of roles and responsibilities as well as internal controls to ensure proper review and approval of conclusions.

Once additional data are available, and at least quarterly, reduce the CARES Act PIH prepayment by the amount actually spent by PHAs or an estimated amount with a low level of estimation uncertainty.

As part of the validation process for CPD’s accrued grant liabilities, review CPD’s accrued grant liabilities estimation methodology to ensure that it is based on verifiable grantee supporting documentation and all assumptions and variables used for the grant accrual estimate were properly established, supported, and documented.

Research the survey responses that resulted in a positive cash on hand balance to determine whether a cash advance exists. If so, the Chief Financial Officer should coordinate with CPD to (1) determine whether the grantees have proper documentation and approvals allowing for cash advances and (2) develop and implement procedures to estimate and account for cash advances for financial reporting purposes.

Investigate other methods for validating CPD’s accrued grant liabilities estimate, including the use of other sampling units, which could provide additional relevant information that can be used to produce more reasonable results and reduce estimation uncertainty to a low level.

Work with the Director of the Office of Multifamily Asset Management and Portfolio Oversight to ensure that all debt owed to HUD is identified, accurately reported in HUD’s financial records, and properly monitored to ensure compliance with applicable laws and regulations.

The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.

The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.

Take appropriate administrative action, up to and including debarment, against the owner for the violations cited in this report including, amongst others, failure to perform the required inspections to ensure that the units the owner were billing for assistance were decent, safe, and sanitary.

Ensure that all of the sampled amounts used for extrapolation in OCFO grant accrual validation estimates are properly supported with documentation that substantiates the amounts certified in the surveys.

Implement a refined accrual validation methodology, to include more comprehensive review procedures to substantiate the amounts certified by the grantee.

Review CPD’s grant accrual estimation methodology to ensure that all assumptions and variables used are properly supported and verifiable with the validation procedure.

After PIH prepayment validations are completed, apply all corrections to CAM 1 codes and Voucher Management System (VMS) expenses to all of the data supporting the fiscal year 2019 beginning balance, and recalculate the fiscal year 2019 PIH prepayment estimate. Based on the recalculation, determine whether restatement is needed to the correct errors in the fiscal year 2019 estimate calculation to ensure consistency between comparative statements.

Revise its review of the PIH prepayment estimate calculations performed by contractors to ensure that the contractors are following the established methodology and any changes to the methodology are applied to the data supporting the beginning balance, if appropriate.

Review all duties currently assigned to action officials to determine which duties can be centralized within OCFO or its Federal shared service provider. For any duties that cannot be centralized, (1) provide an explanation as to why they cannot be centralized and (2) assign these duties to appropriate positions within the program offices. Further, update the Debt Collection Handbook to include any changes made as a result of the review.

Implement monitoring and control activities to ensure that all debt collection action officials perform their duties in accordance with the Debt Collection Handbook

In coordination with each program office, identify the possible debts that could arise from normal business and monitoring activities and create a listing of these scenarios. Based on this listing, implement control activities to ensure that all debts that result from these activities are considered in financial reporting, U.S. Department of the Treasury reporting, and debt collection activities.

Develop and implement a procedure that requires OCFO to identify and research all debts that are more than 120 days old to ensure (1) validity, (2) that proper debt collection efforts occur, and (3) that the status reported in the TROR is correct according to Treasury’s TROR requirements.