We recommend that the Deputy Assistant Secretary for REAC require REAC to develop, use, and document an electronic checklist for each contract inspector’s file to ensure that inspectors (1) obtain and maintain the required insurance, and (2) have approved background checks before conducting inspections. In addition, support that the three sampled inspectors meet the minimum insurance limits for the current effective periods.

We recommend that the Deputy Assistant Secretary for REAC require REAC to execute administrative action related to outside standards determinations for five inspectors.

We recommend that the Deputy Assistant Secretary for REAC require REAC to develop and implement processes and procedures, in accordance with its system security plan and the HUD Handbook, Information Technology Security Policy, to ensure that annual assessments and continuous monitoring of the security controls are performed and that security control failures are prevented and corrected when identified.

We recommend that the Deputy Assistant Secretary for REAC require REAC to establish and implement written processes and procedures to verify the accuracy of the unit numbers sampled and entered for inspection by the inspector, which could include requiring (1) inspectors to upload a picture of the rent roll to the data collection device, (2) housing agencies to maintain a copy of the rent roll used, and (3) inspectors and public housing agencies to sign a certification stating that the units were inspected in accordance with the sample generated by the data collection device.

Develop and implement internal policies and procedures to ensure that approved underwriters are accurately maintained and kept current in the origination systems for the Section 184 program.

Develop a comprehensive plan to continue to seek indemnification statutory authority, including consideration to include indemnification authority language in draft regulations currently being considered. Until statutory authority is obtained, develop and implement internal policies and procedures for the voluntary indemnification process, to include a voluntary indemnification agreement, followup procedures, and resolution procedures. Procedures should be revised once statutory authority is obtained.

Develop and implement internal ONAP and OLG policies and procedures for the audit resolution process, complementing HUD Handbook 2000.06, to include management oversight and review of documents prepared and submitted to evidence that corrective actions have been adequately developed and fully implemented.

Support line item expenditures for the administrative contract expense fund for fiscal years 2015 to 2018. OLG should repay the U.S. Department of the Treasury for any expenditures that cannot be supported.

Develop and implement policies and procedures, coordinating with other program offices as needed, to track and make administrative contract expense fund expenditures readily available for review.

Develop and implement a comprehensive plan to use unobligated administrative contract expense funds.

Consider adding additional OLG staff, including a full time director to provide additional leadership and management oversight.

Obtain the required depository agreements for two5 grantees to ensure that they invest program funds in investment securities for use in carrying out affordable housing activities in accordance with PIH Notices 2014-21, section 4, and 2015-08, section 7.

Strengthen monitoring controls to ensure that current and future grantees maintain the required depository agreements before allowing them to invest program funds in investment securities for use toward affordable housing activities.

Update HUD’s Indian Housing Block Grant Recipient Self-Monitoring Guidebook to replace the expired requirement for investing program funds with PIH Notice 2015-08 and ensure that the Guidebook is updated with the latest requirements to ensure that grantees remain compliant with program requirements.

Support that the converted units met HUD’s housing quality standards or reimburse its program $1,206,046 from non-Federal funds ($1,053,618 in housing assistance payments $152,428 in administrative fees).

Seek retroactive approval or reimburse its program $10,124 for program funds paid to the contractor not approved by HUD for the housing quality standards inspections for units owned by entities substantially controlled by the Authority.

Implement adequate procedures and controls to ensure that the Authority complies with HUD’s conflict-of-interest requirements, including but not limited to ensuring that (1) its staff is appropriately trained and familiar with HUD’s requirements for units owned by entities it substantially controls and (2) future contracts to perform housing quality standards inspections for program units owned by entities substantially controlled by the Authority are with a HUD-approved independent third party.

Implement adequate procedures and controls, including but not limited to providing guidance to its program staff on how to apply the correct contract rents and developing an effective quality control process.

Provide sufficient documentation to support that it disbursed the $199,604 in program funds, which it determined were inappropriate housing or utility assistance payments, and that it made a reasonable effort to collect the debts. If the Agency cannot provide sufficient documentation to support the disbursements and that the debts were uncollectable, it should reimburse its program from non-Federal funds as appropriate. If the Agency provides sufficient documentation to support the disbursements but cannot provide sufficient documentation to support that the debts were uncollectable, it should make a reasonable effort to collect from the debtors or reimburse its program from non-Federal funds as appropriate.

Implement adequate procedures and controls to ensure that it maintains sufficient documentation to support housing and utility assistance payments and that it makes a reasonable effort to collect debts.