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.

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.

Correct the reporting and use of proceeds received from the current lease, thereby putting $1,278,260 to better use. This requirement includes properly recording the proceeds as restricted nonrental program income on its financial data schedule, placing any unspent funds into an account subject to a general depository agreement until spent, providing a detailed accounting of the use of the proceeds, reporting the use of any proceeds used for demolition or other expenses in a revised 5-year annual plan, and making any other updates needed to ensure that funds are properly recorded and used.

Repay from non-Federal funds any proceeds used for unallowable expenses identified in recommendation 1C.

Submit a Section 18 application to obtain HUD approval of any proposed new lease agreement prior to its execution, in compliance with the United States Housing Act of 1937 and 24 CFR Part 970.

Consider and take additional action if the Authority does not complete recommendations 1A and 1B before submitting its next annual plan, including withholding further awards for its program, conditioning future grant funds, and other remedies that may be legally available until the Authority completes recommendations 1A and 1B.

Support that $2,870,374 paid for goods and services was reasonable in accordance with applicable requirements or repay its Public Housing Operating Fund or Capital Fund programs from non-Federal funds for any amount that it cannot support or that is not considered reasonable.

Support that $1,236,210 in funds not yet spent on the contracts reviewed, along with any new procurements, would be reasonable or reallocate the funds to ensure that they will be put to their intended use

Adequately support the eligibility of payroll costs or repay its CoC grants $824,302 from non-Federal funds.

Adequately support the eligibility of rent costs or repay its CoC grants $55,545 from non-Federal funds.

Develop and implement additional written procedures and controls to ensure that employees charge time in accordance with program requirements and that the Authority fully documents and supports that salary and rental cost allocations are charged to its CoC grants in accordance with its cost allocation plan.

Develop and implement written policies and procedures regarding the designation of legal representation for applicants.

Complete a program-specific fraud risk assessment and risk profile for the CDBG and ESG programs, with emphasis on CARES Act funding, and replicate this process to create program-specific fraud assessments and risk profiles for other CPD programs.

Consider OIG’s fraud risk inventory to improve CPD’s own fraud risk assessments and develop a program-specific fraud risk map and compendium.

Implement efforts to increase the awareness of fraud at all levels (headquarters, field offices, grantees, subrecipients, etc.), including but not limited to regularly publishing articles on known fraud schemes and identified instances of fraud in periodic newsletters or on CPD’s intranet website, providing recurring fraud risk trainings to HUD employees and grantees and working with OIG to develop materials to support fraud awareness.

Develop and implement a fraud risk checklist or other instrument as part of CPD’s monitoring oversight requirements, to be completed as part of each remote and onsite monitoring review.

Develop and implement a fraud analytics strategy using available data, including but not limited to data and information collected during the grantee risk assessment and monitoring processes, to begin conducting data analyses to identify potential fraud risks for further review.

Establish and implement a process to ensure that The Office of Multifamily Housing Programs’ policies, procedures, and supervisory controls are effective. This process should include addressing postdisaster damage assessments, properly updating iREMS, and executing loan forbearances. This process should also integrate with other HUD program offices as appropriate to improve consistency with HUD’s overall disaster response and to ensure the effectiveness of disaster controls.