Implement policies and procedures that align with HUD’s requirements and controls to ensure that reevaluations are completed when required.

Implement controls to ensure that accurate lead disclosures are provided to prospective and current tenants.

Work with HUD’s Office of Lead Hazard Control and Healthy Homes to provide training for the Authority’s staff on the management of lead-based paint, including technical assistance with developing and implementing procedures and controls to address the issues cited in this finding.

Work with HUD’s Office of Lead Hazard Control and Healthy Homes to assess whether the lead-based paint inspections and risk assessments with missing elements are sufficient to support the lead-based paint status of the Authority’s properties. If it is determined that the lead-based paint and risk assessment reports are not sufficient, HUD should require the Authority to perform new assessments.

Provide evidence that the owners corrected the 248 deficiencies for the 48 units with outstanding deficiencies. If the owners fail to make corrections, the Authority should implement its stop payment procedures and provide supporting documentation to HUD.

Implement a quality control process for monitoring its contracted inspectors to ensure that units meet HUD’s requirements to prevent nearly $36 million in program funds from being spent on units that do not meet HQS over the next year.

Implement procedures and controls regarding its quality control inspections to ensure that the results of those inspections are appropriately used to evaluate and monitor the performance of the Authority’s contracted inspectors and documentation is maintained on communications with the contractor on corrective actions taken to address recurring inspection deficiencies.

Pursue collection from the applicable owner or reimburse its HCV Program $5,194 from non-Federal funds for HAP that was not properly stopped for two units with outstanding HQS deficiencies.

Provide support showing whether HAP was appropriately stopped for the four units cited in the finding or reimburse or pursue collection of $10,233 from non-Federal funds for HAP to owners with outstanding HQS deficiencies.

Implement procedures and controls regarding its stop payment process to ensure that it consistently (1) stops payments as required by its HCV Program administrative plan and HUD requirements, (2) verifies and documents the correction of deficiencies, and (3) maintains sufficient documentation to support the stop payment for each unit.

Implement controls over its inspection processes and procedures to ensure that emergency failures are properly identified, reinspected, and corrected within 24 hours in accordance with its HCV Program administrative plan or the housing assistance to the owner is stopped.

Work with its contractor to ensure that the contractor’s inspectors receive training on how to properly identify and categorize life-threatening deficiencies.

Develop and implement policies and procedures that align with HUD’s requirements and controls to ensure that owners follow the requirements of the LSHR.

Work with HUD’s Office of Lead Hazard Control and Healthy Homes to provide technical assistance to the Authority’s staff to develop and implement policies, procedures, and controls for managing cases of children with EBLLs to ensure compliance with the LSHR, including attempts to collaborate with public health departments to identify cases of EBLL in children under 6 years of age under its HCV Program and updating its policies and procedures accordingly.

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.

Consider grantee feedback on the challenges they faced as part of ONAP’s planning for technical assistance and training of ONAP COVID-19 recovery program grantees.

Develop and implement a nationwide inspection review protocol, which includes but is not limited to (1) whether field office staff should mark verification of PHA corrections of life-threatening deficiencies in PASS or any future tracking systems, (2) acceptable documentation for offsite verifications, and (3) whether field office staff should discuss or verify corrections of non-life-threatening deficiencies.

Corrective Action Taken

HUD's Office of Field Operations (OFO) created a protocol describing how it would perform quality control reviews of field office oversight of PHAs’ corrections of life-threatening deficiencies. The implementation of this recommendation resulted in HUD creating a protocol that established consistency in the way HUD field office staff monitored public housing agencies’ corrections of life-threatening deficiencies.

Develop and implement training for field offices that addresses reviewing or following up with PHAs about the correction of life-threatening and non-life-threatening deficiencies and how (1) to review physical inspection reports to effectively ensure that PHAs correct physical deficiencies, (2) PHAs should address or correct each type of deficiency observed in the REAC physical inspection report, and (3) to use PASS or any future tracking system.

Corrective Action Taken

HUD developed and provided training to the field offices on their roles and responsibilities for following up with PHAs on the correction of life-threatening and non-life-threatening deficiencies observed during REAC inspections, the NSPIRE system and standards, protocols, and timelines for deficiency correction and verification. Implementation of the recommendation will help HUD to ensure that field office staff are clear on their roles and responsibilities to communicate with PHAs on how deficiencies should be addressed and verify that PHAs’ inspection deficiencies have been corrected.

Implement a system to track field office inspection review activities and create a repository for the support documentation collected to verify the correction of life-threatening deficiencies.

Corrective Action Taken

HUD’s Office of Field Operations (OFO) had created a quality assurance tracker as well as a life-threatening deficiency tracker, which contained data specific to the inspections selected by OFO HQs, for quality assurance reviews. The documentation (photographs, work orders, etc.) of the life-threatening deficiency correction was maintained in HUD’s NSPIRE Salesforce system.

Implementation of the recommendation resulted in HUD creating a system to track HUD field offices’ verifications of PHAs’ corrections of life-threatening deficiencies.

We recommend that the Deputy Assistant Secretary for REAC determine whether PHAs are required to perform annual inspections on 100 percent of their public housing units annually and issue clarifying guidance to all PHAs.