Work with action officials to determine the validity of all receivables from OIG sustained audit findings, determine whether restatement is necessary, and adjust HUD’s current and prior-year accounts receivable balances accordingly, ensuring that all writeoffs are reported to the Treasury.

Develop and implement procedures that require action officials to certify the validity of accounts receivables periodically, at least quarterly. OCFO should use this information to assess the reasonableness of the allowance for loss estimate.

Evaluate the impact of the improper accounting for grant funds issued under the Disaster Relief Appropriations Act, 2013, identified in audit memorandum 2018-FW- 0802 and perform an adjustment or restatement of the impact if deemed significant.

Work with CPD on remediation plans to address application control weaknesses within DRGR identified by audit memorandum 2018-FW-0802 that have contributed to continuing FFMIA noncompliance.

Require the grantees to submit supporting documentation with their survey responses to substantiate the amounts certified in support of OCFO’s validation of grant accrual estimates

Provide periodic training to grantees to assist them with understanding and completing the information requested in the survey letter to validate HUD’s grant accrual estimates.

Research the survey responses received as part of OCFO’s validation of grant accrual estimates that resulted in a positive cash on hand to determine whether a cash advance exists. If so, OCFO should coordinate with CPD to (1) determine whether the grantees have proper documentation and approvals Read More

Develop and implement standard operating procedures for recording and periodically evaluating sustained audit receivables to ensure that (1) all receivables are supported by a claim to cash and (2) an allowance for loss is recorded that reasonably estimates uncollectible amounts to reduce the Read More

Update its quality control plan to include the performance of physical inspections of the properties in its inventory.

Implement adequate procedures and controls to ensure that it properly monitors the listing brokers to ensure compliance with its contract. The procedures and controls should include but not limited to performing quality control reviews and supervisory review of its brokers, and maintaining Read More

Require lenders to provide evidence of sufficient flood insurance or execute indemnification agreements for the 21 loans in our statistical sample that did not have sufficient flood insurance at the time of our audit to put nearly $1.1 million to better use. (See appendix A.)

Develop a control to detect loans that did not maintain the required flood insurance to put $1.5 billion to better use by avoiding potential future costs to the FHA insurance fund from inadequately insured properties. Corrective Action Taken In November 2022, FHA published the Read More

Consult with the Office of General Counsel to review the language in the statutes, regulations, and handbooks and if warranted, make adjustments to the forward mortgage handbook to ensure consistency with the statute.

Consult with the Office of General Counsel to review the language in the statutes, regulations, and handbooks and if warranted, make adjustments to the HECM handbook to ensure consistency with the statute and regulation.

Complete all steps necessary for an effective evaluation effort.

Work with grant program offices to overcome reporting challenges. Ensure that grant program offices report OMB-requested data. Learn from and leverage results of participating grant programs.

Work with PD&R on an evaluation approach and design for the Promise Zone initiative. Ensure that OFPM has the appropriate resources for its new Communications and Data Analysis Division.

Correct the impact of all the modeling errors that we identified in this report.

Revisit the model’s ability to predict future performance of the single-family portfolio, based on our concerns expressed in this report regarding relationships of certain variables (such as loan-to-value ratio and FICO scores to prepayment) that are not consistent with our expectations. FHA Read More

Establish and implement policies and procedures for assessing and monitoring the reliability of the work performed by FHA’s modeling contractors.