Perform an assessment of concentration risk and take appropriate action based on the results.

Develop and implement a fraud risk management program with an emphasis on obtaining high-level management buy-in to ensure commitment from the board and senior management and subsequently, to ensure involvement of all levels of the program in setting an anti-fraud culture and tone to effectively combat fraud. This would include ensuring the program includes specific procedures to effectively manage fraud disclosures from employees and emphasis on reporting fraud to the HUD OIG Hotline.

Establish a dedicated anti-fraud component to design and oversee risk management activities within the organization and its subrecipients.

Implement fraud risk assessment processes tailored to all levels of the program to identify and assess risks to determine VIHFA’s disaster recovery and mitigation program’s risk profile.

Evaluate its program’s fraud risk profile and fraud risk assessment outcomes to (1) design risk responses and specific actions for responding to fraud, and (2) develop, document, and communicate an anti-fraud strategy for employees and stakeholders that contain all key elements described in GAO’s “A Framework for Managing Fraud Risks in Federal Program” (3) monitor and evaluate fraud risk management activities to improve the organization’s fraud risk management.

Implement fraud awareness initiatives, such as official anti-fraud training for staff and stakeholders, including subrecipients. This could include developing frequent formal communication containing newsletters or bulletins and post physical visual displays to ensure staff’s fraud awareness when conducting day-to-day activities.

Upon completion of recommendations 1A – 1E, assess whether VIHFA has established and implemented mature fraud risk management practices within its disaster recovery and mitigation programs.

Repay ineligible landlord holding fees of $964,952 drawn from ESG CARES Act funds to HUD from non-federal funds.

Determine if the $58,878 drawn for 18 signing bonuses or additional security deposits from ESG CARES Act funds were reasonable under the program participant’s particular circumstances, and not more than necessary to house the program participants or repay HUD from non-federal funds.

Repay risk mitigation overpayments of $6,549 drawn from ESG CARES Act funds to HUD from non-federal funds.

Determine if the remaining risk mitigation expenses of $185,731 drawn from ESG CARES Act funds were reasonable and necessary in accordance with program requirements or repay HUD from non-federal funds.

Support the cost reasonableness of $96,561 drawn from ESG CARES Act funds for the kitchen services contractor or repay HUD from non-federal funds.

Develop and implement additional written procedures and internal controls for the annual ESG program to ensure that it, and its subrecipients, do not charge holding fees and risk mitigation costs as expenses to the program, and that contracts are properly executed and maintained.

Require PRDOH to submit supporting documentation so HUD can evaluate the basis of the contract amendments and determine the eligibility of more than $31 million in disaster recovery funds. If HUD determines that the contract amendments were not supported, PRDOH must reimburse HUD from non-Federal funds.

Determine whether the $714,512 paid for 233 signing bonuses under the ESG CARES Act program were reasonable under the program participant’s particular circumstances, and not more than necessary to house the program participants or repay HUD from non-Federal funds.

Develop and implement written policies and procedures that include internal controls for the ESG program to ensure that it, and its subrecipients, prorate the rent amount for the first month for tenant-based rental assistance. Since the City did not prorate rent, there was an estimated overpayment to landlords of $248,572 that could have been put to better use.

Repay HUD from non-Federal funds $51,235 in overpaid rent to landlords because the first month of rent was not prorated.

Develop and implement written policies and procedures that include internal controls to prevent any duplication of benefits for the ESG program participants with other programs, specifically for rapid rehousing and homeless prevention.

Review the rental assistance payments made for the ESG CARES Act program to identify other possible duplication of benefits with other rental assistance programs that the City operates. The $10,100 in duplication of benefits identified during the audit could have been put to better use.

Develop and implement written policies to ensure that any changes to the expenditure and draw deadlines for the ESG program are provided in a formal document, such as a CPD notice. In this case, implementing these controls would provide clear guidelines to the grantee and help prevent the disbursement of $1,933,693 that was drawn after the draw deadline.