Develop and implement a policy that requires OCFO to review all new program notices, new regulations, and new types of funding and evaluate each against the accounting standards and current accounting treatment (as documented in white papers or other forms) to determine whether OCFO’s treatment complies with generally accepted accounting principles and if not, propose changes. The policy should include formal designation of roles and responsibilities as well as internal controls to ensure proper review and approval of conclusions.

Once additional data are available, and at least quarterly, reduce the CARES Act PIH prepayment by the amount actually spent by PHAs or an estimated amount with a low level of estimation uncertainty.

As part of the validation process for CPD’s accrued grant liabilities, review CPD’s accrued grant liabilities estimation methodology to ensure that it is based on verifiable grantee supporting documentation and all assumptions and variables used for the grant accrual estimate were properly established, supported, and documented.

Research the survey responses that resulted in a positive cash on hand balance to determine whether a cash advance exists. If so, the Chief Financial Officer should coordinate with CPD to (1) determine whether the grantees have proper documentation and approvals allowing for cash advances and (2) develop and implement procedures to estimate and account for cash advances for financial reporting purposes.

Investigate other methods for validating CPD’s accrued grant liabilities estimate, including the use of other sampling units, which could provide additional relevant information that can be used to produce more reasonable results and reduce estimation uncertainty to a low level.

Work with the Director of the Office of Multifamily Asset Management and Portfolio Oversight to ensure that all debt owed to HUD is identified, accurately reported in HUD’s financial records, and properly monitored to ensure compliance with applicable laws and regulations.

We recommend that the Director of HUD’s Office of Davis-Bacon and Labor Standards seek guidance from the Department of Labor to correct the wage determinations where applicable for the five projects addressed in this report.

We recommend that the Director of HUD’s Office of Davis-Bacon and Labor Standards based on the outcome of recommendation 1A, determine the correct wages to be paid to workers and ensure that appropriate actions are taken to pay the workers.

We recommend that the Director of HUD’s Office of Davis-Bacon and Labor Standards update HUD Handbook 1344.1, REV-2, CHG-2, and Labor Relations Letter No. LR-96-03 to comply with the Department of Labor’s policies and guidance on the application of wage determinations for construction projects.

We recommend that the Director of HUD’s Office of Davis-Bacon and Labor Standards develop and implement controls to ensure that the appropriate Davis-Bacon wage rate determinations are implemented in the contracts of FHA-insured multifamily construction projects that require multiple wage determinations, including the requirement that contract specifications clearly identify the portions of the contract subject to each assigned wage determination, and that adequate documentation to support wage determinations is maintained.

The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.

The OIG has determined that the contents of this recommendation would not be appropriate for public disclosure and has therefore limited its distribution to selected officials.

Ensure that all of the sampled amounts used for extrapolation in OCFO grant accrual validation estimates are properly supported with documentation that substantiates the amounts certified in the surveys.

Implement a refined accrual validation methodology, to include more comprehensive review procedures to substantiate the amounts certified by the grantee.

Review CPD’s grant accrual estimation methodology to ensure that all assumptions and variables used are properly supported and verifiable with the validation procedure.

After PIH prepayment validations are completed, apply all corrections to CAM 1 codes and Voucher Management System (VMS) expenses to all of the data supporting the fiscal year 2019 beginning balance, and recalculate the fiscal year 2019 PIH prepayment estimate. Based on the recalculation, determine whether restatement is needed to the correct errors in the fiscal year 2019 estimate calculation to ensure consistency between comparative statements.

Revise its review of the PIH prepayment estimate calculations performed by contractors to ensure that the contractors are following the established methodology and any changes to the methodology are applied to the data supporting the beginning balance, if appropriate.

Review all duties currently assigned to action officials to determine which duties can be centralized within OCFO or its Federal shared service provider. For any duties that cannot be centralized, (1) provide an explanation as to why they cannot be centralized and (2) assign these duties to appropriate positions within the program offices. Further, update the Debt Collection Handbook to include any changes made as a result of the review.

Implement monitoring and control activities to ensure that all debt collection action officials perform their duties in accordance with the Debt Collection Handbook

In coordination with each program office, identify the possible debts that could arise from normal business and monitoring activities and create a listing of these scenarios. Based on this listing, implement control activities to ensure that all debts that result from these activities are considered in financial reporting, U.S. Department of the Treasury reporting, and debt collection activities.