Develop and implement a plan to manage and reduce its backlog of work orders. This plan should include but not be limited to (1) assessing and addressing staffing needs; (2) creating a timeline for completion of the work orders to ensure that its properties are maintained in decent, safe, and sanitary condition and in good repair; and (3) providing documentation showing that it is on track to meet the completion timeframe.

Implement adequate procedures and controls to ensure that inspection reports are uploaded to the Authority’s electronic filing system and work orders are created in a timely manner. This process should include but not be limited to providing training to its staff on the Authority’s systems, establishing timeframes for the creation of work orders, and monitoring the work order process.

Provide evidence to support that the Authority corrected the 3 non-life-threatening health and safety, and 19 non-health and safety deficiencies.

Develop and implement adequate procedures and controls to ensure that (1) the deficiencies identified during REAC inspections are corrected in a timely manner and (2) documentation is maintained to support that repairs were made.

Implement adequate controls to ensure that the Authority’s information system properly tracks the completion of work orders.

Implement adequate controls to ensure that the correction of life-threatening deficiencies is reported to HUD accurately and in a timely manner.

Require Carrington to remedy HUD and the 27 borrowers in our sample with improper foreclosure filings and take administrative actions if appropriate.

Require Carrington to perform a review of loans affected by the system errors and when appropriate, remedy the borrowers or HUD.

Require Carrington to update its policies and procedures to comply with HUD requirements by reviewing eligible borrowers for streamlined options without unnecessary documents, notifying borrowers if they are ineligible for any loss mitigation options, and using best efforts to review borrowers for loss mitigation within 37 days of the foreclosure sale date.

Require Carrington to implement improved controls to prevent manual errors by performing additional review of all foreclosure actions and performing timely review of all documentation provided by the borrowers and third parties.

Require MidFirst to remedy the 24 borrowers in our sample with improper foreclosure filings or take administrative actions if appropriate.

Analyze MidFirst’s resolution of the manual process issues identified during its 2022 quality control review to verify that it remedied the borrowers or HUD and corrected the issues identified related to manual processing.

Require MidFirst to update its policies and procedures to comply with HUD requirements by placing foreclosure holds for loss mitigation requests made before the first legal filing.

Review the non-life-threatening health and safety and other deficiencies observed by the audit team and ensure that property owners and agents make the necessary corrections to the deficiencies as appropriate.

Determine the appropriate timeframe for when initial MORs should be completed for all properties that convert under RAD and issue updated guidance that includes a system to track the timeliness of initial MORs.

Status

HUD has not provided a draft plan for corrective action yet.

Analysis

Failure to determine the timing of the initial MORs could delay HUD's performance of the MORs, which may result in property owners' untimely corrective actions, and thus potentially impact the health and safety of families.

The implementation of this recommendation has the potential to directly impact the health and safety of families.

Complete the initial MORs for RAD properties that have not had an initial MOR.

Status

HUD has not provided a draft plan for corrective action yet.

Analysis

Completing initial MORs would assist HUD in holding property owners accountable for maintaining the conditions of their properties and sufficient reserve for replacement accounts balances, which could impact property owners' ability to make needed capital repairs.

The recommended corrective action has the potential to directly impact the health and safety of families.

Develop and implement a plan to determine how to implement the risk-based approach to review the RAD properties that have not had subsequent MORs in more than 3 years and to require periodic MORs going forward.

Status

HUD has not provided a draft plan for corrective action yet.

Analysis

Developing a plan to implement the risk-based approach would establish the criteria for identifying properties that are at a higher risk of noncompliance.

The recommended corrective action would help HUD to monitor property owners' compliance with its requirements and thus, potentially protect families from living in unsafe units.

Provide training to field staff members to ensure that they have the skills necessary to complete MORs of converted properties.

Review the reserve for replacement account balances for the 13 properties (11 underfunded and 2 overfunded) to determine whether the balances are maintained in accordance with the applicable HUD requirements and executed HUD business documents and require owners to fully fund any underfunded reserves and determine whether any overfunded accounts should have the deposits suspended for a specified period.

Review the HUD business documents, such as the RAD conversion commitment, HAP contract, and regulatory agreement, for the four properties that did not contain consistent reserve for replacement information and update the documents to be consistent as appropriate.