HUD OCFO, in coordination with other appropriate program offices, should define and implement a process to document and allocate non-personnel risk management resources in a risk-based manner, to include but not limited to funding, processes, and technology (IG FISMA metric 7).

HUD OCIO should implement a process to consistently update and maintain its inventory of hardware assets and ensure that the inventory is consistent with the automated discovery scans used to perform vulnerability, configurations, and continuous diagnostics and mitigation scans and use this inventory to consistently remove unauthorized hardware assets from the HUD network (IG FISMA metrics 2, 20, and 21).

HUD OCIO should implement a process to consistently update and maintain its inventory of software assets and ensure that the inventory is consistent with the automated discovery scans used to perform vulnerability, configurations, and continuous diagnostics and mitigation scans and use this inventory to consistently remove unauthorized software assets from the HUD network (IG FISMA metrics 2, 20, and 21).

HUD OCIO should update its software inventory policies and procedures to account for critical software as defined by EO 14028 (IG FISMA metrics 3 and 21).

HUD OCIO should implement policies and procedures to maintain inventories of critical software and software licenses, critical software platforms, and all software installed on critical software platforms (both critical software and noncritical software) and use the inventory of critical software platforms and all software installed on them to ensure that only supported versions of software are used on those critical software platforms (IG FISMA metrics 3 and 21).

HUD OCIO should in coordination with the Chief Risk Officer (CRO), document cybersecurity risk management roles and responsibilities in a consolidated list and; define procedures to hold personnel accountable to their assigned roles in the consolidated list (IG FISMA metric 7)

HUD OCIO should consistently implement personnel accountability procedures to ensure that assigned cybersecurity risk management roles are being performed in an effective manner (IG FISMA metric 7).

HUD OCIO should ensure that external systems, such as cloud systems and cloud service providers, have and maintain configuration management plans that are consistent with HUD’s defined configuration management requirements (IG FISMA metric 19).

HUD OCIO should define and implement metrics to monitor the effectiveness of ICAM program activities and assist in identifying areas for improvement (IG FISMA metric 26).

HUD OCIO should develop a comprehensive ICAM policy, strategy, process, and technology solution roadmap, including milestones, budget estimates, and appropriate technology solution details (IG FISMA metric 27). This recommendation replaces FY 2020 FISMA recommendation 11.

HUD OCIO should define policies and guidance for the use of system-specific access agreements (IG FISMA metric 29).

HUD OCIO should develop a plan that includes milestones and funding requirements for implementing phishing-resistant MFA for all users in alignment with Federal requirements (IG FISMA metrics 30 and 31).

HUD OCIO, in coordination with other appropriate HUD offices, should define and communicate policies and procedures for use of MFA at HUD facilities (IG FISMA metrics 30 and 31).

HUD OCIO should define a plan to meet the logging requirements at all event logging maturity levels (basic, intermediate, advanced) in accordance with OMB M-21-31. This plan should include logging sufficient to allow for reviewing privileged user activities (IG FISMA metrics 32 and 54).

HUD OCIO should develop and implement monitoring and enforcement procedures to ensure that non-GFE devices (for example, BYOD), such as those owned by contractors or HUD employees, are either: (a) prohibited from connecting to the HUD network; or (b) properly authorized and configured before connection to the HUD network (IG FISMA metrics 2, 21, and 33).

HUD OCIO should develop and implement procedures and contract terms to enforce forfeiture of non-GFE devices (for example, BYOD), to allow for analysis when security incidents occur (IG FISMA metrics 33 and 55).

HUD OCIO should define a process and assign responsibility to evaluate the effectiveness of its incident response technologies and adjust configurations and toolsets to improve the incident response program (IG FISMA metric 58).

HUD OCIO should update its enterprisewide business impact prioritization analysis procedures to include system dependencies and the characterization of system components (IG FISMA metric 61).

We recommend that the Deputy Secretary Develop and execute a detailed plan and timeline for both testing and reporting estimates of improper payments in the PIH-TBRA and PBRA programs in compliance with Federal law and OMB guidance.

Status

In response to the Management Alert, the Deputy Secretary stated that she would provide a plan in 30 days. On April 10, 2024, the Chief Financial Officer, Assistant Secretary for Housing, and Principal Deputy Assistant Secretary for Public and Indian Housing (PIH) stated their respective executives had been working together to develop a plan to accelerate HUD’s ability to produce statistically valid estimates. With respect to PBRA, HUD plans to use ongoing data collection for fiscal year (FY) 2023 tier 1 and tier 2 payments to develop a statistical estimate in FY 2024.

However, our ongoing Payment Integrity Information Act audit has determined that neither program produced a compliant estimate in fiscal year 2024. For multifamily-PBRA, HUD made some progress and reported an estimate that captured part of the payment cycle; however, the estimate did not include testing to ensure that housing assistance payments from contract administrators to owners were calculated correctly and supported by tenant-level documentation. The PIH-TBRA program did not produce an estimate at all, noting that IT system modernization must occur first. However, PIH has not yet provided a plan that indicates how the system upgrades will address this issue or a timeline for implementation. As of January 31, 2025, a detailed plan or timeline has not been provided.

Analysis

As of January 31, 2025, HUD has not provided a detailed plan or timeline for OIG review. It remains unclear how HUD will produce a complete estimate of the PBRA programs in future years, and when it will be able to produce an estimate for PIH-TBRA.

For HUD to close this recommendation, it must finish testing the full life cycle of payments in these programs and publicly report estimates of the improper payments in them. Merely producing a plan with future action target dates is not sufficient to meet the spirit of this recommendation.

PBRA and PIH-TBRA are the two largest program expenditures in HUD's portfolio, totaling $50 billion in FY 24, or 62.4 percent of HUD's total expenditures. HUD has been challenged with developing a compliant sampling methodology that can test the full payment cycle and that can be executed within the required timeframes. To fully address this recommendation, the sampling methodology should test the full payment cycle, and the associated sample testing and statistical estimation must be completed in time to be included in the Annual Financial Report.

Implementation of this recommendation will result in HUD better-safeguarding taxpayer dollars and decrease improper payments.

The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.