Implement a policy to ensure that monitoring of RAD PBV projects includes, at a minimum, a review of the accuracy of the reserve for replacement account balances and compliance with HUD’s physical condition and inspection requirements.
Publication Report
2025-CH-0002 | June 26, 2025
HUD's Office of Public and Indian Housing Needs to Improve Its Oversight of Non-FHA-Insured PBV Projects Converted Under RAD
We audited the U.S. Department of Housing and Urban Development (HUD) to determine whether HUD had adequate oversight of the physical condition of the public housing units that converted to non-Federal Housing Administration (FHA)-insured project-based… moreRelated Recommendations
Public and Indian Housing
- Status2025-CH-0002-001-AOpenClosed
Implement procedures and controls for targeting non-FHA-insured RAD PBV projects to monitor the physical conditions and reserve for replacement accounts.
- Status2025-CH-0002-001-BOpenClosed
Implement procedures for monitoring property owners’ reserve for replacement accounts for compliance with HUD’s requirements, using reserve for replacement account data collected on projects from PHAs.
- Status2025-CH-0002-001-COpenClosed
Provide inspection reports for the units identified in this report that failed to meet HQS showing that the units and associated buildings meet HUD’s current physical condition standards.
- Status2025-CH-0002-001-EOpenClosed
Review the reserve for replacement accounts for the 12 underfunded projects to ensure that the account balances are maintained in accordance with the applicable HUD requirements and executed HUD business documents and require owners to fully fund any underfunded reserves, as applicable.
- Status2025-CH-0002-001-FOpenClosed
Review the reserve for replacement accounts for the 14 project owners that did not make annual adjustments for inflation, as identified in the capital needs assessment, to determine whether the account balances are sufficient to meet anticipated capital needs. If the account balances are not sufficient, HUD should require the owners to appropriately fund the accounts.
- Status2025-CH-0002-001-GOpenClosed
Implement a plan to review the reserve for replacement accounts for all RAD PBV projects to ensure that reserve for replacement accounts are appropriately funded.
- Status2025-CH-0002-001-HOpenClosed$1,005,913.00Questioned Costs
Recommendations with questioned costs identify costs: (A] resulting from an alleged violation of a law, regulation, contract, grant, or other document or agreement governing the use of Federal funds; (B] that are not supported by adequate documentation (also known as an unsupported cost]; or (C] that appear unnecessary or unreasonable.
Obtain documentation from the PHAs to support that more than $1 million in withdrawals from the eight reserve accounts complied with HUD’s requirements or require the project owners to reimburse the reserve accounts for the unsupported withdrawals.
- Status2025-CH-0002-001-IOpenClosed
Implement a process, in conjunction with the Office of Recapitalization, to ensure that the reserve for replacement requirements in HUD’s business documents, such as the RAD conversion commitment, HAP contract, and operating agreement, are consistent for converted projects.
- Status2025-CH-0002-001-JOpenClosed
Collect data on projects’ reserve for replacement accounts to support the Office of Field Operations’ monitoring activities.