Profile of Performance

Audit Results1 This Reporting Period Fiscal Year 2019

Recommendations that funds be put to better use $6,694,381,707 $7,208,515,909

Recommended questioned costs $944,948,081 $968,988,402

Collections from audits $225,323,329 $236,165,859

Administrative sanctions 1 4

Civil actions 1 1

Subpoenas 3 15

Investigation Results1 This Reporting Period Fiscal Year 2019

Total restitutions and judgments $82,885,767 $119,274,824

Total recoveries and receivables to HUD programs2 $54,003,969 $61,726,291

Arrests 111 277

Indictments and informations 113 243

Convictions, pleas, and pretrial diversions 90 205

Civil actions 25 47

Total administrative sanctions 94 204

Suspensions 13 33

Debarments 19 52

Program referrals 16 39

Evictions 38 55

Other3 8 25

Systemic implication reports 0 1

Search warrants 35 75

Subpoenas 298 660

Joint Civil Fraud Results1 This Reporting Period Fiscal Year 2019

Total restitutions and judgements $44,064,836 $57,371,577

Recoveries and receivables for other entities $3,375,163 $17,768,422

Administrative agreement $0 $5,710,000,000

Recommendations that funds be put to better use $0 $1,460,000,000

Civil actions 4 6

Subpoenas 26 31

The Offices of Audit and Investigation and the Joint Civil Fraud Division periodically combine efforts and conduct joint civil fraud initiatives. 

Outcomes from these initiatives are shown in the Joint Civil Fraud Results profile and are not duplicated in the Audit Results or Investigation 

Results.

Does not include civil settlements worked jointly with the Office of Audit

Includes reprimands, suspensions, demotions, or terminations of the employees of Federal, State, or local governments or of Federal 

contractors and grantees as the result of OIG activities

1

2

3
$6,694,381,707 45

$225,323,329 113

$944,948,081 111

$54,003,969 90

Highlights

Recommendations That Funds 

Be Put To Better Use

Audits Issued

Collections From Audits Indictments-Informations

Recommended

Questioned Costs

Arrests

Investigative Recoveries and 

Receivables to HUD Programs

Convictions-Pleas-Pretrial 

Diversions

For the period ending September 30, 2019

?

Return On 

Investment

112:1
It is with pride 

that I submit the 

U.S. Department of 

Housing and Urban 

Development (HUD), 

Office of Inspector 

General’s (OIG) 

Semiannual Report 

to Congress for the 

second half of fiscal 

year 2019. This 

report is the culmination of the efforts of 

our dedicated staff of auditors, investigators, 

evaluators, attorneys, and support staff. 

By promoting better stewardship and 

accountability, HUD OIG continues to make 

a significant impact on the Department and 

our communities for the benefit of all of our 

stakeholders and the public we serve.

This Semiannual Report offers a snapshot 

of our work for the last 6-month period 

of fiscal year 2019. The OIG staff has 

delivered strong results to improve all of 

HUD’s programs and operations during this 

reporting period, and we are well positioned 

to continue to deliver value as we carry out 

our oversight duties. 

We completed 45 audits during this 

semiannual reporting period, and the 

agency collected more than $225 million 

as a result of our work. Our audit reports 

issued during this reporting period provided 

recommendations to single-family housing, 

public and Indian housing, multifamily 

housing, and community planning and 

development program areas, which 

questioned nearly $945 million in costs and 

made recommendations to the agency on 

how nearly $6.7 billion in funds could be put 

to better use.

HUD OIG’s investigative workload has also 

continued at a steady pace. During this 

reporting period, HUD OIG accomplished 111 

arrests, 113 indictments, and 90 convictions 

to improve departmental operations and 

address program abuses. The agency 

recovered more than $54 million as a result 

of this work. 

In my short tenure as Inspector 

General, I have seen many examples of 

how committed our people are to the 

Department’s mission. I would like to 

express my gratitude to Congress and the 

Department for their sustained interest 

and commitment to improving HUD’s 

programs. We continue to strengthen 

our organizational capabilities – both by 

developing our work to successfully address 

each challenge that arises and by continuing 

to address HUD’s Top Management 

Challenges. 

In closing, I want to acknowledge the 

extraordinary efforts of the auditors, 

investigators, inspectors, evaluators, and 

support personnel who form the core of 

HUD OIG. Through their collective effort, 

HUD OIG has achieved its annual goals, 

fulfilled its mission and responsibilities to 

its stakeholders, and had a significant and 

positive impact on the Department and our 

communities.

A MESSAGE FROM THE INSPECTOR GENERAL RAE OLIVER DAVIS

Rae Oliver Davis I Inspector General

Chapter 1– Single-Family Programs.................................................................................................................1

Audit.......................................................................................................................................................................................1

Investigation........................................................................................................................................................................ 3

Joint Civil Fraud.................................................................................................................................................................. 4

Chapter 2 – Public and Indian Housing Programs......................................................................................... 6

Audit...................................................................................................................................................................................... 6

Investigation........................................................................................................................................................................ 9

Chapter 3 – Multifamily Housing and Healthcare Programs.......................................................................11

Audit.....................................................................................................................................................................................11

Investigation.......................................................................................................................................................................11

Chapter 4 – Community Planning and Development Programs ................................................................ 12

Audit.................................................................................................................................................................................... 12

Investigation.......................................................................................................................................................................15

Chapter 5 – Disaster Recovery Programs ..................................................................................................... 16

Audit.....................................................................................................................................................................................17

Investigation...................................................................................................................................................................... 19

Chapter 6 – Other Significant Audits and Evaluations................................................................................ 20

Audit....................................................................................................................................................................................20

Joint Civil Fraud................................................................................................................................................................ 21

Chapter 7 – Legislation, Regulations, and Other Directives....................................................................... 22

Chapter 8 – Report Resolution ...................................................................................................................... 27

Chapter 9 – Whistleblower Ombudsman......................................................................................................46

Appendix 1 – Peer Review Reporting ............................................................................................................48

Appendix 2 – Audit and Evaluation Reports Issued..................................................................................... 50

Appendix 3 – Tables......................................................................................................................................... 54

Appendix 4 – Inspector General Empowerment Act ...................................................................................80

OIG Telephone Directory ................................................................................................................................ 85

Acronyms and Abbreviations List...................................................................................................................89

Reporting Requirements................................................................................................................................. 92

Table of Contents
SEMIANNUAL REPORT TO CONGRESS

CHAPTER 1 – SINGLE-FAMILY PROGRAMS

The Federal Housing Administration (FHA) single-family programs provide mortgage insurance to mortgage 

lenders that, in turn, provide financing to enable individuals and families to purchase, rehabilitate, or construct 

homes. Some of the highlights from this semiannual period are noted below. 

AUDIT

Strategic Initiative 1: Contribute to the reduction of fraud in single-family insurance 

programs

Key program results Questioned costs Funds put to better use

Audit 5 audits $7,791,090 $6,157,857,970

REVIEW OF FHA-INSURED LOANS

The U.S. Department of Housing and Urban Development, Office of Inspector General (HUD OIG), audited FHAinsured loans from fiscal year 2018 to determine whether FHA provided insurance on loans that were made to 

ineligible, delinquent Federal tax debtors.

FHA insured at least 56,376 loans worth more than $13 billion, which were not eligible for insurance because they 

were made to borrowers with delinquent Federal tax debt. In addition, it insured another 57,918 loans worth more 

than $14.3 billion to borrowers who had delinquent taxes and payment plans with the Internal Revenue Service 

(IRS) but may not have met FHA’s requirement for 3 months of payments on the payment plans. OIG was not able 

to determine the eligibility of these loans because it did not have information showing whether these borrowers 

completed 3 months of payments on their payment plans.

OIG recommended that FHA require lenders to obtain the borrowers’ consent to verify the existence of delinquent 

Federal taxes with the IRS during loan origination and deny any applicant with delinquent Federal tax debt not 

meeting FHA requirements. OIG also recommended that FHA revise its handbooks to reflect that tax liens and 

judgments are no longer reported on credit reports and for uniform treatment of delinquent tax debt for forward and 

reverse mortgages. (Audit Report: 2019-KC-0003) 

REVIEW OF FHA PARTIAL CLAIMS

HUD OIG audited FHA to determine whether FHA improperly paid partial claims that did not reinstate the 

delinquent loans.

FHA improperly paid partial claims that did not reinstate the related delinquent loans. From a sample of 87 partial 

claims reviewed, FHA paid 47 partial claims totaling more than $2.7 million that did not cure the loan delinquency. 

By using a statistical projection, OIG estimated that FHA paid a total of 831 improper partial claims totaling $27.1 

million between April 2017 and March 2018. As a result, the FHA insurance fund was unnecessarily depleted by 

more than $27.1 million in partial claims. 

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SEMIANNUAL REPORT TO CONGRESS

OIG recommended that HUD (1) take corrective action against lenders for the improper partial claims that did not

reinstate the delinquent loans and have not been repaid; (2) design controls to protect the insurance fund from 

improper partial claims that did not reinstate the loans to put funds from the FHA insurance fund to better use; and 

(3) update program guidance, clarifying that upon application of the partial claim funds, the mortgage must be fully 

reinstated with no unpaid amounts. (Audit Report: 2019-KC-0001) 

HUD OIG completed a corrective action verification of recommendations 1A and 1C from prior OIG Audit Report 

2015-LA-0001 (issued April 20, 2015). These recommendations were for HUD to implement controls to detect and 

prevent payment of claims with a modification or FHA Home Affordable Modification Program (HAMP) option 

submitted within a 24-month period and to implement controls to detect and prevent the payment of duplicate 

claims. These recommendations had been closed by HUD as having been implemented. OIG’s objective was to 

determine whether HUD had implemented adequate corrective actions in response to these recommendations and 

the number and amount of previously unidentified FHA loan modification claims or partial claims that were 

ineligible due to a prior loss mitigation claim for the same loan within 24 months or a duplicate claim.

HUD had implemented the agreed-upon corrective actions in response to recommendation 1A, yet further action is 

needed to improve Single Family Insurance System – Claims Subsystem controls and to address ineligible claims 

that were paid. HUD’s revised controls did not work in limited circumstances, and as a result, HUD paid 12 

unsupported claims for amounts totaling nearly $200,000, which appeared to have been ineligible based on a 

reported prior claim within 24 months. Additionally, after the prior OIG audit testing period ended and before HUD 

implemented the related corrective action, lenders submitted 810 unsupported claims for amounts totaling $4.9 

million, which appeared to have been ineligible due to a second reported claim within 24 months. 

For recommendation 1C, HUD did not implement adequate corrective actions to detect and prevent the payment of 

duplicate claims. HUD attempted to implement enhanced Claims Subsystem controls to prevent duplicate payments 

in response to recommendation 1C but later reversed the changes because the new controls did not function as 

intended and blocked claim payments unnecessarily. Ultimately, HUD did not implement a permanent corrective 

action to address the recommendation and as a result, paid 28 unsupported claims for amounts totaling more than 

$333,000, which were potentially ineligible duplicates, based on matching partial claim note amounts.

Based on the cited deficiencies, OIG will reopen recommendation 1C until corrective action is fully developed and 

implemented. In addition, OIG recommended that HUD (1) provide support of eligibility or require lender 

repayment of more than $5.1 million for the 822 identified claims with a reported partial claim or loan modification 

within the prior 24 months; (2) further revise and implement the Claims Subsystem controls to address deficiencies, 

which allowed payment for a limited number of claims that were ineligible due to a prior loan modification or FHAHAMP option within 24 months; and (3) provide support of eligibility or require repayment for the 28 identified 

potential duplicate claims with reported matching partial claim note amounts and take appropriate action as 

necessary to ensure that related partial claim note amounts are correctly reflected within HUD’s Single Family 

Mortgage Asset Recovery Technology system for loan-servicing purposes. (Audit Memorandum: 2019-LA-0801) 

2
SEMIANNUAL REPORT TO CONGRESS

INVESTIGATION

Program Results

Administrative - civil actions 30

Convictions - pleas - pretrial diversions 25

Financial recoveries $69,012,951

BANK AND LENDER EXECUTIVES FORCED TO REPAY MORE THAN $60 MILLION

The president, chief executive officer, and chief business strategist and an in-house counsel of a mortgage lender 

and the chief executive officer of a savings bank were sentenced in U.S. District Court to a total of 4 years 

imprisonment followed by 17 years supervised release. The conspirators were also ordered to pay $60.3 million in 

restitution to the Government National Mortgage Association (Ginnie Mae), $1 million in restitution to the IRS, and 

$120,000 in forfeiture. The lender was a participant in the HUD-administered direct endorsement program and 

originated FHA-insured mortgages that were packaged and sold as Ginnie Mae-guaranteed mortgage-backed 

securities. The conspirators took part in a scheme whereby they misappropriated funds from the lender’s warehouse 

line of credit to pay the lender’s operating expenses rather than using the funds for the intended purpose of paying 

off the first mortgages of FHA-insured refinanced loans. Further, the conspirators caused the bank, a troubled 

savings bank, which acted as a warehouse lender to the mortgage lender, to engage in transactions that gave the 

appearance that the bank had improved its financial position when it had not. The scheme resulted in a loss to the 

savings bank in the amount of $1.84 million. HUD OIG, the Special Inspector General for the Troubled Asset 

Relief Program, and the Federal Bureau of Investigation (FBI) conducted this investigation. (Central Islip, NY)

FAKE LAW GROUP TO SERVE 11 YEARS IN PRISON FOR LOAN MODIFICATION SCAM

Three individuals were sentenced in State Superior Court to a total of 11 years imprisonment and ordered to pay 

more than $2.5 million in restitution. The scam artists were sentenced after each pleaded guilty to 64 felony charges 

of conspiracy, grand theft, money laundering, and unlawful loan modification advance fees for their role in a loan 

modification scam. The fraudsters established businesses claiming to be law firms and solicited individuals seeking 

lower mortgage payments via mail advertisements. The trio promised loan modifications and charged the 

homeowners upfront fees without rendering services. In some instances, the group was able to secure a loan 

modification but had the homeowners send the payments to its company instead of the lenders. The fraudsters then 

kept the payments instead of forwarding them to the mortgage servicers. In total, they victimized 387 borrowers, to 

include 46 with FHA properties, and used more than $2.4 million in ill-gotten gains for their personal use. HUD 

OIG, the Federal Housing Finance Agency OIG, and the Orange County District Attorney’s Office conducted this 

investigation. (Santa Ana, CA)

PURPORTED INVESTORS SENTENCED FOR FRAUDULENT HOME SALE SCHEME 

Two individuals purporting to be investors were sentenced in U.S. District Court in relation to their earlier guilty 

pleas to identity theft, wire fraud, mail fraud, bank fraud, and bankruptcy fraud. The two were sentenced to a 

3
SEMIANNUAL REPORT TO CONGRESS

cumulative 105 months imprisonment and ordered to pay restitution totaling $581,386, of which $80,136 was due to 

FHA. The two were involved in a scheme in which they would convince distressed homeowners to sign over the 

rights to their properties via quit claim deeds with the promise that the investors would make payments to the 

homeowners at a later date. The investors would then send a promissory note to the lenders holding the mortgages 

and file a fraudulent satisfaction of mortgage at the recorder’s office to resell the properties. The investors 

performed this scheme on six properties, three of which were FHA insured. HUD OIG and the FBI conducted this 

investigation. (South Bend, IN) 

JOINT CIVIL FRAUD 

Program Results

Civil actions 3 

Questioned costs $42,964,836

Funds put to better use 0 

REVIEW OF QUICKEN LOANS, INC.

HUD OIG assisted the U.S. Department of Justice, Washington, DC, in the civil investigation of Quicken Loans, 

Inc. The investigation was of Quicken’s origination, underwriting, endorsement, and related certifications of FHAinsured mortgage loans between September 1, 2007, and December 31, 2011. Quicken has its principal place of 

business in Detroit, MI. 

On June 3, 2019, Quicken entered into a settlement agreement with the Federal Government to pay $32.5 million to 

HUD. The United States contends that Quicken knowingly approved loans that violated FHA rules while falsely 

certifying compliance with those rules. Between 2007 and 2011, Quicken allegedly submitted claims for hundreds 

of improperly underwritten FHA-insured loans. The settlement was reached through mediation. The settlement 

was neither an admission of liability by Quicken nor a concession by the United States that its claims were not well 

founded. (Audit Memorandum: 2019-CF-1805) 

REVIEW OF PRIMELENDING, A PLAINSCAPITAL COMPANY

HUD OIG assisted the U.S. Department of Justice, Washington, DC, and the U.S. Attorney’s Offices for the District 

of Kansas and the Northern District of Texas in the civil investigation of PrimeLending, a PlainsCapital company. 

The investigation was of PrimeLending’s origination, underwriting, and quality control of FHA-insured mortgage 

loans between 2008 and 2012. PrimeLending has its principal place of business in Dallas, TX. 

On October 23, 2018, PrimeLending entered into a settlement agreement with the Federal Government to pay more 

than $6.75 million to avoid the delay, uncertainty, inconvenience, and expense of lengthy litigation of certain civil 

claims the Government stated it had against PrimeLending. The United States contends that for 79 FHA-insured 

loans, PrimeLending failed to follow all HUD requirements in connection with its origination, underwriting, and 

quality control. Specifically, the United States contends that between January and December 2008, PrimeLending 

failed to ensure that the 79 loans qualified for FHA insurance, improperly incentivized underwriters, and failed to 

4
SEMIANNUAL REPORT TO CONGRESS

perform quality control reviews as required by HUD regulations. The settlement was neither an admission of 

liability or wrongdoing by PrimeLending nor a concession by the United States that its claims were not well 

founded. Of the $6.75 million settlement, HUD FHA received more than $3.37 million.

PrimeLending also entered into an indemnification agreement with HUD to pay more than $6.75 million in 

restitution to indemnify FHA for the portion of losses associated with 160 FHA-insured loans that were not eligible 

for FHA insurance because of alleged material underwriting defects. These 160 FHA-insured loans were originated 

by PrimeLending between January 1, 2009, and December 31, 2012. The indemnification agreement did not 

constitute an admission of liability or fault on the part of either PrimeLending or HUD. (Audit Memorandum: 

2019-CF-1804)

5
SEMIANNUAL REPORT TO CONGRESS

CHAPTER 2 – PUBLIC AND INDIAN HOUSING PROGRAMS

The U.S. Department of Housing and Urban Development (HUD) provides grants and subsidies to more than 3,100 

public housing agencies (PHA) nationwide. Many PHAs administer both public housing and Section 8 programs. 

HUD also provides assistance directly to PHAs’ resident organizations to encourage increased resident 

management entities and resident skills programs. Programs administered by PHAs are designed to enable lowincome families, the elderly, and persons with disabilities to obtain and reside in housing that is safe, decent, 

sanitary, and in good repair. Some of the highlights from this semiannual period are noted below. 

AUDIT

Strategic Initiative 2: Contribute to the reduction of erroneous payments in rental 

assistance

Key program results Questioned costs Funds put to better use

Audit 19 audits $6,835,638 $21,481,023

REVIEW OF HUD’S COMPLIANCE WITH THE HOUSING OPPORTUNITY THROUGH 

MODERNIZATION ACT OF 2016

HUD’s Office of Inspector General (OIG) audited HUD to determine whether PHAs had access to the information 

in the Do Not Pay system maintained by the U.S. Department of the Treasury’s Bureau of the Fiscal Service as 

required by the Housing Opportunity Through Modernization Act of 2016.

HUD did not provide PHAs with access to the information in the Do Not Pay system. HUD paid nearly $19.8 

million in annual rental subsidies to PHAs to benefit 2,278 tenants who were reported in Do Not Pay as excluded 

from Federal programs or deceased. 

OIG recommended that HUD (1) issue guidance to PHAs to ensure that any applicant for or tenant of public or 

assisted housing whose name appears on the General Services Administration’s System for Award Management 

excluded parties list is reviewed by PHAs to determine eligibility and prevent ineligible applicants or tenants from 

being admitted or recertified, thereby putting nearly $13.7 million to better use; (2) take corrective actions for the 

729 tenants reported as deceased, putting nearly $6.1 million to better use; and (3) establish a method to provide 

information in the Do Not Pay system to PHAs. (Audit Report: 2019-KC-0002) 

REVIEW OF THE PUBLIC HOUSING CAPITAL FUND 

HUD OIG audited the Public Housing Capital Fund program at the Housing Authority of the City of Woonsocket, 

RI, to determine whether the Authority administered its Capital Fund program in accordance with HUD’s 

requirements; specifically, whether costs were eligible and supported and the Authority procured and awarded 

contracts in accordance with HUD requirements and its procurement policies. In addition, OIG wanted to determine 

whether a complaint regarding the Authority’s purchase and later demolition of a property next to one of its 

developments had merit.

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SEMIANNUAL REPORT TO CONGRESS

Authority officials did not administer the Capital Fund program in accordance with HUD requirements. 

Specifically, they did not always ensure that Capital Fund activity costs were eligible and supported. In addition, 

they did not always follow environmental review requirements and support that awarded contracts were procured in 

accordance with HUD requirements. As a result, the Authority spent more than $1.9 million for ineligible costs and 

more than $1.4 million for unsupported costs and may spend more than $125,000 for additional ineligible costs. 

Further, although the complaint had merit, non-Federal funds were used for the property purchase and demolition.

OIG recommended that HUD require Authority officials to (1) repay from non-Federal sources the ineligible costs 

related to environmental deficiencies and payments made beyond the contract terms, (2) support that the 

unsupported costs were fair and reasonable and in accordance with Federal procurement and environmental review 

requirements or repay from non-Federal funds any amounts that it cannot support, and (3) deobligate the funds not 

yet spent on ineligible activities and costs. (Audit Report: 2019-BO-1002) 

REVIEW OF THE RENTAL ASSISTANCE DEMONSTRATION PROGRAM 

HUD OIG audited the Little Rock Housing Authority in Little Rock, AR, regarding its Rental Assistance 

Demonstration Program (RAD) conversions to determine whether the Authority administered its RAD in 

accordance with regulations and whether the program was viable. 

The Authority did not ensure that its RAD fully met requirements. Specifically, it did not ensure timely completion 

of its conversions, properly account for predevelopment costs as required, and resolve a potential conflict of 

interest. In addition, the Authority’s executive management and board members did not communicate effectively 

with each other. Further, the Authority did not have effective procedures to ensure that costs were properly 

supported and allocated. As a result, revisions and postponements of its RAD conversion plans adversely affected 

rehabilitation costs by requiring the same or similar tasks to be amended, updated, or reworked multiple times. The 

delays resulted in reduced occupancy in anticipation of rehabilitation of units and hindered the Authority’s ability to 

provide decent, safe, and sanitary housing to current and prospective tenants. 

OIG recommended that HUD require the Authority to (1) develop and implement an achievable plan to close its 

remaining projects and complete its RAD conversions; (2) support or repay more than $1.9 million in 

predevelopment costs to its program from non-Federal funds; (3) design and implement financial controls to ensure 

that predevelopment costs are properly accounted for and eligible, thereby putting nearly $830,000 to better use; (4) 

develop and implement procedures to identify, report, and resolve conflict-of-interest and ethics concerns; and (5) 

design and implement adequate control systems to ensure that the executive management team provides oversight of 

its RAD. (Audit Report: 2019-FW-1001) 

REVIEW OF HUD’S HOUSING CHOICE VOUCHER PROGRAM

HUD OIG audited the New York City Department of Housing Preservation and Development (HPD) in New York, 

NY, regarding its Housing Choice Voucher Program to determine whether HPD ensured that its program units met 

HUD’s housing quality standards and whether it abated housing assistance payments when required.

HPD did not always ensure that its program units met housing quality standards and its quality control inspections 

met HUD requirements, but it generally abated housing assistance payments when required. Of the 58 sample units 

inspected, 52 had housing quality standards violations. While each of the 52 units had at least 1 violation, only 6 of 

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SEMIANNUAL REPORT TO CONGRESS

the units materially failed to meet HUD’s standards. In addition, although HPD generally abated the correct amount 

of payments, OIG identified several areas in which it could improve its controls. As a result, HPD disbursed more 

than $26,000 in housing assistance payments and received more than $2,000 in administrative fees for units that 

materially failed to meet HUD’s housing quality standards. Further, HUD did not have assurance that HPD’s 

quality control process was fully effective and that it consistently carried out the abatement process, including 

maintaining records that were accurate and complete. By improving its inspection process, HPD could better ensure 

that more than $760,000 in future program funds is spent on units that meet HUD’s housing quality standards.

OIG recommended that HUD require HPD to (1) certify, along with the owners of the 52 units cited in the finding, 

that the applicable housing quality standards violations have been corrected; (2) reimburse its program from nonFederal funds for the 6 units that materially failed to meet HUD standards; (3) improve controls over its inspection 

process to ensure that units meet housing quality standards and that the results are used to enhance the effectiveness 

of its inspections; and (4) improve controls over its quality control sampling and abatement processes. (Audit 

Report: 2019-NY-1003) 

REVIEW OF HUD’S OFFICE OF NATIVE AMERICAN PROGRAMS 

HUD OIG completed a corrective action verification of three of the four recommendations from prior OIG Audit 

Report 2014-LA-0006, issued on August 19, 2014, addressing the Office of Native American Programs’ (ONAP) 

Indian Community Development Block Grant Program (ICDBG). OIG had recommended that HUD implement 

policies and procedures to establish minimum standards for oversight of the grant closeout process, review the 

Performance Tracking Database (PTD) closeout and target closeout dates for open grants and correct inaccurate or 

missing data, and evaluate management’s need for PTD reports and correct deficiencies within the applicable PTD 

reports. These recommendations had been closed by HUD as having been implemented. The objective was to 

determine whether ONAP satisfactorily completed the agreed-upon corrective actions for recommendations 1A, 1B, 

and 1C.

ONAP did not satisfactorily complete the agreed-upon corrective actions for recommendations 1A, 1B, and 1C. 

OIG also selected a nonrepresentative targeted sample of 25 grants totaling nearly $17.4 million to evaluate the 

controls over the closeout process and determined that the same issues identified in the audit continued to impact the 

ICDBG closeout process. There were 15 grants that had inaccurate data in the PTD, including missing target 

closeout dates, incorrect target closeout dates, and missing closeout dates. As a result, ONAP continued to lack 

adequate controls over the ICDBG closeout process approximately 3.5 years after the recommendations were closed 

in December 2015 and January 2016.

Based on the deficiencies cited, OIG will reopen the three recommendations for which the corrective actions were 

not satisfactorily completed (1A, 1B, and 1C) until corrective action is fully developed and implemented. In 

addition, OIG recommended that HUD, as part of reopened recommendation 1B, correct the deficiencies within 

applicable PTD reports, including missing or inaccurate records. (Audit Memorandum: 2019-LA-0802) 

REVIEW OF SECTION 184 LOAN GUARANTEES FOR INDIAN HOUSING PROGRAMS

HUD OIG audited Bank2 in Oklahoma City, OK, regarding its origination of Section 184 Loan Guarantees for 

Indian Housing program loans to determine whether Bank2 originated those loans in accordance with HUD’s 

processing guidelines. OIG audited Bank2’s Section 184 program because prior audit work determined that HUD 

8
SEMIANNUAL REPORT TO CONGRESS

lacked proper oversight of the program and lenders did not underwrite loans in accordance with HUD requirements. 

Additionally, Bank2 is one of the largest Section 184 lenders. The Section 184 Loan Guarantees for Indian Housing 

program is a home mortgage product specifically designed for American Indian and Alaska Native families, Alaska 

villages, tribes, or tribally designated housing entities.

Bank2 originated all 14 statistically sampled loans reviewed in accordance with Section 184 Loan Guarantees for 

Indian Housing program processing guidelines. Specifically, it ensured that borrowers met income, debt, and credit 

requirements; property values were supported; and the borrower and properties were eligible for the program. 

Because the 14 loans reviewed met the processing guidelines, there was not an increased risk to HUD’s Loan 

Guarantee Fund. In addition, Bank2 developed internal controls to ensure that its loan files were complete, and it 

had a detailed quality control plan and procedures for its Section 184 loan program.

OIG made no recommendations, and no further action is needed. (Audit Report: 2019-LA-1007) 

INVESTIGATION

Program Results

Administrative - civil actions 58

Convictions - pleas - pretrial diversions 44

Financial recoveries $5,484,222

CONSTRUCTION EXECUTIVES SENTENCED FOR PROCUREMENT FRAUD

The president and vice president of a construction company were sentenced in U.S. District Court after being 

convicted at trial of conspiracy, false statements, and wire fraud. The executives were sentenced to a total of 92 

months imprisonment and 6 years supervised release. The two were ordered to forfeit more than $1.7 million and 

pay a total of $32,211 in restitution to workers who were defrauded. The construction executives orchestrated a 

scheme to defraud a local PHA on multiple contracts valued at more than $3.3 million to renovate public housing 

units. Between 2014 and 2016, the two obtained contracts with the PHA by submitting drastically reduced bids, 

which were reduced because the company did not pay Federal employer tax or have adequate insurance coverage 

for the contracts. During the contracting process, the two certified to the PHA that no subcontractors would be 

used. However, immediately after being awarded the contracts, the company hired subcontractors at below DavisBacon Act prevailing wage rates. The company did not obtain workers’ compensation insurance in accordance with 

State laws. The company also required its subcontractors to provide information regarding their employees so the 

company could falsely certify that those workers were on its payroll. HUD OIG, the U.S. Department of Labor 

OIG, and the Miami Dade County OIG conducted this investigation. (Miami, FL)

HOUSING SUBSIDY RECIPIENT TO SERVE 12 YEARS IN PRISON FOR FRAUD

A Housing Choice Voucher Program participant was sentenced in State Superior Court after being found guilty by a 

jury. The tenant was sentenced to 12 years incarceration on a total of 13 felony counts of grand jury tampering and 

perjury. He was also ordered to pay restitution of nearly $275,780, including $60,380 to the local PHA. From 2008 

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SEMIANNUAL REPORT TO CONGRESS

to 2016, the program participant orchestrated a fraud scheme in which he failed to report his marital status and 

assets to the local PHA. The tenant maintained assets of more than $300,000 located in various bank accounts in 

addition to his wife’s owning property. As a result, the PHA paid more than $60,000 in housing assistance on his 

behalf, to which he was not entitled. During the course of the investigation, it was also determined that he was 

fraudulently collecting other government subsidies, to include health care services and Social Security benefits. 

HUD OIG; the Social Security Administration OIG; and the California Department of Health Care Services, 

Investigations Unit, conducted this investigation. (Los Angeles, CA) 

HOUSING AUTHORITY EMPLOYEE SENTENCED FOR THEFT

A former software coordinator for a local PHA was sentenced to 1 year incarceration, 20 years probation, and 40 

hours of community service and ordered to pay restitution of $271,325 to the PHA. The software coordinator was 

sentenced in a county district court in relation to his earlier guilty plea to theft by swindle. The software coordinator 

was responsible for the PHA’s computer system and created fictitious landlords and tenants in the system to 

fraudulently obtain housing assistance payments. He created two fictitious management companies, which received 

housing assistance checks for tenants who were deceased, no longer eligible for assistance, or never on the program. 

The software coordinator was the registered agent for both companies and diverted more than $271,000 in PHA 

funds for his personal use. HUD OIG and the Egan Police Department conducted this investigation. (Egan, MN)

IDENTITY THIEF SENTENCED TO MORE THAN 3 YEARS IN PRISON

A Dominican national and Section 8 tenant was sentenced in U.S. District Court in relation to an earlier guilty plea 

to aggravated identity theft, false representation of a Social Security number, and theft of public funds. The tenant 

was sentenced to 39 months imprisonment followed by 5 years supervised release and ordered to pay restitution of 

$55,215 to the local PHA. The tenant stole the identity of a U.S. citizen residing in Puerto Rico and used that 

identity to receive benefits in Section 8 subsidies, State health benefits, unemployment benefits, and a driver’s 

license. Hurricane Maria destroyed the victim’s home in Puerto Rico and left him homeless. Due to the theft of his 

identity, the Puerto Rico Housing Authority denied him housing assistance, believing he was already receiving 

subsidies from the other PHA. HUD OIG and the Homeland Security Document and Benefits Fraud Task Force 

conducted this investigation. (Boston, MA)

EXECUTIVE DIRECTOR AND LANDLORD SENTENCED FOR THEFT OF HOUSING 

SUBSIDIES

A landlord and an executive director of a PHA were sentenced in U.S. District Court to a total of 1 year 

imprisonment and 6 years probation and ordered to pay joint restitution of $133,243 to HUD. The two were 

sentenced in relation to their earlier guilty pleas to theft of public funds and misprision of a felony. The two 

conspired to receive more than $170,000 worth of housing assistance checks for properties, which either did not 

exist or were not a part of the Housing Choice Voucher Program. HUD OIG conducted this investigation. 

(Lubbock, TX)

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SEMIANNUAL REPORT TO CONGRESS

CHAPTER 3 – MULTIFAMILY HOUSING AND HEALTHCARE 

PROGRAMS 

In addition to multifamily housing developments with U.S. Department of Housing and Urban Development (HUD)-

held or HUD-insured mortgages and the Office of Healthcare Programs, HUD subsidizes rents for low-income 

households, finances the construction or rehabilitation of rental housing, and provides support services for the 

elderly and disabled. Some of the highlights from this semiannual period are shown below.

AUDIT

Strategic Initiative 2: Contribute to the reduction of erroneous payments in rental 

assistance

Key program results Questioned costs Funds put to better use

Audit 4 audit $2,043,716 $99,401

REVIEW OF HUD’S MULTIFAMILY SECTION 8 PROGRAM 

HUD’s Office of Inspector General (OIG) audited the multifamily Section 8 Project-Based Rental Assistance 

(PBRA) program at the Northline Point Apartments in Houston, TX, to determine whether the owner administered 

its Section 8 PBRA program in accordance with applicable requirements.

The owner did not administer its Section 8 PBRA program in accordance with applicable requirements. 

Specifically, it billed HUD for at least 51 tenants whose eligibility it could not adequately support and subsidized 

uninspected units. As a result, the owner received more than $1 million in housing assistance payments for tenants 

whose eligibility and unit physical condition standards it could not support. Further, the owner could not assure 

HUD that its certifications for reimbursement were based on accurate information, which could adversely affect the 

program.

OIG recommended that HUD require the Northline Point Apartments’ owner to (1) support or repay HUD for 

tenants whose eligibility it could not support; (2) perform annual inspections as required; and (3) implement 

appropriate controls to ensure that tenants are eligible, housing assistance subsidies are accurate, tenants are 

properly moved and transferred, transactions are properly coded, units are inspected as required, and tenant files 

contain all required documentation. (Audit Report: 2019-FW-1003) 

INVESTIGATION

Program Results

Administrative - civil actions 1 

Convictions - pleas - pretrial diversions 1 

Financial recoveries $0

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SEMIANNUAL REPORT TO CONGRESS

CHAPTER 4 – COMMUNITY PLANNING AND 

DEVELOPMENT PROGRAMS 

The Office of Community Planning and Development (CPD) seeks to develop viable communities by promoting 

integrated approaches that provide decent housing, suitable living environments, and expanded economic 

opportunities for low- and moderate-income persons. The primary means toward this end is the development of 

partnerships among all levels of government and the private sector. Some of the highlights from this semiannual 

period are shown below.

AUDIT

Strategic Initiative 3: Contribute to the strengthening of communities

Key program results Questioned costs Funds put to better use

Audit 12 audits4 $925,727,345 $510,134,027

During the semiannual period, the U.S. Department of Housing and Urban Development, Office of Inspector 

General (HUD OIG), audited the Neighborhood Stabilization Program (NSP), community housing development 

organizations (CHDO), the HOME Investment Partnerships program, the Continuum of Care Program (CoC), the 

Community Development Block Grant (CDBG) program, and the Shelter Plus Care program. 

REVIEW OF THE NEIGHBORHOOD STABILIZATION PROGRAM 

HUD OIG audited the North Carolina Department of Commerce’s NSP grants to determine whether the 

Department administered its NSP1 and NSP3 grants in accordance with HUD’s requirements.

The Department did not administer its NSP1 and NSP3 grants in accordance with HUD’s requirements. 

Specifically, it did not deobligate grant funds in a timely manner, reallocate grant funds with proper justification, 

maintain adequate documentation to support grant expenditures, properly track program income, and ensure that six 

NSP activities met their national objectives. As a result, the Department allowed more than $417,000 in grant funds 

to remain unused, improperly reallocated $1.3 million in grant funds, used more than $1.1 million in grant 

expenditures without adequate supporting documentation, underreported nearly $6.1 million in program income to 

HUD, and drew down more than $11.9 million in grant funds without showing that a national objective was met.

OIG recommended that HUD require the Department to (1) reprogram and put unused NSP1 funds to better use, (2) 

support more than $2.4 million or reimburse its NSP grants from non-Federal funds, (3) reconcile and update the 

NSP program income reported to HUD, and (4) develop and implement a remediation plan to show that national 

objectives have been met as required to support more than $11.9 million in program funds. OIG also recommended 

that HUD review the Department’s expenditure of the more than $736,000 in remaining NSP1 grant funding before 

its drawdowns. (Audit Report: 2019-AT-1004) 

4 The total CPD audits, questioned costs, and funds put to better use amounts include questioned costs for any disasterrelated audits included in the community planning and development area (four audits). The writeup for this audit is shown 

separately in chapter 5 of this semiannual report.

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SEMIANNUAL REPORT TO CONGRESS

REVIEW OF COMMUNITY HOUSING DEVELOPMENT ORGANIZATIONS 

HUD OIG audited the City of Dallas, TX’s management of its CHDOs to determine whether the City managed its 

CHDOs in accordance with HUD regulations and guidance, including environmental requirements. 

The City did not follow environmental requirements or effectively manage its CHDOs. It did not always complete 

an environmental review or obtain HUD approval before committing funds, maintain environmental review 

documentation, exercise due diligence, or properly administer its CHDO in accordance with requirements. As a 

result, it misspent more than $6.6 million and did not account for more than $180,000 in program income. 

OIG recommended that HUD require the City to (1) repay nearly $2.4 million in funds committed before 

completion of an environmental review or HUD approval; (2) support or repay more than $424,000 in funds 

committed to projects without environmental reviews; (3) support or repay more than $3.8 million for unsupported 

files and draws; (4) support or repay the unsupported program income; (5) repay more than $13,000 in ineligible 

costs; and (6) strengthen its underwriting procedures and implement documentation, home-buyer income 

verification, and CHDO recertification procedures. (Audit Report: 2019-FW-1004) 

REVIEW OF THE HOME INVESTMENT PARTNERSHIPS PROGRAM 

HUD OIG audited the City of Bridgeport CT’s HOME Investment Partnerships program to determine whether the 

City properly committed and disbursed HOME funds in accordance with Federal and HUD rules and regulations.

City officials did not properly administer their HOME program. Specifically, they did not properly commit and 

disburse HOME funds in accordance with Federal and HUD rules and regulations. They did not ensure that they 

met the commitment deadline for their community housing development organizations’ funds, properly documented 

and supported their underwriting of activities, complied with environmental review requirements, disbursed funds in 

accordance with program requirements, maintained adequate support to ensure tenant eligibility and compliance 

with HOME rental limits, and supported their administrative fees. Further, the City’s HOME policies and 

procedures were outdated. As a result, the City incurred nearly $423,000 in ineligible costs and more than $3.2 

million in unsupported costs, and nearly $742,000 in unspent HOME funds will need to be reallocated to eligible 

activities.

OIG recommended that HUD require City officials to (1) repay the ineligible costs related to the City’s failure to 

meet commitment deadlines and complete activities in accordance with the HOME agreement and HOME 

regulations, (2) support that the unsupported costs were reasonable and supported or repay the funds, (3) reallocate 

the unspent funds to ensure that they will be put to their intended use, and (4) develop and implement adequate and 

updated HOME policies and procedures and tools to improve record-keeping practices. (Audit Report: 2019-BO1001)

REVIEW OF THE CONTINUUM OF CARE PROGRAM 

HUD OIG reviewed the CoC of the Northlake Homeless Coalition in Mandeville, LA, to determine whether 

Northlake administered its CoC in accordance with HUD’s and its own program requirements.

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SEMIANNUAL REPORT TO CONGRESS

Northlake did not always administer its CoC in accordance with HUD’s and its own requirements, as it did not 

always monitor its program partners, maintain adequate supporting documentation for disbursements, and follow 

procurement requirements. In addition, Northlake did not always ensure that its board members executed code-ofconduct and conflict-of-interest forms, met monthly, maintained written documentation of board meetings, and 

updated its charters annually. As a result, Northlake could not provide reasonable assurance to HUD that its 

program achieved its purpose or followed HUD’s and other requirements, putting more than $2 million in CoC 

funds allocated to its program partners at risk of mismanagement. In addition, Northlake paid more than $120,000 

in questioned costs. 

OIG recommended that HUD require Northlake to (1) develop and implement written procedures and take actions 

to ensure that its program partners better spend CoC funds, (2) support or repay the questioned costs, (3) annually 

monitor its CoC recipients as required, and (4) develop and implement procedures to ensure that its CoC is 

administered in accordance with HUD’s and its own requirements. (Audit Report: 2019-FW-1005) 

REVIEW OF THE COMMUNITY DEVELOPMENT BLOCK GRANT PROGRAM 

HUD OIG audited the Commonwealth of Massachusetts’ (State) Small Cities CDBG program to determine 

whether the State provided adequate oversight and monitoring to ensure that its grantees complied with applicable 

State and Federal laws and requirements regarding procurement, conflicts of interest, program delivery, and indirect 

cost rates.

The State did not always ensure that its grantees complied with applicable State and Federal laws and requirements. 

Specifically, grantees did not always properly conduct and document environmental reviews, obtain independent 

cost estimates, properly charge program delivery costs, and obtain the State’s approval for projects that exceeded 

program limits. As a result, OIG identified more than $1.5 million in questioned costs charged to the program, and 

HUD did not have assurance that all costs were eligible and supported.

OIG recommended that HUD require State officials to (1) repay nearly $666,000 in ineligible program costs; (2) 

support or repay more than $896,000 in unsupported program costs; and (3) provide additional guidance to their 

grantees and strengthen controls over procurement, site-specific environmental reviews, and the definition of which 

expenses are considered program delivery costs. (Audit Report: 2019-BO-1003) 

HUD OIG audited the Municipality of Yauco, PR’s CDBG program to determine whether the Municipality 

complied with HUD regulations, procedures, and instructions related to the administration of the program.

The Municipality did not properly identify the grant year and application of CDBG funds. In addition, it 

inappropriately transferred CDBG grant funds to its general fund account, did not disburse program funds in a 

timely manner, and paid ineligible bank penalties. As a result, HUD lacked assurance that more than $1 million in 

CDBG drawdowns was adequately accounted for, safeguarded, and used for eligible purposes.

In addition, the Municipality did not properly support the scope of its street resurfacing efforts, paid for work done 

before a contract was awarded, and improperly completed street resurfacing work on private properties. As a result, 

HUD lacked assurance that more than $469,000 in CDBG funds was used for eligible purposes and in accordance 

with the program requirements.

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SEMIANNUAL REPORT TO CONGRESS

OIG recommended that HUD require the Municipality to (1) develop and implement a financial management 

system in accordance with HUD requirements, (2) submit all supporting documentation showing the eligibility and 

propriety of more than $1.5 million in CDBG funds, (3) return to its line of credit unspent program funds, (4) 

reimburse the CDBG program for funds paid for ineligible penalties, and (5) develop and implement adequate 

controls and procedures to permit proper accountability for all program funds. (Audit Report: 2019-AT-1005) 

REVIEW OF THE SHELTER PLUS CARE PROGRAM

HUD OIG audited the Housing Authority of the County of Stanislaus in Modesto, CA, regarding its Shelter Plus 

Care program to determine whether the Authority documented participant eligibility related to homelessness and 

disability in accordance with program requirements. 

While participants’ disabilities were supported, the Authority did not always adequately document participants’ 

eligibility related to homelessness in accordance with HUD requirements. In 1 of the 15 participant files reviewed, 

the Authority’s documents lacked detail to show that the applicant, who was in transitional housing, originally came 

from the streets or emergency shelters, which was an additional requirement stated in the notice of funding 

availability. As a result, the Authority could not support that nearly $14,000 in housing assistance payments and 

any later payments were for an eligible participant.

OIG recommended that HUD require the Authority to provide supporting documentation for the unsupported 

housing assistance payments and later payments for the participant for whom eligibility could not be supported or 

repay its program from non-Federal funds. (Audit Report: 2019-LA-1004) 

INVESTIGATION

Program Results

Administrative - civil actions 1 

Convictions - pleas - pretrial diversions 8 

Financial recoveries $502,318

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SEMIANNUAL REPORT TO CONGRESS

CHAPTER 5 – DISASTER RECOVERY PROGRAMS

In response to disasters, Congress may appropriate additional funding as Disaster Recovery grants to rebuild the 

affected areas and provide crucial seed money to start the recovery process. Since fiscal year 2001, Congress has 

appropriated $83.7 billion to the U.S. Department of Housing and Urban Development (HUD), from which HUD 

provides flexible grants to help cities, counties, and States recover from presidentially declared disasters. Of the 

$82.8 billion5 in active disaster grants, the funds have been allocated nationwide, with nearly $55.9 billion 

obligated and more than $40.9 billion disbursed as of September 30, 2019. 

Disaster Funds allocated Funds disbursed Percentage of 

funds disbursed

Fiscal year funds 

allocated

Harvey, Irma & Maria $35.8 billion $264 million 1 2017 & 2018

Louisiana, Texas & West 

Virginia6 2.5 billion 923 million 36 2016 & 2017

Hurricane Sandy 15.2 billion 11.4 billion 75 2013

Hurricanes Ike, Gustav & 

Dolly 6.1 billion 5.7 billion 93 2008

Hurricanes Katrina, Rita & 

Wilma 19.7 billion 19.4 billion 99 2006 & 2008

9-11 3.5 billion 3.25 billion 93 2001 & 2002

HUD’s Office of Inspector General (OIG) continues to take steps to ensure that the Department remains diligent in 

assisting communities with their recovery efforts.

5 The more than $9 million difference between appropriated funds and active disaster grants is due to nonmajor program 

appropriations made since fiscal year 2001.

6 In addition to Louisiana, Texas, and West Virginia (LTW is the name of the grant), funding was included for North and 

South Carolina and Florida in fiscal year 2017, but the grant name (LTW) remained the same.

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SEMIANNUAL REPORT TO CONGRESS

AUDIT

Strategic Initiative 3: Contribute to the strengthening of communities

Key program results Questioned costs Funds put to better use

Audit 4 audits7 $897,484,884 $506,881,030

REVIEW OF HUD’S MONITORING OF THE DISASTER RELIEF APPROPRIATIONS ACT, 

2013

HUD OIG audited HUD’s Office of Community Planning and Development (CPD) to determine whether CPD 

monitored and ensured that its Disaster Relief Appropriations Act, 2013, grantees complied with the Act’s 24-

month statutory expenditure requirement.

Although it monitored grantees, CPD did not enforce the 2013 Act’s 24-month grantee expenditure requirement. 

Specifically, CPD allowed the six grantees reviewed to either spend more funds than they had obligated and 

budgeted, record expenses before an amendment was executed, or record expenses after the 24-month expenditure 

deadline. Further, HUD’s Office of the Chief Financial Officer did not use its financial controls to monitor 

compliance with the Act. As a result, CPD allowed grantees to improperly receive payments totaling more than 

$526 million as of January 19, 2018. In addition, it allowed grantees to revise 1,333 vouchers totaling $1.8 billion 

from the month in which the original voucher was created to 3 years later. CPD also did not recapture and 

reallocate unspent funds totaling more than $524,000, and it did not ensure that grantees reported their activities and 

expenses in a transparent manner. If CPD does not correct the identified issues, grantees risk misspending more 

than $413 million of the $6.2 billion in unspent 2013 Act Community Development Block Grant Disaster Recovery 

(CDBG-DR) funds remaining as of January 19, 2018.

OIG recommended that CPD require the grantees to repay the ineligible payments made (1) in excess of the amount 

obligated for a round, (2) before a grant round agreement was executed, (3) after a grant round agreement expired, 

and (4) with funds that should have been recaptured. OIG also recommended that CPD (1) adopt and enforce new 

written policies, procedures, and internal controls for CDBG-DR funds that have a statutory expenditure deadline 

and (2) take action to correct and address HUD’s Disaster Recovery Grant Reporting system material internal 

control weaknesses. (Audit Report: 2019-FW-0001) 

REVIEW OF NEW YORK RISING BUYOUT AND ACQUISITION PROGRAM

HUD OIG audited the State of New York’s CDBG-DR-funded New York Rising Buyout and Acquisition program 

to determine whether the State ensured that the appraised fair market values used to determine award amounts under 

its program were supported and appraisal costs for its program complied with applicable requirements and were for 

services performed in accordance with Federal, State, and industry standards.

7 Disaster-related audits fall under the purview of the Office of Community Planning and Development (CPD). The total 

disaster audits, questioned costs, and funds put to better use amounts shown above do not include questioned costs for any 

CPD audits that are not disaster related.

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SEMIANNUAL REPORT TO CONGRESS

The State did not ensure that appraised fair market values used to determine award amounts under its program were 

supported and appraisal costs complied with applicable requirements and were for services performed in accordance 

with applicable Federal, State, and industry standards. The State also did not ensure that it had a clear and 

enforceable agreement with the City of New York before relying on appraisal services provided by the City’s 

contractor and did not ensure that the appraisal services were properly procured and performed. As a result, HUD 

and the State did not have assurance that more than $367.3 million paid to purchase properties was supported; more 

than $3.4 million disbursed for appraisal services was for costs that were reasonable, necessary, and adequately 

documented; and appraisal services were properly procured and performed. If the State improves controls over its 

program, it can ensure that nearly $93.4 million not yet disbursed is put to better use.

OIG recommended that HUD require the State to (1) provide documentation to support the appraised values of the 

properties purchased; (2) provide support to show that appraisal costs were reasonable, necessary, supported, and 

for services that were performed in accordance with requirements; (3) execute an agreement with the City for the 

use of appraisal services and show that services were properly procured; and (4) strengthen controls to ensure that 

CDBG-DR funds used for appraisal services are for costs that are reasonable, necessary, supported, and for services 

that comply with applicable requirements. (Audit Report: 2019-NY-1002) 

REVIEW OF TEXAS GENERAL LAND OFFICE’S COMMUNITY DEVELOPMENT BLOCK 

GRANT DISASTER RECOVERY GRANT

HUD OIG audited the Texas General Land Office’s CDBG-DR grant, which it used to rehabilitate or reconstruct 

125 homes affected by Hurricane Ike in 2008. The Texas General Land Office contracted with the Deep East Texas 

Council of Governments in Jasper, TX, to operate its program. The audit objective was to determine whether the 

Texas General Land Office administered its CDBG-DR program in accordance with HUD requirements; 

specifically, whether it ensured that its subrecipient met its contract requirements.

The Texas General Land Office generally administered its CDBG-DR program in accordance with HUD 

requirements. However, it did not ensure that its subrecipient administered its CDBG-DR grant in a prudent and 

cost-effective manner. In addition, the Texas General Land Office’s affordability period for its disaster program did 

not appear to be reasonable based on those of its other disaster programs that its subrecipient administered and the 

government’s substantial CDBG-DR grant fund investment. As a result, the Texas General Land Office and its 

subrecipient did not effectively use government funds or assist as many homeowners as they could have. In 

addition, the government investment benefited a relatively small number of low- and moderate-income persons for a 

short time. Further, the Texas General Land Office and its subrecipient placed participants at risk of incurring 

increased property tax bills that they may not have been able to afford. 

OIG recommended that HUD require the Texas General Land Office to (1) implement appropriate controls, 

including limits for reconstruction and rehabilitation costs, to ensure that it uses limited government resources in a 

more economical and efficient manner; (2) evaluate whether its program would benefit from a longer affordability 

period; and (3) ensure that tax burden implications are adequately addressed as part of the determination of whether 

to replace homes. (Audit Report: 2019-FW-1007) 

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SEMIANNUAL REPORT TO CONGRESS

INVESTIGATION

Program Results* 

Administrative - civil actions 5 

Convictions - pleas - pretrial diversions 10

Financial recoveries $2,349,453

*Figures included in public and Indian housing and community 

planning and development statistics

DISASTER RECIPIENT ORDERED TO PAY MORE THAN $85,000

A disaster aid recipient was sentenced in U.S. District Court in connection with an earlier guilty plea to making 

false statements to the government. The recipient was sentenced to 2 years supervised release and ordered to pay a 

$25,000 fine after having paid restitution of $61,539 to HUD. The recipient falsified applications and generated 

fraudulent documents to support his false certification that his primary residence was damaged during Hurricane 

Sandy in 2012. In fact, the damaged property was a vacation home, which is not entitled to CDBG-DR assistance. 

Based on his false statements, the property owner received $79,655 in disaster relief funds, of which $34,734 was 

from the HUD-funded New York Rising Program and $26,805 was from the HUD-funded Single Family 

Homeowner Program. The recipient also received funds from the Federal Emergency Management Agency and the 

U.S. Small Business Administration. HUD OIG, the U.S. Small Business Administration OIG, and the U.S. 

Department of Homeland Security OIG conducted this investigation. (Central Islip, NY) 

DISASTER RECIPIENT SETTLES FALSE CLAIMS ACT VIOLATION

A Rehabilitation, Reconstruction, Elevation, and Mitigation grant program (RREM) recipient entered into a civil 

settlement in U.S. District Court in lieu of being charged with a False Claims Act violation. The recipient agreed to 

repay $75,000 to HUD. The recipient submitted applications resulting in her receiving $75,000 in CDBG-DR funds 

administered by RREM for use in the repair of her home. Instead of following program requirements, the recipient 

used the funds to pay credit card bills, purchase a boat engine, and invest $36,000 in the stock market. The recipient 

then moved to Florida to evade accountability. HUD OIG conducted this investigation. (Newark, NJ) 

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SEMIANNUAL REPORT TO CONGRESS

CHAPTER 6 – OTHER SIGNIFICANT AUDITS AND 

EVALUATIONS 

AUDIT

Strategic Initiative 4: Contribute to improving HUD’s execution of and accountability for 

fiscal responsibilities as a relevant and problem-solving advisor to the Department

Key program results Questioned costs Funds put to better use

Audit 2 audits $0 $0 

The U.S. Department of Housing and Urban Development, Office of Inspector General’s (HUD OIG) additional

significant reports are discussed below.

REVIEW OF HUD’S COMPLIANCE WITH THE IMPROPER PAYMENTS ELIMINATION AND 

RECOVERY ACT OF 2010

HUD OIG audited HUD’s fiscal year 2018 compliance with the Improper Payments Elimination and Recovery Act 

of 2010 (IPERA) to determine whether HUD complied with IPERA reporting and improper payment reduction 

requirements according to guidance from Office of Management and Budget Circular A-123, appendix C.

Fiscal year 2018 marked the sixth consecutive year in which HUD did not comply with IPERA. In 2018, HUD 

complied with three of the six IPERA requirements and did not comply with two requirements, and one requirement 

was not applicable. Specifically, HUD did not always publish improper payment estimates for all required 

programs and report an improper payment rate of less than 10 percent. 

New recommendations were not made because prior-year audit recommendations that remain open will help HUD 

remediate repeat findings identified in this audit if implemented. (Audit Report: 2019-AT-0001) 

ANNUAL RISK ASSESSMENT OF HUD’S PURCHASE CARD PROGRAM 

HUD OIG conducted its annual risk assessment of HUD’s purchase cards as required by the Government Charge 

Card Abuse Prevention Act of 2012 (Public Law 112-194) and Office of Management and Budget Memorandum 

M-13-21. The objective was to identify and analyze risks of illegal, improper, or erroneous purchases and payments 

in HUD’s fiscal years 2017 and 2018 purchase card program.

HUD’s purchase card program had a moderate risk of illegal, improper, or erroneous purchases. Risk-increasing 

factors included a prior audit recommendation that was not fully implemented, purchase card use by cardholders not 

being identified as active or closed, cardholders and noncardholders being late on meeting their 3-year training 

requirements, cardholders missing from the training records, potential split purchases, purchases at agencyrestricted merchants, sales tax being paid on purchases, interest being paid on payments, and supporting 

documentation missing or not provided. Risk-decreasing factors included no open purchase card recommendations, 

a decrease in purchase card use from fiscal year 2016, and the discontinued use of the purchase card in the Real 

Estate Assessment Center’s Reverse Auction Program.

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SEMIANNUAL REPORT TO CONGRESS

OIG made no recommendations. It will use the risk assessment to determine the scope, frequency, and number of 

periodic audits or reviews of the purchase card program. (Audit Memorandum: 2019-KC-0801) 

JOINT CIVIL FRAUD 

Program Results

Civil actions 1 

Questioned costs $1,100,000

Funds put to better use $0

On June 12, 2019, PMB-RD Parties entered into a settlement agreement with the Federal Government to pay 

$1.1 million to avoid the delay, uncertainty, inconvenience, and expense of lengthy litigation of certain civil 

claims the Government stated it had against PMB-RD Parties. Lakeway Regional Medical Center, LLC, was a 

corporation formed to develop a hospital named the Lakeway Regional Medical Center in Lakeway, TX. The 

settlement was neither an admission of liability or wrongdoing by PMB-RD Parties nor a concession by the 

United States that its claims were not well founded. PMB-RD Parties denied the United States’ allegations. 

The United States has filed a complaint under the False Claims Act and the Financial Institutions Reform, 

Recovery, and Enforcement Act of 1989 against Lakeway Regional Medical Center, LLC (LRMC); Surgical 

Development Partners, LLC (SDP); G. Edward Alexander; Frank Sossi; and John Prater for improperly 

obtaining a loan insured by the Federal Housing Administration (FHA) and for impermissibly distributing 

project funds relating to the development of Lakeway Regional Medical Center in Lakeway, Texas

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SEMIANNUAL REPORT TO CONGRESS

CHAPTER 7 – LEGISLATION, REGULATIONS, AND OTHER 

DIRECTIVES

Reviewing and making recommendations on legislation, regulations, and policy issues is a critical part of the Office 

of Inspector General’s (OIG) responsibilities under the Inspector General Act. During this 6-month reporting 

period, OIG has committed more than 700 hours to reviewing 134 issuances. The draft directives consisted of 89 

notices, 9 mortgagee letters, and 36 other directives. OIG provided comments on 41 (or 31 percent) of the 

issuances and nonconcurred on 9 (or 7 percent) but lifted 2 nonconcurrences. Of the 36 other directives, OIG

reviewed 3 proposed and 3 final rules, providing comments on 1 and taking no position on 5; 23 handbooks or 

guidebooks; 6 U.S. Department of Housing and Urban Development (HUD) legislative referral memorandum 

reports; and 1 research report. A summary of selected reviews for this 6-month period is provided below.

.

NOTICES, MORTGAGEE LETTERS, AND OTHER DIRECTIVES

OFFICE OF SINGLE FAMILY HOUSING

Downpayment assistance – On April 18, 2019, the Federal Housing Administration (FHA) published Mortgagee 

Letter 2019-06, which clarifies source requirements for a borrower’s minimum required investment (MRI). In 

addition, the letter sets forth new documentation requirements, which apply when the MRI includes funds from a 

government entity. OIG provided concerns with the mortgagee letter in light of open audit recommendations on an 

OIG downpayment assistance audit report,

8 along with uncertainty on jurisdiction issues. FHA provided details on 

progress being made on the open recommendations and specifics on the jurisdiction issues. 

Single-Family Loan Sale Program – On May 5, 2019, FHA published an advanced notice of proposed rulemaking 

and request for public comment. The notice sought comments regarding FHA’s Single-Family Loan Sale Program. 

The Program has been operating under demonstration and general disposition authority, through which eligible, 

single-family mortgage loans assigned to FHA in exchange for claim payment and mortgage notes are sold 

competitively to maximize recoveries and strengthen the FHA Mutual Mortgage Insurance Fund. FHA sought 

comments from the public to improve program practices and procedures as FHA transitions the Program from a 

demonstration to a permanent program. This preliminary rulemaking action is in response to an OIG audit report9

in which OIG concluded that HUD did not conduct rulemaking or develop formal procedures for its single-family 

note sales program. OIG provided a no position response regarding this notice.

Single-family condominium – On August 14, 2019, FHA published its Condominium Project Approval Final Rule 

in the Federal Register (Docket No. FR-5715-F-02). Additionally, it added two new sections—Section II.A.8.p, 

Condominiums, and Section II.C, Condominium Project Approval—and incorporated new condominium project 

approval policy guidance into other sections of its Single Family Housing Policy Handbook 4000.1 (SF Handbook). 

The rule provides requirements for lenders to obtain approval under the direct endorsement lender review and 

approval process authority for condominiums and for standards that projects must meet to be approved for mortgage 

insurance on individual units. The rule further provides for flexibility with respect to the concentration of FHAinsured units, owner-occupied units, and the amount that can be set aside for commercial and nonresidential space. 

FHA published Mortgagee Letter 2019-17 on September 27, 2019, providing updated origination requirements for 

home equity conversion mortgages (HECM) on condominium units. The mortgagee letter also establishes borrower 

eligibility requirements for prospective HECM borrowers seeking to use the single-unit approval process to obtain 

8 HUD Failed To Adequately Oversee FHA-Insured Loans With Borrower-Financed Downpayment Assistance (2017-

LA-0003), issued March 3, 2017 9 HUD Did Not Conduct Rulemaking or Develop Formal Procedures for Its Single-Family Note Sales Program (2017-KC0006), issued July 14, 2017

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FHA insurance on an individual condominium unit. The effective date for both the final rule and SF Handbook 

updates is October 15, 2019. OIG had no position on the final rule or mortgagee letter. 

 

OFFICE OF PUBLIC AND INDIAN HOUSING

Carbon monoxide detectors in HUD-assisted housing – On April 18, 2019, HUD’s Office of Public and Indian 

Housing (PIH) issued Notice PIH 2019-06, which was issued to remind owners, managers, and agents of housing 

covered by the public housing, Section 8 Project-Based Rental Assistance, Housing Choice Voucher, Section 202, 

or Section 811 programs to ensure that the units have carbon monoxide (CO) detectors when specified by the State 

or local requirements and that the detectors are operational. The Notice also encourages owners, managers, and 

agents of housing covered by the assistance programs above but located in areas where State or local law, code, or 

other regulations do not require CO detectors to have operational CO detectors in their covered units that have fuelfired or fuel-burning appliances, an attached garage, or both and in bedrooms that contain a fireplace or a fuel-fired 

or fuel-burning appliance. OIG’s review of the Notice resulted in comments to the Department, suggesting that 

HUD require owners to install CO detectors in all units served with gas. OIG noted that while HUD recognizes the 

danger and need for CO protection in HUD-subsidized housing, the Notice does not protect all tenants with gasserved units. OIG also noted that the Notice does not establish any new requirements to protect tenants from CO

but, rather, as the draft Notice is written, owners in some areas are “reminded” that they are required to follow any 

local codes to install CO detectors. Owners of housing in other areas with no local requirements to install CO 

detectors are “encouraged” to do so anyway. OIG commented that allowing certain owners to decide whether to 

provide detectors creates a considerable risk to both the affected tenants and HUD. In response to OIG’s comments, 

the Department added that the Notice “strongly” encourages owners in other areas to have operational CO detectors.

Notice of demonstration to assess the National Standards for the Physical Inspection of Real Estate and 

associated protocols – On August 21, 2019, HUD published a notice (Federal Register 6160–N–01), which solicits 

comment on the proposed, voluntary National Standards for the Physical Inspection of Real Estate (NSPIRE) 

demonstration. During this demonstration, HUD will solicit volunteers to test the NSPIRE standards and protocols 

as the means for assessing the physical conditions of HUD-assisted and -insured housing. The demonstration, 

which will include approximately 4,500 properties, will be implemented on a rolling, nationwide basis and will 

assess all aspects of the physical inspection line of business of the Real Estate Assessment Center—the collection, 

processing, and evaluation of physical inspection data and information, including a new scoring model. As the first 

step in the implementation of NSPIRE, HUD is soliciting comments on this proposed, voluntary demonstration. 

Specifically, HUD is seeking comments on questions related to health and safety and exigent health and safety 

deficiencies and property characteristics to consider in its inspection and scoring model and inspection incentives. 

OIG’s review of the notice resulted in comments to the Department questioning what remedy mechanisms will be 

used for deficiencies found, the difference between the responsibilities and role of a contract inspector versus a 

Federal inspector, and whether HUD will provide and publish the list of properties selected to be part of the 

demonstration. OIG also suggested that a question regarding inspecting the safety of the drinking water be added to 

the list of questions. HUD issued the notice without making any changes in these areas.

OFFICE OF MULTIFAMILY HOUSING PROGRAMS

Incentives for FHA mortgage insurance for properties located in opportunity zones – On May 9, 2019, HUD 

issued Notice H 2019-07, which introduces incentives for property owners applying for certain loans with FHA 

multifamily mortgage insurance for properties located in a qualified opportunity zone census tract to further 

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promote opportunity zones. Lenders must identify in their application that they met the criteria. This measure will 

ensure expert and expedient review of these applications by FHA underwriters. Eligible applicants should identify 

the opportunity zone tract in which the property is or is proposed to be located and (if applicable) the associated 

qualified opportunity fund to receive this incentive. Also, applicants to FHA’s Section 221(d)(4), Section 220, and 

Section 223(f) mortgage insurance programs for properties located in qualified opportunity zones will be eligible for 

reduced application fees. OIG provided a no position response regarding this notice.

Annual revisions to base city high-cost percentage, high-cost area, and per unit substantial rehabilitation 

threshold for 2019 – On May 20, 2019, HUD issued Notice 2019-08 (related to Mortgagee Letter 2019-08), which 

announces that the maximum mortgage amounts were revised by the Consolidated Appropriations Act, 2008 (Public 

Law 110-161, approved December 26, 2007) (FY (fiscal year) 2008 Appropriations Act). Section 221 of the 

General Provisions of Title II of Division K of the FY 2008 Appropriations Act revises the statutory exceptions to 

maximum mortgage amounts for the FHA multifamily housing programs listed in Section 221 of the FY 2008 

Appropriations Act by substituting 170 percent for the 140 percent exception of any geographical area and 

substituting 215 percent for 170 percent as the maximum exception allowed for a specific project. Accordingly, the 

statutory revision allows the HUD Secretary to grant exceptions to maximum mortgage limits for certain 

multifamily housing programs by (1) up to 170 percent (equivalent to a 270 percent multiplier) in geographic areas 

where cost levels so require or (2) up to 170 percent or 215 percent in high-cost areas (equivalent to a 315 percent 

multiplier) when necessary on a project-by-project basis. OIG provided a no position response regarding this 

notice.

HEALTHCARE PROGRAMS

Updating the requirements for the locations of bathrooms in board and care homes and assisted living

facilities – On September 13, 2019, HUD published a proposed rule, FR-6022-P-01, which proposes changes to 

update the requirements for the location of bathrooms in board and care homes and assisted living facilities. Such 

changes are to allow providers to configure the facilities to meet the needs of memory care residents and allow for 

flexibility in the bathroom requirement when financing or refinancing existing facilities. Regarding memory care 

residents, these are patients in assisted living or board and care settings that have cognitive impairments, such as 

Alzheimer’s disease and other dementias, who require care in a secure setting. Therefore, HUD included in its 

proposal the financing for the health and safety of these patients by enhancing their environments with features to 

accommodate cognitive and physical impairments, such as separate floors or wings to address their needs. HUD’s 

Section 232 program insures mortgage loans to facilitate the construction, substantial rehabilitation, purchase, and 

refinancing of nursing homes, intermediate care facilities, board and care homes, and assisted-living facilities. OIG 

provided comments regarding this notice. The notice under the clearance process mentioned that HUD’s section 

232.7 requires a specific number of bathrooms per number of residents and specifies the physical configuration of a 

board and care home or assisted living facility and noted that this regulation has not been updated in any substantial 

manner in more than 20 years. 

Incentives for FHA mortgage insurance for Sections 232 and 242 properties located in opportunity zones – 

On September 27, 2019, HUD issued Notice H 2019-10 to further promote opportunity zones. For properties 

located in a qualified opportunity zone, the notice introduces incentives for property owners applying for loans with 

FHA mortgage insurance under the following programs: (1) Section 232, Construction, and Section 232 under

sections 223(f) and 241(a) and (2) Section 242, Construction, and Section 242 under sections 223(f) and 241(a). 

Specifically, HUD will reduce the FHA mortgage insurance fees for properties located in qualified opportunity 

zones. Further incentives may be available to FHA-insured mortgages for properties in qualified opportunity zones 

that are also qualified census tracts or difficult development areas under the Section 232 Low-Income Housing Tax 

Credit (LIHTC) program. In particular, the annual (rather than the upfront) mortgage insurance premium for such 

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transactions is lower than that required of non-LIHTC transactions. OIG provided a no position response regarding 

this notice.

OFFICE OF COMMUNITY PLANNING AND DEVELOPMENT

Disaster funding - updates to duplication of benefits requirements – In consultation with the Federal 

Emergency Management Agency and the U.S. Small Business Administration, on June 20, 2019, HUD issued a 

notice updating its duplication of benefits requirements. The notice implemented a provision of the Disaster 

Recovery Reform Act of 2018 that changed the treatment of loans under the Stafford Act for disasters declared 

between January 1, 2016, and December 31, 2021. When certain circumstances are met, the notice authorizes 

the use of Community Development Block Grant Disaster Recovery (CDBG-DR) funds for the reimbursement 

of costs paid with subsidized loans, such as those provided by the U.S. Small Business Administration or other 

sources. OIG commented that portions of the notice were inconsistent with an open management decision on 

Audit Report 2017-KC-0004.

10 In that report, OIG recommended that HUD “pursue departmental clearance for 

the July 25, 2013, guidance that did not go through required departmental clearance.” In the management 

decision, HUD said it would rescind the July 25, 2013, notice upon publication of the revised duplication of 

benefits guidance and provide the revised guidance and rescission to the audit liaison officer. This June 2019 

notice appeared to be the revision to which HUD was referring. The updated notice did not rescind the July 25, 

2013, notice as proposed but explicitly says that for disasters declared in 2011, 2012, or 2013, the notice does 

not amend the July 25, 2013, notice. 

On the same day, HUD also issued a companion notice, which amended the notices governing disasters that 

occurred in 2015, 2016, and 2017 to impose the requirements of the 2019 notice. OIG provided a minor 

comment on the notice.

Notice of Neighborhood Stabilization Program changes to closeout requirements related to program 

income amendment – On September 12, 2019, HUD issued a notice to hasten the expenditure of remaining 

Neighborhood Stabilization Program (NSP) grant funds to facilitate closeout. The notice eliminated the 

requirement that NSP2 and NSP3 grantees use the HUD Foreclosure Need website to identify new target areas 

before using NSP funds. It also provided guidance related to program income and encouraged the use of CDBG 

formula funds to leverage investments in targeted areas. OIG had no position on the notice. 

ADMINISTRATIVE AND OTHER PROGRAM AREAS

HUD Acquisition Regulation changes – On April 15, 2019, HUD published a final rule, FR-6041-F-02, which 

amends various provisions of the HUD Acquisition Regulation (HUDAR). This final rule became effective on 

May 15, 2019. These provisions incorporated several clauses and made additions to the HUDAR matrix; 

replaced references to government technical representatives with references to contracting officer’s 

representatives; codified deviations approved by HUD’s Chief Procurement Officer; and made minor 

corrections to clauses, provisions, and the HUDAR matrix. This final rule followed the proposed rule originally 

10 CPD Did Not Follow the Departmental Clearance Process When It Issued the July 25, 2013, Guidance for Duplication of 

Benefits Requirements, issued June 2, 2017

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published on April 9, 2018, which was changed only by the removal of obsolete definitions. OIG provided a no 

position response regarding this final rule.

Review of HUD policy in opportunity zones – On April 17, 2019, for consistency with Executive Order 

13853, Establishing the White House Opportunity and Revitalization Council, HUD published FR-6155-N-01, a 

notice informing the public of its intent to maximize the beneficial impact of investment in opportunity zones. 

HUD was reviewing its existing policies, practices, planned actions, regulations, and guidance regarding HUDadministered programs and laws to identify actions HUD can take to encourage beneficial investment, both 

public and private, in urban and economically distressed communities, including qualified opportunity zones. 

HUD sought input and recommendations from the public regarding potential agency actions. Comments were 

due on June 17, 2019. OIG provided a no position response regarding this request for information.

HUD’s implementation of the Fair Housing Act’s disparate impact standard – On August 19, 2019, HUD 

published a proposed rule, FR-6111-P-02, which proposed amending HUD’s interpretation of the Fair Housing 

Act’s disparate impact standard to better reflect the Supreme Court’s 2015 ruling in Texas Department of 

Housing and Community Affairs v. Inclusive Communities Project, Inc., and to provide clarification regarding 

the application of the standard to State laws governing the business of insurance. Title VIII of the Civil Rights 

Act of 1968, as amended, prohibits discrimination in the sale, rental, or financing of dwellings and in other 

housing-related activities on the basis of race, color, religion, sex, disability, familial status, or national origin. 

HUD has historically interpreted the Act to create liability for practices with an unjustified discriminatory 

effect, even if those practices were not motivated by discriminatory intent. This proposed rule follows a June 

20, 2018, advance notice of proposed rulemaking, in which HUD solicited comments on the disparate impact 

standard set forth in HUD’s 2013 final rule, including the disparate impact rule’s burden-shifting approach, 

definitions, and causation standard and whether it required amendment to align with the decision of the 

Supreme Court. OIG provided a no position response regarding this notice. 

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SEMIANNUAL REPORT TO CONGRESS

CHAPTER 8 – REPORT RESOLUTION

In the report resolution process, Office of Inspector General (OIG) and U.S. Department of Housing and Urban 

Development (HUD) management agree upon needed actions and timeframes for resolving recommendations. 

Through this process, OIG strives to achieve measurable improvements in HUD programs and operations. The 

overall responsibility for ensuring that the agreed-upon changes are implemented rests with HUD managers. This 

chapter describes reports issued before the start of the period that do not have management decisions, have 

significantly revised management decisions, or have significant management decisions with which OIG disagrees. 

It also has a status report on HUD’s implementation of the Federal Financial Management Improvement Act of 

1996 (FFMIA). In addition to this chapter on report resolution, see appendix 3, table B. 

AUDIT REPORTS ISSUED BEFORE START OF PERIOD WITH NO MANAGEMENT 

DECISION AS OF SEPTEMBER 30, 2019

ADDITIONAL DETAILS TO SUPPLEMENT OUR REPORT ON HUD’S FISCAL YEARS 2013 

AND 2012 (RESTATED) FINANCIAL STATEMENTS, ISSUE DATE: DECEMBER 16, 2013

HUD OIG audited the Office of Public and Indian Housing’s (PIH) implementation of U.S. Treasury cash 

management regulations as part of the annual audit of HUD’s consolidated financial statements for fiscal years 2013 

and 2012. OIG found that HUD’s implementation of the new cash management process for the Housing Choice 

Voucher Program departed from Treasury cash management requirements and Federal generally accepted 

accounting principles (GAAP). OIG also reported that there were not sufficient internal controls over the process to 

ensure accurate and reliable financial reporting. Due to weaknesses in the process, material financial transactions 

were not included in HUD’s consolidated financial statements; therefore, public housing agencies (PHA) were 

allowed to continue to hold Federal funds in excess of their immediate disbursing needs, which is in violation of 

Treasury cash management regulations. The OIG report included a recommendation (2C) that HUD PIH implement 

a cost-effective method for automating the cash management process, to include an electronic interface of 

transactions to the standard general ledger.

HUD issued three proposals to address recommendation 2C. However, OIG rejected all three proposals because 

they were too vague and did not include a high-level plan showing the actions PIH will take until the final action 

date to implement corrective action. Further, the proposals included several contingencies from which OIG cannot 

determine whether PIH is making progress in addressing the recommendation. 

This issue was referred to the Assistant Secretary on June 19, 2014, and September 30, 2014, but, as of March 31, 

2015, a new proposal had not been made. Therefore, this issue was referred to the Deputy Secretary on March 31, 

2015. OIG briefed the Deputy Secretary’s staff on the subject on April 20, 2015. On August 24, 2016, PIH 

indicated that in coordination with the Office of the Chief Information Officer (OCIO), plans were being developed 

to address the recommendation. OIG follows up during each audit cycle to determine the status of this 

recommendation. In fiscal year 2019, PIH informed OIG that it had a contractor working on the issue and portions 

of a new cash management system would be implemented in fiscal year 2020. However, PIH has reservations about 

providing a new management decision because it is unsure whether this system will be able to interface with HUD’s 

general ledger and is not sure when it will be completed. As of September 30, 2019, HUD had not submitted a new 

proposed management decision. (Audit Report: 2014-FO-0003) 

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SEMIANNUAL REPORT TO CONGRESS

HUD DID NOT ALWAYS RECOVER FHA SINGLE-FAMILY INDEMNIFICATION LOSSES AND 

ENSURE THAT INDEMNIFICATION AGREEMENTS WERE EXTENDED, ISSUE DATE: 

AUGUST 8, 2014

HUD OIG audited HUD’s controls over its Federal Housing Administration (FHA) loan indemnification recovery 

process to determine whether HUD had adequate controls in place to monitor indemnification agreements and 

recover losses on FHA single-family loans.

HUD did not always bill lenders for FHA single-family loans that had an indemnification agreement and a loss to 

HUD. Specifically, it did not bill lenders for any loans that were part of the Accelerated Claims Disposition (ACD) 

program or the Claims Without Conveyance of Title (CWCOT) program or loans that went into default before the 

indemnification agreement expired but were not in default on the expiration date. There were a total of 486 loans 

from January 2004 to February 2014 that had enforceable indemnification agreements and losses to HUD but were 

not billed to lenders. This condition occurred because HUD’s Financial Operations Center was not able to 

determine loss amounts for loans that were part of the ACD program, was not aware of the CWCOT program, and 

considered the final default date for billing only. As a result, HUD did not attempt to recover a loss of $37.1 million 

for 486 loans that had enforceable indemnification agreements.

In addition, HUD did not ensure that indemnification agreements were extended to 64 of 2,078 loans that were 

streamline refinanced. As a result, HUD incurred losses of $373,228 for 5 loans, and 16 loans had a potential loss 

to HUD of approximately $1 million. The remaining 43 loans were either terminated or did not go into delinquency 

before the indemnification agreement expired, or the agreement did not state that it would extend to loans that were 

streamline refinanced.

OIG rejected three management decisions proposed by the Offices of Single Family Housing and Finance and 

Budget because they did not follow the plain language explicitly stated in signed indemnification agreements. The 

Offices of Single Family Housing and Finance and Budget disagree with OIG’s determination that HUD should 

have billed lenders for FHA loans that either were in default or went into default during the indemnification 

agreement period.

OIG referred the matter to the Assistant Secretary for Housing – Federal Housing Commissioner on January 8, 

2015. OIG met with the HUD Offices of General Counsel, Housing, Single Family Housing, and Finance and 

Budget on January 30, 2015. The meeting ended in disagreement; however, the HUD Office of General Counsel 

and OIG Office of Legal Counsel continued discussions. 

Single Family Housing received two legal opinions from HUD’s Office of General Counsel, dated January 26, 

2015, and February 24, 2015, respectively. Combined, the legal opinions support Single Family Housing’s and 

Finance and Budget’s position that they have collected in a manner consistent with longstanding policy that 

emphasized the definition of the “date of default.” Single Family Housing maintains that its collection practice is 

consistent with FHA’s regulatory definition of “date of default” found in 24 CFR (Code of Federal Regulations) 

203.331, which refers to the first “uncorrected” failure and the first failure to pay that is not satisfied by later 

payments.

OIG disagrees and believes that Single Family Housing and Finance and Budget have adopted a collection practice 

not supported by the plain language of the indemnification agreements or required by HUD regulations. Based on 

the plain language explicitly stated in signed indemnification agreements, OIG believes that the indemnification 

agreement should be enforced for any loan that “goes into default” during the indemnification agreement term, 

regardless of whether the loan emerged from a default status after the agreement expired. In response to HUD’s 

legal opinions, OIG received its own legal opinion from the OIG Office of Legal Counsel that supports OIG’s 

position. 

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SEMIANNUAL REPORT TO CONGRESS

OIG has had discussions with HUD’s Offices of General Counsel, Single Family Housing, and Finance and Budget 

regarding the recommendations in question but has not reached agreeable management decisions. On March 31, 

2015, OIG referred the recommendations to the Deputy Secretary for a decision and as of September 30, 2019, was

awaiting that decision. (Audit Report: 2014-LA-0005) 

GOVERNMENT NATIONAL MORTGAGE ASSOCIATION FISCAL YEARS 2014 AND 2013 

FINANCIAL STATEMENTS AUDIT, ISSUE DATE: FEBRUARY 27, 2015

HUD OIG audited the Government National Mortgage Association’s (Ginnie Mae) fiscal year 2014 stand-alone 

financial statements. OIG conducted this audit in accordance with the Chief Financial Officers Act of 1990 as 

amended. OIG found a number of material weaknesses in Ginnie Mae’s financial reporting specifically related to 

the auditability of several material assets and reserve for loss liability account balances. The audit report had 20 

audit recommendations to (1) correct the financial statement misstatements identified and (2) take steps to 

strengthen Ginnie Mae’s financial management operations. 

Initially, OIG did not reach consensus with Ginnie Mae on the necessary corrective actions for 9 of the 20 audit 

recommendations and referred the matter to the Deputy Secretary for a decision on September 21, 2015. Since that 

time, OIG has reached an agreement for management decision on four of nine management decisions that it

previously rejected. As a result, there are now five audit recommendations without a management decision. OIG’s

audit recommendations requested that HUD’s Office of the Chief Financial Officer (OCFO) provide oversight of 

Ginnie Mae’s financial management operations, but HUD’s proposed corrective action plan to provide the oversight 

of Ginnie Mae lacked specificity. As of September 30, 2019, the Deputy Secretary had not provided a decision on 

the five recommendations referred. (Audit Report: 2015-FO-0003) 

GOVERNMENT NATIONAL MORTGAGE ASSOCIATION FISCAL YEARS 2015 AND 2014 

(RESTATED) FINANCIAL STATEMENTS AUDIT, ISSUE DATE: NOVEMBER 13, 2015

HUD OIG audited Ginnie Mae’s fiscal year 2015 stand-alone financial statements. OIG conducted this audit in 

accordance with the Chief Financial Officers Act of 1990 as amended. This report had new and repeat audit 

findings. Of 11 audit recommendations, OIG did not reach consensus on the necessary corrective actions for 3 

recommendations. 

Ginnie Mae did not provide a response to OIG to explain Ginnie Mae’s refusal to implement one audit 

recommendation related to compliance with the Debt Collection Improvement Act. 

For the remaining two information technology (IT)-related audit recommendations, Ginnie Mae’s master 

subservicer (MSS) disagreed with one audit recommendation. The MSS believes that it has the proper segregation 

of duties for cash processes, payment processing, and reconciliation of all financial activities. However, OIG 

disagrees and maintains its original position that segregation of duties means that no single person should have 

control of two or more conflicting functions within a transaction or operation. Further, while a security camera 

system, criminal background checks, etc., are helpful, they do not take the place of good internal controls, which 

include the segregation of duties. 

Regarding the second IT audit recommendation, Ginnie Mae’s MSS agreed to regularly review the market discount 

fraction change report and confirm this review in its monthly self-evaluation. However, this response and 

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SEMIANNUAL REPORT TO CONGRESS

management’s plan of action did not fully address OIG’s recommendation. The methods identified were neither 

sufficient nor adequate to address OIG’s finding “that management had an ineffective monitoring tool in place” and 

recommendation that management automate the approval process to include restricting the capability to make 

unauthorized changes unless evidence of approval is present or increase the scope of the “Admin Adjustment 

Report” to include all exceptions and adjustments. The issue was not that a review process was not in place but that 

the review was not meaningful or effective because the tool or report used to review financial adjustment changes 

was limited. The manual approval process also enabled staff to avoid obtaining approval before making 

adjustments because there were no checks and balances and no restrictions in the financial system to prevent 

unauthorized adjustments. Management’s plan of action did not address OIG’s concern. 

OIG referred this matter to the President of Ginnie Mae on April 21, 2016, and to the Deputy Secretary for a 

decision on March 6, 2017. On September 12, 2018, Ginnie Mae provided additional information in response to the 

recommendations. OIG reviewed the information and concluded that the information did not adequately address the 

recommendations. As of September 30, 2019, OIG was awaiting a decision on these three recommendations 

referred to the Deputy Secretary. (Audit Report: 2016-FO-0001) 

ADDITIONAL DETAILS TO SUPPLEMENT OUR FISCAL YEARS 2015 AND 2014 

(RESTATED) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINANCIAL 

STATEMENT AUDIT, ISSUE DATE: NOVEMBER 18, 2015 

HUD OIG audited HUD’s consolidated financial statements and reported on deficiencies, including the areas of 

accounting for liabilities for PIH programs in accordance with GAAP and FFMIA and HUD’s financial 

management governance structure and internal controls over financial reporting. HUD disagreed with several 

recommendations made in each of these areas, and as a result, OIG first referred them to the Principal Deputy 

Assistant Secretary for Public and Indian Housing and the Deputy Chief Financial Officer on April 21, 2016. OIG 

received a response to only one recommendation, and disagreement remained on the actions necessary to correct the 

deficiencies identified in the report. OIG referred the remaining recommendations to the Deputy Secretary on 

September 20, 2016. OIG had received two new proposals as of March 31, 2018; however, OIG could not agree 

with them due to an insufficient proposal that was not clear on how to address the recommendations and insufficient 

evidence to support closure. 

Accounting for liabilities for PIH programs in accordance with GAAP and FFMIA: OIG reported that HUD is not 

recognizing the accounts payables arising from shortages identified in PIH’s cash management reconciliations. 

PIH’s position is that it does not record the payables because the cash management reconciliations are completed 

45-60 days after each quarter. By the time they are conducted, the PHA could have used either restricted or 

unrestricted net position balances or requested frontload funding to cover the shortages. PIH believes that adjusting 

the prepaid expense is the most practical way to account for the cash reconciliation activities. OIG does not agree 

that this position complies with GAAP because adjusting the prepaid expense after payables have been paid is not 

accrual accounting. PIH has not submitted a revised position on this matter. OIG believes that this 

recommendation cannot be resolved until PIH’s cash management process is automated, which OIG discusses in 

Audit Report 2014-FO-0003 (discussed above). As of September 19, 2019, PIH had not submitted a new 

management decision for the recommendation OIG made in 2014-FO-0003 or this recommendation.

HUD’s financial management governance structure and internal controls over financial reporting: OIG reported 

on deficiencies found in the financial governance and financial reporting areas. OIG could not accept the proposed 

management decisions for eight recommendations because OCFO requested final action target dates that were too 

far into the future, claimed that the deficiencies had been addressed by the new processes implemented by New 

Core when they had not, or did not provide sufficient detail to support that the recommendations would be fully 

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SEMIANNUAL REPORT TO CONGRESS

addressed. OIG communicated these issues to HUD on March 7, 2016, and April 6, 2017. New proposals were 

submitted for four of the eight recommendations and accepted. As of September 30, 2019, OIG had not received 

new proposals for the remaining four outstanding recommendations. (Audit Report: 2016-FO-0003) 

HUD DID NOT ALWAYS PROVIDE ADEQUATE OVERSIGHT OF PROPERTY ACQUISITION

AND DISPOSITION ACTIVITIES, ISSUE DATE: JUNE 30, 2016

HUD OIG audited HUD’s Community Development Block Grant (CDBG) program’s property acquisition and 

disposition activities. OIG’s audit objective was to determine whether HUD had adequate oversight of property 

acquisition and disposition activities under its CDBG program. 

OIG found that HUD did not always provide adequate oversight of property acquisition and disposition activities. 

Specifically, of 14 activities reviewed, 7 field offices did not provide adequate oversight of 8 property acquisition 

and disposition activities totaling more than $26.2 million. For the eight activities for which adequate oversight was 

not provided, two activities with draws totaling $6.1 million had outstanding program-related findings that HUD 

had not enforced, and six totaling $20.1 million had not been monitored. Additionally, four of the eight activities 

totaling nearly $11.9 million had not met a national objective. These conditions occurred because HUD did not 

have adequate controls to ensure that it enforced its monitoring findings and its grantee risk assessment procedures 

did not specifically address oversight of property acquisition and disposition activities. 

The OIG report included a recommendation that the Deputy Assistant Secretary for Grant Programs direct field 

offices to include property acquisition and disposition activities as an area of special emphasis when assessing 

grantee risk and establishing their monitoring plans and grantee monitoring strategies. 

The Deputy Assistant Secretary for Grant Programs proposed a management decision in December 2016. However, 

after discussions with HUD, OIG rejected the proposed management decision because it did not specifically address 

directing field offices to include property acquisition and disposition activities as an area of special emphasis when 

assessing grantee risk and establishing its monitoring plans and grantee monitoring strategies as recommended. For 

OIG to consider the proposed management decision as an acceptable alternative action, OIG requested clarification 

and documentation from HUD. However, HUD did not provide the requested information and documentation, and 

OIG referred this recommendation to the Assistant Secretary for Community Planning and Development on March 

30, 2017. HUD proposed another management decision in April 2017; however, OIG rejected it because it also did 

not directly address the intent of the recommendation. OIG referred this recommendation to the Deputy Secretary 

on August 23, 2017, and as of September 30, 2019, had not received a decision. (Audit Report: 2016-PH-0001) 

HUD DID NOT ALWAYS PROVIDE ACCURATE AND SUPPORTED CERTIFICATIONS OF 

STATE DISASTER GRANTEE PROCUREMENT PROCESSES, ISSUE DATE: SEPTEMBER 

29, 2016

HUD OIG audited HUD’s controls over its certifications of State disaster recovery grantee procurement processes 

to determine whether HUD’s certifications were accurate and supported. OIG found that HUD did not always 

provide accurate and supported certifications of State disaster grantee procurement processes. Specifically, it 

allowed conflicting information on its certification checklists, did not ensure that required supporting documentation 

was included with the certification checklists, and did not adequately evaluate the supporting documentation 

submitted by the grantees. These conditions occurred because HUD did not have adequate controls over the 

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SEMIANNUAL REPORT TO CONGRESS

certification process. Due to the weaknesses identified, HUD did not have assurance that State grantees had 

proficient procurement processes in place, and the HUD Secretary’s certifications did not meet the intent of the 

Disaster Relief Appropriations Act of 2013.11 

The report included five recommendations for the Deputy Assistant Secretary for Grant Programs, who in turn 

proposed corrective actions on January 11, 2017. OIG rejected the proposed actions on January 27, 2017. OIG 

referred the recommendations to the General Deputy Assistant Secretary for Community Planning and Development 

on February 6, 2017. The General Deputy Assistant Secretary responded to the referral on February 21, 2017. For 

all of the recommendations, the General Deputy Assistant Secretary stated that OIG’s disagreement regarding the 

definition of a proficient procurement process as it relates to State disaster grantees and the meaning of “equivalent” 

as it relates to a State’s procurement policies and procedures being “equivalent to” or “aligned with” the Federal 

procurement standards was closed by the Deputy Secretary in her decision regarding resolution of recommendations 

from OIG’s audit of New Jersey’s Sandy Integrated Recovery Operations and Management System.12 In the 

January 10, 2017, decision, the Deputy Secretary wrote that the State certified that its procurement standards were 

equivalent to the Federal standards at 24 CFR 85.36 and HUD had also certified to the proficiency of the State’s 

policies and procedures. The Deputy Secretary noted that two legal opinions from the Office of General Counsel 

concluded that the standards at 24 CFR 85.36 did not apply and, therefore, there was no legal basis for the finding 

and associated recommendations. The General Deputy Assistant Secretary asserted that the legal opinion for the 

New Jersey audit applied to this audit. Based on this information, the General Deputy Assistant Secretary believed 

it was appropriate to close all of the recommendations.

OIG disagreed with the General Deputy Assistant Secretary’s request to close the recommendations in this audit 

based on the Deputy Secretary’s decision to resolve recommendations from OIG’s audit of New Jersey’s Sandy 

Integrated Recovery Operations and Management System. OIG has two main areas of disagreement with the 

decision: OIG continues to assert that 24 CFR 85.36 was applicable to the State because its procedures needed to be 

equivalent to these Federal standards, and OIG asserts that the applicability of 24 CFR 85.36 was not the only basis 

for the recommendations in the New Jersey audit report and believes that the decision failed to consider the other 

bases of the recommendations. Further, the Deputy Secretary’s decision did not address all of the issues with 

HUD’s process for certifying State disaster grantee procurement processes that were identified in the subject audit 

report. OIG referred these recommendations to the Deputy Secretary on March 31, 2017, and as of September 30, 

2019, had not received a decision. (Audit Report: 2016-PH-0005) 

AUDIT OF FISCAL YEARS 2016 AND 2015 (RESTATED) FINANCIAL STATEMENTS AUDIT, 

ISSUE DATE: NOVEMBER 14, 2016

HUD OIG audited Ginnie Mae’s fiscal year 2016 stand-alone financial statements. OIG conducted this audit in 

accordance with the Chief Financial Officers Act of 1990 as amended. Of 19 recommendations issued, OIG did not 

reach consensus on the necessary corrective actions for 2 audit recommendations. 

The first disagreement was associated with OIG’s recommendation for Ginnie Mae to reverse the accounting 

writeoff of the advances account. In conjunction with the subledger data solution, Ginnie Mae needs to conduct a 

proper analysis to determine whether any of the $248 million balances in the advances accounts are collectible. 

Ginnie Mae believed that it could not reverse the $248 million residual balance in the advances account. Based on 

its analysis, Ginnie Mae explained that this residual balance should have been charged off by the realized losses 

11 Public Law 113-2, dated January 29, 2013 12 2015-PH-1003, dated June 4, 2015

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SEMIANNUAL REPORT TO CONGRESS

incurred on liquidated loans from fiscal years 2009 through 2016 but was not. Therefore, according to Ginnie Mae, 

this residual balance was no longer supportable or collectible after the sale of the mortgage servicing rights. 

Additionally, Ginnie Mae stated that it could not pursue additional collection from its MSSs based on the terms of a 

settlement agreement. OIG has concerns about the reliability of Ginnie Mae’s analysis because when OIG

attempted to review Ginnie Mae’s support for the advances writeoff, it was unable to validate the accuracy of the 

information used in its analysis. For example, of $248 million, OIG could not validate the $180 million in realized 

losses because this information was based on rough estimates ($50 million) and MSSs’ accounting reports that OIG

considered unauditable ($130 million). Ginnie Mae could not explain the other $68 million. Further, OIG’s audit 

showed that the $248 million residual balance may contain advances related to unliquidated nonpooled loans. 

Specifically, in fiscal year 2016, Ginnie Mae informed OIG that all advance balances associated with liquidated 

loans were removed from the advances account and attached (carried forward) to the liquidated loans balance. 

However, in fiscal year 2017, OIG learned that this was not the case. According to Ginnie Mae, the advance 

balances associated with these loans were not carried forward. Therefore, there are legitimate collection action 

claims that Ginnie Mae can pursue on these unliquidated nonpooled loans.

The second disagreement was related to OIG’s recommendation for Ginnie Mae to appropriately exclude the loan 

impairment allowance on other indebtedness instead of reporting it as part of the loan impairment allowance on its 

mortgage held for investment (MHI) account. Ginnie Mae partially agreed with OIG regarding the MHI allowance 

issue. Ginnie Mae agreed that it should have excluded from the MHI allowance account the allowance portion 

related to the reimbursable preforeclosure expense but not the nonreimbursable preforeclosure expense portion. 

According to Ginnie Mae, it included the nonreimbursable preforeclosure expense in the MHI allowance calculation 

because the expense was necessary to collect proceeds of the MHI loans. Ginnie Mae cited Accounting Standards 

Codification (ASC) 450-20 and the Interagency Policy Statement on the allowance for loan and lease losses as the 

bases for its conclusion with respect to the issue of nonreimbursable preforeclosure expense. Overall, Ginnie Mae 

concluded that in estimating the MHI allowance, the expected-anticipated recoveries from insurance, as well as the 

expected but not yet incurred preforeclosure costs, will need to be included in determining the collectability of cash 

flows from these loans. Regarding nonreimbursable preforeclosure expenses, OIG does not agree with Ginnie Mae 

that its inclusion in the ASC 450-20 or ASC 310-10 components of the MHI allowance was in accordance with 

GAAP. 

Both disagreements were referred to the Deputy Secretary on August 24, 2017. As of September 30, 2019, OIG 

was awaiting a decision. (Audit Report: 2017-FO-0001) 

ADDITIONAL DETAILS TO SUPPLEMENT OUR FISCAL YEARS 2016 AND 2015 

(RESTATED) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINANCIAL 

STATEMENT AUDIT, ISSUE DATE: NOVEMBER 15, 2016

HUD OIG audited HUD’s consolidated financial statements and reported on deficiencies in the areas of HUD’s loan 

guarantee balances. OIG issued several referrals to HUD senior management for untimeliness and disagreement 

between May 31 and July 24, 2017. For the recommendation regarding HUD’s loan guarantee balances, OIG 

rejected HUD’s initial management decision on April 24, 2017, as it did not contain adequate evidence to provide 

closure. This recommendation was referred to the Deputy Secretary on July 24, 2017; however, as of September 30, 

2019, HUD had not submitted a revised management decision. (Audit Report: 2017-FO-0003) 

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SEMIANNUAL REPORT TO CONGRESS

HUD’S TRANSITION TO FEDERAL SHARED SERVICE PROVIDER FAILED TO MEET 

EXPECTATIONS, ISSUE DATE: FEBRUARY 1, 2017

HUD OIG audited the effectiveness of the controls over the New Core Interface Solution (NCIS) and PRISMTM and 

the impact of the implementation of release 3 of phase 1 of the New Core Project on the preparation of HUD’s 

financial statements. 

HUD’s transition to a Federal shared service provider (FSSP) did not significantly improve the handling of its 

financial management transactions. Weaknesses identified with the controls over NCIS and PRISMTM contributed 

to this issue. A year after the transition, HUD had inaccurate data resulting from the conversions and continued to 

execute programmatic transactions using its legacy applications. The transition increased the number of batch 

processes required to record programmatic financial transactions and introduced manual processes and delays for 

budget and procurement transactions. In addition, the interface program that allowed for and translated the financial 

transactions between HUD and the Administrative Resource Center was not covered under HUD’s disaster recovery 

plan. These conditions occurred because of funding shortfalls as well as HUD’s decisions to separate phase 1 of the 

project into smaller releases, move forward with the implementation despite unresolved issues, and terminate the 

project before its completion. These system issues and limitations inhibited HUD’s ability to produce reliable, 

useful, and timely financial information. 

While HUD considered its New Core Project implementation successful, it acknowledged that not all of the 

originally planned capabilities were deployed. HUD needs to pursue new process improvement projects to address 

the functionalities that were not achieved with phase 1 of New Core, which will require additional time and funding. 

HUD will also need to pursue process improvements for the functionality planned in the future phases of the 

project. In April 2016, HUD ended the New Core Project and the transition to an FSSP after spending $96.3 

million. However, the transition did not allow HUD to decommission all of the applications it wanted to or achieve 

the planned cost savings. 

OIG made two recommendations that were directed to the Deputy Secretary. Specifically, (1) reevaluate the 

functionality initially planned under the New Core Project and determine how the agency will implement the 

functionality needed for budget formulation, cost accounting, property management, and the consolidation of 

HUD’s financial statements and (2) take an active role in the implementation of financial management improvement 

initiatives or projects moving forward to ensure collaboration within HUD and that adequate funding and 

governance are in place.

OIG referred these recommendations to the Deputy Secretary on June 6, 2017. In September 2019, OCFO initiated 

actions to work with the Deputy Secretary to address these weaknesses. However, as of September 30, 2019, HUD 

had not submitted management decisions for these recommendations. (Audit Report: 2017-DP-0001) 

HUD’S OFFICE OF COMMUNITY PLANNING AND DEVELOPMENT DID NOT 

APPROPRIATELY ASSESS STATE CDBG GRANTEES’ RISK TO THE INTEGRITY OF CPD 

PROGRAMS OR ADEQUATELY MONITOR ITS GRANTEES; ISSUE DATE: JULY 10, 2017

HUD OIG audited HUD’s Office of Community Planning and Development’s (CPD) risk assessment and 

monitoring of its State CDBG recipients. OIG’s reporting objective was to determine whether CPD appropriately 

assessed State CDBG grantees’ risk to the integrity of CPD programs and adequately monitored its grantees. 

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SEMIANNUAL REPORT TO CONGRESS

OIG found that CPD did not appropriately assess State CDBG grantees’ risk to the integrity of CPD programs or 

adequately monitor its grantees. This condition occurred because its field office staff did not follow CPD risk 

assessment and monitoring requirements and field office management responsible for reviewing staff performance 

did not correct noncompliance of staff performing these responsibilities. In addition, the headquarters desk officer 

review function was administrative in focus and failed to note noncompliance. As a result, CPD could not be 

assured that its field offices correctly identified the high-risk grantees or conducted adequate monitoring to mitigate 

risk to the integrity of CPD programs. 

The report included five recommendations, including recommendations to (1) develop and implement a policy 

requiring field offices to rate grantees of at least medium risk that have not been monitored in their respective 

program area within the last 3 years on factors that require assessments of capacity, program complexity, and 

monitoring findings resulting in repayment or grant reductions; (2) develop and implement guidance for field 

offices to maintain supporting documentation in their official files with an adequate explanation of procedures 

performed to verify risk scores assigned, which could include upgrading CPD’s systems to allow for the attachment 

of supporting documentation for risk analysis; and (3) update monitoring exhibits to require staff to document 

procedures performed, provide sufficient explanation to verify procedures performed and conclusions drawn, and 

reference appropriate supporting documentation. 

CPD provided proposed management decisions on October 19, 2017, for all five recommendations. OIG concluded 

that the response did not adequately address the three recommendations discussed above. OIG advised HUD of its 

concerns in October 2017 but was unable to reach agreement. 

OIG referred the three recommendations without management decisions to the Assistant Secretary for Community 

Planning and Development on December 19, 2017. Following OIG’s referral, CPD submitted proposed 

management decisions, along with additional documentation, on March 30, 2018. Based on the documentation 

submitted, OIG was not able to reach a resolution on the remaining three recommendations. OIG referred these 

recommendations to the Deputy Secretary on June 25, 2018. On June 27, 2018, HUD again submitted proposed 

management decisions. However, the management decisions did not appropriately address the recommendations, 

and OIG could not concur. OIG has attempted to resolve the disagreement; however, as of September 30, 2019, 

OIG was awaiting an agreeable management decision. (Audit Report: 2017-FW-0001) 

HUD NEEDS TO CLARIFY WHETHER ILLEGAL-UNDOCUMENTED ALIENS ARE ELIGIBLE 

FOR ASSISTANCE UNDER THE HOUSING OPPORTUNITIES FOR PERSONS WITH AIDS 

PROGRAM, ISSUE DATE: AUGUST 21, 2017 

HUD OIG assisted the U.S. Attorney’s Office, Southern District of New York, in a civil investigation related to 

illegal-undocumented aliens receiving Housing Opportunities for Persons With AIDS (HOPWA) assistance. The 

HOPWA program at 24 CFR part 574 is a HUD CPD grant program that provides formula allocations and 

competitively awarded grants to eligible States, cities, and nonprofit organizations to provide housing assistance and 

related supportive services to meet the housing needs of low-income persons and their families living with HIVAIDS.

Noncitizen or alien ineligibility for federally funded programs is a recurring issue in Congress. Two laws primarily 

govern noncitizen or alien eligibility for housing programs: Title IV of the Personal Responsibility and Work 

Opportunity Reconciliation Act of 1996 - 8 U.S.C. (United States Code) 1611 (PRWORA) and Section 214 of the 

Housing and Community Development Act of 1980 as amended. PRWORA states that aliens, who are not qualified 

aliens, are not eligible for “Federal public benefits,” a term defined in the law to include public and assisted 

housing. Under this statute, illegal aliens do not meet the definition of qualified aliens and as a result are ineligible 

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SEMIANNUAL REPORT TO CONGRESS

for Federal public benefits. However, PRWORA exempted certain Federal public benefits from the alien eligibility 

restrictions, including programs, services, or assistance (such as soup kitchens, crisis counseling and intervention, 

and short-term shelters) specified by the Attorney General, after consultation with the appropriate Federal agency.

The issue of nonqualified aliens receiving assistance under HOPWA or other homeless assistance programs has not 

been clearly addressed in HUD regulations and guidance. Specifically, OIG has not been able to identify clear 

guidance as to whether programs that are funded through HUD’s community development programs and 

administered through nonprofits (such as HOPWA) have been clearly designated as a “Federal public benefit.” This 

designation is important because aliens, who have not been qualified to be considered “qualified aliens” under 8 

U.S.C. 1611, are not eligible for Federal public benefits. Also, it is not clear whether homeless assistance grants are 

considered a Federal public benefit. There is a conflict as to whether “housing assistance” and “homeless 

assistance” are synonymous. If homeless assistance grants were considered a Federal public benefit, HOPWA 

benefits would not be available to illegal-undocumented aliens. However, since it is unclear whether such grants 

are considered Federal public benefits, there is a potential for unqualified aliens to fall under the exceptions under 8 

U.S.C. 1611 (which include emergency type programs) and qualify to receive benefits.

OIG recommended that HUD CPD (1) clarify whether assistance provided under its community development 

programs, such as HOPWA, are considered “Federal public benefits” and are, therefore, subject to PRWORA’s 

noncitizen eligibility restrictions and (2) consult with the Office of the Attorney General to establish whether 

HOPWA and other homeless assistance programs are a Federal public benefit that meets the definition of 

“providing assistance for the protection of life or safety” and are, therefore, exempt from PRWORA noncitizen 

eligibility restrictions. 

HUD CPD submitted management decisions for both recommendations on December 18, 2017, but the management 

decisions stated that CPD was not able to take action on the recommendations, and OIG rejected them. This issue 

was referred the Assistant Secretary on December 19, 2017. In January 2018, OIG attempted to meet with HUD 

regarding the recommendations but was unsuccessful. The issue was referred to the Deputy Secretary on February 

27, 2018. As of September 30, 2019, OIG was awaiting a decision from the Deputy Secretary. (Audit 

Memorandum: 2017-CF-0801) 

HUD DID NOT PROVIDE SUFFICIENT GUIDANCE AND OVERSIGHT TO ENSURE THAT 

STATE DISASTER GRANTEES FOLLOWED PROFICIENT PROCUREMENT PROCESSES, 

ISSUE DATE: SEPTEMBER 22, 2017

HUD OIG audited HUD’s oversight of disaster grantee procurement processes to determine whether HUD provided 

sufficient guidance and oversight to ensure that disaster grantees followed proficient procurement processes when 

purchasing products and services. OIG found that HUD did not provide sufficient guidance and oversight to ensure 

that State disaster grantees followed proficient procurement processes. Since HUD agreed to correct procurement 

issues from a previous audit,13 OIG has issued 17 audit reports on disaster grantees with questioned costs totaling 

nearly $391.7 million related to procurement. These conditions occurred because HUD was so focused on 

providing maximum feasible deference to State grantees that it was unable to ensure that grantees followed 

proficient procurement processes. HUD also believed that State grantees were not required to have procurement 

standards that aligned with each of the Federal procurement standards. As a result, HUD lacked assurance that State 

grantees purchased necessary products and services competitively at fair and reasonable prices. 

13 Audit Report 2013-FW-0001, Generally, HUD’s Hurricane Disaster Recovery Program Assisted the Gulf Coast States’ 

Recovery; However, Some Program Improvements Are Needed, issued March 28, 2013

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SEMIANNUAL REPORT TO CONGRESS

OIG made four recommendations to the Deputy Assistant Secretary for Grant Programs, who in turn proposed 

corrective actions on November 24, 2017. For two of the recommendations, the Deputy Assistant Secretary for 

Grant Programs stated that the matter of the applicability of the Federal procurement standards at 2 CFR 200.318 

through 200.32614 (or 24 CFR 85.36(b) through (i)) and the requirements of the Federal Register notices on 

procurement was closed by the Deputy Secretary in her decision regarding resolution of recommendations from 

OIG’s audit of New Jersey’s Sandy Integrated Recovery Operations and Management System.15 In the January 10, 

2017, decision, the Deputy Secretary wrote that the State certified that its procurement standards were equivalent to 

the standards at 24 CFR 85.36 and HUD had also certified to the proficiency of the State’s policies and procedures. 

The Deputy Secretary noted that two legal opinions from the Office of General Counsel concluded that the 

standards at 24 CFR 85.36 did not apply and, therefore, there was no legal basis for the finding and associated 

recommendations. 

The Deputy Assistant Secretary for Grant Programs also noted that the Senate Appropriations Committee report on 

fiscal year 2018 U.S. Department of Transportation-HUD appropriations legislation16 addressed this issue. The 

report stated that the Committee believed that as long as HUD provided consistent and rigorous oversight of the 

procurement processes employed by the State and local recipients, an equivalent, though not identical, procurement 

standard that upholds the principles of fair and open competition can prevent Federal dollars appropriated for 

disaster recovery from being spent irresponsibly. The Deputy Assistant Secretary for Grant Programs further stated 

that HUD clarified its definition of proficient procurement processes and policies when it published subsequent 

Federal Register notices allocating funds under Public Laws 114-113, 114-223 and 114-254. Based on this 

information, the Deputy Assistant Secretary believed it was appropriate to close these two recommendations.

OIG disagrees with the Deputy Assistant Secretary’s request to close these two recommendations based on the 

Deputy Secretary’s decision to resolve recommendations from OIG’s audit of New Jersey’s Sandy Integrated 

Recovery Operations and Management System. OIG continues to assert that the procurement standards at 24 CFR 

85.36 were applicable to the State because its procedures needed to be equivalent to these Federal standards. OIG 

acknowledges the Senate Committee’s belief that consistent and rigorous oversight of equivalent State procurement 

processes and standards that uphold the principles of fair and open competition can prevent Federal dollars from 

being spent irresponsibly. However, Federal procurement involves the acquisition of products and services at fair 

and reasonable prices, which OIG believes is a higher standard, requiring cost estimates and cost analyses. OIG 

believes that HUD weakened its interpretation of Federal procurement standards in the subsequent Federal Register 

notices because rather than considering a State’s procurement process proficient if its procurement standards were 

equivalent to the Federal standards, HUD considered a State’s procurement process proficient if its procurement 

standards operated in a manner that provided for full and open competition. Because of OIG’s disagreement, it

rejected the Deputy Assistant Secretary’s request to close the recommendations. 

In response to another recommendation, OIG rejected it because the proposed corrective action did not directly 

address improving controls by having HUD personnel who specialize in procurement evaluate the proficiency of 

State grantee procurement processes for those States that select the equivalency option to ensure that the State 

processes fully align with or meet the intent of each of the Federal procurement standards at 2 CFR 200.318 through 

200.326. 

In response to the remaining recommendation, OIG rejected it because the proposed guidance and training did not 

include State grantees that chose to certify that their procurement processes and standards were equivalent to the 

Federal procurement standards at 2 CFR 200.318 through 200.326. 

14 Before December 26, 2014, the relevant procurement requirements were found at 24 CFR 85.36. HUD has since 

moved its uniform administrative requirements, cost principles, and audit requirements for Federal awards to 2 CFR part 

200.

15 2015-PH-1003, dated June 4, 2015 16 Senate Report 1115-138, dated July 27, 2017

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SEMIANNUAL REPORT TO CONGRESS

OIG referred the recommendations to the Assistant Secretary for Community Planning and Development on January 

25, 2018. The Assistant Secretary did not respond. OIG referred the recommendations to the Deputy Secretary on 

March 16, 2018, and as of September 30, 2019, had not received a decision. (Audit Report: 2017-PH-0002) 

HUD COULD IMPROVE ITS CONTROLS OVER THE DISPOSITION OF PROPERTIES 

ASSISTED WITH CDBG FUNDS, ISSUE DATE: SEPTEMBER 29, 2017 

HUD OIG audited HUD’s oversight of the disposition of real properties assisted with CDBG funds. OIG’s 

objective was to determine whether HUD had adequate controls over the disposition of real properties assisted with 

CDBG funds.

OIG found that HUD could improve its oversight of the disposition of real properties assisted with CDBG funds. 

Although HUD’s drawdown and reporting system allowed grantees to enter identifying information for assisted 

properties and its field offices performed risk-based monitoring of grantees, HUD’s controls were not always 

sufficient to ensure that grantees entered addresses of assisted properties into its system, provided proper notice to 

affected citizens before changing the use of assisted properties, adequately determined the fair market value of 

assisted properties at the time of disposition, and properly reported program income from the disposition of the 

properties. Further, HUD did not fully implement guidance related to the applicability of change of use 

requirements after voluntary grant reductions. OIG attributed these deficiencies to HUD’s lack of emphasis on 

verifying address information, its field office staff’s not being adequately trained to use data to monitor HUD’s 

interest in properties, and the Milwaukee field office’s incorrectly interpreting program requirements. As a result, 

HUD could not track and monitor its interest in the properties and did not have assurance that grantees properly 

handled changes in use and properly reported program income.

OIG recommended that the Deputy Assistant Secretary for Grant Programs develop a process to ensure that grantees 

properly report the addresses of assisted properties in the Integrated Disbursement and Information System (IDIS)

and properly calculate and report program income from the disposition of these properties regularly. OIG indicated 

that this process could include but was not limited to developing a process to extract data reported in IDIS on 

activities with the matrix codes related to real property and training and instructing CPD’s field office staff to 

extract these data and manually check for address and program income data on grantees’ activities, particularly 

activities that are completed but have properties that could still be subject to program income requirements.

The Deputy Assistant Secretary for Grant Programs proposed a management decision in January 2018, which OIG 

rejected. OIG referred this recommendation to the Assistant Secretary for Community Planning and Development 

on February 6, 2018, and to the Deputy Secretary on March 26, 2018. In an attempt to reach agreement, OIG held 

discussions with CPD officials on February 13 and March 8, 2018. On March 28, 2018, the Deputy Assistant 

Secretary for Grant Programs submitted a revised proposal. CPD proposed to ensure that its staff is aware of a 

recent CPD notice; ensure that its staff and grantees are aware of the record retention requirements related to 

change-of-use and reversion-of-asset requirements; present a webinar for field staff on the importance of 

requirements related to real property, especially program income in relation to the acquisition and disposition of real 

properties, and the requirement to maintain inventories of real property; identify, create, or revise a report that lists 

acquisition-related activities or includes addresses and accomplishment data for staff to use for monitoring; and 

evaluate the adequacy of several sections of the CDBG Single Audit Compliance Supplement to include reviews for 

real property acquisition and disposition and related to program income issues. 

OIG rejected HUD’s March 28, 2018, proposal for several reasons. For example, HUD’s proposal did not clearly 

cover all categories of activities related to real property assisted with CDBG funds but, rather, focused on those 

specifically related to acquisitions and dispositions and did not commit to changes that would result in a process to 

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SEMIANNUAL REPORT TO CONGRESS

ensure that grantees properly report the addresses of properties assisted with CBDG funds and properly calculate 

and report program income from the disposition of these properties regularly. While it alluded to a report that could 

be used by field staff to prepare for monitoring, it did not indicate that its monitoring process would be updated to 

require field offices to consider the relevant information. Further, while HUD committed to reviewing the CDBG 

Single Audit Compliance Supplement requirements, it did not commit to this review’s resulting in a process to 

ensure that grantees properly report the addresses of properties assisted with CDBG funds and that grantees properly 

calculate and report program income from the disposition of these properties. As of September 30, 2019, OIG was

awaiting a decision. (Audit Report: 2017-NY-0002) 

ADDITIONAL DETAILS TO SUPPLEMENT OUR FISCAL YEARS 2017 AND 2016 

(RESTATED) U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT FINANCIAL 

STATEMENT AUDIT, ISSUE DATE: NOVEMBER 15, 2017

HUD OIG audited HUD’s consolidated financial statements and reported on deficiencies in the area of HUD’s 

administrative control of funds system and internal control documentation. Recommendations were made to the 

Office of the Chief Procurement Officer (OCPO) to address the deficiency of not maintaining adequate records for 

interagency agreements (IAA) in its procurement system of record, the U.S. Treasury Administrative Resource 

Center’s PRISM. OIG issued a referral regarding two recommendations to address this deficiency to HUD’s OCPO 

on March 22, 2018, but could not reach agreement. OCPO stated that it no longer had access to the documents in 

question because the previous system was shut down and data migration had not yet occurred. OCPO indicated that 

it was not willing to correct a deficiency with the maintenance of IAAs within PRISM because it would not be a 

prudent use of taxpayer funds.

On May 31, 2018, OIG referred these recommendations to the Deputy Secretary due to disagreement. On July 5, 

2018, OCPO provided the remaining changes to its internal policies and procedures for one of the two 

recommendations, and OIG concurred with the management decision on October 30, 2018. However, OCPO did 

not provide additional corrective action plans for resolving the missing IAAs and modifications in its procurement 

system of record. As of September 30, 2019, OIG had not received a new proposed management decision for the 

recommendation relating to missing IAA’s and modifications. (Audit Report: 2018-FO-0004) 

HUD’S OFFICE OF BLOCK GRANT ASSISTANCE HAD NOT CODIFIED THE COMMUNITY 

DEVELOPMENT BLOCK GRANT DISASTER RECOVERY PROGRAM, ISSUE DATE: JULY 

23, 2018

HUD OIG audited HUD’s Office of Block Grant Assistance’s (OBGA) CDBG Disaster Recovery (CDBG-DR) 

program. OIG’s analysis noted that Congress had historically provided disaster funding through supplemental 

appropriations, yet OBGA had not created a formal codified program. Instead, it had issued multiple requirements 

and waivers for each Disaster Recovery supplemental appropriation in Federal Register notices, many of which 

were repeated from disaster to disaster. OIG’s objective was to determine whether OBGA should codify the 

CDBG-DR funding as a program in the Code of Federal Regulations.

Although OBGA had managed billions in Disaster Recovery funds since 2002, it had not codified the CDBG-DR 

program. It had not codified the program because it believed it did not have the authority under the Robert T. 

Stafford Disaster Relief and Emergency Assistance Act and it had not determined whether it had the authority under 

the Housing and Community Development Act of 1974 as amended. It also believed a Presidential Executive order

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SEMIANNUAL REPORT TO CONGRESS

presented a barrier to codification, as it required CPD to identify two rules to eliminate in order to create a new 

codified rule. OIG believes OBGA has the authority under the Housing Act of 1974 and it should codify the 

program. OBGA’s use of multiple Federal Register notices to operate the CDBG program presented challenges to 

the grantees. For example, 59 grantees with 112 active CDBG-DR grants, which totaled more than $47.4 billion as 

of September 2017, had to follow requirements contained in 61 different Federal Register notices to manage the 

program. Further, codifying the CDBG-DR program would ensure that a permanent framework is in place for 

future disasters, reduce the existing volume of Federal Register notices, standardize the rules for all grantees, and 

ensure that grants are closed in a timely manner. OIG recommended that the Acting Director of OBGA work with 

its Office of General Counsel to codify the CDBG-DR program.

On October 31, 2018, CPD provided a memorandum stating that it did not believe the codification of the CDBG-DR 

program was necessary. OIG waited for CPD to enter this information into the automated tracking system for audit 

resolution so OIG could reject the proposed management decision. CPD had not entered a management decision 

when the government furlough started in December 2018. Shortly after the furlough ended on January 29, 2019, 

OIG issued a referral memorandum to CPD’s Deputy Assistant Secretary for Grant Programs, noting that it had

been unable to reach a management decision and disagreed with CPD’s management decision memorandum. 

Specifically, OIG disagreed with OBGA’s statements that codification is not necessary and that codification has 

limited or no applicability for future disasters. OIG also noted that OBGA did not address that its use of multiple 

Federal Register notices to administer the CDBG-DR funding presented challenges to the grantees. OIG further 

disagreed that language in the various Disaster Recovery statutes prohibits HUD or OBGA from issuing codified 

rules under the authority granted to it in the Housing and Community Development Act of 1974, as Congress 

provided these funds under the Community Development Fund. 

Additionally, OBGA acknowledged the report’s conclusion that codification could increase the speed at which 

grantees could assemble an action plan. OBGA further stated and OIG agrees that Federal Register notices would 

still be required. However, OIG believes the number and content volume of Federal Register notices would be 

reduced if OBGA codified the program. Thus, OIG believes that a management decision, which contains only an 

agreement to issue a consolidated guide for the issued Federal Register notices, is not sufficient to address the 

recommendation, which was to create a codified disaster recovery program. 

OIG did not receive a response to the disagreement referral to the Deputy Assistant Secretary for Grant Programs. 

Therefore, on March 26, 2019, OIG referred its disagreement to the Principal Deputy Assistant Secretary for 

Community Planning and Development. Despite followup emails to both officials, OIG did not receive a response 

to either referral. Therefore, OIG referred its disagreement to the Deputy Secretary on September 30, 2019. (Audit 

Report: 2018-FW-0002) 

THE STATE OF NEW YORK DID NOT ENSURE THAT PROPERTIES PURCHASED UNDER 

THE ACQUISITION COMPONENT OF ITS PROGRAM WERE ELIGIBLE, ISSUE DATE: 

MARCH 29, 2019 

HUD OIG audited the State of New York’s CDBG-DR-funded New York Rising Buyout and Acquisition program. 

OIG’s objective was to determine whether the State ensured that properties purchased under the acquisition 

component of the program met applicable HUD, Federal, and State requirements.

OIG found that the State did not ensure that properties purchased under the acquisition component of its program 

met eligibility requirements. Specifically, it did not ensure that properties were substantially damaged and complied 

with flood hazard requirements. Further, it may have improperly purchased properties that did not comply with 

flood insurance requirements. These deficiencies occurred because the State did not have adequate controls and 

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SEMIANNUAL REPORT TO CONGRESS

relied on applicants and other entities to ensure compliance with requirements. For example, the State relied on 

letters from local governments provided by its applicants to show that properties were substantially damaged, and it 

did not have a process to ensure that the substantial damage determination letters were accurate and supported. As a 

result, the State disbursed more than $3.5 million for ineligible properties and incentives and more than $5.9 million 

for properties that it could not show met applicable requirements, and HUD did not have assurance that CDBG-DR

funds were used for their intended purpose.

OIG recommended that HUD require the State to (1) reimburse more than $3.5 million in settlement costs and 

incentives paid for properties that did not meet eligibility requirements or should not have received incentives; (2) 

provide documentation showing that 15 properties met requirements related to substantial damage, flood hazards, 

and flood insurance or reimburse more than $5.9 million paid to purchase the properties; and (3) conduct a review 

of the other properties purchased under its program to ensure that properties were eligible and reimburse the amount 

paid for any additional properties found to be ineligible. Further, OIG recommended that HUD require the State to 

provide documentation showing that the acquisition component of its program has ended or improve its controls to 

ensure that properties purchased are eligible.

The Deputy Assistant Secretary for Grant Programs did not propose a management decision to address the eight 

recommendations contained in the audit report. OIG referred the recommendations to the Assistant Secretary for 

Community Planning and Development on August 19, 2019. In an attempt to reach agreement, OIG held 

discussions with CPD officials on June 17, July 26, and September 24, 2019. HUD told OIG that a management 

decision had been drafted but it was undergoing a review process within CPD. OIG referred the recommendations 

to the Deputy Secretary on September 30, 2019. (Audit Report: 2019-NY-1001) 

EVALUATION REPORTS ISSUED BEFORE START OF PERIOD WITH NO MANAGEMENT 

DECISION AS OF SEPTEMBER 30, 2019 

RISK-BASED ENFORCEMENT COULD IMPROVE PROGRAM EFFECTIVENESS, ISSUE

DATE: FEBRUARY 12, 2016

HUD OIG evaluated the effectiveness of the Departmental Enforcement Center (DEC). Historically, HUD program 

managers have not wanted to enforce program requirements. That reluctance increases the risk that program funds 

will not provide maximum benefits to recipients and allows serious noncompliance to go unchecked. When it was 

created, DEC had independent enforcement authority, but it lost that authority when it moved from the Deputy 

Secretary’s office to the Office of General Counsel. DEC lost control of funding and staffing levels and contended 

with inadequate IT systems and support. Although program offices were asking for more DEC financial analyses, 

they did not consistently use enforcement actions to remedy noncompliance. Further, managers’ reluctance to 

enforce program requirements limited DEC’s effectiveness in most programs. Turnover, retirements, and hiring 

limitations could leave DEC without enough skilled staff to support future workloads needed to service HUD 

programs and enforce program requirements. Risk-based monitoring and enforcement offers the opportunity to 

provide quality, affordable rental housing, improve the quality of life, and build strong, resilient communities. 

OIG made eight recommendations, three of which remain open. OIG has not reached an agreed-upon management 

decision for one of these recommendations, although it is making progress on this recommendation through 

correspondence with HUD officials. To address this recommendation, HUD plans to develop a protocol that would 

provide data-driven referrals to DEC on financial and physical performance failures. HUD plans to develop two

protocols: one among the Real Estate Assessment Center (REAC), DEC, and PIH and another among REAC, DEC, 

and the Office of Multifamily Housing Programs. HUD has developed and provided draft protocols. In August 

2019, OIG notified HUD officials that one of the draft protocols must be revised to demonstrate collaboration with 

REAC and meet the intent of the recommendation. (Evaluation Report: 2014-OE-0002) 

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SEMIANNUAL REPORT TO CONGRESS

OPPORTUNITIES FOR IMPROVEMENT WITHIN CPD’S RISK MANAGEMENT PROCESS 

FOR HURRICANE SANDY GRANTS, ISSUE DATE: MARCH 29, 2017

HUD OIG evaluated the risk analysis process for Hurricane Sandy grants performed by HUD CPD. CPD uses a 

risk analysis process to rank grantees that pose the greatest risk to the integrity of its programs. According to CPD, 

the risk analysis results guide how the monitoring phase of the risk management process is conducted. After CPD 

management certifies the risk analysis results, management develops a monitoring strategy. By monitoring 

grantees, CPD aims to ensure that a grantee performs and delivers on the terms of the grant while reducing the 

possibility of fraud, waste, and mismanagement.

OIG observed that (1) CPD’s risk analysis worksheet did not consider risk related to performance outputs, (2) the 

risk analysis did not consider the likelihood of risk events occurring, (3) no clear correlation between the risk 

analysis and monitoring existed, (4) CPD made limited use of data analytics in its risk management process, and (5) 

CPD staff was not trained to conduct a risk analysis.

OIG made five recommendations, three of which remain open. OIG has not reached an agreed-upon management 

decision for one of these recommendations. On November 1, 2018, OIG referred this recommendation to the 

Acting General Deputy Assistant Secretary for Community Planning and Development for resolution. On June 24, 

2019, OIG referred this recommendation to the Principal Deputy Assistant Secretary for Community Planning and 

Development for resolution. OIG met with CPD officials in July 2019 to discuss CPD’s progress in resolving the 

recommendation. To address this recommendation, CPD plans to improve the risk analysis process, namely through 

data automation. The intent of the recommendation is to include the likelihood of future risk occurrence in the risk 

analysis, but CPD’s planned changes do not address how it has incorporated or plans to incorporate the likelihood of 

risk occurrence into its updated risk analysis. In August 2019, OIG notified CPD officials that CPD should specify 

how its planned changes to the risk analysis process will incorporate the likelihood of risk occurrence into its 

updated risk analysis and when it expects to complete these changes. (Evaluation Report: 2016-OE-0004S) 

HUD WEB APPLICATION SECURITY EVALUATION, ISSUE DATE: JULY 6, 2017

HUD OIG completed a targeted web application security evaluation of HUD in support of a Counsel of the 

Inspectors General on Integrity and Efficiency Federal cross-cutting project, making nine recommendations for 

improvement to the Department. OIG assessed HUD’s capability to identify and mitigate critical IT vulnerabilities 

in the Department’s publicly accessible web applications. OIG identified key deficiencies in HUD’s practices that 

put HUD’s extensive collection of sensitive data, including personal information of private citizens, at increased 

risk of unauthorized access and compromise. Of particular concern was the discovery of multiple operating web 

applications unknown to the Office of the Chief Information Officer. 

To date, HUD has not provided management decisions for the nine open recommendations or a required estimated 

completion date for providing the management decisions. On June 2, 2017, HUD concurred with all

recommendations and agreed to work with OIG to assign responsibility and complete resolution. Due to key 

leadership changes and priority focus on providing OIG with management decisions for the fiscal years 2017 and 

2018 Federal Information Security Modernization Act evaluations, management decisions for this report have not 

been provided. (Evaluation Report: 2016-OE-0002) 

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SEMIANNUAL REPORT TO CONGRESS

HUD IT SYSTEM MANAGEMENT AND OVERSIGHT OF THE SECTION 184 PROGRAM, 

ISSUE DATE: AUGUST 13, 2018

HUD OIG evaluated the IT systems supporting the Office of Native American Program (ONAP) Indian Home Loan 

Guarantee Program (Section 184 program) following concerns that HUD had not used provided resources to address 

shortcomings in internal controls and the ability to deploy a reliable IT system. Concerning a newly developed IT 

system called the Loan Origination System (LOS), OIG observed (1) significant limitations, requiring lenders and 

program officials to continue to use a HUD legacy IT system and manual processes for maintaining files, servicing 

loans, and managing claims; (2) that only 1 of 38 lenders was able to access and use LOS due to HUD’s inability to 

resolve and implement a user access solution; (3) that LOS had no capability to conduct loan servicing and claims, 

which are still conducted using Excel spreadsheets; and (4) that LOS lacked critical management reporting 

capabilities. Despite HUD’s investing $4 million into the development of LOS, the system does not satisfy all 

management and oversight objectives.

OIG made five recommendations with all five remaining open. HUD and ONAP concurred with all five 

recommendations in August 2018 with a suspense of November 26, 2018, to provide OIG with management 

decisions. However, due to the LOS contract lapse in September 2018 and the inability to let a new contract, HUD 

and ONAP have been unable to provide management decisions for all five recommendations. ONAP has been in 

regular contact with OIG and states that a new contract for maintaining LOS must be in place to coordinate with

HUD on the management decisions. The LOS solicitation was released in March 2019, with proposals expected to 

be provided to HUD for review in April 2019. (Evaluation Report: 2018-OE-0004) 

SIGNIFICANTLY REVISED MANAGEMENT DECISIONS

Section 5(a)(11) of the Inspector General Act, as amended, requires that OIG report information concerning the 

reasons for any significantly revised management decisions made during the reporting period. During the current 

reporting period, there were three significantly revised management decisions.

U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, COMPLIANCE WITH THE 

IMPROPER PAYMENTS ELIMINATION AND RECOVERY ACT, ISSUE DATE: MAY 13, 2016

HUD OIG audited HUD’s fiscal year 2015 compliance with the Improper Payments Elimination and Recovery Act 

of 2010 (IPERA). OIG determined that HUD did not comply with IPERA in fiscal year 2015. OIG made 13 

recommendations to improve HUD’s compliance with IPERA and to address weaknesses identified in HUD’s 

payment recapture audit plans, rental housing assistance program improper payment estimation process, and 

reporting of improper payment information in the agency financial report. 

In implementing corrective actions, HUD determined that it needed to significantly change its IPERA process and is 

now using contractor support with a 2-year deadline to bring HUD into full compliance with all requirements of the 

Improper Payments Elimination and Recovery Improvement Act and Office of Management and Budget Circular A123, appendix C, for all HUD programs, components, and offices by fiscal year 2020. HUD stated that this work 

would incorporate an increased level of effort to support HUD’s programs that are susceptible to significant

improper payments and provide analyses to identify other HUD programs that may be susceptible to significant 

improper payments. OIG agreed that OCFO’s previous process was flawed and has, therefore, accepted several 

revised management decisions that reflect this new plan. (Audit Report: 2016-FO-0005) 

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SEMIANNUAL REPORT TO CONGRESS

INTERIM REPORT ON HUD’S INTERNAL CONTROLS OVER FINANCIAL REPORTING, 

ISSUE DATE: DECEMBER 8, 2014

As part of the annual HUD OIG consolidated audit, OIG found deficiencies in HUD’s accounting for its plant,

property, and equipment (PP&E) in fiscal year 2014. OIG recommended that HUD periodically reconcile balances 

with OCIO subsidiary records and research and resolve any identified differences.

OCFO has been working to remediate several PP&E audit findings by collaborating with key HUD stakeholders and 

implementing new workflow processes, procedures, and internal controls. This recent remediation created the need 

for a revised management decision. The updated process will reconcile the PP&E account, which will now be 

accounted for in Oracle’s Fixed Asset module, to OCIO subsidiary ledgers. OIG agreed with this approach and 

accepted the revised management decision. (Audit Report: 2015-FO-0002) 

HUD DID NOT HAVE EFFECTIVE CONTROLS TO ENSURE THAT LENDERS REPORTED 

DEFAULTS ACCURATELY AND IN A TIMELY MANNER, ISSUE DATE: SEPTEMBER 10, 

2013

HUD OIG audited HUD’s Office of Single Family Housing to determine whether it had effective controls in place 

to ensure that lenders reported default information on FHA-insured loans accurately and in a timely manner. 

Lenders report default information to HUD’s Single Family Default Monitoring System. This system collects and 

tracks the key significant events that occur during a default episode.

OIG determined that HUD did not have effective controls to ensure that lenders reported default information 

accurately and in a timely manner. HUD’s controls included only minimal system error codes; basic monitoring of 

error code rates, nonreporting, and underreporting; and lender servicing reviews examining a sample of default 

information at selected lenders. HUD also did not have an adequate penalty process in place to deter future issues. 

As a result, the default data were not always accurate and timely.

One recommendation OIG made was for HUD to implement additional system error checks to identify potential 

reporting issues. In its original management decision, HUD agreed to modify its Single Family Default Monitoring 

System to create additional system error checks, subject to budgetary constraints. On August 10, 2018, HUD 

submitted a revised management decision, stating that due to funding restraints, it had not been able to enhance the 

system. Instead, HUD planned to implement its 4-year Roadmap plan, which included retiring the Single Family 

Default Monitoring System and replacing it with a more modern and robust system. HUD planned to submit a 

business case for the Roadmap through the fiscal year 2020 budget process. On August 15, 2019, HUD submitted 

another revised management decision, stating that it had established project timelines and would replace the default 

monitoring system by July 31, 2021, as part of phase 1 of the project. On September 5, 2019, OIG agreed with the 

revised management decision. (Audit Report: 2013-KC-0003) 

SIGNIFICANT MANAGEMENT DECISION WITH WHICH OIG DISAGREES

During the reporting period, OIG did not disagree with any significant management decision.

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SEMIANNUAL REPORT TO CONGRESS

FEDERAL FINANCIAL MANAGEMENT IMPROVEMENT ACT OF 1996

Section 804 of FFMIA requires OIG to report in its Semiannual Reports to Congress instances and reasons when an 

agency has not met the intermediate target dates established in its remediation plans required by FFMIA. Section 

803(a) of FFMIA requires that each agency establish and maintain financial management systems that comply with 

Federal financial management system requirements, Federal accounting standards, and the United States Standard 

General Ledger at the transaction level.

HUD issued its agency financial report for fiscal year 2018 during fiscal year 2019 and reported that it could not 

provide assurance that its financial management systems complied with FFMIA due to financial management 

system weaknesses and nonconformance with FFMIA. OIG concurred with HUD’s assessment as reported in 

OIG’s report on HUD’s financial statements. 

HUD continues to implement its remediation plans to address the longstanding weaknesses in its financial 

management systems. However, OIG has noted several instances in which HUD has not met the intermediate target 

dates established in its prior-year remediation plans to address FFMIA noncompliance. Specifically, HUD has 

missed intermediate target dates in addressing weaknesses in Ginnie Mae and CPD systems. Ginnie Mae’s 

noncompliance is primarily due to material weaknesses in internal controls over financial reporting and its inability 

to properly account for its defaulted issuer loan portfolio. In fiscal year 2019, HUD asserted that Ginnie Mae’s 

financial statements were auditable for the first time since fiscal year 2014. Further, CPD’s decision to not adopt 

compliant grant accounting and related controls within the IDIS application for fiscal year 2014 and prior grants 

continues the longstanding noncompliance with Federal system requirements, GAAP, and the United States 

Standard General Ledger at the transaction level. OIG’s fiscal year 2019 financial statement audit, including its

assessment of compliance with FFMIA, was still in process as of September 30, 2019. 

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SEMIANNUAL REPORT TO CONGRESS

CHAPTER 9 – WHISTLEBLOWER OMBUDSMAN 

Whistleblowers play a critical role in keeping our Government programs honest, efficient, and accountable. The 

U.S. Department of Housing and Urban Development, Office of Inspector General (HUD OIG), continues to ensure 

that HUD and HUD OIG employees are aware of their rights to disclose misconduct, waste, or abuse in HUD 

programs without reprisal and to assist HUD and HUD OIG employees in seeking redress when employees believe 

that they have been subject to retaliation for whistleblowing. HUD OIG also investigates complaints of 

whistleblower retaliation by government contractors and grantees.

HUD OIG’s Whistleblower Protection Coordinator Program works with HUD and HUD OIG employees to provide 

information on

• employee options for disclosing misconduct, waste, or abuse in HUD programs; 

• statutory protections for Federal employees who make such disclosures; and 

• how to file a complaint under the Whistleblower Protection Act when an employee believes he or she has

been retaliated against for making protected disclosures.

The HUD OIG Whistleblower Protection Coordinator Program continued its focus on staff training and individual 

assistance. The mandatory whistleblower training is presented in conjunction with the OIG annual ethics training. 

The 2019 training was presented on September 19, 2019. It was presented live and will be posted on HUD OIG’s 

website for employees who could not attend in person. 

In October 2017, Congress enacted the Dr. Chris Kirkpatrick Whistleblower Protection Act of 2017, which contains 

new training and performance standards for supervisors regarding the handling of whistleblowers. HUD OIG is in 

the process of implementing these requirements.

The Whistleblower Protection Coordinator meets with HUD employees individually, upon request. Generally, 

HUD OIG will refer HUD employees with whistleblower retaliation complaints to the Office of Special Counsel

(OSC). HUD OIG does not track these matters unless OSC requests HUD OIG assistance in investigating a 

complaint. During this semiannual reporting period, HUD OIG did not substantiate any whistleblower retaliation 

complaints against HUD employees. 

HUD OIG did receive a number of complaints filed under 41 U.S.C. (United States Code) 4712. In December 

2016, Congress passed the Enhancement of Whistleblower Protection Act. It made the whistleblower protections 

under 41 U.S.C. 4712 permanent. Section 4712 extends whistleblower protection to employees of Federal 

contractors, subcontractors, grantees, and subgrantees. If the employee of a HUD grantee or contractor believes he 

or she has been retaliated against for whistleblowing, he or she may file a complaint with OIG, and OIG will 

investigate the complaint and provide findings of fact to HUD. OIG is required to complete its investigation within 

180 days unless the complainant agrees to an extension. 

The chart below provides further information on those complaints.

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SEMIANNUAL REPORT TO CONGRESS

Number of complainants asserting whistleblower 

status17 7 (2 referred to hotline)

Complaints referred for investigation to the HUD

OIG Office of Investigation (OI) 5 

Complaint investigations opened by OI 5 

Complaints declined by OI 0 

Complaints currently under review by OI 3 

Employee complaint investigations closed by OI 2 

17 Not all complainants are found to be whistleblowers under Section 4712. For example, many complainants raise 

questions regarding treatment by public housing agencies following their alleged disclosures of wrongdoing by the same 

housing agency. They claim to be whistleblowers, but they are not employees of the grantee. These complaints are 

referred to OIG’s hotline for appropriate referral and disposition.

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SEMIANNUAL REPORT TO CONGRESS

APPENDIX 1 – PEER REVIEW REPORTING 

BACKGROUND

The Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law No. 111-203), section 989C, 

requires inspectors general to report the latest peer review results in their semiannual reports to Congress. The 

purpose in doing so is to enhance transparency within the government. The Offices of Audit, Investigation, and 

Evaluation are required to undergo a peer review of their individual organizations every 3 years. The purpose of the 

review is to ensure that the work completed by the respective organizations meets the applicable requirements and 

standards. The following is a summary of the status of the latest round of peer reviews for the organization. 

OFFICE OF AUDIT

PEER REVIEW CONDUCTED ON HUD OIG BY DOT OIG

The U.S. Department of Housing and Urban Development, Office of Inspector General (HUD OIG), received a 

grade of pass (the highest rating) on the peer review report issued by the U.S. Department of Transportation (DOT) 

OIG on September 28, 2018. There were no recommendations included in the System Review Report. The report 

stated: 

In our opinion, the system of quality control for the audit organization of the HUD OIG in effect for the year ended 

March 31, 2018, was suitably designed and complied with to provide the HUD OIG with reasonable assurance of 

performing and reporting in conformity with applicable professional standards in all material respects. Federal 

Audit organizations can receive a rating of pass, pass with deficiencies, or fail. The HUD OIG has received a peer 

review rating of pass.

PEER REVIEW CONDUCTED BY HUD OIG ON DOD OIG

HUD OIG conducted an external peer review of the U.S. Department of Defense (DoD) OIG, Office of Audit, and 

issued a final report September 27, 2018. DoD OIG received a peer review rating of pass. A copy of the external 

quality control review report can be viewed at https://media.defense.gov/2018/Oct/05/2002048826/-1/-

1/1/TRANSMITTAL%20MEMO%20AND%20SYSTEM%20REVIEW%20REPORT.PDF.

OFFICE OF INVESTIGATION

PEER REVIEW CONDUCTED ON HUD OIG BY DHS OIG

The U.S. Department of Homeland Security (DHS) OIG conducted a peer review of the HUD OIG, Office of 

Investigation, and issued a final report on July 3, 2017. DHS OIG determined that HUD OIG was in compliance 

with the quality standards established by the Council of the Inspectors General on Integrity and Efficiency and the 

Attorney General’s guidelines.

PEER REVIEW CONDUCTED BY HUD OIG ON USDA OIG

HUD OIG conducted an external peer review of the U.S. Department of Agriculture (USDA) OIG, Office of

Investigation, and issued a final report on October 4, 2016. HUD OIG determined that USDA OIG was in

compliance with the quality standards established by the Council of the Inspectors General on Integrity and

Efficiency. 

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SEMIANNUAL REPORT TO CONGRESS

OFFICE OF EVALUATION

PEER REVIEW CONDUCTED BY HUD OIG ON FHFA OIG

HUD OIG conducted an external peer review of the Federal Housing Finance Agency (FHFA) OIG’s inspection and 

evaluation functions and issued a final report September 10, 2019. FHFA OIG received a peer review rating of 

pass. A copy of the external quality control review report can be viewed at 

https://www.fhfaoig.gov/sites/default/files/Final%20Report%20-

%20External%20Peer%20Review%20of%20FHFA%20OIG.pdf. 

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SEMIANNUAL REPORT TO CONGRESS

APPENDIX 2 – AUDIT AND EVALUATION REPORTS 

ISSUED 

Internal Reports

AUDIT REPORTS

CHIEF FINANCIAL OFFICER

2019-AT-0001 HUD Did Not Always Comply With the Improper Payments Elimination and Recovery Act of 2010, 

06/03/2019.

COMMUNITY PLANNING AND DEVELOPMENT

2019-FW-0001 CPD Did Not Enforce the Disaster Appropriations Act, 2013, 24-Month Grantee Expenditure 

Requirement, 05/17/2019. Questioned: $526,629,659. Better use: $413,530,414.

HOUSING

2019-KC-0001 FHA Improperly Paid Partial Claims That Did Not Reinstate Their Related Loans, 04/11/2019. 

Questioned: $2,342,833. Better use: $27,100,000.

2019-KC-0003 FHA Insured at Least $13 Billion in Loans to Ineligible Borrowers With Delinquent Federal Tax Debt, 

09/30/2019. Better use: $6,130,757,970.

PUBLIC AND INDIAN HOUSING

2019-KC-0002 HUD Paid Rental Subsidies To Benefit Public Housing and Voucher Tenants Reported as Excluded 

From Federal Programs or Deceased, 06/25/2019. Better use: $19,763,190.

AUDIT-RELATED MEMORANDUMS18

CHIEF PROCUREMENT OFFICER

2019-KC-0801 Moderate Risk Identified in HUD’s Fiscal Years 2017-2018 Purchase Card Program Risk Assessment, 

04/18/2019.

HOUSING

2019-LA-0801

HUD Completed the Agreed-Upon Corrective Actions for One of the Two Recommendations 

Reviewed From Prior OIG Audit Report 2015-LA-0001 on FHA-HAMP Partial Claims, 07/15/2019. 

Questioned: $5,448,257. Unsupported: $5,448,257.

PUBLIC AND INDIAN HOUSING

2019-LA-0802

The Office of Native American Programs Did Not Satisfactorily Complete the Agreed-Upon Corrective 

Actions for Three of the Four Recommendations From Prior OIG Audit Report 2014-LA-0006, 

07/18/2019.

18 The memorandum format is used to communicate the results of reviews not performed in accordance with generally accepted 

government auditing standards; to close out assignments with no findings and recommendations; to respond to requests for information; 

or to report on the results of a survey, attestation engagement, or civil actions or settlements.

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SEMIANNUAL REPORT TO CONGRESS

External Reports

AUDIT REPORTS

COMMUNITY PLANNING AND DEVELOPMENT

2019-AT-1004

The North Carolina Department of Commerce Did Not Administer Its Neighborhood Stabilization 

Program Grants as Required by HUD, 06/14/2019. Questioned: $14,402,177. Unsupported: 

$14,402,177. Better use: $417,113.

2019-AT-1005

The Municipality of Yauco, PR, Did Not Always Administer Its CDBG Program in Accordance With 

HUD Requirements, 08/09/2019. Questioned: $1,515,165. Unsupported: $1,515,059. Better use: 

$1,641.

2019-BO-1001 The City of Bridgeport, CT, Did Not Properly Administer Its HOME Program, 04/25/2019. 

Questioned: $3,690,233. Unsupported: $3,267,465. Better use: $741,698.

2019-BO-1003

The Commonwealth of Massachusetts Did Not Always Ensure That Its Grantees Complied With 

Applicable State and Federal Laws and Requirements, 08/05/2019. Questioned: $1,562,307. 

Unsupported: $896,387.

2019-FW-1004

The City of Dallas, Dallas, TX, Did Not Follow Environmental Requirements or Effectively Manage Its 

Community Housing Development Organizations, 06/17/2019. Questioned: $6,266,932. Unsupported: 

$3,867,955.

2019-FW-1005 Northlake Homeless Coalition, Mandeville, LA, Did Not Always Follow Continuum of Care Program 

Requirements, 07/11/2019. Questioned: $128,692. Unsupported: $128,692. Better use: $2,092,545.

2019-FW-1007 The Texas General Land Office, Jasper, TX, Did Not Ensure That Its Subrecipient Administered Its 

Disaster Grant in a Prudent and Cost-Effective Manner, 09/30/2019.

2019-LA-1004

The Housing Authority of the County of Stanislaus, Modesto, CA, Did Not Always Adequately 

Document Homeless Eligibility in Accordance With Shelter Plus Care Program Requirements, 

04/17/2019. Questioned: $13,885. Unsupported: $13,885.

2019-LA-1005

The Housing Authority of the County of San Bernardino, CA, Did Not Adequately Support 

Administrative Fees Charged to Its Continuum of Care Grants, 04/17/2019. Questioned: $663,070. 

Unsupported: $663,070.

2019-NY-1002

The State of New York Did Not Ensure That Appraised Values Used by Its Program Were Supported 

and Appraisal Costs and Services Complied With Requirements, 05/29/2019. Questioned: 

$370,855,225. Unsupported: $370,855,225. Better use: $93,350,616.

2019-NY-1004 The Lower Manhattan Development Corporation, New York, NY, Generally Administered Its Disaster 

Recovery-Funded Program in Accordance With Applicable Requirements, 08/14/2019.

HOUSING

2019-BO-1004

Tuscan Homes I and II in Hartford, CT, Was Not Always Managed in Accordance With Its Regulatory 

Agreement and HUD Requirements, 09/09/2019. Questioned: $35,414. Unsupported: $17,653. 

Better use: $45,000.

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SEMIANNUAL REPORT TO CONGRESS

2019-CH-1003

The Management Agent for Lake View Towers Apartments, Chicago, IL, Did Not Always Comply 

With HUD’s Section 8 HAP Program Requirements, 09/03/2019. Questioned: $456,390. 

Unsupported: $399,438. Better use: $54,401.

2019-DE-1001 Bank of America, Plano, TX, Followed the Loss Mitigation Requirements for All of the Loans 

Reviewed, 04/09/2019.

2019-FW-1003 Northline Point Apartments, Houston, TX, Multifamily Section 8 Program, Subsidized Unsupported 

Tenants and Uninspected Units, 06/10/2019. Questioned: $1,054,150. Unsupported: $1,054,150.

2019-PH-1003 PK Management, LLC, Richmond Heights, OH, Did Not Always Maintain Documentation Required to 

Support Housing Assistance Payments, 08/02/2019. Questioned: $497,762. Unsupported: $497,762.

2019-PH-1005 Summit Construction and Environmental Services, LLC, Richmond, VA, Generally Complied With 

Requirements for Lead-Based Paint Evaluations, 09/25/2019.

PUBLIC AND INDIAN HOUSING

2019-AT-1003

The Talladega Housing Authority, Talladega, AL, Generally Administered Its Rental Assistance 

Demonstration Conversion in Accordance With HUD Requirements but Did Not Comply With Critical 

Renovations Regulations, 05/08/2019. Questioned: $36,022.

2019-AT-1006 Palm Beach County Housing Authority, West Palm Beach, FL, Did Not Support and Spend HUD 

Funds According to Regulations, 09/30/2019. Questioned: $67,377. Unsupported: $62,377.

2019-BO-1002

The Housing Authority of the City of Woonsocket, RI, Did Not Always Comply With Capital Fund 

Program and Procurement Requirements, 05/07/2019. Questioned: $3,377,137. Unsupported: 

$1,427,019. Better use: $125,491.

2019-CH-1004

The Taylor Housing Commission, Taylor, MI, Did Not Always Comply With HUD’s and Its Own 

Requirements for Its Program Household Files, 09/30/2019. Questioned: $57,909. Unsupported: 

$20,762. Better use: $1,726. 

2019-DE-1002 The Fort Collins Housing Authority, Fort Collins, CO, Administered Its RAD Project in Accordance 

With HUD Requirements for the Items Reviewed, 04/18/2019.

2019-FW-1001

The Little Rock Housing Authority, Little Rock, AR, Did Not Fully Meet Rental Assistance 

Demonstration Program Requirements, 04/23/2019. Questioned: $1,925,814. Unsupported: 

$1,925,814. Better use: $829,544.

2019-FW-1002 The Weslaco Housing Authority, Weslaco, TX, Did Not Follow Federal, State, and Authority 

Requirements for Legal Services, 05/15/2019. Questioned: $118,170. Unsupported: $97,170.

2019-FW-1006

The Bogalusa Housing Authority, Bogalusa, LA, Did Not Always Administer Its Public Housing 

Programs in Accordance With Requirements, 08/16/2019. Questioned: $279,953. Unsupported: 

$254,002. Better use: $709.

2019-KC-1001 

The Columbia Housing Authority, Columbia, MO, Did Not Maintain Written Records of Resident 

Relocation Incentive Payment Consultations or Properly Pay Business Relocation Incentives, 

04/11/2019. Questioned: $136,432. Unsupported: $136,432.

2019-LA-1006 The Housing Authority of the County of Los Angeles, Alhambra, CA, Did Not Ensure That Its 

Intergovernmental Agreements Included the Current HUD Requirements, 07/03/2019.

52
SEMIANNUAL REPORT TO CONGRESS

2019-LA-1007 Bank2, Oklahoma City, OK, Originated Loans Reviewed in Accordance With Section 184 Loan 

Guarantees for Indian Housing Program Processing Guidelines, 07/11/2019.

2019-LA-1008 The Compton Housing Authority, Compton, CA, Did Not Administer Its Housing Choice Voucher 

Program in Accordance With HUD Requirements, 07/11/2019. Questioned: $77,542.

2019-LA-1009 The Housing Authority of the County of San Diego, San Diego, CA, Executed and Administered Its 

Intergovernmental Agreement as Required, 07/15/2019.

2019-NY-1003

New York City Department of Housing Preservation and Development, New York, NY, Did Not 

Always Ensure That Units Met Housing Quality Standards but Generally Abated Payments When 

Required, 08/02/2019. Questioned: $28,303. Better use: $760,363.

2019-PH-1001 The Housing Authority of the City of Easton, PA, Did Not Always Properly Administer Its Housing 

Choice Voucher Program, 07/30/2019. Questioned: $2,463.

2019-PH-1002

The Charlottesville Redevelopment and Housing Authority, Charlottesville, VA, Did Not Always 

Comply With Applicable Procurement Requirements, 08/02/2019. Questioned: $728,516. 

Unsupported: $728,516.

2019-PH-1004 The Housing Authority of the City of Annapolis, MD, Did Not Always Properly Administer Its 

Housing Choice Voucher Program, 08/14/2019.

AUDIT-RELATED MEMORANDUMS19

GENERAL COUNSEL

2019-CF-1803 Pacific Horizon Bancorp, Inc., and Two Loan Officers Settled Allegations of Failing To Comply With 

HUD’s Federal Housing Administration Loan Requirements, 09/30/2019. Questioned: $340,000.

2019-CF-1804 PrimeLending, a PlainsCapital Company, Settled Allegations of Failing To Comply With HUD’s 

Federal Housing Administration Loan Requirements, 09/30/2019. Questioned: $10,124,836.

2019-CF-1805 Quicken Loans, Inc., Settled Allegations of Failing To Comply With HUD’s Federal Housing 

Administration Loan Requirements, 09/30/2019. Questioned: $32,500,000.

No Evaluation reports were issued during the reporting period. 

19 The memorandum format is used to communicate the results of reviews not performed in accordance with generally accepted government 

auditing standards; to close out assignments with no findings and recommendations; to respond to requests for information; or to report on the 

results of a survey, an attestation engagement, or civil actions or settlements.

53
SEMIANNUAL REPORT TO CONGRESs

APPENDIX 3 – TABLES

TABLE A

AUDIT REPORTS ISSUED BEFORE START OF PERIOD WITH NO MANAGEMENT 

DECISION AT 09/30/2019 

*Significant audit reports described in previous Semiannual Reports

REPORT NUMBER AND TITLE REASON FOR LACK OF MANAGEMENT 

DECISION ISSUE DATE

* 2014-FO-0003 Additional Details To Supplement Our Report

on HUD’s Fiscal Years 2013 and 2012 (Restated) Financial

Statements

See chapter 8, page 27 12/16/2013

* 2014-LA-0005 HUD Did Not Always Recover FHA SingleFamily Indemnification Losses and Ensure That

Indemnification Agreements Were Extended

See chapter 8, page 28 08/08/2014

* 2015-FO-0003 Audit of the Government National Mortgage

Association’s Financial Statements for Fiscal Years 2014 and

2013

See chapter 8, page 29 02/27/2015

* 2016-FO-0001 Audit of Fiscal Years 2015 and 2014

(Restated) Financial Statements See chapter 8, page 29 11/13/2015

* 2016-FO-0003 Additional Details To Supplement Our Fiscal

Years 2015 and 2014 (Restated) U.S. Department of Housing

and Urban Development Financial Statement Audit

See chapter 8, page 30 11/18/2015

* 2016-PH-0001 HUD Did Not Always Provide Adequate

Oversight of Property Acquisition and Disposition Activities See chapter 8, page 31 06/30/2016

* 2016-PH-0005 HUD Did Not Always Provide Accurate and

Supported Certifications of State Disaster Grantee Procurement

Processes

See chapter 8, page 31 09/29/2016

* 2017-FO-0001 Audit of Fiscal Years 2016 and 2015

(Restated) Financial Statements See chapter 8, page 32 11/14/2016

* 2017-FO-0003 Additional Details To Supplement Our Fiscal

Years 2016 and 2015 (Restated) U.S. Department of Housing

and Urban Development Financial Statement Audit

See chapter 8 page 33 11/15/2016

* 2017-DP-0001 HUD’s Transition to a Federal Shared Service

Provider Failed To Meet Expectations See chapter 8, page 34 02/01/2017

2017-FW-0001 HUD’s Office of Community Planning and 

Development Did Not Appropriately Assess State CDBG 

Grantees’ Risk to the Integrity of CPD Programs or Adequately 

Monitor Its Grantees

See chapter 8, page 34 07/10/2017

54
SEMIANNUAL REPORT TO CONGRESS

REPORT NUMBER AND TITLE REASON FOR LACK OF MANAGEMENT 

DECISION ISSUE DATE

2017-CF-0801 HUD Needs To Clarify Whether IllegalUndocumented Aliens Are Eligible for Assistance Under the 

Housing Opportunities for Persons With AIDS Program

See chapter 8, page 35 08/21/2017

* 2017-PH-0002 HUD Did Not Provide Sufficient Guidance

and Oversight To Ensure That State Disaster Grantees

Followed Proficient Procurement Processes

See chapter 8, page 36 09/22/2017

* 2017-NY-0002 HUD Could Improve Its Controls Over the

Disposition of Real Properties Assisted With Community

Development Block Grant Funds

See chapter 8, page 38 09/29/2017

* 2018-FO-0004 Additional Details To Supplement Our Fiscal

Years 2017 and 2016 (Restated) U.S. Department of Housing

and Urban Development Financial Statement Audit

See chapter 8, page 39 11/15/2017

* 2018-FW-0002 HUD’s Office of Block Grant Assistance

Had Not Codified the Community Development Block Grant

Disaster Recovery Program

See chapter 8, page 39 07/23/2018

* 2019-NY-1001 The State of New York Did Not Ensure That

Properties Purchased Under the Acquisition Component of Its

Program Were Eligible

See chapter 8, page 40 03/29/2019

EVALUATION REPORTS ISSUED BEFORE START OF PERIOD WITH NO MANAGEMENT 

DECISION AT 09/30/2019

REPORT NUMBER AND TITLE REASON FOR LACK OF MANAGEMENT 

DECISION ISSUE DATE

2014-OE-0002 Risk-Based Enforcement Could Improve 

Program Effectiveness See chapter 8, page 41 02/12/2016

2016-OE-0004S Opportunities for Improvement Within CPD’s 

Risk Management Process for Hurricane Sandy Grants See chapter 8, page 42 03/29/2017

2016-OE-0002 HUD Web Application Security Evaluation See chapter 8, page 42 07/06/2017

2018-OE-0004 HUD IT System Management and Oversight of 

the Section 184 Program See chapter 8, page 43 08/13/2018

55
SEMIANNUAL REPORT TO CONGRESS

TABLE B

SIGNIFICANT AUDIT REPORTS FOR WHICH FINAL ACTION HAD NOT BEEN COMPLETED 

WITHIN 12 MONTHS AFTER THE DATE OF THE INSPECTOR GENERAL’S REPORT

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2005-AT-1013

Corporacion para el Fomento Economico de la 

Ciudad Capital, San Juan, Puerto Rico, Did Not 

Administer Its Independent Capital Fund in 

Accordance with HUD Requirements

09/15/2005 01/11/2006 Note 1

2006-CH-1021

Housing Authority of the County of Cook, Chicago, 

Illinois, Had Weak Controls over Its Section 8 

Housing Choice Voucher Program

09/30/2006 01/26/2007 09/30/2037

2009-NY-1012

The City of Rome Did Not Administer Its Economic 

Development Activity in Accordance With HUD 

Requirements, Rome, NY

05/20/2009 09/23/2009 01/30/2032

2009-AT-0001

HUD Lacked Adequate Controls to Ensure the 

Timely Commitment and Expenditure of HOME 

funds

09/28/2009 03/18/2011 Note 1

2010-AT-1003 The Housing Authority of Whitesburg Mismanaged 

Its Operations, Whitesburg, KY 04/28/2010 08/26/2010 11/29/2035

2010-CH-1008

The DuPage Housing Authority Inappropriately 

Administered Its Section 8 Project-Based Voucher 

Program, Wheaton, IL

06/15/2010 10/08/2010 11/01/2019

2011-FO-0003

Additional Details To Supplement Our Report on 

HUD’s Fiscal Years 2010 and 2009 Financial 

Statements

11/15/2010 08/08/2011 Note 1

2011-PH-1005

The District of Columbia Did Not Administer Its 

HOME Program in Accordance With Federal 

Requirements, Washington, DC

12/23/2010 04/22/2011 Note 1

2011-CH-1006

The DuPage Housing Authority Inappropriately 

Administered Its Section 8 Housing Choice Voucher 

Program, Wheaton, IL

03/23/2011 07/28/2011 11/01/2019

2011-NY-1010

The City of Buffalo Did Not Always Administer Its 

CDBG Program in Accordance With HUD 

Requirements, Buffalo, NY

04/15/2011 01/25/2012 Note 1

2011-AT-1018

The Municipality of San Juan Did Not Properly 

Manage Its HOME Investment Partnerships 

Program, San Juan, PR

09/28/2011 01/12/2012 Note 1

56
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2012-NY-1002 The City of New York Charged Questionable 

Expenditures to Its HPRP, New York, NY 10/18/2011 02/16/2012 Note 1

2012-PH-0001

HUD Needed To Improve Its Use of Its Integrated 

Disbursement and Information System To Oversee 

Its CDBG Program

10/31/2011 02/28/2012 Note 1

2012-LA-0001

HUD Did Not Adequately Support the 

Reasonableness of the Fee-for-Service Amounts or 

Monitor the Amounts Charged

11/16/2011 03/27/2012 05/29/2020

2012-AT-1009

The Municipality of Bayamón Did Not Always 

Ensure Compliance With HOME Investment 

Partnerships Program Requirements, Bayamon, PR

05/23/2012 09/18/2012 Note 1

2012-PH-1011

Prince George’s County Generally Did Not 

Administer Its HOME Program in Accordance With 

Federal Requirements, Largo, MD

08/03/2012 11/30/2012 Note 1

2012-CH-1012

The Saginaw Housing Commission Did Not Always 

Administer Its Section 8 Housing Choice Voucher 

Program in Accordance With HUD’s and Its Own 

Requirements, Saginaw, MI

09/27/2012 01/07/2013 01/01/2023

2012-CH-1013

The Flint Housing Commission Did Not Always 

Administer Its Grants in Accordance With Recovery 

Act, HUD’s, and Its Own Requirements, Flint, MI

09/27/2012 01/24/2013 11/29/2019

2013-PH-1001

Luzerne County Did Not Properly Evaluate, 

Underwrite, and Monitor a High-Risk Loan, WilkesBarre, PA

10/31/2012 01/31/2013 Note 1

2013-FO-0003

Additional Details To Supplement Our Report on 

HUD’s Fiscal Years 2012 and 2011 Financial 

Statements

11/15/2012 05/15/2013 Note 1

2013-LA-1003

Bay Vista Methodist Heights Violated Its 

Agreement With HUD When Administering Its 

Trust Funds, San Diego, CA

03/14/2013 05/15/2013 12/31/2019

2013-AT-1003

The Municipality of Arecibo Did Not Always 

Ensure Compliance With CDBG Program 

Requirements, Arecibo, PR

03/22/2013 06/14/2013 Note 1

2013-NY-1006

Nassau County Did Not Administer Its HOME 

Investment Partnerships Program in Accordance 

With HUD Requirements, Nassau County, NY

05/13/2013 09/06/2013 Note 1

57
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2013-KC-0002

HUD Did Not Enforce the Reporting Requirements 

of Section 3 of the Housing and Urban Development 

Act of 1968 for Public Housing Authorities

06/26/2013 10/24/2013 Note 1

2013-LA-1009

The City of Hawthorne Inappropriately Used Nearly 

$1.6 Million in HOME Funds for Section 8 Tenants, 

Hawthorne, CA

09/13/2013 01/06/2014 Note 1

2013-LA-1010

The City of Hawthorne Did Not Administer Its 

CDBG Program Cost Allocations in Accordance 

With HUD Rules and Requirements, Hawthorne, 

CA

09/20/2013 01/06/2014 Note 1

2013-NY-1010

The City of Auburn Did Not Always Administer Its 

CDBG Program in Accordance With HUD 

Requirements, Auburn, NY

09/26/2013 01/24/2014 Note 1

2013-CH-1009

The Flint Housing Commission Did Not Always 

Administer Its Grant in Accordance With Recovery 

Act, HUD’s, and Its Own Requirements, Flint, MI

09/27/2013 01/14/2014 11/29/2019

2013-CH-1011

The Michigan State Housing Development 

Authority Did Not Follow HUD’s Requirements 

Regarding the Administration of Its Program, 

Lansing, MI

09/30/2013 01/15/2014 07/31/2029

2013-CH-1012

The Hamtramck Housing Commission Did Not 

Administer Its Grant in Accordance With Recovery 

Act, HUD’s, and Its Own Requirements, 

Hamtramck, MI

09/30/2013 01/21/2014 11/29/2019

2013-DE-1005

The Jefferson County Housing Authority Did Not 

Properly Use Its Disposition Sales Proceeds, Wheat 

Ridge, CO

09/30/2013 01/24/2014 02/28/2020

2014-AT-1001 The Municipality of Arecibo Did Not Properly 

Administer Its HOME Program 12/03/2013 01/24/2014 Note 1

2014-FO-0001 Government National Mortgage Association Fiscal 

Years 2013 and 2012 Financial Statements Audit 12/06/2013 05/02/2014 Note 1

2014-FO-0003

Additional Details To Supplement Our Report on 

HUD’s Fiscal Years 2013 and 2012 (Restated) 

Financial Statements

12/16/2013 07/09/2014 Note 3

58
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2014-AT-1004

The State of Mississippi Did Not Ensure That Its 

Subrecipient and Appraisers Complied With 

Requirements, and It Did Not Fully Implement 

Adequate Procedures for Its Disaster Infrastructure 

Program, Jackson, MS

12/30/2013 04/15/2014 Note 1

2014-CH-1002

The City of Detroit Lacked Adequate Controls Over 

Its Neighborhood Stabilization Program-Funded 

Demolition Activities Under the Housing and 

Economic Recovery Act of 2008, Detroit, MI

01/06/2014 05/05/2014 Note 1

2014-FW-0001

The Boston Office of Public Housing Did Not 

Provide Adequate Oversight of Environmental 

Reviews of Three Housing Agencies, Including 

Reviews Involving Recovery Act Funds

02/07/2014 03/17/2015 Note 2

2014-NY-0001 HUD Did Not Provide Effective Oversight of 

Section 202 Multifamily Project Refinances 02/19/2014 06/10/2014 Note 1

2014-AT-0001 Violations Increased the Cost of Housing’s 

Administration of Its Bond Refund Program 03/14/2014 07/11/2014 Note 1

2014-FO-0004

HUD’s Fiscal Year 2013 Compliance With the 

Improper Payments Elimination and Recovery Act 

of 2010

04/15/2014 01/07/2015 12/31/2020

2014-CH-1003

The Hamtramck Housing Commission Did Not 

Always Administer Its Grant in Accordance With 

Recovery Act, HUD’s, or Its Own Requirements, 

Hamtramck, MI

04/30/2014 08/08/2014 11/29/2019

2014-FW-0002

Improvements Are Needed Over Environmental 

Reviews of Public Housing and Recovery Act Funds 

in the Kansas City Office

05/12/2014 03/17/2015 Note 2

2014-AT-1005

The City of Huntsville, Community Development 

Department, Did Not Adequately Account for and 

Administer the Mirabeau Apartments Project, 

Huntsville, AL

05/29/2014 09/23/2014 Note 1

2014-LA-0004

HUD Could Not Support the Reasonableness of the 

Operating and Capital Fund Programs’ Fees and Did 

Not Adequately Monitor Central Office Cost 

Centers

06/30/2014 10/20/2014 05/29/2020

2014-KC-0002 The Data in CAIVRS Did Not Agree With the Data 

in FHA’s Default and Claims Systems 07/02/2014 10/27/2014 Note 2

59
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2014-NY-1008

Palladia, Inc., Did Not Administer Its Supportive 

Housing Program in Accordance With HUD 

Requirements, New York, NY

07/25/2014 11/21/2014 Note 1

2014-AT-1007 The Municipality of Carolina Did Not Properly 

Administer Its HOME Program, Carolina, PR 08/08/2014 12/05/2014 Note 1

2014-LA-0005

HUD Did Not Always Recover FHA Single-Family 

Indemnification Losses and Ensure That 

Indemnification Agreements Were Extended

08/08/2014 12/03/2014 Note 3

2014-CH-1006

The Goshen Housing Authority Failed To Follow 

HUD’s and Its Own Requirements Regarding the 

Administration of Its Program, Goshen, IN

08/14/2014 01/21/2015 12/31/2019

2014-LA-0006 HUD’s ONAP Lacked Adequate Controls Over the 

ICDBG Closeout Process 08/19/2014 12/09/2014 11/29/2019 

2014-PH-1008

The State of New Jersey Did Not Fully Comply 

With Federal Procurement and Cost Principle 

Requirements in Implementing Its Tourism 

Marketing Program

08/29/2014 09/02/2015 Note 1

2014-NY-0003

Asset Repositioning Fees for Public Housing 

Authorities With Units Approved for Demolition or 

Disposition Were Not Always Accurately Calculated

09/04/2014 12/29/2014 12/31/2020

2014-AT-1010 Miami-Dade County Did Not Always Properly 

Administer Its HOME Program, Miami, FL 09/11/2014 12/11/2014 Note 1

2014-FW-0005

Improvements Are Needed Over Environmental 

Reviews of Public Housing and Recovery Act Funds 

in the Detroit Office

09/24/2014 03/17/2015 Note 2

2014-LA-1007

The City of Los Angeles Did Not Always Ensure 

That CDBG-Funded Projects Met National Program 

Objectives, Los Angeles, CA

09/29/2014 01/27/2015 Note 1

2015-NY-1001

The City of New York Did Not Always Disburse 

CDBG Disaster Recovery Assistance Funds to Its 

Subrecipient in Accordance With Federal 

Regulations, New York, NY

11/24/2014 03/23/2015 Note 1

2015-FO-0002 Interim Report on HUD’s Internal Controls Over 

Financial Reporting 12/08/2014 09/28/2015 12/31/2019

2015-FO-0003

Audit of the Government National Mortgage 

Association’s Financial Statements for Fiscal Years 

2014 and 2013

02/27/2015 06/25/2015 Note 3

60
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2015-AT-0001

HUD’s Office of Community Planning and 

Development Did Not Always Pursue Remedial 

Actions but Generally Implemented Sufficient 

Controls for Administering Its Neighborhood 

Stabilization Program

03/31/2015 08/28/2015 Note 1

2015-LA-0001 HUD’s Claim Payment System Did Not Always 

Identify Ineligible FHA-HAMP Partial Claims 04/20/2015 08/19/2015 Note 2

2015-NY-1005

The City of Paterson, NJ’s HOME Investment 

Partnerships Program Controls Did Not Ensure 

Compliance With Regulations

04/30/2015 06/03/2015 07/30/2023

2015-LA-1004

The Housing Authority of the County of San 

Bernardino, San Bernardino, CA, Used Shelter Plus 

Care Program Funds for Ineligible and Unsupported 

Participants

05/29/2015 09/16/2015 Note 1

2015-PH-1003

The State of New Jersey Did Not Comply With 

Federal Procurement and Cost Principle 

Requirements in Implementing Its Disaster 

Management System

06/04/2015 10/02/2015 Note 1

2015-FW-0001

HUD Did Not Adequately Implement or Provide 

Adequate Oversight To Ensure Compliance With 

Environmental Requirements

06/16/2015 10/07/2015 Note 1

2015-LA-0002 HUD Did Not Provide Adequate Oversight of the 

Section 184 Indian Home Loan Guarantee Program 07/06/2015 10/28/2015 12/31/2021

2015-LA-1005

NOVA Financial & Investment Corporation’s FHAInsured Loans With Downpayment Assistance Gifts 

Did Not Always Meet HUD Requirements

07/09/2015 09/11/2015 Note 1

2015-CH-0001

HUD Did Not Always Provide Adequate Oversight 

of Its Section 203(k) Rehabilitation Loan Mortgage 

Insurance Program

07/31/2015 11/27/2015 Note 1

2015-KC-0002

The Office of Community Planning and 

Development’s Reviews of Matching Contributions 

Were Ineffective and Its Application of Match 

Reductions Was Not Always Correct

08/11/2015 12/09/2015 Note 1

2015-AT-0002

HUD’s Office of Multifamily Asset Management 

and Portfolio Oversight Did Not Comply With Its 

Requirements For Monitoring Management Agents’ 

Costs

08/21/2015 12/16/2015 Note 1

61
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2015-NY-1010

New York State Did Not Always Administer Its 

Rising Home Enhanced Buyout Program in 

Accordance With Federal and State Regulations

09/17/2015 03/01/2016 Note 1

2015-NY-1011

Program Control Weaknesses Lessened Assurance 

That New York Rising Housing Recovery Program 

Funds Were Always Disbursed for Eligible Costs

09/17/2015 03/18/2016 Note 1

2015-CH-1009

The State of Illinois’ Administrator Lacked 

Adequate Controls Over the State’s Community 

Development Block Grant Disaster Recovery 

Program-Funded Projects

09/30/2015 01/28/2016 06/28/2021

2015-LA-1009

loanDepot’s FHA-Insured Loans With 

Downpayment Assistance Funds Did Not Always 

Meet HUD Requirements

09/30/2015 01/12/2016 Note 1

2015-LA-1010

loanDepot’s FHA-Insured Loans With Golden State 

Finance Authority Downpayment Assistance Gifts 

Did Not Always Meet HUD Requirements

09/30/2015 01/12/2016 Note 1

2016-FO-0001 Audit of Fiscal Years 2015 and 2014 (Restated) 

Financial Statements 11/13/2015 03/24/2016 Note 3

2016-FO-0002 Fiscal Years 2015 and 2014 Financial Statements 

Audit 11/16/2015 03/16/2016 Note 1

2016-FO-0003

Additional Details To Supplement Our Fiscal Years 

2015 and 2014 (Restated) U.S. Department of 

Housing and Urban Development Financial 

Statement Audit

11/18/2015 03/22/2016 Note 3

2016-DP-0801 Review of Information System Controls Over the 

Government National Mortgage Association 11/30/2015 03/30/2016 Note 1

2016-AT-1002 The Municipality of Toa Alta, PR, Did Not Properly 

Administer Its Section 108 Loan Guarantee Program 12/17/2015 04/12/2016 Note 1

2016-DP-0002 Single Family Insurance System and Single Family 

Insurance Claims Subsystem 12/21/2015 03/31/2016 Note 1

2016-NY-1003

The City of Rochester, NY, Did Not Always 

Administer Its Community Development Block 

Grant Program in Accordance With HUD 

Requirements

02/05/2016 06/17/2016 Note 1

2016-CH-0001

HUD Lacked Adequate Oversight of Public Housing 

Agencies’ Compliance With Its Declaration of Trust 

Requirements

02/26/2016 06/20/2016 10/01/2019

62
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2016-SE-1001

Homewood Terrace, Auburn, WA, Did Not Always 

Conduct Timely Reexaminations, Properly Request 

Assistance Payments, or Verify Income Information

03/09/2016 07/06/2016 Note 1

2016-NY-1006

New York State Did Not Always Disburse 

Community Development Block Grant Disaster 

Recovery Funds in Accordance With Federal and 

State Regulations

03/29/2016 07/27/2016 Note 1

2016-NY-1007

The City of Jersey City, NJ’s Community 

Development Block Grant Program Had 

Administrative and Financial Control Weaknesses

03/30/2016 06/08/2016 Note 1

2016-FO-0005 Compliance With the Improper Payments 

Elimination and Recovery Act 05/13/2016 10/04/2016 12/31/2020

2016-AT-0001

HUD Did Not Enforce and Sufficiently Revise Its 

Underwriting Requirements for Multifamily 

Accelerated Processing Loans

05/20/2016 09/16/2016 12/31/2019

2016-AT-1006 The City of Miami Beach Did Not Always Properly 

Administer Its HOME Program 06/17/2016 10/05/2016 Note 1

2016-BO-1003

The State of Connecticut Did Not Always 

Administer Its Neighborhood Stabilization Program 

in Compliance With HUD Regulations

06/28/2016 10/25/2016 Note 1

2016-PH-0001 HUD Did Not Always Provide Adequate Oversight 

of Property Acquisition and Disposition Activities 06/30/2016 02/16/2017 Note 3

2016-AT-1012

The Municipality of Bayamon, PR, Did Not Always 

Ensure Compliance With HUD Program 

Requirements

08/29/2016 12/15/2016 Note 1

2016-DP-0003 Additional Review of Information System Controls 

Over FHA Information Systems 08/31/2016 12/22/2016 Note 1

2016-FW-1006

The State of Louisiana’s Subrecipient Did Not 

Always Comply With Its Agreement and HUD 

Requirements When Administering Its Disaster 

Assistance Programs

08/31/2016 12/16/2016 Note 1

2016-NY-0001 Operating Fund Calculations Were Not Always 

Adequately Verified 09/12/2016 12/22/2016 04/01/2025

2016-DP-0004 HUD Rushed the Implementation of Phase 1, 

Release 3, of the New Core Project 09/20/2016 01/10/2017 Note 1

63
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2016-NY-1010

Folts, Inc., Herkimer, NY, Did Not Administer the 

Folts Adult Home and Folts Home Projects In 

Accordance With Their Regulatory Agreements

09/29/2016 03/28/2017 Note 1

2016-CH-1009

The Condominium Association and Management 

Agent Lacked Adequate Controls Over the 

Operation of West Park Place Condominium, 

Chicago, IL

09/30/2016 01/25/2017 Note 1

2016-FW-1010

The State of Oklahoma Did Not Obligate and Spend 

Its Community Development Block Grant Disaster 

Recovery Funds in Accordance With Requirements

09/30/2016 01/17/2017 Note 2

2016-PH-1009

The State of New Jersey Did Not Disburse Disaster 

Funds to Its Contractor in Accordance With HUD, 

Federal, and Other Applicable Requirements

09/30/2016 01/27/2017 Note 2

2017-BO-1001

The State of Connecticut Did Not Always Comply 

With CDBG Disaster Recovery Assistance 

Requirements

10/12/2016 02/01/2017 Note 1

2017-KC-0001

FHA Paid Claims for an Estimated 239,000 

Properties That Servicers Did Not Foreclose Upon 

or Convey on Time

10/14/2016 02/28/2017 Note 2

2017-BO-1002

The City of Springfield, MA, Needs To Improve Its 

Compliance with Federal Regulations for Its CDBG 

Disaster Recovery Assistance Grant

10/17/2016 01/04/2017 Note 2

2017-NY-1001

The City of New York, NY, Implemented Policies 

That Did Not Always Ensure That CDBG Disaster 

Recovery Funds Were Disbursed in Accordance 

With Its Action Plan and Federal Requirements

11/02/2016 05/08/2017 Note 1

2017-FO-0001 Audit of Fiscal Years 2016 and 2015 (Restated) 

Financial Statements 11/14/2016 04/06/2017 Note 3

2017-FO-0003

Additional Details To Supplement Our Fiscal Years 

2016 and 2015 (Restated) U.S. Department of 

Housing and Urban Development Financial 

Statement Audit

11/15/2016 09/13/2017 Note 3

2017-NY-1004

The City of New York, NY, Lacked Adequate 

Controls To Ensure That the Use of CDBG-DR 

Funds Was Always Consistent With the Action Plan 

and Applicable Federal and State Requirements

12/21/2016 04/17/2017 Note 1

64
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2017-NY-1005

Union County, NJ’s HOME Investment Partnerships 

Program Was Not Always Administered in 

Compliance With Program Requirements

01/13/2017 05/11/2017 Note 2

2017-LA-0002

HUD Failed To Follow Departmental Clearance 

Protocols for FHA Programs, Policies, and 

Operations

01/25/2017 09/22/2017 Note 1

2017-DP-0001 HUD’s Transition to a Federal Shared Service 

Provider Failed To Meet Expectations 02/01/2017 05/25/2017 Note 3

2017-DP-0002

Review of Information Systems Controls Over 

FHA’s Single Family Premiums Collection 

Subsystem – Periodic and the Single Family 

Acquired Asset Management System

02/09/2017 06/12/2017 Note 1

2017-KC-1801

Final Action Memorandum: Purchaser of HUDInsured Single-Family Property Settled Allegations 

of Causing the Submission of a False Claim

02/23/2017 02/23/2017 06/15/2021

2017-LA-0003

HUD Failed To Adequately Oversee FHA-Insured 

Loans With Borrower-Financed Downpayment 

Assistance 

03/03/2017 06/22/2017 Note 2

2017-PH-1001

The City of Pittsburgh, PA, Did Not Always 

Administer Its CDBG Program in Accordance With 

HUD and Federal Requirements

03/22/2017 07/19/2017 Note 1

2017-CF-1803

United Shore Financial Services, LLC, Settled 

Allegations of Failing To Comply With HUD’s 

Federal Housing Administration Loan Requirements

03/29/2017 03/29/2017 03/27/2022

2017-CH-1801

Final Civil Action: Judgment Imposed on the 

Former President and Founder of MDR Mortgage 

Corporation Regarding Allegations of Failing To 

Comply With HUD’s Federal Housing 

Administration Requirements

03/31/2017 08/31/2017 Note 1

2017-NY-0001 HUD PIH’s Required Conversion Program Was Not 

Adequately Implemented 05/18/2017 09/15/2017 12/31/2023

2017-KC-0003

HUD Did Not Ensure That Lenders Properly 

Processed Voluntary Terminations of Insurance 

Coverage on FHA Loans and Disclosed All 

Implications of the Terminations to the Borrowers

05/22/2017 09/19/2017 11/01/2019

65
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2017-PH-1003

The Yorkville Cooperative, Fairfax, VA, Did Not 

Administer Its HUD-Insured Property and Housing 

Assistance Contract According to Applicable 

Requirements

05/22/2017 09/19/2017 Note 1

2017-KC-0005

Owners of Cooperative Housing Properties 

Generally Charged More for Their Section 8 Units 

Than for Their Non-Section 8 Units

06/12/2017 10/06/2017 Note 1

2017-LA-1005

The City of Huntington Park, CA, Did Not 

Administer Its Community Development Block 

Grant Program in Accordance With Requirements

06/16/2017 10/17/2017 Note 2

2017-FW-1009

Beverly Place Apartments, Groves, TX, Subsidized 

Nonexistent Tenants, Unqualified Tenants, and 

Tenants With Questionable Qualifications

06/29/2017 10/20/2017 Note 2

2017-CH-1002

The Youngstown Metropolitan Housing Authority, 

Youngstown, OH, Did Not Always Comply With 

HUD’s and Its Own Requirements Regarding the 

Administration of Its Housing Choice Voucher 

Program

07/07/2017 11/03/2017 11/02/2019

2017-KC-0006

HUD Did Not Conduct Rulemaking or Develop 

Formal Procedures for Its Single-Family Note Sales 

Program

07/14/2017 10/19/2017 03/31/2020

2017-LA-1006

The City of Fresno, CA, Did Not Administer Its 

Community Development Block Grant in 

Accordance With HUD Requirements

08/09/2017 11/21/2017 Note 2

2017-PH-1005

The State of New Jersey Did Not Always Disburse 

Disaster Funds for Its Sandy Homebuyer Assistance 

Program To Assist Eligible Home Buyers

08/14/2017 11/15/2017 Note 1

2017-AT-1011

The Lexington Housing Authority, Lexington, NC, 

Did Not Administer Its RAD Conversion in 

Accordance With HUD Requirements

08/21/2017 12/11/2017 12/31/2019

2017-FW-1011

BLM Companies LLC Failed To Ensure That It 

Protected and Preserved HUD Properties Under Its 

Field Service Manager Contract for Area 1D

08/29/2017 12/26/2017 Note 2

2017-FW-1012

The City of New Orleans, New Orleans, LA, Did 

Not Always Properly Administer Its HOME 

Program

09/06/2017 12/19/2017 Note 2

66
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2017-KC-0007 HUD Subsidized 10,119 Units for Tenants Who 

Were Undercharged Flat Rents 09/12/2017 12/01/2017 12/31/2019

2017-LA-0004 HUD Did Not Have Adequate Controls To Ensure 

That Servicers Properly Engaged in Loss Mitigation 09/14/2017 01/11/2018 Note 2

2017-NY-1010

The State of New York Did Not Show That Disaster 

Recovery Funds Under Its Non-Federal Share Match 

Program Were Used for Eligible and Supported 

Costs

09/15/2017 01/12/2018 Note 1

2017-LA-0005

HUD Did Not Always Follow Applicable 

Requirements When Forgiving Debts and 

Terminating Debt Collections

09/21/2017 01/17/2018 Note 2

2017-PH-1006

The Owner of Schwenckfeld Manor, Lansdale, PA, 

Did Not Always Manage Its HUD-Insured Property 

in Accordance With Applicable HUD Requirements

09/25/2017 01/23/2018 Note 2

2017-CF-1807

Residential Home Funding Corp. Settled Allegations 

of Failing To Comply With HUD’s Federal Housing 

Administration Loan Requirements

09/28/2017 09/28/2017 09/30/2021

2017-DP-0003 New Core Project: Although Transaction 

Processing Had Improved, Weaknesses Remained 09/28/2017 01/25/2018 Note 2

2017-NY-0002

HUD Could Improve Its Controls Over the 

Disposition of Real Properties Assisted With 

Community Development Block Grant Funds

09/29/2017 01/26/2018 Note 3

2017-CH-1009

The Owner and Management Agents Lacked 

Adequate Controls Over the Operation of Mary 

Scott Nursing Center, Dayton, OH

09/30/2017 01/26/2018 Note 2

2017-CH-1011

BLM Companies LLC, Hurricane, UT, Did Not 

Provide Property Preservation and Protection 

Services in Accordance With Its Contract With 

HUD and Its Own Requirements

09/30/2017 01/25/2018 Note 2

2018-FO-0003 Fiscal Years 2017 and 2016 (Restated) Financial 

Statements Audit 11/15/2017 04/03/2018 Note 1

2018-FO-0004

Additional Details To Supplement Our Fiscal Years 

2017 and 2016 (Restated) U.S. Department of 

Housing and Urban Development Financial 

Statement Audit

11/15/2017 07/02/2018 Note 3

67
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2018-AT-1802

Yabucoa Housing Project, Yabucoa Volunteers of 

America Elderly Housing, Inc., Yabucoa, PR, 

Section 202 Supportive Housing for the Elderly 

Program

12/29/2017 04/20/2018 Note 2

2018-CF-0801

Management Alert: HUD Did Not Provide 

Acceptable Oversight of the Physical Condition of 

Residential Care Facilities

01/05/2018 08/14/2018 12/31/2019

2018-FW-1001 Jefferson Parish, Jefferson, LA, Did Not Always 

Properly Administer Its Rehabilitation Program 01/29/2018 05/22/2018 Note 2

2018-NY-1003

The Housing Authority of the City of Asbury Park, 

NJ, Did Not Always Administer Its Operating and 

Capital Funds in Accordance With Requirements

02/08/2018 06/07/2018 01/28/2050

2018-PH-1001

The Fairmont-Morgantown Housing Authority, 

Fairmont, WV, Did Not Always Administer Its 

Housing Choice Voucher Program in Accordance 

With Applicable Program Requirements

02/12/2018 06/11/2018 11/25/2019

2018-DP-0002

Review of Selected FHA Information Systems and 

Credit Reform Estimation and Reestimation Process 

Applications

02/13/2018 05/07/2018 Note 2

2018-PH-1002

The Fairmont-Morgantown Housing Authority, 

Fairmont, WV, Did Not Always Ensure That Its 

Program Units Met Housing Quality Standards and 

That It Accurately Calculated Housing Assistance 

Payment Abatements

02/16/2018 06/12/2018 11/25/2019

2018-KC-1001

CitiMortgage, Inc., O’Fallon, MO, Improperly Filed 

for FHA-HAMP Partial Claims Before Completing 

the Loan Modifications and Reinstating the Loans

03/05/2018 06/13/2018 Note 2

2018-DP-0003

Fiscal Year 2017 Review of Information Systems 

Controls in Support of the Financial Statements 

Audit

03/09/2018 06/07/2018 Note 2

2018-KC-0802 Limited Review of HUD Multifamily Waiting List 

Administration 03/22/2018 07/25/2018 Note 2

2018-CF-1801

MetLife Home Loans, LLC, and a Borrower’s Son 

Settled Allegations of Failing To Comply With 

HUD’s Federal Housing Administration HECM 

Loan Requirements

03/23/2018 08/09/2018 Note 2

2018-KC-0001 FHA Insured $1.9 Billion in Loans to Borrowers 

Barred by Federal Requirements 03/26/2018 07/11/2018 01/31/2020

68
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2018-LA-1003

The City of South Gate, CA, Did Not Administer Its 

Community Development Block Grant Program in 

Accordance With HUD Requirements

03/29/2018 07/25/2018 Note 2

2018-KC-1002

The Kansas City, MO, Health Department Did Not 

Spend Funds in Accordance With HUD 

Requirements

04/06/2018 08/02/2018 Note 2

2018-SE-1001

The Spokane, WA, Housing Authority Did Not 

Follow Permanent Relocation Requirements for Its 

RAD Conversion of the Parsons Apartments

04/24/2018 05/15/2018 Note 2

2018-FW-1003

The Texas General Land Office, Austin, TX, Should 

Strengthen Its Capacity To Administer Its Hurricane 

Harvey Disaster Grants

05/07/2018 08/16/2018 Note 2

2018-LA-0002

HUD Did Not Have Adequate Controls To Ensure 

That Grantees Submitted Accurate Tribal 

Enrollment Numbers for Program Funding

05/07/2018 08/23/2018 12/31/2020

2018-FW-1004

The City of Dallas, TX, HOME Investment 

Partnerships Program Was Not Always 

Administered in Accordance With Requirements

05/08/2018 08/30/2018 06/08/2020 

2018-FW-0802

Interim Report - Potential Antideficiency Act and 

Generally Accepted Accounting Principle Violations 

Occurred With Disaster Relief Appropriation Act, 

2013, Funds

05/15/2018 09/12/2018 Note 2

2018-CH-0002

HUD Lacked Adequate Oversight of Lead-Based 

Paint Reporting and Remediation in Its Public 

Housing and Housing Choice Voucher Programs

06/14/2018 12/06/2018 12/31/2021

2018-BO-1003 The City of Providence, RI, Did Not Properly 

Administer Its HOME Program 06/20/2018 09/28/2018 Note 2

2018-FW-0001

CPD’s Risk Assessment and Monitoring Program 

Did Not Provide Effective Oversight of Federal 

Funds

06/26/2018 10/16/2018 10/15/2019

2018-AT-1006

The Lexington-Fayette Urban County Housing 

Authority, Lexington, KY, Did Not Always Comply 

With HUD’s and Its Own Section 8 Housing Choice 

Voucher Program Requirements

07/13/2018 11/09/2018 02/28/2020

69
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2018-AT-1008

The Lexington-Fayette Urban County Housing 

Authority, Lexington, KY, Did Not Fully Comply 

With HUD’s Program Requirements After the 

Completion of Its Rental Assistance Demonstration 

Program Conversion

07/13/2018 11/09/2018 02/28/2020

2018-AT-1009

The Pell City Housing Authority, Pell City, AL, Did 

Not Always Administer Its and the Ragland Housing 

Authority, Ragland, AL’s Funds in Accordance 

With HUD Requirements

07/23/2018 10/23/2018 10/22/2019

2018-FW-1005

Eastwood Terrace Apartments, Nacogdoches, TX, 

Multifamily Section 8, Subsidized Questionable 

Tenants, Overhoused Tenants, and Uninspected 

Units

08/02/2018 11/26/2018 Note 2

2018-KC-0002

HUD’s Office of the Chief Financial Officer Did 

Not Locate or Recover Its Funds Held by State 

Unclaimed Property Administrators

08/07/2018 08/07/2018 Note 2

2018-FW-1802

Final Civil Action: The Former Executive Director 

of the Housing Authority of the City of Beeville, 

TX, Et Al, Settled False Claims Allegations in the 

Housing Choice Voucher Program

08/21/2018 08/21/2018 12/31/2022

2018-LA-0801

The Office of Native American Programs Section 

184 Program Continues To Operate Without 

Adequate Oversight 3 Years After the Prior OIG 

Audit

08/27/2018 12/21/2018 12/31/2021

2018-FW-0003 REAC Could Improve Its Inspections Processes and 

Controls 08/31/2018 11/14/2018 11/14/2019

2018-FW-1006

Louis Manor Apartments, Port Arthur, TX, 

Multifamily Section 8 Program, Subsidized 

Unsupported Tenants and Uninspected Units

08/31/2018 02/27/2019 01/31/2020

2018-DE-1001

Meeker Housing Authority, Meeker, CO, 

Improperly Used Project Operating Funds for Its 

221(d)(3) Multifamily Housing Insurance Program

09/06/2018 04/05/2019 03/02/2020 

2018-PH-0002 HUD Did Not Provide Adequate Oversight of Its 

Family Self-Sufficiency Program 09/10/2018 02/04/2019 12/31/2019

2018-BO-0001

HUD’s Office of Residential Care Facilities Did Not 

Always Have and Use Financial Information To 

Adequately Assess and Monitor Nursing Homes

09/17/2018 03/07/2019 12/02/2019

70
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2018-CH-1006

The Columbus Metropolitan Housing Authority, 

Columbus, OH, Did Not Always Comply With 

HUD’s Requirements Regarding the Administration 

of Its Public Housing Operating and Capital Fund 

Programs

09/18/2018 12/20/2018 12/31/2019

2018-BO-1005

The State of Connecticut Did Not Ensure That Its 

Grantees Properly Administered Their Housing 

Rehabilitation Programs

09/19/2018 03/27/2019 02/15/2020

2018-KC-0004 HUD Did Not Always Identify and Collect Partial 

Claims Out of Surplus Foreclosure Proceeds 09/20/2018 04/18/2019 12/31/2021

2018-LA-0005

HUD Did Not Have Adequate Controls To Ensure 

That Partial Claim Notes for FHA Loans Were 

Properly Tracked for Future Collection

09/21/2018 03/08/2019 03/21/2020

2018-PH-1006

The Owner of Luther Towers II, Wilmington, DE, 

Did Not Manage Its HUD-Insured Project in 

Accordance With Its Regulatory Agreement and 

HUD Requirements

09/21/2018 02/22/2019 02/22/2020

2018-NY-0001 HUD Did Not Adequately Administer Its Housing 

Counseling Program 09/24/2018 02/26/2019 03/31/2021

2018-CH-1007

The Housing Authority of the County of Lake, 

Grayslake, IL, Did Not Always Comply With 

HUD’s and Its Own Requirements Regarding the 

Administration of Its Housing Choice Voucher 

Program

09/25/2018 12/20/2018 12/20/2019

2018-PH-1007

The Crisfield Housing Authority, Crisfield, MD, Did 

Not Properly Administer Its Public Housing 

Program Operating and Capital Funds

09/25/2018 03/01/2019 12/31/2019

2018-NY-1005

The Red Bank Housing Authority, Red Bank, NJ, 

Did Not Always Administer Its Operating and 

Capital Funds in Accordance With Requirements

09/26/2018 02/28/2019 02/27/2020

2018-NY-1006

The Buffalo Municipal Housing Authority, Buffalo, 

NY, Did Not Administer Its Operating Funds in 

Accordance With Requirements

09/26/2018 02/26/2019 01/24/2020

2018-PH-1008

The City of Erie, PA, Did Not Always Administer 

Its Code Enforcement and Community Policing 

Activities in Accordance With HUD and Federal 

Requirements

09/26/2018 03/07/2019 12/31/2019

71
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2018-CH-1008

Hamilton County, OH, and People Working 

Cooperatively, Inc., Did Not Always Comply With 

HUD’s Requirements in the Use of Community 

Development Block Grant Funds for a Housing 

Repair Services Program

09/27/2018 03/26/2019 03/31/2020

2018-KC-0005

HUD’s Travel Cards Were Used for Unauthorized, 

Unsupported, or Ineligible Purchases in at Least 950 

Instances Totaling More Than $95,000

09/27/2018 03/07/2019 04/02/2020

2018-LA-0007

HUD Paid an Estimated $413 Million for 

Unnecessary Preforeclosure Claim Interest and 

Other Costs Due to Lender Servicing Delays

09/27/2018 04/03/2019 04/02/2021

2018-NY-1007

The City of New York, NY, Did Not Always Use 

Disaster Recovery Funds Under Its Program for 

Eligible and Supported Costs

09/27/2018 02/28/2019 Note 2

2018-AT-0801

HUD’s Improper Approvals Resulted in Invalid 

Exemptions and an Ineligible Capital Funds 

Expenditure for the Lexington-Fayette Urban 

County Housing Authority

09/28/2018 03/18/2019 03/01/2020

2018-AT-1011

The City of Hattiesburg, MS, Did Not Always 

Administer Its HOME Investment Partnerships 

Program in Accordance With HUD’s and Its Own 

Requirements

09/28/2018 02/13/2019 03/10/2020

2018-CH-1009

The Owner and Management Agent for Rainbow 

Terrace Apartments, Cleveland, OH, Did Not 

Always Operate the Project in Accordance With the 

Regulatory Agreement and HUD’s Requirements

09/28/2018 03/25/2019 02/21/2020

2018-FW-1007

The State of Louisiana, Baton Rouge, LA, Did Not 

Always Maintain Adequate Documentation or 

Comply With Website Reporting Requirements

09/28/2018 03/29/2019 Note 2

2018-NY-1008

The Newark Housing Authority, Newark, NJ, Did 

Not Ensure That Units Met Housing Quality 

Standards and That It Accurately Calculated 

Abatements

09/28/2018 03/04/2019 02/29/2020

2018-PH-0003

HUD Did Not Have Adequate Oversight of Its 

Community Compass Technical Assistance and 

Capacity Building Program

09/28/2018 02/22/2019 02/21/2020

72
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2018-CF-0802

HUD Failed To Enforce the Terms of a Settlement 

Agreement With Fifth Third Bank Because It Did 

Not Record Indemnified Loans in Its Tracking 

System

09/29/2018 12/21/2018 11/19/2019

2018-CH-1010

The City of Chicago’s Department of Public Health, 

Chicago, IL, Did Not Administer Its Lead Hazard 

Reduction Demonstration Grant Program in 

Accordance With HUD’s and Its Own Requirements

09/30/2018 03/14/2019 02/28/2020

SIGNIFICANT AUDIT REPORTS ISSUED WITHIN THE PAST 12 MONTHS THAT WERE 

DESCRIBED IN PREVIOUS SEMIANNUAL REPORTS FOR WHICH FINAL ACTION HAD NOT 

BEEN COMPLETED AS OF 09/30/2019 

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2019-FO-0002

Audit of the Federal Housing Administration’s 

Financial Statements for Fiscal Years 2018 and 

2017 (Restated)

11/14/2018 05/30/2019 03/26/2020

2019-FO-0003

Additional Details To Supplement Our Fiscal 

Years 2018 and 2017 (Restated) U.S. Department 

of Housing and Urban Development Financial 

Statement Audit

11/15/2018 07/11/2019 09/30/2021

2019-AT-1001

The Owners of Civic Towers and Civic Towers 

Senior in Miami, FL, Generally Corrected Section 

Eight Housing Assistance Payments To Address 

Duplicate Benefits and Ensured That the Payments 

Were Eligible and Supported

12/14/2018 04/08/2019 12/27/2019

2019-CH-1001

The Housing Authority of the City of North 

Chicago, North Chicago, IL, Did Not Always 

Comply With HUD’s Requirements and Its Own 

Policies Regarding the Administration of Its 

Housing Choice Voucher Program

12/20/2018 03/28/2019 02/28/2024

2019-DP-0001 Information System Control Over Integrated Pool 

Management System 12/21/2018 04/11/2019 12/31/2019

2019-CH-1002

The Detroit Housing Commission, Detroit, MI, Did 

Not Always Administer Its Moderate 

Rehabilitation Program in Accordance With 

HUD’s and Its Own Requirements

02/06/2019 06/05/2019 05/23/2020

73
SEMIANNUAL REPORT TO CONGRESS

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2019-LA-1003

The City of San Bernardino, CA, Did Not Fully 

Administer Its HOME Investment Partnerships 

Program in Accordance With HUD Requirements

02/20/2019 04/25/2019 02/19/2020

2019-DP-0002 Review of Selected Controls of the GrantSolutions 

and OneStream Applications 02/28/2019 05/07/2019 12/31/2019

2019-AT-1002

Louisville Metro, Louisville, KY, Did Not Always 

Administer the TBRA Activity in Its HOME and 

CoC Programs in Accordance With Program 

Requirements

03/18/2019 07/16/2019 01/16/2020

2019-DP-0004

Fiscal Year 2018 Review of Information Systems 

Controls in Support of the Financial Statements 

Audit

03/27/2019 06/20/2019 08/31/2020

Audits excluded: 

88 audits under repayment plans 

34 audits under debt claims collection processing, formal judicial review, investigation, or legislative solution

Notes: 

1 Management did not meet the target date. Target date is more than 1 year old. 

2 Management did not meet the target date. Target date is less than 1 year old. 

3 No management decision

74
SEMIANNUAL REPORT TO CONGRESS

SIGNIFICANT EVALUATION REPORTS FOR WHICH FINAL ACTION HAD NOT BEEN 

COMPLETED WITHIN 12 MONTHS AFTER THE DATE OF THE INSPECTOR GENERAL’S 

REPORT

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2013-ITED0001FY 2013 Federal Information Security 

Management Act (FY13 FISMA) 11/29/2013 11/29/2013 Note 1

2014-ITED0001 HUD Cybersecurity Privacy Programs (Privacy) 04/30/2014 04/30/2014 Note 1

2014-OE-0003 FY 2014 Federal Information Security 

Modernization Act (FY14 FISMA) 11/15/2014 11/15/2014 Note 1

2015-OE-0001 FY 2015 Federal Information Security 

Modernization Act (FY15 FISMA) 11/15/2015 11/15/2015 Note 1

2015-OE-0002 HUD IT Modernization 09/28/2015 09/25/2015 Note 1

2014-OE-0002 Risk-Based Enforcement Could Improve Program 

Effectiveness 02/12/2016 04/09/2019 Note 3

2016-OE-0006 FY 2016 Federal Information Security 

Modernization Act (FY16 FISMA) 11/10/2016 11/10/2016 Note 1

2016-OE-0004S

Opportunities for Improvement Within CPD’s 

Risk Management Process for Hurricane Sandy 

Grants

03/29/2017 08/20/2019 Note 3

2016-OE-0002 HUD Web Application Security Evaluation 07/06/2017 06/02/2017 Note 3

2017-OE-0007 FY 2017 Federal Information Security 

Modernization Act (FY17 FISMA) 10/31/2017 08/16/2018 Note 1

2017-OE-0014 HUD’s Oversight of the Alexander County 

Housing Authority 07/24/2018 09/13/2018 Note 1

2018-OE-0002 Fire Safety Planning for the Weaver Building 

Needs Improvement 06/12/2018 11/29/2018 Note 1

2018-OE-0004 HUD IT System Management and Oversight of 

the Section 184 Program 08/13/2018 11/26/2018 Note 2

75
SEMIANNUAL REPORT TO CONGRESS

SIGNIFCANT EVALUATION REPORTS ISSUED WITHIN THE PAST 12 MONTHS THAT 

WERE DESCRIBED IN PREVIOUS SEMIANNUAL REPORTS FOR WHICH FINAL ACTION

HAD NOT BEEN COMPLETED AS OF 09/30/2019

REPORT 

NUMBER REPORT TITLE ISSUE DATE DECISION DATE FINAL ACTION

2018-OE-0003 FY 2018 Federal Information Security 

Modernization Act (FY18 FISMA) 10/31/2018 05/17/2019 Note 2

Notes: 

1 Management did not meet the target date. Target date is more than 1 year old. 

2 Management did not meet the target date. Target date is less than 1 year old. 

3 No management decision

76
SEMIANNUAL REPORT TO CONGRESS

TABLE C

INSPECTOR GENERAL-ISSUED REPORTS WITH QUESTIONED AND UNSUPPORTED 

COSTS AT 09/30/2019 (IN THOUSANDS)

AUDIT REPORTS

NUMBER OF 

AUDIT 

REPORTS

QUESTIONED 

COSTS

UNSUPPORTED 

COSTS

A1 For which no management decision had been made by the 

beginning of the reporting period 10 $67,047 $19,744

A2 For which litigation, legislation, or investigation was 

pending at the beginning of the reporting period 2 24,559 2,744

A3 For which additional costs were added to reports in 

beginning inventory - 2,550 1,319

A4 For which costs were added to noncost reports 1 1 0 

B1 Which were issued during the reporting period 31 985,363 407,679

B2 Which were reopened during the reporting period 0 0 0 

Subtotals (A+B) 44 1,079,520 431,486

C For which a management decision was made during the 

reporting period 1920 66,554 11,767

(1) Dollar value of disallowed costs:

 Due HUD 

 Due program participants 

821

14

50,927

15,428

5,809

5,759

(2) Dollar value of costs not disallowed 122 199 199

D 

For which a management decision had been made not to 

determine costs until completion of litigation, legislation, 

or investigation

1 20,157 0 

E For which no management decision had made by the end 

of the reporting period

23

<60>23

992,809

<955,494>23

419,719

<405,025>23 

20 Seven audit reports also contain recommendations with funds to be put to better use. 21 Three audit reports also contain recommendations with funds due program participants. 22 One audit report also contains recommendations with funds agreed to by management. 23 The figures in brackets represent data at the recommendation level as compared to the report level. See Explanations of 

Tables C and D below table D.

77
SEMIANNUAL REPORT TO CONGRESS

TABLE D

INSPECTOR GENERAL-ISSUED REPORTS WITH RECOMMENDATIONS THAT FUNDS BE 

PUT TO BETTER USE AT 09/30/2019 (IN THOUSANDS)

AUDIT REPORTS NUMBER OF AUDIT 

REPORTS DOLLAR VALUE

A1 For which no management decision had been made by the beginning 

of the reporting period 14 $9,562,221

A2 For which litigation, legislation, or investigation was pending at the 

beginning of the reporting period 0 0 

A3 For which additional costs were added to reports in beginning 

inventory - 4,809

A4 For which costs were added to noncost reports 0 0 

B1 Which were issued during the reporting period 16 6,689,573

B2 Which were reopened during the reporting period 0 0 

Subtotals (A+B) 30 16,256,603

C For which a management decision was made during the reporting 

period 1024 961,941

(1) Dollar value of recommendations that were agreed to by 

management:

 Due HUD

 Due program participants 

3 

6 

925,879

35,920

(2) Dollar value of recommendations that were not agreed to by 

management 

225 142

D For which a management decision had been made not to determine 

costs until completion of litigation, legislation, or investigation 0 0 

E For which no management decision had made by the end of the 

reporting period 

20

<17>26

15,294,662

<11,780,849>26

24 Seven audit reports also contain recommendations with questioned costs. 25 One audit report also contains recommendations with funds agreed to by management. 26 The figures in brackets represent data at the recommendation level as compared to the report level. See Explanations of Tables C and D.

78
SEMIANNUAL REPORT TO CONGRESS

EXPLANATIONS OF TABLES C AND D

The Inspector General Act Amendments of 1988 require inspectors general and agency heads to report cost data on 

management decisions and final actions on audit reports. The current method of reporting at the “report” level 

rather than at the individual audit “recommendation” level results in misleading reporting of cost data. Under the 

Act, an audit “report” does not have a management decision or final action until all questioned cost items or other 

recommendations have a management decision or final action. Under these circumstances, the use of the “report” 

based rather than the “recommendation” based method of reporting distorts the actual agency efforts to resolve and 

complete action on audit recommendations. For example, certain cost items or recommendations could have a 

management decision and repayment (final action) in a short period of time. Other cost items or nonmonetary 

recommendation issues in the same audit report may be more complex, requiring a longer period of time for 

management’s decision or final action. Although management may have taken timely action on all but one of many 

recommendations in an audit report, the current “all or nothing” reporting format does not recognize their efforts.

The closing inventory for items with no management decision in tables C and D (line E) reflects figures at the report 

level as well as the recommendation level.

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SEMIANNUAL REPORT TO CONGRESS

APPENDIX 4 – INSPECTOR GENERAL EMPOWERMENT 

ACT

The Inspector General Empowerment Act (Public Law 114-317) (IGEA), enacted in December 2016, contains

several reporting requirements in the Offices of Inspector General’s (OIG) Semiannual Reports to Congress (SAR). 

Below are the U.S. Department of Housing and Urban Development, Office of Inspector General (HUD OIG), 

statutory requirements as stipulated in the IGEA, with hyperlinks to the detailed information located on its website 

at www.hudoig.gov. 

Summary of Reports With No Establishment Comment

The IGEA requires OIGs to report on each audit and evaluation report for which the Department did not return 

comments within 60 days of HUD OIG’s providing the report to the Department. 

On February 22, 2019, HUD OIG’s Office of Investigation delivered Systemic Implication Report (SIR) FY (fiscal 

year) 19-001, Systemic Implication Report Pertaining to the Housing Choice Voucher Program Initial Certification 

and Annual Recertifications, to HUD’s Office of Public and Indian Housing. Specifically, the SIR recommended 

that HUD standardize the initial certification and annual recertification questionnaire for the Housing Choice 

Voucher Program. It specifically recommended that HUD standardize and require the use of a personal declaration 

form regarding a tenant’s declaration of his or her income and assets. The Department did not respond within the 

requisite 60 days, and HUD OIG had not received a response as of September 30, 2019. 

Summary of Reports With Open Recommendations

The IGEA requires OIGs to report on each audit and evaluation report for which there are any outstanding 

unimplemented recommendations, including the combined potential cost savings of these recommendations. 

Summaries for the Office of Audit and Office of Evaluation (OE) are presented below. 

The details of each open recommendation can be found on OIG’s website at 

https://www.hudoig.gov/library/semiannual-reports. 

AUDIT

The Department currently has 1,760 outstanding (open) unimplemented recommendations with a combined

potential cost savings of nearly $25 billion. The following table and charts reflect the reasons why they remain 

unimplemented:

• 1,569 recommendations have active corrective action plans in place or valid repayment plans, but 

HUD has not finished implementing the recommendation. 

• 191 recommendations are currently without management decisions (agreement between the 

Department and OIG), 48 of which are beyond the 180-day statutory requirement due to disagreement 

and were reported in table A of OIG’s Semiannual Report to Congress. The remainder are within the 

180-day limit, during which time management and OIG can arrive at an agreed-upon corrective action 

plan.

• 421 open recommendations have management decisions in place but are currently under investigative, 

legislative, or judicial action or under a valid repayment plan and are, therefore, suspended pending 

resolution.

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SEMIANNUAL REPORT TO CONGRESS

OFFICE OF AUDIT OPEN RECOMMENDATIONS

Calendar year Number of open 

recommendations

Cumulative estimated cost savings from 

open recommendations

Pre-2001 4 $3,920,288

2001 1 240,000

2002 7 1,382,626

2003 14 1,813,658

2004 8 8,303,357

2005 5 3,006,373

2006 15 10,996,201

2007 18 5,207,180

2008 33 72,339,854

2009 29 80,007,224

2010 24 23,911,025

2011 42 100,086,158

2012 29 19,117,105

2013 92 393,535,823

2014 171 554,820,823

2015 152 1,153,952,566

2016 243 8,448,844,579

2017 242 1,423,515,123

2018 393 5,040,518,907

2019 238 7,642,209,116

Total 1,760 24,987,727,986

81
SEMIANNUAL REPORT TO CONGRESS

EVALUATION

The following table summarizes OE reports with open recommendations. 

OFFICE OF EVALUATION OPEN RECOMMENDATIONS 

Reporting period Number of open recommendations

2013 10

2014 22

2015 24

2016 9 

2017 26

2018 61

2019 0 

Total 152

OE conducts evaluations focused on improving departmental process and programs. As of the writing of this SAR, 

OE’s recommendations have not focused on producing direct cost savings but, rather, improving program 

effectiveness, reducing the likelihood of negative outcomes, and addressing HUD’s top management challenges. 

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SEMIANNUAL REPORT TO CONGRESS

Statistical Table Showing Investigative Report Metrics

The IGEA requires the SAR to include statistical tables and metrics for investigative cases. 

OFFICE OF INVESTIGATION IGEA STATISTICAL TABLE

Requirement Total

A. Total number of investigative reports issued during the reporting period.

27 208

B. Total number of persons referred to the U.S. Department of Justice for criminal prosecution

during the reporting period.28 150* 

C. Total number of persons referred to State and local prosecuting authorities for criminal

prosecution during the reporting period. 71* 

D. Total number of indictments and criminal informations during the reporting period that

resulted from any prior referral to prosecuting authorities. 113

* The data used in this statistical table were extracted from HUD OIG’s Case Management System. The Case Management

System and its underlying infrastructure allow for data input and maintain data integrity during the complete investigative

case cycle, while ensuring data privacy and confidentiality. The system was developed in .Net 4.5.1, and the database is SQL

2012. HUD OIG develops queries to extract data from the Case Management System to meet business requirements, such as

the information used to create this statistical table. The footnotes referenced in the table provide additional guidance

pertaining to each requested category of information.

Investigations of Senior Government Employees 

The IGEA requires OIG to summarize in the SAR each investigation involving a senior government employee when 

allegations of misconduct were substantiated. Listed below are the cases for this reporting period. 

A senior HUD OIG employee received a letter of reprimand for misconduct. During a HUD OIG management 

assistance review, irregularities were discovered in a field office’s evidence room. An investigation into this matter 

determined there was a discrepancy between what had been logged into and out of evidentiary custody and what 

was maintained within the evidence room. HUD OIG referred this case to the United States Attorney’s Office; 

however, the matter was declined for prosecution.

Instances of Whistleblower Retaliation

The IGEA requires OIG to include in the SAR a detailed description of any instance of whistleblower retaliation, 

including information about the official found to have engaged in retaliation and what, if any, consequences the 

establishment imposed to hold that official accountable. 

There are no instances of whistleblower retaliation to report in this SAR period.

27 Includes approved Reports of Investigations 28 Includes all charging documents reported: criminal complaints, indictments, informations, and superseding indictments

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SEMIANNUAL REPORT TO CONGRESS

OIG Independence

The IGEA requires OIG to include in the SAR a detailed description of any attempt by the establishment to interfere 

with the independence of OIG, including incidents in which the establishment has resisted or objected to oversight

activities or restricted or significantly delayed access to information. 

On April 29, 2019, the Inspector General issued a management alert to Secretary Benjamin Carson, Sr., to 

inform him of significant deficiencies in the process used by the Department to provide OIG with access 

electronically stored information. The departmental failures resulted in unreasonable delays, seriously 

impeding OIG’s ability to carry out its oversight function. 

The management alert requested that the Department take immediate action to address the shortcomings in its 

process to ensure that OIG has timely access to all requested records as required by the Inspector General Act of 

1978 as amended. 

Reports That Were Closed During the Period That Were Not Disclosed to the Public 

Section 5(a)(22) of the IGEA, as amended, requires that OIG report on each audit and investigation conducted by 

the office that is closed during the reporting period and was not disclosed to the public.

During the current reporting period, OIG has one investigation report that was closed but not disclosed to the public. 

The allegations include the following:

INVESTIGATION

It was alleged that a senior HUD official made false statements on his Government Ethics, Public Financial

Disclosure Report (OGE Form 278e); specifically, that the employee failed to disclose debts related to an eviction, 

boat slip and dockage fees, and a car note on the OGE Form 278e. The investigation revealed no evidence to 

substantiate the allegation involving false statements on the OGE Form 278e. HUD OIG did not refer this case to

the United States Attorney’s Office because no criminal violations occurred. 

84
OIG TELEPHONE DIRECTORY

OFFICE OF AUDIT

HEADQUARTERS OFFICE Washington, DC 202-708-0364

REGION 1 Boston, MA 617-994-8380

Hartford, CT 860-240-9739

REGION 2 New York, NY 212-264-4174

Buffalo, NY 716-551-5755

Newark, NJ 973-622-7900

REGION 3 Philadelphia, PA 215-656-0500

Baltimore, MD 410-962-2520

Pittsburgh, PA 412-644-6372

Richmond, VA 804-771-2100

REGION 4 Atlanta, GA 404-331-3369

Greensboro, NC 336-547-4001

Miami, FL 305-536-5387

San Juan, PR 787-766-5540

REGION 5 Chicago, IL 312-913-8499

Columbus, OH 614-280-6138

Detroit, MI 313-226-6190

85
REGION 6 Fort Worth, TX 817-978-9309

Baton Rouge, LA 225-448-3975

Houston, TX 713-718-3199

New Orleans, LA 504-671-3000

Albuquerque, NM 505-346-6463

Oklahoma City, OK 405-609-8606

San Antonio, TX 210-475-6800

REGION 7-8-10 Kansas City, KS 913-551-5870

St. Louis, MO 314-539-6339

Denver, CO 303-672-5452

Seattle, WA 206-220-5360

REGION 9 Los Angeles, CA 213-894-8016

Las Vegas, NV 702-366-2100

Phoenix, AZ 602-379-7250

San Francisco, CA 415-489-6400

OFFICE OF EVALUATION

HEADQUARTERS Washington, DC 202-708-0430

OFFICE OF INVESTIGATION

HEADQUARTERS Washington, DC 202-708-5998

REGION 1-2 New York, NY 212-264-8062

Boston, MA 617-994-8450

Hartford, CT 860-240-4800

Manchester, NH 603-666-7988

Newark, NJ 973-776-7347

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REGION 3 Philadelphia, PA 215-430-6756

 Baltimore, MD 410-209-6695

 Pittsburgh, PA 412-644-2668

 Richmond, VA 804-822-4890

REGION 4 Atlanta, GA 404-331-5001

 Greensboro, NC 336-547-4000

 Miami, FL 305-536-3087

 San Juan, PR 787-766-5868

REGION 5 Chicago, IL 312-353-4196

 Cleveland, OH 216-357-7800

 Columbus, OH 614-469-5737

 Detroit, MI 313-226-6280

 Indianapolis, IN 317-957-7377

 Minneapolis-St. Paul, MN 612-370-3130

REGION 6 Fort Worth, TX 817-978-5440

 Baton Rouge, LA 225-448-3941

 Houston, TX 713-718-3220

 New Orleans, LA 504-671-3700

 Oklahoma City, OK 405-609-8601

 San Antonio, TX 210-475-6822

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REGION 7-8-10 Denver, CO 303-672-5350

 Billings, MT 406-247-4080

 Kansas City, KS 913-551-5566

 Salt Lake City, UT 801-524-6091

 St. Louis, MO 314-539-6559

 Seattle, WA 206-220-5380

REGION 9 Los Angeles, CA 213-534-2496

 Las Vegas, NV 702-366-2144

 Phoenix, AZ 602-379-7252

 Sacramento, CA 916-930-5693

 San Francisco, CA 415-489-6685

JOINT CIVIL FRAUD

Audit Kansas City, KS 913-551-5566

Investigation Kansas City, KS 913-551-5566

88
ACRONYMS AND ABBREVIATIONS LIST

ACD......................................................................Accelerated Claims Disposition

ASC ......................................................................Accounting Standards Codification 

CDBG...................................................................Community Development Block Grant

CDBG-DR ............................................................Community Development Block Grant Disaster Recovery

CFR ......................................................................Code of Federal Regualations

CHDO ..................................................................community housing development organization

CO........................................................................carbon monoxide

CoC......................................................................Continuum of Care

CPD......................................................................Office of Community Planning and Development

CWCOT ...............................................................Claims Without Conveyance of Title program

DEC......................................................................Departmental Enforcement Center

DHS......................................................................U.S. Department of Homeland Security

DoD......................................................................U.S. Department of Defense

DOT......................................................................U.S. Department of Transportation

FBI........................................................................ Federal Bureau of Investigation

FFMIA................................................................... Federal Financial Management Improvement Act of 1996

FHA ...................................................................... Federal Housing Administration

FHFA .................................................................... Federal Housing Finance Agency

FSSP..................................................................... Federal shared service provider

FY .........................................................................fiscal year

GAAP....................................................................generally accepted accounting principles

Ginnie Mae..........................................................Government National Mortgage Association

HAMP...................................................................Home Affordable Modification Program

HECM...................................................................home equity conversion mortgage

HOPWA ...............................................................Housing Opportunities for Persons With AIDS

HPD.......................................................................New York City Department of Housing Preservation and 

Development

HUD .....................................................................U.S. Department of Housing and Urban Development

89
ACRONYMS AND ABBREVIATIONS LIST (CONTINUED)

HUDAR ................................................................HUD Acquisition Regulation

IAA ....................................................................... interagency agreement

ICDBG..................................................................Indian Community Development Block Grant

IDIS ......................................................................Integrated Disbursement and Information System

IGEA.....................................................................Inspector General Empowerment Act

IPERA...................................................................Improper Payments Elimination and Recovery Act of 2010

IRS........................................................................Internal Revenue Service

IT.......................................................................... information technology

LIHTC................................................................... Low-Income Housing Tax Credit

LOS ...................................................................... Loan Origination System

LTW...................................................................... Louisiana, Texas, and West Virginia

MHI......................................................................mortgage held for investment

MRI.......................................................................minimum required investment

MSS......................................................................master subservicer

NCIS.....................................................................New Core Interface Solution

NSP ......................................................................Neighborhood Stabilization Program

NSPIRE ................................................................National Standards for the Physical Inspection of Real Estate

OBGA...................................................................Office of Block Grant Assistance

OCFO...................................................................Office of the Chief Financial Officer

OCIO....................................................................Office of the Chief Information Officer

OCPO...................................................................Office of the Chief Procurement Officer

OE ........................................................................Office of Evaluation

OI .........................................................................Office of Investigation

OIG.......................................................................Office of Inspector General

ONAP...................................................................Office of Native American Programs

OSC......................................................................Office of Special Counsel

PBRA....................................................................Project-Based Rental Assistance

PHA......................................................................public housing agency

90
PIH .......................................................................Office of Public and Indian Housing

PP&E ....................................................................plant, property, and equipment

PRWORA..............................................................Personal Responsibility and Work Opportunity Reconcilliation Act of 

1996

PTD ......................................................................Performance Tracking Database

RAD......................................................................Rental Assistance Demonstration Program

REAC....................................................................Real Estate Assessment Center

RREM ...................................................................Rehabilitation, Reconstruction, Elevation, and Mitigation

SAR.......................................................................Semiannual Report to Congress

SEMAP .................................................................Section Eight Management Assessment Program

SIR........................................................................Systemic Implication Report

U.S.C. ...................................................................United States Code

USDA....................................................................U.S. Department of Agriculture

ACRONYMS AND ABBREVIATIONS LIST (CONTINUED)

91
REPORTING REQUIREMENTS

The specific reporting requirements as prescribed by the Inspector General Act of 1978, as amended by the 

Inspector General Act of 1988, are listed below.

SOURCE-REQUIREMENT PAGES

Section 4(a)(2)-review of existing and proposed legislation and regulations. 22

Section 5(a)(1)-description of significant problems, abuses, and deficiencies relating to the 

administration of programs and operations of the Department.

1-19, 46-47

Section 5(a)(2)-description of recommendations for corrective action with respect to significant 

problems, abuses, and deficiencies.

27-45

Section 5(a)(3)26-identification of each significant recommendation described in previous 

Semiannual Report on which corrective action has not been completed.

Appendix 3,

table B,

56-74

Section 5(a)(4)-summary of matters referred to prosecutive authorities and the prosecutions and 

convictions that have resulted.

1-21

Section 5(a)(5)-summary of reports made on instances where information or assistance was 

unreasonably refused or not provided, as required by Section 6(b)(2) of the Act.

No instances

Section 5(a)(6)-listing of each audit report completed during the reporting period, and for each 

report, where applicable, the total dollar value of questioned and unsupported costs and the dollar 

value of recommendations that funds be put to better use.

Appendix 2,

50-53

Section 5(a)(7)-summary of each particularly significant report. 1-21

Section 5(a)(8)-statistical tables showing the total number of audit reports and the total dollar 

value of questioned and unsupported costs.

Appendix 3,

table D,

77

Section 5(a)(9)-statistical tables showing the total number of audit reports and the dollar value of 

recommendations that funds be put to better use by management.

Appendix 3,

table D,

78

Section 5(a)(10)-summary of each audit report issued before the commencement of the reporting 

period for which no management decision had been made by the end of the period.

Appendix 3,

table A,

50-55

Section 5(a)(11)-a description and explanation of the reasons for any significant revised 

management decisions made during the reporting period.

43-44

Section 5(a)(12)-information concerning any significant management decision with which the 

Inspector General is in disagreement.

44

Section 5(a)(13)-the information described under section 05(b) of the Federal Financial 

Management Improvement Act of 1996.

45

Unsupported costs are a subset of questioned costs that the Inspector General Act requires be identified separately from the cumulative 

questioned costs identified.

30

92
FRAUD ALERT

Every day, loan modification and foreclosure rescue scams rob vulnerable homeowners of their money and their homes. 

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), is the Department’s 

law enforcement arm and is responsible for investigating complaints and allegations of mortgage fraud. Following are 

some of the more common scams.

COMMON LOAN MODIFICATION SCAMS

Phony counseling scams: The scam artist says that he or she can negotiate a deal with the lender to modify the mortgage 

— for an upfront fee. 

Phony foreclosure rescue scams: Some scammers advise homeowners to make their mortgage payments directly to the 

scammer while he or she negotiates with the lender. Once the homeowner has made a few mortgage payments, the scammer 

disappears with the homeowner’s money.

Fake “government” modification programs: Some scammers claim to be affiliated with or approved by the government. 

The scammer’s company name and website may appear to be a real government agency, but the website address will end 

with .com or .net instead of .gov. 

Forensic loan audit: Because advance fees for loan counseling services are prohibited, scammers may sell their services as 

“forensic mortgage audits.” The scammer will say that the audit report can be used to avoid foreclosure, force a mortgage 

modification, or even cancel a loan. The fraudster typically will request an upfront fee for this service.

Mass joinder lawsuit: The scam artist, usually a lawyer, law firm, or marketing partner, will promise that he or she can 

force lenders to modify loans. The scammers will try to “sell” participation in a lawsuit against the mortgage lender, 

claiming that the homeowner cannot participate in the lawsuit until he or she pays some type of upfront fee. 

Rent-to-own or leaseback scheme: The homeowner surrenders the title or deed as part of a deal that will let the 

homeowner stay in the home as a renter and then buy it back in a few years. However, the scammer has no intention of 

selling the home back to the homeowner and, instead, takes the monthly “rent” payments and allows the home to go into 

foreclosure.

Remember, only work with a HUD-approved housing counselor to understand your options for assistance. HUD-approved 

housing counseling agencies are available to provide information and assistance. Call 

888-995-HOPE to speak with an expert about your situation. HUD-approved counseling is free of charge. 

If you suspect fraud, call HUD OIG.

93
Diversity and Equal Opportunity

The promotion of high standards and equal employment opportunity for

employees and job applicants at all levels. HUD OIG reaffirms its commitment

to nondiscrimination in the workplace and the recruitment of qualified employees

without prejudice regarding their gender, race, religion, color, national origin,

sexual orientation, disability, or other classification protected by law. HUD OIG

is committed and proactive in the prevention of discrimination and ensuring

freedom from retaliation for participating in the equal employment opportunity

process in accordance with departmental policies and procedures.
Faxing the OIG hotline: 202-708-4829

Emailing the OIG hotline: hotline@hudoig.gov

Sending written information to

Department of Housing and Urban Development

Inspector General Hotline (GFI)

451 7th Street SW

Washington, DC 20410

Internet

https://www.hudoig.gov/hotline

ALL INFORMATION IS CONFIDENTIAL, AND 

YOU MAY REMAIN ANONYMOUS.

Report fraud, waste, and mismanagement

in HUD programs and operations by

U.S. DEPARTMENT 

OF HOUSING 

AND URBAN 

DEVELOPMENT

Report Number 82

www.hudoig.gov