We recommend that the Acting Deputy Assistant Secretary for Single Family Housing instruct Seneca Mortgage officials to develop and implement program controls and procedures for FHA-insured loans being subserviced by another lender, including procedures for conducting quality control reviews of the subservicer’s actions.

Acknowledge that the settlement agreement for $5,000 represents an amount due HUD.

Evaluate the current content of HUD’s financial statement note disclosures to identify outdated or irrelevant information that may not be needed, while maintaining compliance with OMB Circular A-136 and presenting the reader with the information necessary to understand HUD’s financial statements.

Work with FHA and Ginnie Mae to reevaluate the note consolidation process to determine changes that can be made to the process to ensure compliance with financial reporting requirements.

Reassess HUD’s current consolidated financial statement and notes review process to ensure that (1) all reviewers have sufficient financial reporting experience; (2) it includes steps to verify that the notes match HUD’s financial statements, are sufficiently supported, and accurately include FHA and Ginnie Mae information; and the review can be completed within the required timeframe needed to allow for audit.

Develop a plan to ensure that restatements to HUD’s consolidated financial statements are properly reflected in all notes impacted by the restatement.

Submit a plan showing how it will use the $7,984,429 in unspent escrow funds to meet program objectives and increase the supply of low- and moderate-income housing for the residents of Puerto Rico, including a schedule HUD can track to ensure the expenditure.

Submit supporting documentation so HUD can reevaluate the feasibility of the three activities and determine the eligibility of the $2,432,271 in escrow funds already disbursed. If HUD determines that an activity has been canceled or is not feasible, the Department must reimburse the escrow account from non-Federal funds.

Submit a plan showing how it will proceed regarding the Yabucoa, Juncos, and Barceloneta housing projects, including a schedule that HUD can track to ensure their completion.

Submit supporting documentation showing the reasonableness and allowability of $2,176,733 disbursed or reimburse its escrow account from non-Federal funds.

Develop and implement written policies detailing procedures and responsibilities related to program administration and monitoring of the escrow program.

Transfer all escrow funds to a financial institution that is supervised by the Federal Deposit Insurance Corporation or the National Credit Union Administration and ensure that all deposits are secured by the Federal Government. Any amount not recovered from the Development Bank must be reimbursed to the escrow account from non-Federal funds.

Submit required certifications and supporting documentation showing that residents of escrow-funded activities met the established income limit requirements. Any amounts determined ineligible must be reimbursed to the escrow account from non-Federal funds.

Acknowledge that $3,173,077 of the $4,250,000, in the attached settlement represents an amount due HUD.

Request sufficient monetary resources to upgrade HUD’s many legacy and financial systems so its technologies and data elements no longer differ and can perform the necessary data inventory and mapping to report HUD’s information in USASpending.gov accurately and in a timely manner.

Ensure that HUD program officials continue taking appropriate steps to fully resolve its errors and data quality issues that the agency identified during implementation, including those related to assigning a unique identifier consistent with the established DATA Act schema, such as the Federal Award Identification Number.

Designate official DATA Act points of contact for FHA and Ginnie Mae and oversee the progress of the two HUD components’ individual implementation plans, ensuring timely and successful completion of their steps.

Finalize required mapping of HUD’s, including FHA’s and Ginnie Mae’s, financial, budgetary and programmatic data, as required by the DATA Act and OMB guidance.

Require New Horizons to repay HUD from project funds if available (otherwise, from nonproject funds) $144,556 in housing assistance payments for tenants who were not eligible for assistance or not living in units.

Require New Horizons to provide support for the $726,399 in housing assistance payments based on missing or incomplete tenant files or repay the assistance from project funds if available (otherwise, from nonproject funds) to HUD.