Put $417,113 in unspent NSP1 funds associated with three activities to better use by reprogramming the funds to other subrecipients using an appropriate method or return the funds to HUD.

Support or reimburse its NSP1 grant $1,300,000 from non-Federal funds for the unsupported reallocation of grant funds.

Support or reimburse the appropriate NSP grant $1,186,105 from non-Federal funds for the unsupported subrecipient and administrative expenditures.

Update the NSP program income information in HUD’s grant tracking system and quarterly performance reports and reconcile with the Department’s records.

Establish and implement written procedures and provide adequate training to staff associated with administering the NSP grant to help ensure accurate reporting of program income.

Support that $3,136,798 in HOME funds disbursed was reasonable and supported in accordance with Federal requirements or repay from non-Federal funds any amount that cannot be supported.

Support that the City properly administered the HOME program and earned $130,667 in HOME administrative fees or repay from non-Federal funds any amount that cannot be supported

Design controls to protect the insurance fund from improper partial claims that did not reinstate the loans to put $27.1 million to better use.

Reimburse the four HOME program participants $468 from program funds for the underpayment of housing assistance due to inappropriate calculations of housing assistance.

Reimburse the three CoC program participants $260 from program funds for the underpayment of housing assistance due to inappropriate calculations of housing assistance.

Support or reimburse its CoC program $7,309 from non-Federal funds for the unsupported housing assistance payments.

We recommend that HUD’s Deputy Assistant Secretary for Grant Programs require the City to provide documentation to show that the $594,012 disbursed due to the use of multipliers was for eligible, reasonable, necessary, and supported costs or reimburse its program from non-Federal funds.

We recommend that HUD’s Deputy Assistant Secretary for Grant Programs require the City to provide documentation to show that the $2,689 disbursed due to a higher than required overtime rate was supported by documentation from the trade unions or reimburse its program from non-Federal funds.

We recommend that HUD’s Deputy Assistant Secretary for Grant Programs require the City to reimburse its program $1,198 from non-Federal funds for overpaid wages due to billing and payroll errors.

We recommend that HUD’s Deputy Assistant Secretary for Grant Programs require the City to pay $544 in unpaid wages to the subcontractors of the affected employees and submit evidence that these employees have been paid.

We recommend that HUD’s Deputy Assistant Secretary for Grant Programs require the City to provide documentation showing that payments made under the Rockaway Boardwalk construction management services contract complied with Davis-Bacon and Related Acts requirements and that restitution is made to affected workers for any underpayments identified.

Implement a change to regulations at 24 CFR Part 203 to require curtailment of preforeclosure interest and other costs that are caused by lender servicing delays, resulting in $413,513,975 in funds to be put to better use. This should include updating or seeking statutory authority to update HUD’s regulations as necessary and coordinating with HUD’s Office of Finance and Budget, well before any changes go through departmental clearance, to ensure that planned curtailment requirements can be consistently enforced through the claims process.

Status

FHA reported that the audit recommendation cannot be closed without the publication of the FHA Maximum Claim Rule. The proposed changes have been on HUD’s regulatory agenda since Spring 2020 but, as of February 2025, the Office of Single Family Housing does not have an estimated publication date.

Analysis

To fully address this recommendation, HUD must provide evidence that it has published and adopted the rule.

Implementation of this rule should result in HUD putting $413 million to better use.

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.

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.

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.