Determine if the $58,878 drawn for 18 signing bonuses or additional security deposits from ESG CARES Act funds were reasonable under the program participant’s particular circumstances, and not more than necessary to house the program participants or repay HUD from non-federal funds.

Determine if the remaining risk mitigation expenses of $185,731 drawn from ESG CARES Act funds were reasonable and necessary in accordance with program requirements or repay HUD from non-federal funds.

Evaluate its program’s fraud risk profile and fraud risk assessment outcomes to (1) design risk responses and specific actions for responding to fraud, and (2) develop, document, and communicate an anti-fraud strategy for employees and stakeholders that contain all key elements described in GAO’s “A Framework for Managing Fraud Risks in Federal Program” (3) monitor and evaluate fraud risk management activities to improve the organization’s fraud…

Repay ineligible landlord holding fees of $964,952 drawn from ESG CARES Act funds to HUD from non-federal funds.

Repay risk mitigation overpayments of $6,549 drawn from ESG CARES Act funds to HUD from non-federal funds.

Implement fraud awareness initiatives, such as official anti-fraud training for staff and stakeholders, including subrecipients. This could include developing frequent formal communication containing newsletters or bulletins and post physical visual displays to ensure staff’s fraud awareness when conducting day-to-day activities.

Upon completion of recommendations 1A – 1E, assess whether VIHFA has established and implemented mature fraud risk management practices within its disaster recovery and mitigation programs.

Implement fraud risk assessment processes tailored to all levels of the program to identify and assess risks to determine VIHFA’s disaster recovery and mitigation program’s risk profile.

Develop and implement a fraud risk management program with an emphasis on obtaining high-level management buy-in to ensure commitment from the board and senior management and subsequently, to ensure involvement of all levels of the program in setting an anti-fraud culture and tone to effectively combat fraud. This would include ensuring the program includes specific procedures to effectively manage fraud disclosures from employees and emphasis…

Develop and implement policies and procedures to ensure that HUD Account Executives document each action plan, properly list all specific risks at a property, identify the root causes of these risks, specify the actions to address the root causes, establish the timetables for completion, and document monthly progress towards completion of the actions in iREMS.

Develop and implement policies and procedures to ensure that borrowers and lenders execute action plans that properly list all specific risks at a property, identify the root causes of each risk, specify the actions to address each root cause, and establish a timetable to complete each action.

Develop and implement policies and procedures for a course of action when borrowers and/or lenders do not timely develop action plans. These policies and procedures should include civil money penalties, flagging the borrower in APPS, and inclusion in the Excluded Parties List System.

Update the protocols to ensure that all HUD ORCF teams working with any subset of the portfolio have insight into the entire portfolio for any portfolio split amongst lenders.

Establish a dedicated anti-fraud component to design and oversee risk management activities within the organization and its subrecipients.

Perform an assessment of concentration risk and take appropriate action based on the results.

Train HUD Account Executives on how to evaluate borrower action plans to ensure that action plans identify specific risks, identify the root causes of each risk, develop actions to address each root cause, identify specific measurable goals for each risk, and establish a timetable to complete the planned actions. Also, train HUD Account Executives on how to work with borrowers and lenders to ensure that borrowers properly develop, implement, and…

Refer any borrowers to the DEC for a civil money penalty or any other appropriate enforcement actions within 60 days of borrowers’ financial statement receipts for all unauthorized distributions not repaid within 30 days. If HUD ORCF chooses to allow a longer repayment period, document in iREMS the amount of the loan, the longer repayment period, and the reasons for the longer period.

Quantify the amount of unauthorized distributions in the portfolio of 21 properties with 35 loans reported by the independent public accountant on the borrowers’ audited financial statements covering fiscal years 2018 to 2024 and require the borrowers to repay the amount of unauthorized distributions or pursue enforcement of the borrowers’ regulatory agreements by a written referral to HUD’s DEC.

Work with borrowers and lenders to develop a plan to address the issues for each of the 58 defaulted loans within a reasonable time frame and implement corrective actions for the 58 loans; thereby protecting HUD’s investment of $329,541,272.

Determine and document in iREMS the reasons that the borrowers did not make the mortgage payments and the specific steps HUD is taking to address the borrowers’ failure to make mortgage payments for all failures to make mortgage payments listed in borrowers’ audited financial statements.