Develop a timeliness standard in the LBPR tracker to establish expectations for how often field office staff must reach out to PHAs on the LBPR tracker to discuss measures that will resolve cases in a timely manner.

Consider conducting an analysis of staffing resources needed to manage the REO and notes sales on tribal trust properties program and adjust staffing accordingly.

In conjunction with corrective actions being taken on previous audits, revise ONAP’s internal policy and procedures to include detailed written policies and procedures for the marketing, preservation, and sale of defaulted loan notes and REO properties on tribal trust and other restricted lands.

Work with the Office of the Chief Information Officer to develop an electronic solution, such as a new module in Native Advantage or one similar to FHA’s P260 tracking system, to track the sale of defaulted loan notes and REO properties on tribal trust and other restricted lands. While the solution is being developed, HUD should put controls into place to ensure that manual systems used to track defaulted loans and REO properties are complete and accurate.

We recommend that the General Deputy Assistant Secretary for Public and Indian Housing require the Real Estate Assessment Center in coordination with the Office of Field Operations to develop and implement a plan to manage lead-based paint and lead-based paint hazards in public housing.

Requires the REAC in coordination with OFO to determine the number of developments and associated units that contain lead-based paint and lead-based paint hazards.

Status

In May 2023, HUD published a final rule establishing a new approach to defining and assessing housing quality: The National Standards for the Physical Inspection of Real Estate. Public Housing regulations were amended, and Public Housing program participants were required to comply with this final rule and use the NSPIRE standards starting July 1, 2023. The Real Estate Assessment Center and Office of Field Operations will collaborate with the Office of Lead Hazard Control and Healthy Homes, the Office of Policy Development and Research, and a statistician to evaluate data collected under the NSPIRE inspection program to estimate the number of public housing developments and associated units that contain lead-based paint and lead-based paint hazards. As of November 2024, PIH reported that inspections have had a slow start due to procurement delays. Additionally, the NSPIRE system did not get the requested functionality to collect lead inspections. The final action target date is March 31, 2025.

Analysis

To address this recommendation, HUD will need to provide evidence that it collected and evaluated data under NSPIRE and estimated the number of public housing developments and associated units that contain lead-based paint and lead-based paint hazards.

Implementation of this recommendation will assist HUD in working with PHAs to address the public housing units that contain lead-based paint and lead-based paint hazards and help HUD’s oversight of units in need of hazard reduction.

We recommend that the General Deputy Assistant Secretary for Public and Indian Housing require the Real Estate Assessment Center in coordination with the Office of Field Operations to determine the cost to eliminate or control the lead-based paint and lead based paint hazards in public housing and the timeframe to complete such work based on the existing funding levels and strategies that could accelerate the timeframe.

We recommend that the General Deputy Assistant Secretary for Public and Indian Housing require the Real Estate Assessment Center in coordination with the Office of Field Operations to implement adequate procedures and controls to ensure that public housing agencies appropriately identify and control lead-based paint and eliminate lead-based paint hazards in public housing.

We recommend that the General Deputy Assistant Secretary for Public and Indian Housing require the Real Estate Assessment Center in coordination with the Office of Field Operations to determine whether the public housing agencies identified as having lead-based paint hazards in their housing developments maintain and implement a plan for managing lead-based paint. For any public housing agency that does not have a plan for the management of lead-based paint in its public housing developments, as appropriate, HUD should inform the public housing agency that it should develop and implement its own plan.

We recommend that the General Deputy Assistant Secretary for Public and Indian Housing require the Real Estate Assessment Center in coordination with the Office of Field Operations to assess the lead-based paint hazard reduction activities performed at the 19 developments associated with 18 public housing agencies reviewed that did not implement interim controls and ongoing maintenance and reevaluation activities or adequately document that previously identified lead-based paint had been abated or treated with interim controls and subjected to ongoing maintenance and reevaluation activities. If those reduction activities did not fully abate the lead-based paint, HUD should ensure that the public housing agencies implement interim controls and ongoing maintenance and reevaluation programs and maintain required documentation.

Use the fraud risk inventory to enhance program-specific fraud risk assessments for the TBRA and Operating Fund programs.

We recommend that the Director of HUD’s Newark Office of Public Housing make a determination regarding outstanding agreement income, including whether those unspent funds should be returned to the public housing agencies, thereby putting up to $697,912 to better use, including $478,165 related to Asbury Park and $219,747 related to Red Bank.

We recommend that the Director of HUD’s Newark Office of Public Housing provide technical assistance to Long Branch and require updates to its procedures to ensure that it properly classifies income received under any future agreements or activities.

We recommend that the Director of HUD’s Newark Office of Public Housing require Long Branch to prepare and provide support for a reasonable estimate of the amount of employee time used to perform services for Asbury Park and Red Bank and the amount of Long Branch program funds used to pay for that time. This estimate should include all employees known or believed to have provided services under the agreements based on language in the agreements, incentive payments, after-the-fact documentation provided, and any other applicable knowledge or documentation, which would show that the employees performed work under the agreements.

We recommend that the Director of HUD’s Newark Office of Public Housing require Long Branch to reimburse Long Branch’s program from non-Federal funds for any Long Branch program funds used for payroll expenses related to services provided to Asbury Park and Red Bank as established in recommendation 2A, estimated to be $1,014,660.

We recommend that the Director of HUD’s Newark Office of Public Housing require Long Branch to prepare and provide support to show the reasonableness and eligibility of the $1,583,652 in employee incentive payments related to services performed for Asbury Park and Red Bank, which was paid from agreement income, or reimburse its program from non-Federal funds for any amount it cannot support.

We recommend that the Director of HUD’s Newark Office of Public Housing require Long Branch to implement adequate controls to ensure compliance with applicable cost principle requirements for employees, including those covering compensation for personal services, such as wages, salaries, and incentive payments, at 2 CFR 200.430. Records should reasonably reflect the total activity for which Long Branch’s employees are compensated by the non-Federal entity and support the distribution of compensation among specific activities and cost objectives.

Develop and implement a plan that ensures the continuity of adequate internal controls over the PIH-TBRA program to detect and prevent improper payments, which can be implemented in a virtual environment. This plan should include how HUD can review tenant files or other information that validates tenant data remotely without compromising PII.

Terminate the current lease and pay for any fees needed to terminate the lease from non-Federal funds.

Execute and record the release of the current lease with the third party and ensure that the declaration of trust is returned to the first priority position.