Require targeted, role-specific training for program office staff and managers in areas where deficiencies were identified, including approvals, segregation of duties, recordkeeping, and delegated authority. This training should reinforce the importance of compliance with internal control requirements and include HUD escalation and enforcement mechanisms.

Based on the causes identified, coordinate with the program offices through remediation activities to develop corrective action plans with defined milestones, responsible parties, and timelines. Progress should be tracked, documented, and periodically reported to senior management. 

Determine which report accurately reflects the status of partial claims without original documentation, certify the completeness and accuracy of the identified report, and provide the report to the General Ledger Division for the reclassification entry.

Issue guidance, including technical assistance, to all disaster recovery grantees that waivers for issues related to a disaster’s impact, like waivers of procurement policies, should be for reasonable and limited time periods after a disaster’s occurrence to ensure full and open competition. 

Develop a standard operating procedure that details the rationale, calculation, and underlying support needed for the amounts and narrative descriptions in the financial statement note disclosures, including borrowing authority.

Implement quality control checks that reconcile financial statement disclosure amounts to the general ledger and other supporting documentation as part of the financial statements review and approval process. 

Implement a procedure to test journal entry posting models and their effect on the financial statements and related note disclosures when there are program changes requiring new journal entries.

Record journal entries to reclassify the HECM cases with missing original first notes for more than 90 days from loans receivable to accounts receivable. 

Ensure the report provided by the NSC to reclassify partial claims from loans receivable to account receivable is appropriate for financial reporting and document the decision. 

Include grantees in the fraud risk identification process and communicate the risks and schemes identified for the disaster recovery program to relevant stakeholders, including, but not limited to, all HUD staff in the CPD Office of  Disaster Recovery, grantees and sub-recipients.

Leverage HUD OIG’s fraud risk inventory and continue using the Office of the Chief Risk Officer’s risk catalog to enhance CPD’s fraud risk management process.

Reassess, establish, and incorporate a maximum review period of grantee-submitted QPRs into an SOP. Inform staff of the review period to ensure consistency and understanding of HUD’s expectations of the time to review grantee-submitted QPRs. In addition, establish formal guidance and implement internal controls to monitor and track the timely review of QPRs.

Consider grantees’ suggestions to improve training sessions, technical assistance, and communication of information that grantees can use to help meet agreed-upon performance benchmarks. In addition, provide documentation to support the guidance OLHCHH plans to share with grantees to ensure agreed-upon performance benchmarks are met.

Use CPD’s fraud risk inventory to identify data needs, potential system enhancements, and implement data analysis techniques to improve CPD’s ability to monitor and respond to fraud risks in the Disaster Recovery program.

Reevaluate ‘High Risk’ designation criteria as part of the SOP update and reimplement its updated ‘High Risk’ criteria to reflect how grantees will be designated as ‘High Risk’ within the program. In addition, train OLHCHH staff on the new ‘High Risk’ designation criteria stated in the SOP.

Provide assistance to the nine identified ‘High Risk’ grantees that will help meet established performance benchmarks to be completed by the end of the respective grants in 2026.

Implement adequate policies and procedures regarding the management of lead-based paint in its public housing, including maintaining adequate records, completing interim controls, and conducting ongoing maintenance for lead-based paint hazards.

Notify grantees of HUD’s updated ‘High Risk’ designation criteria and HUD’s expectations when designated as ‘High Risk.’

Conduct lead-based paint inspections at public housing abated through removal methods where an abatement report is unavailable to ensure that units are “lead-free.”

Abate or implement interim control measures to reduce the risk of exposure to lead-based paint hazards identified through risk assessments.