We audited the U.S. Department of Housing and Urban Development’s (HUD) Real Estate Assessment Center’s (REAC) inspections process. We initiated this audit in accordance with our annual audit plan. Our objective was to determine whether REAC had adequate processes for and controls over the certification and monitoring of contracted inspectors and its public housing units’ physical inspections processes.
We found that REAC could improve its inspections processes and controls related to the certification and monitoring of its contracted inspectors and its public housing units’ physical inspections processes. Specifically, REAC did not always ensure that (1) contract inspectors met requirements, (2) database system controls functioned properly, and (3) it verified the accuracy of sampled units for public housing authorities. These conditions occurred because REAC either did not follow its procedures or did not have procedures in place for parts of its inspections process. As a result, REAC did not always have assurance that it (1) made the most effective and efficient use of its resources when training and certifying inspectors, (2) protected its database system data from unauthorized access and use, and (3) had accurate unit selections.
We recommend that the Deputy Assistant Secretary for REAC (1) develop written policies and procedures to ensure that inspectors meet program requirements, (2) support that inspector candidates met minimum qualifications and were properly monitored, (3) ensure that it performs annual assessments and continuous monitoring of its database, and (4) develop processes and procedures to verify the accuracy of sampled units.
Recommendations
Public and Indian Housing
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Status2018-FW-0003-001-AOpenClosedClosed on November 07, 2019
We recommend that the Deputy Assistant Secretary for REAC require REAC to develop and implement written policies and procedures requiring REAC to (1) select a sample of inspector candidates, (2) require the sampled inspector candidates to provide written documentation supporting their minimum qualifications, (3) verify the written documentation provided by the inspector candidates, and (4) document the completion of the verification and method(s) used to verify the documentation.
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Status2018-FW-0003-001-BOpenClosedClosed on November 07, 2019
We recommend that the Deputy Assistant Secretary for REAC require REAC to ensure that the nine contract inspectors, who did not meet the minimum requirements to begin the training, receive specialized training in residential or commercial building for electrical; heating, ventilation, and air conditioning; masonry; plumbing; and carpentry, as applicable.
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Status2018-FW-0003-001-COpenClosedClosed on November 07, 2019
We recommend that the Deputy Assistant Secretary for REAC require REAC to develop, use, and document an electronic checklist for each contract inspector’s file to ensure that inspectors (1) obtain and maintain the required insurance, and (2) have approved background checks before conducting inspections. In addition, support that the three sampled inspectors meet the minimum insurance limits for the current effective periods.
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Status2018-FW-0003-001-DOpenClosedClosed on November 07, 2019
We recommend that the Deputy Assistant Secretary for REAC require REAC to execute administrative action related to outside standards determinations for five inspectors.
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Status2018-FW-0003-001-EOpenClosedClosed on November 14, 2019
We recommend that the Deputy Assistant Secretary for REAC require REAC to develop and implement processes and procedures, in accordance with its system security plan and the HUD Handbook, Information Technology Security Policy, to ensure that annual assessments and continuous monitoring of the security controls are performed and that security control failures are prevented and corrected when identified.
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Status2018-FW-0003-001-FOpenClosedClosed on September 04, 2019
We recommend that the Deputy Assistant Secretary for REAC require REAC to establish and implement written processes and procedures to verify the accuracy of the unit numbers sampled and entered for inspection by the inspector, which could include requiring (1) inspectors to upload a picture of the rent roll to the data collection device, (2) housing agencies to maintain a copy of the rent roll used, and (3) inspectors and public housing agencies to sign a certification stating that the units were inspected in accordance with the sample generated by the data collection device.