Deobligate the 835 administrative obligations totaling $38,525,836.88 identified for deobligation during the fiscal year 2024 OOR that had not been deobligated as of February 28, 2025.

Work with the prime award recipients that had subaward reporting deficiencies to ensure that their subaward information is reported or reported accurately.

Update and expand the guidance on FFATA subaward reporting requirements provided to prime award recipients by (1) updating program website(s) with comprehensive information about FFATA, (2) implementing training, (3) issuing formal communication, and (4) implementing a feedback mechanism to ensure that all prime award recipients have the opportunity to share challenges with HUD and ask questions.

Integrate FFATA reporting requirements into program monitoring procedures for all programs and conduct regular reviews to assess compliance.

Ensure that programs with subaward activity include specific clauses related to FFATA compliance in their grant agreements, and notices of funding opportunities.

Develop ALU engagement standards and incorporate them into acquisition policies and procedures.

Update guidance to clarify the different roles and responsibilities of the ALU, CO, CS, and COR.

We recommend that the Chief Procurement Officer develop, implement, and communicate requirements for program offices to establish written minimum roles and responsibilities for their respective procurement management functions, including but not limited to CORs, PMs, and SMEs.

Develop a standard operating procedure for the monthly transaction review that aligns with the HUD policy and includes specific procedures on how to (1) identify and review common transactions that raise the level of risk in the program (for example, personal use purchases, other prohibited purchases, unauthorized purchases or services, split purchases, fraudulent purchases, FAR violation purchases, etc.), (2) methodically select transactions for investigation, and (3) follow up on identified potential improper transactions, including record-keeping requirements.

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.

We recommend that the Chief Procurement Officer direct the contracting officers to review the current FSM contracts’ QASP and update accordingly to ensure that all minimum contract requirements are included.

We recommend that the Chief Procurement Officer direct the contracting officers to oversee the implementation of the current FSM contracts’ QASP.

We recommend that the Chief Procurement Officer require the contracting officers to implement the policies and procedures in the HUD Acquisition Policy and Procedure Handbook for completion of HUD’s FSM contractor performance assessment reports in CPARS to ensure that Government past performance is documented properly and in a timely manner, at least annually, for use by all Federal agencies and maintained in the contract files.

We recommend that the Chief Procurement Officer require all staff involved in the oversight of FSM contracts to maintain the required documentation in the official contract file identified by HUD policy to support the contracts.

We recommend that the Chief Procurement Officer require the contracting officers to formally designate CORs in a timely manner and maintain the required documentation in the proper location identified in the relevant HUD policies and procedures, which fully supports the CORs’ oversight of the FSM contract.

Conduct a departmentwide comprehensive staff capacity assessment to identify resource and skills gaps of staff involved in IT acquisitions.

Develop a departmentwide human capital plan or evaluate and revise existing plans to guide the recruitment, retention, and skill development of staff involved in IT acquisitions. The plan should include related metrics to measure plan implementation and effectiveness.

Evaluate IT acquisition process workflows and identify ways to simplify the processes, facilitate more effective stakeholder coordination across offices, and create efficiencies when possible.

Status

The Office of the Chief Procurement Officer (OCPO) had agreed to an estimated completion date of March 2024. In November 2024, OCPO submitted additional evidence for closure; however, the evidence did not identify how the revisions to the process will address efficiency issues. The OIG requested further information that identifies improvements in the IT acquisition process.

Analysis

To fully address this recommendation, HUD must provide evidence that it has published its standard operating procedures resulting from its evaluation of workflows and efforts to simplify processes and facilitate more effective coordination.

Implementation of this recommendation will result in defined IT acquisition process workflow procedures to increase efficiency and ensure coordination across program offices.

Establish a centralized acquisition tracking system that allows for input and monitoring by all offices involved with the IT acquisition process by: a. Developing a plan with detailed implementation milestones; b. Obtaining appropriate approvals and funding; and c. Implementing a centralized acquisition tracking system, based on the implementation plan and approvals from 4a and 4b.

Develop a plan for clearly defining, communicating, and enforcing IT acquisition process standards, including acquisition process roles and responsibilities.