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Open Recommendations by Oversight Area
Oversight Area	Priority Recommendations	Open Recommendations
Housing Assistance	75	100
Community Development	3	75
Disaster Recovery	3	82
Financial Risk and Accountability	6	130
Technology and Cybersecurity	4	88
Health and Safety	1	53
HUD's Operations	4	100
Total	96	628

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We audited the State of Connecticut’s Small Cities Community Development Block Grant program based on an Office of Inspector General risk assessment, which ranked the State as the highest risk grantee in Connecticut. Our audit objective was to determine whether the State ensured that its grantees…

Oversight Area: Community Improvement

Repay from non-Federal funds the $1,190,977 in ineligible costs charged to the program.

Repay from non-Federal funds the $434,970 in unreasonable costs charged to the program

Support $249,015 in program costs spent on a 2014 grant for which the grantee was unable to provide a tier one environmental review record or repay from non-Federal funds any amount that cannot be supported

Support $676,922 for contracts that were improperly procured or repay from non-Federal funds any amount that cannot be supported.

Support $422,600 in program income that was not used before additional grant fund drawdowns or repay from non-Federal funds any amount that cannot be supported

Strengthen controls over program oversight to ensure that grantees comply with their agreements and program requirements, including tier two environmental reviews, contract procurements, and homeowner and project eligibility, to ensure that (1) all income, including rental income, is considered; (2) loan-to-value ratios do not exceed 90 percent without State approval; and (3) projects do not exceed the program limits without State approval.

Strengthen controls over monitoring to ensure that onsite monitoring and monitoring letters are completed in a timely manner and sufficient supporting documentation is required and reviewed by those responsible for grant oversight.

Develop and implement policies and procedures to assess the validity of all program complaints to ensure that they are addressed and resolved in a timely manner.

Provide additional guidance to its grantees regarding its policy stating that the repair or replacement of paved surfaces should be minimal in cost and incidental to the rehabilitation of the dwelling, including whether grantees are required to consult with the State before starting the work.

We audited the U.S. Department of Housing and Urban Development’s (HUD) tracking of partial claim notes. The audit was initiated in response to an Office of Inspector General preaudit analysis of HUD’s Single Family Data Warehouse (SFDW) data, which determined that partial claim notes may not have…

Oversight Area: Homeownership

Board 47 partial claim notes that were not boarded into SMART, resulting in funds to be put to better use in the amount of $716,061.

Coordinate with the Deputy Assistant Secretary for Finance and Budget to board 350 manually paid partial claims that were not boarded into SMART, resulting in funds to be put to better use in the amount of $2,297,706.

Remove 24 duplicate partial claim note entries from SMART, resulting in funds to be put to better use in the amount of $697,354.

Obtain the missing mortgage documents for 33 loans and the missing note documents for 40 loans, totaling $644,767 in partial claim notes, and require any unrecorded mortgage documents to be recorded at the appropriate county’s office to ensure that HUD’s interests are protected. For any missing documents that cannot be obtained, the Deputy Assistant Secretary should require the lender to reimburse HUD for the partial claim note.

Review 249 loans labeled with “DNV” in appendix D to identify any missing note or mortgage documents for the partial claims. For loans identified with missing documents, the Deputy Assistant Secretary should obtain the documents or require the lender to reimburse HUD for the partial claim note. For loans identified with unrecorded mortgage documents, the Deputy Assistant Secretary should require them to be recorded at the county’s office to ensure that HUD’s interests are protected.

Coordinate with the Deputy Assistant Secretary for Finance and Budget to record lender payments to update the balances for 139 loans in SMART, resulting in funds to be put to better use in the amount of $1,055,113.

Rerecord the mortgage documents at the respective counties’ offices for 18 loans for which the partial claim mortgages were inappropriately released, resulting in funds to be put to better use in the amount of $451,000.

Review four loans with partial claim notes already recorded in SMART and remove those loans in which HUD has not paid a partial claim, resulting in funds to be put to better use in the amount of $93,409.

Reverse the transaction for one loan for which the transaction removing a partial claim note was made in error, resulting in funds to be put to better use in the amount of $63,591.

Collect on one partial claim note for which the loan had matured, resulting in funds to be put to better use in the amount of $1,905.

Review two loans in which the partial claim note amount entered was different from the note or mortgage amount to ensure that the appropriate partial claim note amount is entered into SMART, resulting in funds to be put to better use in the amount of $622.

Update its procedures to allow automatic boarding for all partial claims paid to eliminate errors caused by manual boarding, including partial claim notes not boarded, and partial claim notes boarded but not yet paid by HUD.

Develop and implement procedures and controls to board all manually paid partial claims and record all lender payments received via claim remittances.

Develop and implement additional controls to ensure that it accepts only note and mortgage documents with correct amounts that could be matched to the amount recorded in SMART and that the note and mortgage documents marked as received are entered into SMART.

Develop and implement additional controls to ensure that it releases mortgages only when they have been satisfied.

We reviewed the State of Florida’s Department of Economic Opportunity’s Community Development Block Grant Disaster Recovery (CDBG-DR) program. We selected the State of Florida in accordance with our goal to review disaster funding and based on a congressional request for us to conduct disaster…

Oversight Area: Disaster Relief

Obtain HUD approval of policies and procedures before executing its subrecipient agreements and ensure that its finalized policies and procedures include but not limited to financial management, procurement, duplication of benefits, and monitoring.

Establish adequate financial controls to ensure that its disaster funds are properly classified and allocated to the correct grant and ensure that DRGR drawdowns are conducted in a timely manner.

Provide adequate training to staff on the appropriate classification of disaster recovery activities to ensure costs are accurately allocated and recorded.

Continue to establish a data sharing agreement with FEMA for Hurricanes Hermine and Matthew to ensure that all sources of funding are included in its disaster policies and procedures to prevent duplication of benefits and ensure that the term of the agreement is sufficient.

Continue to negotiate with SBA to extend its data-sharing agreements for the term of the expenditure requirements set forth in public laws or the Federal Register.

Continue to fill its vacancy and assess staffing resources as it prepares for additional disaster funds.

We performed a review of the U.S. Department of Housing and Urban Development’s (HUD) Housing Counseling Program, located within the Office of Housing Counseling. We selected this program based on an audit suggestion that was included in our annual audit plan to help address HUD’s strategic goal…

Oversight Area: Homeownership

We recommend that HUD’s Deputy Assistant Secretary for Housing Counseling identify additional housing counseling agencies that were classified as reapproved when it had not completed a performance review upon expiration of the approved period and determine whether they are properly qualified to provide counseling services to consumers.

We recommend that HUD’s Deputy Assistant Secretary for Housing Counseling obtain and provide documentation for the four housing counseling agency reapprovals and the three housing counseling agency voucher approvals to show that the $1,310,719 in Housing Counseling Grant funds5 disbursed was for eligible and supported costs or repay from non-Federal funds any amount that cannot be supported.

We recommend that HUD’s Deputy Assistant Secretary for Housing Counseling update its policies and procedures to ensure consistency and adequacy of the agency approval, performance review, voucher approval, and termination and posttermination processes. Specifically, the updates should ensure that the deficiencies identified in this report are acknowledged and corrected going forward, including (1) updating the Housing Counseling Program handbook and developing or updating standard operating procedures for each of the key processes and (2) implementing controls to ensure that staff perform work properly and consistently, and maintain significant documentation provided by agencies, along with any analysis performed during reviews.

We recommend that HUD’s Deputy Assistant Secretary for Housing Counseling ensure that the new Housing Counseling Agency Management System provides HUD with the ability to adequately oversee the work of its staff and track important housing counseling agency milestones, including HUD approval expirations and required terminations.

We audited the U.S. Department of Housing and Urban Development’s (HUD) Community Development Block Grant code enforcement program due to results from our external audits, which showed that grantees did not adequately understand and failed to ensure compliance with program requirements. Our audit…

Oversight Area: Community Improvement

Update and revise the CPD Notice to further improve the code enforcement guidance.

Provide mandatory training on the revised Notice to the local field offices and to grantees that use CDBG funds for the code enforcement program to ensure compliance with requirements.

Ensure that the updated and revised notice is issued with the appropriate clearance.

We audited the Housing Authority of the County of Lake, IL’s Housing Choice Voucher Program based on the activities included in our 2018 annual audit plan and our analysis of risk factors related to the public housing agencies in Region 5’s jurisdiction. Our audit objective was to determine…

Transfer $78,786 ($22,601 $56,185) from its Family Self-Sufficiency account to its Housing Choice Voucher Program account for the overfunded and forfeited escrows.

Support or reimburse its Housing Choice Voucher Program $120,067 from non-Federal funds for unsupported graduation disbursements.

Reimburse its Housing Choice Voucher Program $12,460 from non-Federal funds for the ineligible disbursements.

Transfer $3,801 from its Housing Choice Voucher Program account to its Family Self-Sufficiency account for the underfunded escrows.

Reimburse one participant, $547 from its Family Self-Sufficiency program for the underpaid graduation payment.

Implement procedures and controls to ensure that documentation required by HUD and the Authority’s own action plan is correctly completed, documented, and updated.

Ensure that its staff is appropriately trained and familiar with HUD’s requirements and its program action plan regarding the administration of its program to ensure that (1) participants’ individual training and services plans are complete and contain appropriate goals to assist the family in achieving self-sufficiency, (2) participants are notified of their escrow account balances at least annually, and (3) contracts of participation are complete and accurate.

Ensure that its newly created policies and procedures include a process for ensuring that (1) escrow balances are correctly calculated and disbursed, (2) escrow accounts and disbursements are fully supported, and (3) forfeited escrow account funds are returned to the Housing Choice Voucher Program as required.

Determine the amount of the $445,122 in coordinator grant funds that were appropriately earned by the Authority for meeting requirements and paid to the coordinators while performing duties of the Family Self-Sufficiency program. The funds that are determined to be unearned should be reimbursed to HUD from non-Federal funds.

Reimburse its program $20,450 from non-Federal funds ($10,331 $10,119 in associated administrative fees) for the overpayment of housing assistance due to inappropriate calculations of housing assistance.

Reimburse the appropriate households $3,590 from program funds for the underpayment of housing assistance due to inappropriate calculations.

Support or reimburse its program $18,638 from non-Federal funds for the unsupported payments of housing assistance cited in this finding.

Enter into repayment agreements to pursue collection from the applicable households or reimburse its program $6,367 from non-Federal funds for the overpayment of housing assistance due to unreported or underreported income

Implement adequate procedures and controls to ensure that housing assistance payments are appropriately calculated and supported and that repayment agreements are created to recover overpaid housing assistance when unreported income is discovered during the examination process to ensure that $453,999 ($351,060 $102,939) in program funds is appropriately used for future payments.

Reimburse its program $3,117 from non-Federal funds for the ineligible program expenditures.

Support or reimburse its program $4,070 from non-Federal funds for the unsupported program expenditures.

Reimburse $9,170 from non-Federal funds to the owners of the Project-Based Voucher developments it inappropriately charged for the normal cost of doing business to administer the Project-Based Voucher contracts.

Reimburse the Housing Choice Voucher Program $10,861 from its various programs for the bank service charges inappropriately charged to its Program.

Determine the appropriate allocations of the bank service charges and reimburse its Housing Choice Voucher Program from the various programs to ensure that $1,848 is available for appropriate program use.

Ensure that its staff is appropriately trained and familiar with HUD’s expenditure and allocation requirements.

Develop and implement adequate procedures and controls to ensure that program expenditures are for eligible and supported program costs and that costs are appropriately allocated to its various programs as required.

Review the Authority’s Project-Based Voucher contracts, determine the total amount to be reimbursed to the project owners, and require the Authority to (1) remove all inappropriate language from its contracts, (2) issue amended contracts as necessary, and (3) reimburse the inappropriate charges to the applicable project owners from non-Federal funds.

Determine any remaining amounts for bank service charges inappropriately charged to the Housing Choice Voucher Program and ensure that the various programs reimburse the Program as appropriate for all bank service charges not appropriately allocated.

Determine whether the rent charged to the Housing Choice Voucher Program for the Family Self-Sufficiency program office space in the Authority’s main office and in its public housing property is appropriate and reasonable.

Require the Authority to reimburse its Housing Choice Voucher Program from non-Federal funds for any amounts determined not to be reasonable to ensure that $40,656 in program funds is available for appropriate program use.

Require the Authority to allocate any rents determined to be reasonable between its Housing Choice Voucher Program and Public Housing Family Self-Sufficiency program and require the Authority to reimburse its Housing Choice Voucher Program from its public housing program any amounts that should have been allocated among the programs.

We audited the City of Erie, PA’s Community Development Block Grant program because we received a complaint regarding its code enforcement program and we had not audited the City’s program since 1997. The complaint alleged that the City targeted low- to middle-income residents in certain…

Oversight Area: Community Improvement

Follow up on the 15 properties in our sample to ensure that the code enforcement violations have been corrected, that the necessary documentation has been gathered and retained in the code enforcement file for the property, and that the code enforcement process has been completed.

Provide documentation to support $671,838 in code enforcement costs or repay the program from non-Federal funds for any amount that it cannot support.

Develop and implement policies and procedures to ensure that its Block Grant-funded code enforcement activities comply with HUD requirements, including documentation requirements, thereby ensuring that funds totaling $301,866 can be put to better use.

Provide documentation to support $1 million in community policing salary costs or repay the program from non-Federal funds for any amount that it cannot support.

Develop and implement policies and procedures to ensure that Block Grant-funded community policing salaries and benefits comply with HUD requirements, including documentation requirements, thereby ensuring that funds totaling $295,935 are put to better use.

We audited the Crisfield Housing Authority’s use of public housing program operating and capital funds because we received a hotline complaint alleging misuse of public housing assets and we had never audited the Authority. The audit objective was to determine whether the Authority administered…

Oversight Area: Rental Assistance

Provide documentation to support the $137,500 paid for security services from operating funds or reimburse its program from non-Federal funds for any costs that it cannot support.

Provide the documentation that was missing from the 14 files reviewed. If documentation cannot be provided, the Authority should follow applicable regulations and terminate or modify assistance as necessary.

Develop and implement controls to ensure that families are properly selected from the waiting list and that their selection is documented in their tenant files.

Correct the rent calculations for the 54 families identified by the audit to properly implement flat rent.

Correct the rent calculations for the employees whom it charged an extremely low rent, thereby ensuring that it collects an estimated $25,248 more in rent over the next year.

Develop and implement controls to ensure that it pays for services only after it receives the documentation required to be provided by contract and that provided services are supported by a contract.

Develop and implement procedures to have a supervisor review tenant files to ensure that the files are accurate and complete and comply with program requirements.

Develop and implement procedures to ensure that flat rents are calculated correctly for those families that choose to pay flat rent, thereby ensuring that it collects at least $38,664 in additional rental income.

Provide training and technical assistance to the Authority to ensure that it properly administers its operating funds in accordance with applicable requirements.

Reimburse its program $111,568 from non-Federal funds for the ineligible payments it made due to the conflict-of-interest situations identified by the audit.

Submit a retroactive request for a waiver to the conflict-of-interest requirements to support payments totaling $1,499,137 or reimburse the appropriate fund from non-Federal funds for any amount not covered by a waiver.

Develop and implement controls to prevent and detect conflict-of-interest situations.

Evaluate the apparent conflict-of-interest situations in this report and pursue administrative sanctions if warranted.

Provide documentation to show that products and services totaling $171,822 were purchased at fair and reasonable prices. For any amounts determined to be unreasonable and not supported, the Authority should reimburse the program from non-Federal funds.

Reimburse its program $170,784 from non-Federal funds for the ineligible salary payments and ongoing security payments.

Develop and implement controls over its procurement actions to ensure that prices paid for goods and services are reasonable.

Develop and implement controls to ensure that program funds are used for eligible activities only.

We audited the Red Bank Housing Authority based on the results of our audit of Asbury Park Housing Authority because both public housing agencies had agreements with the Long Branch Housing Authority to provide services. The objective of this audit was to determine whether the Authority…

Oversight Area: Rental Assistance

We recommend that the Director of HUD’s Newark Office of Public Housing require the Authority to provide documentation to show that the $252,000 paid to the Long Branch Housing Authority was for eligible, reasonable, necessary, and allocable costs or reimburse its Operating and Capital Fund programs from non-Federal funds for any amount that it cannot support or that is not considered reasonable.

We recommend that the Director of HUD’s Newark Office of Public Housing require the Authority to update its policies and procedures to ensure that any additional payments made under interagency agreements are adequately supported before payment is made and that the services are provided in accordance with applicable requirements. These requirements include but are not limited to HUD, Federal, and Authority requirements related to procurement, allocation of costs, and review and approval of payments.

We recommend that the Director of HUD’s Newark Office of Public Housing require the Authority to provide documentation to show that the $161,600 paid for legal, fee accounting, and auditing services was for prices that were reasonable and that the costs were properly allocated among the Authority’s programs or reimburse its Operating and Capital Fund programs from non-Federal funds for any amount that it cannot support or is not considered reasonable

We recommend that the Director of HUD’s Newark Office of Public Housing require the Authority to provide documentation to show that $172,538 paid for goods and services was reasonable or reimburse its Operating and Capital Fund programs from non-Federal funds for any amount that it cannot support or that is not considered reasonable.

We recommend that the Director of HUD’s Newark Office of Public Housing require the Authority to provide documentation to show that $36,508 disbursed1 was for authorized and approved costs or reimburse its Operating and Capital Fund programs from non-Federal funds for any amount that it cannot support.

We recommend that the Director of HUD’s Newark Office of Public Housing provide technical assistance to the Authority to help ensure that 1) future interagency agreements, including the renewal of its agreement with Long Branch clearly outline the expectations and documentation required to show that work was performed, (2) its board provides adequate oversight of work performed under interagency agreements, and 3) it complies with HUD, Federal, and Authority procurement requirements when purchasing goods and services.

The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General (OIG) audited HUD’s travel and purchase card programs for fiscal year 2017 based on (1) our annual risk assessment of these programs and (2) our requirement under the Charge Card Abuse Prevention Act of 2012 to…

Oversight Area: HUD Business Functions

Review the 17 travel cardholders with purchases that occurred without a travel authorization and the 6 travel cardholders with purchases that were not supported to determine whether the purchases were allowable, proper, and paid in full by the cardholder, taking appropriate administrative actions as necessary. These unsupported purchases totaled $6,407. However, a total of $5,780 remains after deducting the duplicate amount of $627 addressed in Recommendation 1C.

Perform an analysis of the 3,045 travel card purchases with indications that they were unauthorized or ineligible to identify potential violations and to address any unauthorized purchases identified. OCFO should perform a review of identified transactions to determine whether they were allowable, proper, and paid in full by the cardholder, taking appropriate administrative actions as necessary.

Refer the 15 ineligible travel card transactions totaling $5,393 to the appropriate program office and obtain a response regarding what administrative actions were taken to resolve the violations. If no actions were taken, OCFO should request support to show why no corrective actions were taken.

Strengthen internal monitoring efforts regarding government travel card use to identify potentially improper, illegal, or erroneous transactions. Such efforts should include data mining to detect instances of delinquency, fraud, and misuse.

Open Recommendations by Oversight Area

Oversight Area

Status

Priority

The State of Connecticut Did Not Ensure That Its Grantees Properly Administered Their Housing Rehabilitation Programs

HUD Did Not Have Adequate Controls To Ensure That Partial Claim Notes for FHA Loans Were Properly Tracked for Future Collection

The Florida Department of Economic Opportunity, Tallahassee, FL, Should Strengthen Its Capacity To Administer Its Disaster Grants

HUD Did Not Adequately Administer Its Housing Counseling Program

Improvements are Needed for HUD’s Code Enforcement Program

The Housing Authority of the County of Lake, Grayslake, IL, Did Not Always Comply With HUD’s and Its Own Requirements Regarding the Administration of Its Housing Choice Voucher Program

The City of Erie, PA, Did Not Always Administer Its Code Enforcement and Community Policing Activities in Accordance With HUD and Federal Requirements

The Crisfield Housing Authority, Crisfield, MD, Did Not Properly Administer Its Public Housing Program Operating and Capital Funds

The Red Bank Housing Authority, Red Bank, NJ, Did Not Always Administer Its Operating and Capital Funds in Accordance With Requirements

HUD’s Travel Cards Were Used for Unauthorized, Unsupported, or Ineligible Purchases in at Least 950 Instances Totaling More Than $95,000

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