Work with the prime award recipients that had subaward reporting deficiencies to ensure that their subaward information is reported or reported accurately.

Update and expand the guidance on FFATA subaward reporting requirements provided to prime award recipients by (1) updating program website(s) with comprehensive information about FFATA, (2) implementing training, (3) issuing formal communication, and (4) implementing a feedback mechanism to ensure that all prime award recipients have the opportunity to share challenges with HUD and ask questions.

Integrate FFATA reporting requirements into program monitoring procedures for all programs and conduct regular reviews to assess compliance.

Ensure that programs with subaward activity include specific clauses related to FFATA compliance in their grant agreements, and notices of funding opportunities.

We recommend that HUD’s Deputy Assistant Secretary for Fair Housing and Equal Opportunity update protocols to promote consistent expectations for timely supervisory, legal, and headquarters reviews of complex cases.

We recommend that HUD’s Deputy Assistant Secretary for Fair Housing and Equal Opportunity review and update the MOUs with OGC for each region to identify and remove inefficiencies that can lead to longer FHEO investigation times and OGC review times and identify best practices that can be implemented across all regions.

We recommend that HUD’s Deputy Assistant Secretary for Fair Housing and Equal Opportunity review and update investigative processes followed by each regional office to identify best practices that can be implemented across all regions and identify and remove inefficiencies that can lead to longer investigation times.

We recommend that HUD’s Deputy Assistant Secretary for Enforcement require the Commission to update its intake policy and procedure to clarify which inquiries are to be recorded in HEMS.

We recommend that HUD’s Deputy Assistant Secretary for Enforcement require the Commission to develop an internal agency intake training guide, distribute it to all agency housing staff members, and ensure that all intake staff members participate in HUD-approved training related to intake.

We recommend that HUD’s Deputy Assistant Secretary for Enforcement require the Commission to implement a record retention policy to ensure that decisions on inquiries are sufficiently supported.

We recommend that HUD’s Deputy Assistant Secretary for Enforcement require the Commission to implement a plan to ensure that it has sufficient staff to meet its obligations under FHAP cooperative agreement.

We recommend that HUD’s Deputy Assistant Secretary for Enforcement require the Commission to implement a system to better track the intake and processing of potential fair housing inquiries.

We recommend that the Deputy Secretary Develop and execute a detailed plan and timeline for both testing and reporting estimates of improper payments in the PIH-TBRA and PBRA programs in compliance with Federal law and OMB guidance.

Status

In response to the Management Alert, the Deputy Secretary stated that she would provide a plan in 30 days. On April 10, 2024, the Chief Financial Officer, Assistant Secretary for Housing, and Principal Deputy Assistant Secretary for Public and Indian Housing (PIH) stated their respective executives had been working together to develop a plan to accelerate HUD’s ability to produce statistically valid estimates. With respect to PBRA, HUD plans to use ongoing data collection for fiscal year (FY) 2023 tier 1 and tier 2 payments to develop a statistical estimate in FY 2024.

However, our ongoing Payment Integrity Information Act audit has determined that neither program produced a compliant estimate in fiscal year 2024. For multifamily-PBRA, HUD made some progress and reported an estimate that captured part of the payment cycle; however, the estimate did not include testing to ensure that housing assistance payments from contract administrators to owners were calculated correctly and supported by tenant-level documentation. The PIH-TBRA program did not produce an estimate at all, noting that IT system modernization must occur first. However, PIH has not yet provided a plan that indicates how the system upgrades will address this issue or a timeline for implementation. As of January 31, 2025, a detailed plan or timeline has not been provided.

Analysis

As of January 31, 2025, HUD has not provided a detailed plan or timeline for OIG review. It remains unclear how HUD will produce a complete estimate of the PBRA programs in future years, and when it will be able to produce an estimate for PIH-TBRA.

For HUD to close this recommendation, it must finish testing the full life cycle of payments in these programs and publicly report estimates of the improper payments in them. Merely producing a plan with future action target dates is not sufficient to meet the spirit of this recommendation.

PBRA and PIH-TBRA are the two largest program expenditures in HUD's portfolio, totaling $50 billion in FY 24, or 62.4 percent of HUD's total expenditures. HUD has been challenged with developing a compliant sampling methodology that can test the full payment cycle and that can be executed within the required timeframes. To fully address this recommendation, the sampling methodology should test the full payment cycle, and the associated sample testing and statistical estimation must be completed in time to be included in the Annual Financial Report.

Implementation of this recommendation will result in HUD better-safeguarding taxpayer dollars and decrease improper payments.

Provide more detailed guidance to HUD reviewers on benchmarks for each performance standard.

Update the PAR template to ensure that HUD reviewers include required information.

Assess HUD reviewers’ skills and readiness to determine the appropriate frequency of training.

Provide more detailed guidance to HUD reviewers and FHEO regional directors on when and under what circumstances to recommend or issue a PIP.

Update HUD Handbook 8024.01, REV-2, and regional intake policies and procedures as necessary to include (1) minimum requirements that all regions follow for documenting in HEMS attempts to reach out to claimants when additional information is needed before closing inquiries; (2) policies and procedures for collecting, recording, and documenting all relevant electronic intake information in HEMS; and (3) clarifying that communications with claimants regarding inquiry closure, requests for additional information, and notices of jurisdiction information clearly inform the claimant of the ability to provide additional information within the statute of limitations.

Develop a process to oversee housing discrimination allegations that FHAP agencies close and do not submit to HUD for dual-filing to ensure that the closure and jurisdictional determinations are consistent with the Fair Housing Act. To help address this recommendation, HUD should consider requiring FHAP agencies to enter data on closed inquiries in HEMS and make updates to FHAP agreements as necessary.

Deobligate all obligations marked for deobligation during the departmentwide OOR, including as much as $168,198 in 29 obligations marked for deobligation as of September 30, 2018.