If REAC determines that 100 percent annual self-inspections are required, establish specific guidance to address the number of units and frequency of PHA self-inspections. If not required, REAC should evaluate whether HUD’s rationale for inspecting a statistical sample rather than 100 percent of public housing units remains appropriate.

We recommend that the Deputy Assistant Secretary for REAC determine whether PHAs are required to perform annual inspections on 100 percent of their public housing units annually and issue clarifying guidance to all PHAs.

Implement a system to track field office inspection review activities and create a repository for the support documentation collected to verify the correction of life-threatening deficiencies.

Corrective Action Taken

Develop and implement training for field offices that addresses reviewing or following up with PHAs about the correction of life-threatening and non-life-threatening deficiencies and how (1) to review physical inspection reports to effectively ensure that PHAs correct physical deficiencies, (2) PHAs should address or correct each type of deficiency observed in the REAC physical inspection report, and (3) to use PASS or any future tracking system.

Corrective Action Taken

Develop and implement a nationwide inspection review protocol, which includes but is not limited to (1) whether field office staff should mark verification of PHA corrections of life-threatening deficiencies in PASS or any future tracking systems, (2) acceptable documentation for offsite verifications, and (3) whether field office staff should discuss or verify corrections of non-life-threatening deficiencies.

Corrective Action Taken

We also recommend that the Director of HUD’s Cleveland Office of Public Housing determine whether the Authority qualifies for an exemption from preaward review.

For the contract activities during the period of January 1, 2020, through April 2022, the Director should require the Authority to implement adequate procedures and controls, including but not limited to ensuring that (1) proper documentation is maintained, (2) contracts are procured in accordance with Federal and the Authority’s procurement requirements, (3) procurement staff complies with Federal procurement requirements, and (4) payments are appropriately reconciled.

For the contract activities during the period of January 1, 2020, through April 2022, the Director should require the Authority to ensure that its staff is appropriately trained and familiar with Federal procurement requirements regarding cost estimates and cost analyses.

For the contract activities during the period of January 1, 2020, through April 2022, the Director should require the Authority to support the contract modifications and the reasonableness of the increased costs for four contracts (0824, 0505, 1023 and 0731) or repay its Public Housing Operating Fund or Capital Fund program from non-Federal funds for any amount determined not to be reasonable.

For the contract activities during the period of January 1, 2020, through April 2022, the Director should require the Authority to support the reasonableness of the change orders that increased the price of the contract (0216) by more than $1.1 million or repay its Public Housing Operating Fund or Capital Fund program from non-Federal funds for any amount determined not to be reasonable.