We audited the U.S. Department of Housing and Urban Development’s (HUD) Real Estate Assessment Center’s inspection process. The audit objectives were to determine whether the Center (1) ensured that public housing properties were inspected within required timeframes before the coronavirus disease 2019 (COVID-19) pandemic; (2) could improve its Big Inspection Plan for inspecting high-priority non-National Standards for the Physical Inspection of Real Estate (NSPIRE) demonstration public housing properties; and (3) had experienced delays in inspecting the physical condition of public housing properties approved under the NSPIRE demonstration.
Before HUD postponed physical inspections due to COVID-19, the Center did not consistently ensure that public housing properties were inspected within required timeframes. The Center developed its Big Inspection Plan to inspect all NSPIRE demonstration and non-NSPIRE public housing and multifamily properties by March 31, 2023; using for its public housing portfolio, a phased approach to inspect non-NSPIRE properties. We found that under phase I of the Plan, the Center did not inspect all of the high-priority non-NSPIRE public housing properties by December 2021. Under phase II, the inspections for these properties were generally not given priority. Further, the Center experienced delays in inspecting public housing properties approved to participate under the NSPIRE demonstration. HUD can improve its procedures and controls, including the coordination of the procurement for inspection services, to ensure that public housing properties are inspected in a timely manner. Making such improvements will better position HUD’s Office of Public and Indian Housing to know whether the physical conditions in public housing properties are decent, safe, and sanitary. These improvements could also result in Public Housing Assessment System scores better reflecting the current conditions of the properties.
Recommendations
Public and Indian Housing
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Status2023-CH-0003-001-AOpenClosed
Prioritize the inspection of public housing properties that were (1) not included in the NSPIRE demonstration but were identified as high priority under the Center’s Big Inspection Plan and (2) approved to participate under the NSPIRE demonstration that the Center was unable to inspect by March 31, 2023.
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Status2023-CH-0003-001-BOpenClosedPriorityPriority
We believe these open recommendations, if implemented, will have the greatest impact on helping HUD achieve its mission to create strong, sustainable, inclusive communities and quality affordable homes for all.
Implement adequate policies, procedures, and controls to ensure that public housing properties will be inspected within required timeframes.
Status
NSPIRE regulations clarified and modified the timing for which inspections should occur. The date for inspection of each public housing property must then be programmed into HUD's system to ensure that inspections occur within the required timeframes. The Real Estate Assessment Center (REAC) continues to work with its management and system support contractors on the list of public housing properties to inspect and the date the inspections should be completed by under the new NSPIRE regulations. REAC is in the process of adjusting the list based on information relating to small, rural public housing. As of November 2024, the NSPIRE regulations on inspection timing are completed. However, REAC is not able to make the required modifications in the NSPIRE system to enforce the regulatory guidelines. REAC previously indicated that new IT funding is needed to make the system modifications but had not provided information about whether additional funding has been allocated. The final action target date was May 31, 2024.
Analysis
To fully address this recommendation, HUD must provide evidence demonstrating that it has implemented control activities to ensure that public housing properties are inspected within required timeframes.
Implementation of this recommendation will result in HUD accurately tracking the dates in which public housing properties should be inspected and that they are timely completed.
Due to the uncertainty of when software changes to NSPIRE can take place to enforce the timing of inspections, REAC cannot enforce the requirements of inspection timing.