Recover from the borrowers and reimburse $1,080,242 to the applicable loan guarantee account from non-Federal funds for ineligible disbursements that were not related to the approved projects and used to finance local government operations.

Obtain and submit supporting documentation showing the eligibility and propriety of $367,840 in disbursements or reimburse the loan guarantee account from non-Federal funds.

Ensure that the borrowers either transfer the unexpended Section 108 loan proceeds to the repayment account or submit a request for extension to HUD.

Ensure that the borrowers provide HUD the additional security requirements according to the loan agreement.

Ensure that borrowers develop and implement a financial management system in accordance with HUD requirements to ensure that program funds can be traced to a level that ensures that such funds have not been used in violation of the restrictions and prohibitions of applicable statutes.

Ensure that all Section 108 loan proceeds deposited at commercial banks are properly collateralized with Government obligations.

Conduct monitoring reviews of all Section 108 projects and ensure that borrowers comply with all loan agreement provisions and HUD regulations.

We recommend that the Director of HUD’s New York Office of Public and Indian Housing require Authority officials to provide supporting documents for the proper use of $1,250,417 in sale proceeds from the scattered-site properties. Any amounts not supported or found to be improperly used should be repaid to the homeownership program from non-Federal funds.

We recommend that HUD’s Deputy Assistant Secretary for Grant Programs instruct City officials to provide documentation to justify the $183 million in unsupported salary and fringe benefits and associated expenses charged to the CDBG-DR program. If documentation provided does not support the costs, this amount should be repaid from non-Federal funds.

Require the Authority to take action to reclaim its properties valued at $2,032,266 to improve its financial position, decrease its reliance on HUD program funding, and address its comingling issues.

Require the Authority to determine how much of the $243,442 in salaries for individuals assigned to work at multiple properties was improperly paid with Federal funds and repay the amounts to the appropriate programs from non-Federal funds. If the Authority is unable to accurately determine the amount due to and due from each program or support that the funds charged to the Federal programs were appropriate, the full $243,422 should be repaid to HUD.

Require the Authority to determine whether the Authority improperly used Federal funds totaling $40,600 to make lease payments on the parking lot it already owned. If Federal funds were improperly used, the Authority should repay $40,600 from non-Federal funds to its Federal program accounts. If the Authority is unable to accurately determine the amount due to and due from each program or support that the funds charged to the Federal program were appropriate, the full $40,600 should be repaid to HUD.

Require the Authority to determine whether the Authority improperly used Federal funds totaling $11,833 which were used to cancel an existing phone system and purchase a new one. If Federal funds were improperly used, the Authority should repay $11,833 to its Federal program accounts from non-Federal funds. If the Authority is unable to accurately determine the amount due to and due from each program or support that the funds charged to the Federal program were appropriate, the full $11,833 should be repaid to HUD.

Require the Authority to determine whether the Authority improperly used Federal funds totaling $50,000 which were used to pay unnecessary severance contract costs. If Federal funds were improperly used, the Authority should repay $50,000 to its Federal program accounts from non-Federal funds. If the Authority is unable to accurately determine the amount due to and due from each program or support that the funds charged to the Federal program were appropriate, the full $50,000 should be repaid to HUD.

Implement controls to prevent or mitigate instances of borrowers violating HECM program residency requirements by concurrently participating in the Voucher program, including policies and procedures to at least annually coordinate with HUD’s Office of Public Housing to match borrower data in the Single Family Data Warehouse to member data in the Public Housing Information Center.

We recommend that the Director of HUD’s New York Office of Community Planning and Development instruct Palladia officials to provide documentation to justify that the $1,615,057 in unsupported costs is associated with eligible program activities. Any unsupported costs determined to be ineligible should be reimbursed from non-Federal funds.

We recommend that the Director of HUD’s New York Office of Community Planning and Development instruct Palladia officials to strengthen oversight controls over disbursements to ensure that adequate supporting documentation is maintained and complies with applicable regulations.

We recommend that the Director of HUD’s New York Office of Community Planning and Development instruct Palladia officials to follow its policies and procedures for record-keeping to maintain records that adequately identify the source and application of funds provided for financially assisted activities.

We recommend that the Director of HUD’s New York Office of Community Planning and Development instruct Palladia officials to provide records detailing the funding sources of the non-Federal cash match for the six grant activities reviewed.

We recommend that the Director of HUD’s New York Office of Community Planning and Development instruct Palladia officials to provide source documentation to substantiate that the $584,579 in required non-Federal cash matching funds for five of the six program projects reviewed were met.