For the period October 1, 2019, to March 31, 2020

OFFICE

INSPECTOR GENERAL

UNITED STATES DEPARTMENT OF

HOUSING AND URBAN DEVELOPMENT 

o f 

OFFICE OF INSPECTOR GENERAL

U.S. Department of Housing and Urban Development 

SEMIANNUAL REPORT 

TO CONGRESS

OFFICE

INSPECTOR GENERAL

UNITED STATES DEPARTMENT OF

HOUSING AND URBAN DEVELOPMENT 

o f 
INTRODUCTION

2 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
$1,605,425

Recommendations that funds 

be put to better use

281

Subpoenas

$5,819,503

Recommended

questioned costs

97

Arrests

$21,499,708

Collections from audits

92

Indictments-informations

$12,704,686

Investigative recoveries and 

receivables to HUD programs

94

Convictions-pleas-pretrial 

diversions

3 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020

HIGHLIGHTS

For the period October 1, 2019, 

to March 31, 2020
AUDIT RESULTS This Reporting Period

INVESTIGATIVE RESULTS

Recommendations that funds be put to better use $1,605,425

Recommended questioned costs $5,819,503

Collections from audits $21,499,708

Administrative sanctions 2

Civil actions 0

Subpoenas 6

Total restitutions and judgments $29,522,163

Total recoveries and receivables to HUD programs $12,704,686

Arrests 97

Indictments and informations 92

Convictions, pleas, and pretrial diversions 94

Civil actions 11

Total administrative sanctions 71

Suspensions 18

Debarments 11

Program referrals 5

Evictions 32

Other1 5

Systemic implication reports 0

Search warrants 31

Subpoenas 274

1

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

4 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020

PERFORMANCE

For the period October 1, 2019, 

to March 31, 2020

PROFILE OF
IG MESSAGE......................................................................................................................................................................6

PRIORITY AREAS.............................................................................................................................................................7

PROGRAM AREAS........................................................................................................................................................ 11

Chapter 1– Single Family Housing..................................................................................................................... 12

Chapter 2 – Public and Indian Housing............................................................................................................ 16

Chapter 3 – Multifamily Housing and Healthcare........................................................................................ 20

Chapter 4 – Community Planning and Development................................................................................ 23

Chapter 5 – Disaster Relief.................................................................................................................................... 25

ADDITIONAL REPORTS............................................................................................................................................. 28

Chapter 6 – Other Significant Audits and Evaluations................................................................................ 29

Chapter 7 – Legislation, Regulations, and Other Directives..................................................................... 34

Chapter 8 – Report Resolution............................................................................................................................ 40

Chapter 9 – Whistleblower Ombudsman........................................................................................................ 64

Chapter 10 - Peer Review Reporting................................................................................................................. 66

APPENDIXES.................................................................................................................................................................. 68

Appendix 1 – Reports Issued............................................................................................................................... 69

Appendix 2 – Tables................................................................................................................................................ 75

Appendix 3 – Inspector General Empowerment Act................................................................................116

Appendix 4 – Reporting Requirements.........................................................................................................123

Appendix 5 – Acronyms and Abbreviations.................................................................................................125

Appendix 6 – OIG Telephone Directory .........................................................................................................126

TABLE OF

CONTENTS

5 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
6 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020

INSPECTOR GENERAL

A MESSAGE FROM THE

It is my pleasure to submit the U.S. Department of Housing 

and Urban Development (HUD), Office of Inspector 

General’s (OIG) Semiannual Report to Congress, which 

covers the period October 1, 2019, to March 31, 2020.

During this reporting period, the work of our Office of Investigation continued 

to protect taxpayer funds and the integrity of HUD programs. Our investigative 

activity resulted in 94 arrests, 92 indictments, 94 convictions, and 71 

administrative sanctions. Our criminal investigative efforts returned $12.7 million 

to HUD programs and also resulted in $29.5 million in judicial orders of restitution. 

Our audit reports issued during this reporting period questioned $5.8 million in 

costs and identified $1.6 million in funds that could be put to better use, and HUD 

collected $21.5 million as a result of our audit work.

The work we completed and initiated in this period falls primarily within 

the Oversight Priority Areas outlined on page 7 of this report. We made 

recommendations for HUD to improve its public housing agencies’ (PHA) tracking 

and inspection practices for developments that might contain lead-based paint. 

We recommended that HUD comply with the laws that require it to take over 

the troubled PHAs that are unable improve and operate at the level required to 

provide sufficiently safe and affordable housing to their communities. We also 

reviewed the Puerto Rico Department of Housing’s capacity to administer nearly 

$20 billion in disaster recovery assistance grants and made recommendations 

to help improve its financial management and procurement controls, which will 

help achieve long-term recovery for millions of Puerto Ricans in need. Throughout 

the reporting period, we also identified many areas for improvement in HUD’s 

information technology and security processes.

Our continued partnership with the U.S. Department of Justice has helped us 

protect HUD’s mortgage insurance funds by securing a multi-million-dollar 

settlement, under the False Claims Act, with a lender who knowingly originated 

and underwrote hundreds of reverse mortgages that did not meet HUD’s 

requirements, resulting in substantial losses to the government. We will 

continue to use the False Claims Act as an important tool to fight fraud in HUD 

programs and return funds to HUD and the U.S. Treasury.

We have initiated work in several areas that have not received oversight in 

the recent past. For example, we are currently surveying the Office of Fair 

Housing and Equal Opportunity, which is responsible for eliminating housing 

discrimination, promoting economic opportunity, and achieving diverse, 

inclusive communities. We have also begun an evaluation of the effectiveness 

of HUD’s internal hiring processes.

As the first half of fiscal year 2020 comes to a close, our Nation is responding 

to the pandemic caused by the coronavirus disease of 2019 (COVID-19). The 

pandemic has dramatically impacted our country and our economy. Through 

the Coronavirus Aid, Relief, and Economic Security Act, Congress provided 

more than $12 billion to HUD to assist homeowners, renters, landlords, and 

impacted communities. In response, we developed a framework of five 

key oversight areas to guide our work: rental assistance, mortgage loan 

forbearance, assistance for vulnerable populations, assistance for communities’ 

response, and HUD’s mission performance. Our audits, evaluations, 

investigative initiatives, and other innovative reviews will align with these five 

key areas to ensure that timely and effective relief is provided to the intended 

recipients and that relief efforts are not undermined by fraud, waste, or abuse.

In closing, I want to express my gratitude to Congress and the Department 

for their sustained interest and commitment to improving HUD’s programs 

and operations. I also want to express my sincere admiration to the staff of 

HUD OIG for their outstanding accomplishments and dedication. Their drive 

and determination have brought HUD OIG to where it is today – a lean, wellestablished, focused team.

Rae Oliver Davis

Inspector General
7 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020

PRIORITY AREAS

OVERSIGHT WORK

The U.S. Department of Housing and Urban Development’s (HUD) mission is to create strong, sustainable, inclusive communities and quality affordable 

homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers, meet the need for quality affordable rental 

homes, utilize housing as a platform for improving quality of life, build inclusive and sustainable communities free from discrimination, and transform the way 

HUD does business.

The HUD Office of Inspector General’s (OIG) mission is to protect the integrity of HUD and its programs and to promote their efficiency and effectiveness. To 

ensure that we are doing the right work at the right time, OIG has established a set of Oversight Priority Areas, which includes our identified Top Management 

Challenges for the Department. We also include primary, cornerstone functions of the Department as well as emerging issues and recent strategic priorities 

that the Department has identified. Below is an overview of our 12 Oversight Priority Areas.
2

The Section 3 program requires that recipients of certain HUD financial assistance, to the greatest extent possible, provide training, employment, contracting, and other economic opportunities to lowand very low-income persons, especially recipients of government assistance for housing, and to businesses that provide economic opportunities to low- and very low-income persons.

8 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020

 Ensuring Safe and Affordable Housing

HUD is responsible for providing quality homes for all. HUD continues to 

be challenged by the increasing scarcity of safe and affordable housing, 

which increasingly impacts persons above very low-income levels. Over 

time, the balance of HUD support has shifted from public housing to 

providing rental housing assistance through subsidies, depending more 

and more on private rental stock. HUD-funded housing stock is aged, 

sometimes environmentally impacted, and in need of critical repairs to 

protect the health and safety of tenants. HUD seeks to extend the life of 

these units through various financing and programmatic vehicles, such as 

the Rental Assistance Demonstration Program and low-income housing 

tax credits, which also shifts HUD oversight to a private rental model. The 

Housing Choice Voucher Program, which provides tenants assistance in 

accessing the private rental market, has been highly successful for lowincome persons but depends on available private rental housing, and need 

for the subsidy far outstrips appropriations. Further, HUD has limited tools 

to address safety and affordability issues impacting such housing.

 Advancing Economic Opportunities Initiatives

Advancing economic opportunity is the first priority goal of HUD’s 

Strategic Plan and has been a signature focus of Secretary Carson. 

HUD initiatives and programs in this priority area focus on economic 

development in local communities, which increases opportunities 

for individuals and families receiving government benefits to find 

employment and become self-sufficient. Many of these initiatives are 

entirely new, such as EnVision Centers and Opportunity Zones. Other 

programs are longstanding self-sufficiency programs, such as the 

Moving To Work Demonstration, Family Self Sufficiency, and Section 3 

oppurtunities to local residents.2

 HUD’s strategic plan also includes as 

a priority goal reducing the length of homelessness in communities. 

Examining the effectiveness of the Department’s efforts to combat 

homelessness is a focus for us in this priority area. 

 Fair Housing

HUD is the Federal entity tasked with eliminating housing discrimination 

and promoting inclusive communities. HUD’s enforcement of fair housing 

laws extends beyond HUD programs into all fair housing issues throughout 

the country, and it accomplishes its mission through both education 

and enforcement in local communities and in Federal housing programs 

and by promoting economic opportunity for protected classes. HUD is 

also empowered to mandate compensation to victims of discriminatory 

housing practices. HUD was appropriated approximately $65 million in 

fiscal year 2017 to support its fair housing mission. According to the Office 

of Fair Housing and Equal Opportunity’s fiscal year 2017 Annual Report 

to Congress, HUD and State and local agencies completed nearly 8,000 

investigations into housing discrimination cases and achieved nearly 

$9 million in monetary relief during that year. HUD’s fair housing work 

extends to sexual harassment associated with housing as a form of sex 

discrimination, and this is an area of particular focus for HUD OIG.

 Protecting the Mortgage Insurance Funds

The Federal Housing Administration (FHA) maintains a portfolio of more 

than 8 million mortgages with an outstanding balance of nearly $1.2 

trillion. The liquidity for the FHA lenders is created by Government 
9 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020

National Mortgage Association (Ginnie Mae) mortgage-back securities. 

FHA is challenged by a lack of safeguards, which increases HUD claim costs. 

Both FHA and Ginnie Mae are challenged by the increased participation 

of nonbanks that are less regulated. Ginnie Mae is rapidly moving toward 

accepting digital mortgages, which may increase risks of fraud as well as 

challenges to information security, data transfers, and platform integration. 

To date, FHA has been silent on its role regarding digital mortgages. HUD 

is also challenged by risks within its programs, including the structural 

weaknesses in the Home Equity Conversion Mortgage program, which 

HUD has been unable to resolve.

 Monitoring and Oversight

HUD’s annual and supplemental budgets are predominantly made up 

of grants and other subsidies to be passed through to governments, 

organizations, and individuals. HUD continues to face challenges with 

effective management controls, monitoring, and oversight of its programs 

and program recipients. Lack of appropriate staffing plays a major role in 

this challenge. HUD is challenged with a lack of management controls of 

its programs, lack of monitoring within CPD and Section 232 programs, 

weaknesses in its standards for and oversight of public housing agencies, 

and a demonstrated inability to manage troubled participants and assets 

across its programs.

 Administering Disaster Assistance

HUD is a primary actor in the Federal effort to assist communities 

recovering from disasters, receiving more than $90.4 billion since 2001. 

Despite the multiyear timespan of disaster recovery and the expectation 

that such activity will not decrease, HUD continues to administer the 

program disaster by disaster. Therefore, HUD faces continuing challenges 

to clarify and simplify its requirements; ensure that it has sufficient 

resources to efficiently monitor grants; ensure that expenditures are 

eligible and supported and proper financial and procurement controls are 

in place to reduce fraud, waste, and abuse; ensure that citizens who seek 

disaster assistance understand their options and obligations; and reduce 

administrative delays in the funds disbursement process.

 Information Technology and Cybersecurity

HUD depends on data systems to assist and track the millions of 

participants in its programs. The systems contain more than a billion 

records containing personally identifiable Information, as well as 

confidential business information and nonpublic HUD information. To 

properly protect these systems and information, HUD must ensure 

data privacy, ongoing system modernization, cybersecurity, and data 

governance. HUD’s persistent information technology and cybersecurity 

challenges have been longstanding and have materially impacted the 

agency mission and services. Although improvements were made during 

fiscal year 2019, HUD is still developing a sound strategic approach with 

ongoing oversight to help HUD manage its risks, improve the maturity of 

its cybersecurity program, meet the needs of its stakeholders, and protect 

taxpayer dollars.

 Financial Management

For several years, HUD’s financial management has been challenged by 

issues relating to HUD’s internal controls, noncompliance with several 

statutory requirements, and significant weaknesses in its financial 

management systems and processes. Since 2018, HUD has made 

progress in addressing governance structures, management practices, 

and accountability. In addition, Ginnie Mae has implemented a loan-level 

system for loans it services, which may resolve the longstanding disclaimer 

of its financial statements. HUD received a qualified opinion for the fiscal 

year 2019 audit, which is notable progress from the disclaimer of opinion 

that HUD had received in previous fiscal years. Beyond the financial 
10 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020

statement audit, there are additional areas of concern associated with 

HUD legacy financial systems and the departmentwide application of an 

effective internal control system.

 Human Resource Management and Procurement

Over the past 10 years, HUD’s staffing level has declined while its programs 

and responsibilities have increased. Between fiscal years 2015 and 2018, 

HUD’s attrition rate outpaced its hiring capacity. In fiscal year 2019, HUD 

hired 44 more employees than separated and it is important that HUD 

sustains this improvement. Yet, employees onboard often do not have 

the right skill sets, tools, or capacity to perform the range of functions 

needed within HUD. Leadership gaps resulting from extended vacancies 

and constant turnover have contributed to poor or delayed decisions and 

an inability to sustain positive changes. Many, if not all, of the challenges 

HUD faces are impacted by its staffing issues. Although HUD has 

increasingly relied on contractors to fill staffing gaps, HUD faces challenges 

with properly directing and monitoring these contractors, which have 

significant influence on the development, implementation, and oversight 

of HUD programs.

 Ethical Conduct

HUD regularly hires senior industry participants to execute its many multibillion-dollar programs, many of whom later return to the industry they 

previously regulated. HUD must ensure that these participants uphold 

the integrity of the programs and avoid even the appearance of cronyism 

and corruption. HUD must ensure that it has a robust ethics program that 

sufficiently educates and deters revolving door misconduct. Additionally, 

the Department must rely on its senior officials to identify potential 

conflicts of interest and remove themselves from decisions affected by 

those conflicts. While the law and departmental policy contain safeguards 

to ensure that current and former employees do not misuse their HUD 

positions and remain free from conflicts of interest, HUD continues to 

face significant challenges in monitoring, identifying, and mitigating 

potential ethical lapses. These challenges present significant risk to the 

Department’s reputation and program integrity.

 Emerging Issues and Opportunities

The environment in which HUD operates is ever changing. HUD must 

strive for success in its mission in ways that are sustainable in – and 

take advantage of – the changing environment. Some environmental 

changes may become a Top Management Challenge or contribute to a Top 

Management Challenge; others may offer new solutions to old problems. 

HUD OIG strives to be cognizant of emerging issues and opportunities 

facing the Department and proactive in assessing risks and opportunities 

for HUD to more effectively address these issues. 

 Mandatory Work

HUD OIG is required to perform certain functions by law, such as financial 

statement audits and the Federal Information Security Modernization Act 

evaluation, and as a result, must plan around a series of annually required 

mandatory reports and reporting requirements. Likewise, HUD receives 

appropriations and supplemental funding that also provide constraints on 

or emphases for our work. This priority area focuses on ensuring that HUD 

OIG meets its mandatory requirements but also performs them in a way 

that is most efficient and effective.
PROGRAM AREAS

11 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
SINGLE FAMILY HOUSING

CHAPTER 1

The Federal Housing Administration (FHA) singlefamily 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 

outlined in this chapter.

12 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
REVIEW OF FHA’S HOME AFFORDABLE MODIFICATION 

PROGRAM

The U.S. Department of Housing and Urban Development, Office 

of Inspector General (HUD OIG), audited HUD’s Federal Housing 

Administration, Home Affordable Modification Program’s (FHA-HAMP) 

policies for reporting nonincentivized loan modifications and filing 

partial claims. The objective was to determine whether there was a need 

for HUD to issue a policy requiring loan servicers to report FHA-HAMP 

nonincentivized loan modifications and file FHA-HAMP nonincentivized 

partial claims within specific timeframes.

HUD’s FHA-HAMP loss mitigation policy did not include deadlines to 

ensure timely reporting for nonincentivized loan modifications and 

filing of nonincentivized partial claims. The servicers were not obligated 

to always report or report in a timely manner nonincentivized loan 

modifications and file or file in a timely manner nonincentivized partial 

claims in FHA Connection. As a result, mortgage data from HUD’s systems 

may not have accurately reflected the status of the FHA-insured mortgages 

for monitoring and financial reporting of the Mutual Mortgage Insurance 

Fund. In addition, OIG’s recent corrective action verification review showed 

that HUD’s Claims Subsystem programming did not always properly 

calculate the time between claims to suspend payment for claims that 

had a reported prior loss mitigation action within 24 months because the 

claims were not submitted in order. 

OIG recommended that HUD (1) update its loss mitigation policies, to 

include deadlines for the servicers to file the FHA-HAMP nonincentivized 

partial claims, and consider imposing sanctions for noncompliance with 

these deadline requirements and (2) update its loss mitigation policies, 

to include deadlines for the servicers to report the new terms of the 

FHA-HAMP nonincentivized loan modifications, and consider imposing 

sanctions for noncompliance with these deadline requirements. (Audit 

Report: 2020-AT-0801) 

(HUD OIG Priority Area: Protecting the Mortgage Insurance Funds)

INVESTIGATION

Program Results

FATHER AND SON IMPRISONED FOR MORE THAN 7 YEARS FOR 

DEFRAUDING THE HUD REO PROGRAM

A father and son, Sergio Garcia, Sr., and Sergio Garcia, Jr., were sentenced 

in U.S. District Court to a total of 88 months imprisonment and 3 years 

supervised release. They were also ordered to pay a total of $500,454 in 

Key program results Questioned costs Funds put to 

better use

1 audit $0 $0

Administrative - civil 

actions

Convictions - pleas - 

pretrial diversions Financial recoveries

19 24 $20,734,249

13 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020

Strategic Initiative 1: Contribute to the reduction of fraud in 

single-family insurance programs

OFFICE OF AUDIT
restitution, with $496,389 due to HUD and the rest due to the victims. The 

Garcias were sentenced following their earlier guilty pleas to conspiracy 

to commit mail fraud. They conspired with others to contract with HUD 

to buy hundreds of HUD real estate-owned (REO) homes across two 

States and sell them for a profit on the day of purchase. The purchase 

contracts provided to HUD stated that they or one of their businesses 

was purchasing the properties as an investor and would pay with cash or 

use other financing not involving FHA. The conspirators used fraudulent 

letters to show that they or their company had access to the funds needed 

to complete each purchase. Once under contract to purchase homes from 

HUD, the conspirators advertised the homes for resale and placed their 

own “for sale” signs at the homes. When the conspirators could not find a 

purchaser to buy the homes, they allowed their purchase contracts with 

HUD to expire and filed false liens on the homes for the full purchase price, 

thus impeding HUD’s ability to sell the homes to other interested buyers. 

The Garcias filed false liens on 87 REO homes, delaying HUD’s sale of 

those homes and leading to a loss of value of almost $500,000 in eventual 

sales. HUD OIG and the Federal Bureau of Investigation conducted this 

investigation. (Hammond, IN) 

(HUD OIG Priority Area: Protecting the Mortgage Insurance Funds)

TRIO ORDERED TO PAY RESTITUTION OF MORE THAN $3.4 

MILLION

Ira Davis, a recruiter; Henry Florez, an investor; and Michael Rogers, a loan 

officer, were sentenced in U.S. District Court in relation to their earlier 

guilty pleas to bank fraud. The three were sentenced to a collective 

36 months incarceration and 8 years supervised release and ordered 

to pay more than $3.4 million in restitution to HUD. Over a course of 2 

years, Davis, Florez, and Rogers submitted or caused to be submitted 

14 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
false representations to financial institutions regarding the sales price of 

properties, the source of the downpayments, and the amount of sales 

proceeds. This false information on real estate contracts, loan applications, 

and HUD-1 settlement statements allowed the trio to assist individuals 

in qualifying for FHA loans and purchase 16 properties for which they 

otherwise would not have qualified. The loss to HUD for the loans is 

approximately $3.4 million. HUD OIG conducted this investigation. 

(Chicago, IL) 

(HUD OIG Priority Area: Protecting the Mortgage Insurance Funds)

MORTGAGE INDUSTRY PROFESSIONAL SENTENCED TO 46 

MONTHS IN PRISON 

Dilcia Mercedes, a mortgage payment processor, was sentenced in 

U.S. District Court in connection with her earlier guilty plea to money 

laundering and unauthorized access of a computer with intent to defraud. 

Mercedes was sentenced to 46 months incarceration and ordered to pay 

more than $2 million in restitution to the mortgage company and the 

mortgage company’s insurer. For nearly 3 years, Mercedes monitored 

unclaimed customer escrow accounts, then diverted the unclaimed escrow 

payments by accessing the mortgage company’s computer system and 

having the payments sent via wire transfers and Automated Clearing 

House transfers to bank accounts and prepaid debit cards controlled 

by Mercedes and others. Mercedes exceeded her computer access 

authorization by using a coworker’s computer login and password to 

approve the fund transfers, then making false entries canceling borrower 

escrow checks to make it appear as though customers had requested the 

unclaimed funds to be wire transferred to their bank accounts. A total of 

1,543 mortgages were impacted by this scheme, of which 211 were FHA 

insured. HUD OIG, the Internal Revenue Service Criminal Investigation 

Division, and the Federal Reserve Board OIG conducted this investigation. 

(Camden, NJ) 

(HUD OIG Priority Area: Protecting the Mortgage Insurance Funds)

DIRECT ENDORSEMENT LENDER AND HECM MORTGAGE 

ORIGINATOR TO PAY $2.47 MILLION

Finance of America Reverse, L.L.C., as successor to Urban Financial Group, 

Inc., an FHA-approved direct endorsement lender that originated FHAinsured home equity conversion mortgages (HECM), entered into two 

settlement agreements in which it agreed to pay the Federal Government 

$2.47 million. As part of the first settlement agreement, HUD received 

$1.31 million to resolve False Claims Act claims. HUD received an 

additional $500,000 as part of the second settlement agreement to 

resolve its administrative liability under the Program Fraud Civil Remedies 

Act. Between January 2007 and April 2010, Urban Financial Group is 

alleged to have violated the False Claims Act by knowingly originating 

and underwriting hundreds of HECM loans that did not meet HUD 

requirements, which resulted in HUD’s incurring substantial losses. HUD 

OIG and the United States Attorney’s Office for the District of Columbia 

conducted this investigation. (Washington, DC) 

(HUD OIG Priority Area: Protecting the Mortgage Insurance Funds)

15 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
PUBLIC AND INDIAN HOUSING

CHAPTER 2

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 low-income 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 outlined in this chapter.

16 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Strategic Initiative 2: Contribute to the reduction of 

erroneous payments in rental assistance

AUDIT

Key program results Questioned costs Funds put to 

better use

6 audits $3,926,226 $408,968

17 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020

REVIEW OF THE PUBLIC HOUSING OPERATING AND CAPITAL 

FUNDS 

HUD’s Office of Inspector General (OIG) audited the Public Housing 

Operating Fund and Capital Fund programs at the Springfield Housing 

Authority in Springfield, MA, to determine whether the Authority 

complied with procurement and contract administration requirements for 

these programs. 

Authority officials did not always comply with Federal procurement 

requirements and their own procurement policy. Specifically, they did not 

always adequately perform and document procurements, and contract 

terms were not always consistent with other procurement documents. 

In addition, Authority officials did not always comply with contract 

administration requirements. Specifically, they did not always ensure that 

contract amounts were not exceeded, change orders were approved in a 

timely manner, and completion documents were submitted as required. 

As a result, the Authority incurred nearly $38,000 in ineligible costs, more 

than $916,000 in unsupported costs, and nearly $409,000 in unspent funds 

that may need to be reallocated.

OIG recommended that HUD require Authority officials to (1) repay the 

ineligible costs from non-Federal funds, (2) support that the amount 

spent on contracts was fair and reasonable or repay the funds, (3) support 

that the amount not yet spent on contracts was fair and reasonable or 

reallocate the funds, (4) establish and implement adequate record-keeping 

procedures to comply with Federal procurement requirements, and (5) 

establish and implement adequate controls so the Authority does not 

exceed the contract amount without appropriate contract amendments 

and approvals. (Audit Report: 2020-BO-1002) 

(HUD OIG Priority Area: Monitoring and Oversight)

REVIEW OF HUD’S HOUSING CHOICE VOUCHER PROGRAM

HUD OIG audited the Housing Authority of the City of Long Beach, CA’s

Housing Choice Voucher Program to determine whether the Authority 

administered its program in compliance with program requirements, with 

an emphasis on its financial transactions, cost and payroll allocations, 

contracting, and procurement.

The Authority did not follow requirements under 2 CFR (Code of Federal 

Regulations) part 200 and 24 CFR part 982 in administering its program. 

It did not adequately support or perform overhead allocations, follow 

procurement requirements, or ensure that costs were eligible. As a result, 

HUD had no assurance that program funds totaling more than $2.4 million 

were appropriately used for the operation of the program. In addition 

nearly $6,000 was used for ineligible program expenses.

OIG recommended that HUD require the Authority to (1) develop 

and implement a HUD-approved cost allocation plan, (2) support the 
18 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020

reasonableness of more than $1.9 million in overhead allocations or 

repay the program from non-Federal funds, (3) determine how much of 

the general operating costs applied to the program and repay potential 

overcharges (nearly $51,000) to the program from non-Federal funds, (4) 

support or repay nearly $26,000 in personnel expenses and more than 

$64,000 for accounting services that applied to other programs from 

non-Federal funds, (5) support the reasonableness of the nearly $341,000 

Casterline and more than $33,000 Genesis contract amounts or repay 

the program from non-Federal funds, (6) implement additional written 

procurement and contracting policies and procedures, and (7) repay the 

program for the unallowable expenses from non-Federal funds. (Audit 

Report: 2020-LA-1002) 

(HUD OIG Priority Area: Monitoring and Oversight)

REVIEW OF HUD’S COMPLIANCE WITH THE LEAD SAFE 

HOUSING RULE

HUD OIG audited HUD’s oversight of PHAs’ compliance with the Lead Safe 

Housing Rule to determine whether HUD’s oversight was adequate.

HUD did not have adequate oversight of PHAs’ compliance with the 

Lead Safe Housing Rule. Specifically, it did not always obtain sufficient 

documentation to support that a public housing development was 

either exempt from or complied with the Rule and review all potential 

cases of noncompliance. HUD also did not ensure that PHAs reported 

accurate construction dates of housing developments to determine the 

applicability of the Rule. As a result, HUD lacked assurance that PHAs 

complied with the Rule, thus potentially exposing children under 6 years of 

age to lead-based paint hazards. 

OIG recommended that HUD ensure that (1) it appropriately determines 

exemptions from the Rule and documents support of the determinations; 

(2) it determines whether children under 6 years of age reside in an 

exempt development; (3) the developments without sufficient support 

of an exemption either support the exemption status or complete the 

required lead-based paint inspections and provide the documentation 

to the appropriate field office; (4) the potentially noncompliant 

developments are reported in its response tracking system and reviewed 

for compliance with the Rule; (5) timeframes are established for reporting 

potentially noncompliant developments in its tracking system, monitoring 

PHAs for compliance, and implementing corrective actions and resolution; 

(6) a framework is developed for administrative action for noncompliant 

PHAs; and (7) PHAs accurately report the construction dates of their 

housing developments. (Audit Report: 2020-CH-0003) 

(HUD OIG Priority Area: Ensuring Safe and Affordable Housing)

PUBLIC HOUSING AGENCY ADMINISTRATOR SENTENCED FOR 

IDENTITY THEFT

Tonya Lewis, a former administrative assistant and human resources 

manager for a PHA, was sentenced in U.S. District Court in relation to an 

INVESTIGATION

Program Results

Administrative- civil 

actions

Convictions - pleas - 

pretrial diversions Financial recoveries

30 39 $1,992,279
19 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020

earlier guilty plea to aggravated identity theft. Lewis was sentenced to 

24 months incarceration and 12 months supervised release and ordered 

to pay restitution of $150,189 to the PHA. Over approximately 31⁄2 

years, the PHA employee used PHA operating account transactions to 

misappropriate PHA funds for personal gain in the amount of $95,689. 

In doing so, Lewis used the identity of another PHA employee to further 

misappropriate PHA funds. Lewis used the funds to make payments 

on her personal car, purchase party supplies and bulk alcohol, and go 

on vacations, among other expenditures. HUD OIG conducted this 

investigation. (Mobile, AL) 

(HUD OIG Priority Area: Ethical Conduct)

EVALUATION

HUD HAS NOT REFERRED TROUBLED PUBLIC HOUSING 

AGENCIES AS THE LAW AND REGULATIONS REQUIRE

The Office of Public and Indian Housing (PIH) has not referred troubled 

PHAs to the Assistant Secretary for Public and Indian Housing to take them 

over as the law and regulations require. Without this referral mechanism, 

a PHA could remain troubled for an indefinite period while conditions 

stagnate or deteriorate. HUD OIG identified 18 PHAs that remained 

troubled for more than 2 years without being referred.

PIH is creating a process for referring troubled PHAs, but two problems 

exist with its approach. First, the draft process that OIG reviewed in this 

evaluation would provide more options to the Assistant Secretary than 

the law and regulations allow. Second, PIH cannot meet the statutory 

deadlines for referral of a troubled PHA without substantial changes to the 

assessment process or changes to the law and regulations, which PIH is 

not making as part of its new process. The new process would allow some 

troubled PHAs more time to recover than the law and regulations allow. 

PIH’s training that existed at the time of OIG’s fieldwork on the authority 

and process for declaring a PHA in substantial default and for taking PHAs 

into possession suggests remedies that do not fully comply with the law 

and regulations. Finally, PIH has not submitted an annual troubled PHAs 

report to Congress for at least 11 years as the law requires, thereby missing 

another opportunity to strengthen the accountability and transparency of 

its recovery process.

OIG recommended that PIH (1) refer troubled PHAs directly to the 

Assistant Secretary for Public and Indian Housing when they have not 

met the 1- or 2-year recovery requirements, (2) ensure that referrals to 

the Assistant Secretary recommend only recovery options allowed by the 

law and regulations, (3) update training to include the actions that PIH 

must take when a troubled PHA does not meet the 1- or 2-year recovery 

requirements, (4) provide training on remedies for long-term troubled 

PHAs to all PIH staff members who routinely interact with troubled PHAs, 

and (5) submit an annual troubled PHAs report to Congress in accordance 

with the statute. (Evaluation Report: 2019-OE-0001) 

(HUD OIG Priority Area: Monitoring and Oversight)
In addition to multifamily housing developments, 

healthcare facilities, and hospitals with U.S. 

Department of Housing and Urban Development 

(HUD)-held or HUD-insured mortgages, 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 outlined in this 

chapter.

MULTIFAMILY HOUSING AND

HEALTHCARE

CHAPTER 3

20 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
REVIEW OF HUD’S RENTAL ASSISTANCE DEMONSTRATION 

PROGRAM 

HUD’s Office of Inspector General (OIG) reviewed HUD’s funding allotment 

for tenant protection assistance at the Vineville Christian Towers (project) 

in Macon, GA, related to a housing conversion action and its approval of 

the project’s Rental Assistance Demonstration Program (RAD) conversion. 

The objective was to determine whether HUD accurately allotted funding 

for tenant protection assistance and whether it properly approved the 

project’s proposed RAD conversion.

HUD inaccurately allotted funding for tenant protection assistance at 

the project and improperly approved the project’s RAD conversion. 

Specifically, it inappropriately processed a funding allotment for tenant 

protection assistance for a housing conversion action at the project 

based on unsupported requests from program offices. Further, HUD 

improperly approved the project’s RAD conversion for 90 units. As a result, 

nearly $715,000 in tenant protection assistance funding was inaccurately 

allocated, and more than $624,000 in housing assistance payments and 

administrative fees was improperly provided through an ineligible Section 

8 Project-Based Voucher Program housing assistance payments contract.

OIG recommended that HUD update and implement internal procedures 

(1) for processing housing conversion actions to require documentation, 

including but not limited to expired contracts or financial documentation 

from HUD’s Line of Credit Control System, to show when the last payment 

was made for the contract to support the proposed housing conversion 

actions before allotment of tenant protection funds and (2) to require 

verification that tenant protection funds were not previously allotted for 

the same type of housing conversion action. OIG also recommended that 

for the remaining retroactive RAD conversions not completed, HUD take 

steps, including but not limited to (1) maintaining adequate approval 

documentation and (2) training staff responsible for reviewing and 

approving RAD applications, to ensure that it enforces its requirement 

that the tenant protection assistance be provided to tenants before the 

submission of the RAD application. (Audit Report: 2020-AT-0802) 

(HUD OIG Priority Area: Ensuring Safe and Affordable Housing)

Strategic Initiative 2: Contribute to the reduction of 

erroneous payments in rental assistance

AUDIT

Key program results Questioned costs Funds put to 

better use

3 audits $0 $0

21 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
INVESTIGATION

Program Results

Administrative - civil 

actions

Convictions - pleas - 

pretrial diversions Financial recoveries

1 1 $54,456

INTERNATIONAL FUGITIVE SENTENCED FOR SUBSIDIZED 

HOUSING FRAUD 

A project-based multifamily tenant, Allan Mann, also known as Hailee 

Randolph DeSouza, was sentenced in U.S. District Court in relation to 

an earlier guilty plea to submitting false statements to HUD. Mann was 

sentenced to 18 months incarceration and ordered to pay restitution of 

$53,256, with $34,744 due to HUD. From 2004 to 2018, Mann made false 

statements and certifications to the government about his identity in order 

to receive HUD-subsidized rental assistance as well as Medicaid medical 

assistance. Mann was wanted by Canadian law enforcement for more 

than 30 years in connection with the June 1987 alleged abduction of his 

biological son during a scheduled weekend visit. Mann used the false 

identity of Hailee Randolph DeSouza in order to receive U.S. government 

benefits. HUD OIG; the U.S. Marshals Service; the U.S. Department of 

Health and Human Services OIG; the Social Security Administration OIG; 

the Diplomatic Security Service; and Homeland Security Investigations 

conducted this investigation. (New Haven, CT) 

(HUD OIG Priority Area: Ensuring Safe and Affordable Housing)

22 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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 

outlined in this chapter.

COMMUNITY PLANNING

AND DEVELOPMENT

CHAPTER 4

23 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
REVIEW OF THE CONTINUUM OF CARE PROGRAM 

The U.S. Department of Housing and Urban Development, Office of 

Inspector General (HUD OIG), audited Community Action North Bay in 

Fairfield, CA, regarding its Continuum of Care Program to determine 

whether the Community administered its program in accordance with 

HUD requirements.

The Community did not administer its Continuum of Care Program in 

accordance with HUD requirements. Specifically, it did not maintain 

documents required to support that (1) it met the matching contribution 

requirement, (2) its rapid rehousing and permanent supportive housing 

programs assisted eligible individuals, and (3) program income and 

expenses were supported and eligible. As a result, the Community is at 

risk of having to repay HUD nearly $648,000. It also could not support the 

eligibility of individuals assisted by its rapid rehousing and permanent 

supportive housing programs.

OIG recommended that HUD require the Community to (1) support 

that it met the matching contribution requirement or reimburse HUD 

nearly $578,000 from non-Federal funds, (2) reclassify nearly $29,000 as 

3

The total CPD audits, questioned costs, and funds put to better use amounts include questioned costs for any disaster-related audits included in the community planning and development area (one 

audit). The writeups for this audit is shown separately in chapter 5 of this semiannual report.

program income to the specific permanent supportive housing program, and 

(3) support that nearly $3,000 paid to a board member for legal services was 

allowed through a HUD-approved waiver or repay HUD from non-Federal 

funds. (Audit Report: 2020-LA-1001) 

(HUD OIG Priority Area: Monitoring and Oversight)

INVESTIGATION

Program Results

Administrative - civil 

actions

Convictions - pleas - 

pretrial diversions Financial recoveries

7 26 $6,713,028

FORMER NONPROFIT HOUSING PROGRAM MANAGER 

SENTENCED FOR IDENTITY THEFT AND THEFT BY SWINDLE

Cynthia Waight, former housing program manager of a nonprofit community 

resource center for adults with serious mental illnesses, was sentenced in State 

District Court in connection with her earlier guilty plea to identity theft and 

theft by swindle. Waight was sentenced to 12 months incarceration and 120 

months probation and ordered to pay $136,543 in restitution to the nonprofit, 

11 individual victims, and others. Over a span of 15 months, Waight created 

and submitted falsified applications for housing assistance on behalf of 

fictitious clients of the nonprofit. Once the funds were made available, Waight 

created, endorsed, and cashed 99 checks issued to the fictitious clients totaling 

almost $100,000, which she then used on gambling ventures at a casino. HUD 

OIG conducted this investigation. (Minneapolis, MN) 

(HUD OIG Priority Area: Financial Management)

Strategic Initiative 3: Contribute to the strengthening of communities

AUDIT

Key program results Questioned costs Funds put to 

better use

5 audits3 $739,836 $390,077

24 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
4

The more than $1.4 billion difference between appropriated and allocated funds is due to nonmajor program appropriations made since fiscal year 2001.

5

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.

DISASTER RELIEF

CHAPTER 5

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 $82.24

billion in active disaster grants, the funds have been allocated nationwide, with nearly $51.8 billion obligated and more than $40.4 billion disbursed as of 

March 31, 2020. 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.

Disaster Funds allocated Funds disbursed % of funds 

disbursed

Fiscal year 

funds allocated

Harvey, Irma, 

& Maria $35.8 billion $382.6 million 1% 2017 &FY 2018

Louisiana, Texas, 

& West Virginia5 2.5 billion 1.14 billion 45% 2016 & FY 2017

Hurricane Sandy 15.2 billion 11.5 billion 76% 2013

Hurricanes Ike, Gustav 

& Dolly 6.1 billion 5.4 billion 89% 2008

Hurricanes Katrina, 

Rita & Wilma 19.7 billion 18.6 billion 95% 2006 & 2008

9-11 3.5 billion 3.27 billion 94% 2001 & 2002

25 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
REVIEW OF THE PUERTO RICO DEPARTMENT OF HOUSING 

HUD OIG audited the Puerto Rico Department of Housing (PRDOH) in 

San Juan, PR, to determine whether the PRDOH (1) had the capacity to 

administer its Community Development Block Grant Disaster Recovery 

(CDBG-DR) grants7

 in accordance with applicable regulations and 

requirements and (2) had in place financial and procurement policies and 

procedures that promoted the expenditure of funds and the acquisition 

of goods and services in accordance with Federal requirements.

The PRDOH should strengthen its financial and procurement capacity to 

administer its CDBG-DR grants in accordance with applicable regulations 

and requirements. Specifically, it could strengthen its capacity by (1) 

improving its financial controls, (2) improving its processes for preventing 

duplication of benefits, (3) improving its procurement controls, and 

(4) continuing to increase its staffing. Strengthening its capacity would 

help ensure that the PRDOH properly administers more than $19 billion in 

CDBG-DR funds in accordance with applicable requirements. Further, the 

PRDOH did not follow Federal and its own procurement requirements when 

it acquired goods and services. As a result, HUD had no assurance that 

purchases were reasonable, necessary, and allowable.

OIG recommended that HUD require the PRDOH to (1) develop adequate 

procedures outlining steps for tracking monthly grant expenditures and 

reprogramming funds and program income and develop and implement 

a financial management system for its 2008 CDBG-DR grant, (2) review 

and update its policies and procedures to prevent duplication of benefits, 

(3) review and update its procurement policies and procedures, and (4) 

continue to fill its vacancies. In addition, HUD should require the PRDOH to 

submit supporting documentation showing compliance with procurement 

requirements and that purchases totaling nearly $417,000 were reasonable 

and necessary costs or reimburse the program more than $55,000 from nonFederal funds and cancel nearly $362,000 in CDBG-DR obligations. 

(Audit Report: 2020-AT-1002) 

(HUD OIG Priority Area: Administering Disaster Assistance)

6

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. 

7

The CDBG-DR grants reviewed were for the 2017 and 2008 disasters.

Strategic Initiative 3: Contribute to the strengthening of communities

AUDIT

Key program results Questioned costs Funds put to 

better use

1 audit6 $55,010 $361,501

26 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
DISASTER RECIPIENT SENTENCED FOR THEFT

Anthony Novello, a disaster aid recipient, was sentenced in State Superior 

Court in connection with an earlier guilty plea to theft by unlawful 

taking. Novello was sentenced to 5 years probation and ordered to pay 

$142,414 in restitution to the New Jersey Department of the Treasury. 

Novello falsified an application and grant agreement to support his 

false certification that his primary residence was damaged during 

Hurricane Sandy in 2012. The damaged property was a vacation home 

and, therefore, ineligible for the CDBG-DR funds, which were HUD funds 

administered by the New Jersey Department of Community Affairs 

through the Resettlement Program and Reconstruction, Rehabilitation, 

Elevation, and Mitigation Program. HUD OIG, the U.S. Small Business 

Administration OIG, and the New Jersey Division of Criminal Justice 

conducted this investigation. (Toms River, NJ) 

(HUD OIG Priority Area: Administering Disaster Assistance)

INVESTIGATION

Program Results*

Administrative - civil 

actions

Convictions - pleas - 

pretrial diversions Financial recoveries

2 9 $416,270

*Figures included in CPD stats

27 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
ADDITIONAL REPORTS

28 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
AUDIT OF HUD’S FISCAL YEAR 2019 CONSOLIDATED 

FINANCIAL STATEMENTS

HUD OIG audited HUD’s consolidated financial statements8 in accordance 

with the Chief Financial Officers Act of 1990 as amended. The objectives 

8

HUD’s consolidated financial statements include its two component entities, the Federal Housing Administration (FHA) and Ginnie Mae. 

OTHER SIGNIFICANT AUDITS

AND EVALUATIONS

CHAPTER 6

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

AUDIT

The U.S. Department of Housing and Urban Development (HUD), Office of 

Inspector General’s (OIG) more significant reports are discussed within this 

chapter.

were to express an opinion on the fair presentation of HUD’s consolidated 

financial statements and to report on HUD’s internal controls over financial 

reporting and compliance with select provisions of applicable laws, 

regulations, contracts, and grant agreements. This report supplements 

OIG’s independent auditor’s report on the results of its audit of HUD’s 

consolidated financial statements for the fiscal year ending September 30, 

2019.

OIG expressed a qualified opinion on HUD’s consolidated financial 

statements for fiscal year 2019 because of the significant effects of 

certain unresolved audit matters, which restricted its ability to obtain 

sufficient, appropriate evidence about HUD’s non-credit reform loans 

and other liabilities resulting from the Government National Mortgage 

Association’s (Ginnie Mae) guaranty asset and guaranty liability. This 

report provides additional details on one material weakness, three 

significant deficiencies, and three instances of noncompliance with laws, 

regulations, contracts, and grant agreements. The most significant finding 

relates to instances in which HUD’s accounting did not always comply with 

Federal generally accepted accounting principles. OIG also identified (1) 

weaknesses in internal controls over financial reporting; (2) weaknesses 

in the financial management system and computing environment; (3) 

financial management governance deficiencies; and (4) three instances of 

noncompliance with laws, regulations, contracts, and grant agreements. 

The most significant OIG recommendations were that HUD (1) improve 

its validation methodology for accrued grant liabilities; (2) develop, 

implement, and improve policies and procedures related to internal 

controls over financial reporting, including the Federal Housing 

Administration’s (FHA) and Ginnie Mae’s estimation models; and (3) ensure 

Key program results Questioned costs Funds put to 

better use

8 audits $618,270 $0

29 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
that sufficient documentation is maintained and is sufficiently traceable to 

support transactions related to non-credit reform loans. (Audit Reports: 

2019-FO-0003 and 2019-FO-0004) 

(HUD OIG Priority Area: Financial Management)

AUDIT OF THE FEDERAL HOUSING ADMINISTRATION’S 

FINANCIAL STATEMENTS FOR FISCAL YEARS 2019 AND 2018

HUD OIG audited FHA’s principal financial statements and notes for the 

fiscal years ending September 30, 2018 and 2019, including a review of 

FHA’s internal control over financial reporting and testing of its compliance 

with selected provisions of laws, regulations, contracts, and grant 

agreements.

In OIG’s opinion, FHA’s fiscal years 2018 and 2019 financial statements 

were presented fairly, in all material respects, in accordance with the U.S. 

generally accepted accounting principles for the Federal Government. 

This opinion is reported in FHA’s Fiscal Year 2019 Annual Management 

Report. The results of OIG’s audit of FHA’s principal financial statements 

and notes for the fiscal years ending September 30, 2018 and 2019, 

including its report on FHA’s internal control over financial reporting and 

compliance with selected provisions of laws, regulations, contracts, and 

grant agreements applicable to FHA, are presented in this report. 

OIG’s audit disclosed one significant deficiency in internal controls and no 

instances of noncompliance with applicable laws, regulations, contracts, 

and grant agreements. OIG recommended that FHA strengthen its 

system of internal control processes, policies, and procedures to (1) ensure 

complete model research and concurrent model documentation and (2) 

prevent inaccurate financial reporting and misstatements from occurring 

in the financial statements and notes. (Audit Report: 2020-FO-0001) 

(HUD OIG Priority Area: Financial Management)

AUDIT OF THE GOVERNMENT NATIONAL MORTGAGE 

ASSOCIATION FISCAL YEAR 2019 FINANCIAL STATEMENTS

HUD OIG audited Ginnie Mae’s fiscal year 2019 financial statements, 

including its internal control over financial reporting and compliance with 

selected provisions of applicable laws, regulations, and contracts.

In fiscal year 2019, OIG was unable to obtain sufficient, appropriate 

evidence to express an opinion on the fairness of Ginnie Mae’s financial 

statements. Specifically, OIG had significant modeling concerns affecting 

Ginnie Mae’s guaranty asset, guaranty liability, and allowance for loan 

losses, which prevented it from completing its audit work due to time 

constraints imposed by the statutory reporting deadlines. These issues 

concerned the appropriateness and reasonableness of the model 

methodologies, specifications, and model assumptions, which raised 

questions about the reliability of the significant accounting estimates 

produced by these models. Additionally, OIG was unable to audit the 

nonpooled loan assets due to (1) documentation challenges to support 

balances for claims receivable and reimbursable costs and (2) insufficient 

time to complete necessary audit procedures for mortgage loans held for 

investment and acquired properties. 

Given the significance of all of these limitations combined, it is 

OIG’s professional opinion that there may be risks that undetected 

misstatements that could be material may exist in these statements. 

30 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Therefore, OIG deemed its audit scope to be insufficient to express an 

opinion on Ginnie Mae’s fiscal year 2019 financial statements as a whole. 

OIG identified two material weaknesses; one significant deficiency; 

and one reportable noncompliance with selected provisions of laws, 

regulations, and contracts. OIG made 18 new audit recommendations. 

(Audit Report: 2020-FO-0002) 

(HUD OIG Priority Area: Financial Management)

REVIEW OF THE LEAD HAZARD REDUCTION DEMONSTRATION 

GRANT PROGRAM 

HUD OIG audited the City of Detroit, MI’s Housing and Revitalization 

Department’s Lead Hazard Reduction Demonstration Grant Program 

to determine whether the Department administered the program in 

accordance with HUD’s requirements.

The Department did not administer the program in accordance with 

HUD’s requirements. Specifically, it did not (1) maintain documentation 

to support that healthy homes assessment and data collection services 

were cost reasonable, (2) ensure that landlords gave preference in renting 

vacant assisted units to targeted families, (3) maintain adequate lead 

inspection documentation to support that lead-based paint hazard 

control activities were necessary, (4) obtain HUD approval before spending 

healthy homes supplemental funds in excess of $5,000 per unit, and (5) 

calculate annual income correctly for one assisted household. As a result, 

the Department and HUD lacked assurance that more than $616,000 in 

program funds was used in accordance with HUD’s requirements. 

OIG recommended that HUD require the Department to (1) support that 

the contract for healthy homes assessment and data collection services 

was cost reasonable, (2) support that landlords gave preference in renting 

vacant assisted units to targeted families, (3) support that lead-based 

paint hazard control activities were necessary, (4) coordinate with HUD 

to determine whether healthy homes supplemental funds used in excess 

of $5,000 per unit were used for eligible activities, and (5) implement 

adequate procedures and controls to address the findings cited. (Audit 

Report: 2020-CH-1001) 

(HUD OIG Priority Area: Monitoring and Oversight)

REVIEW OF HUD’S COMPLIANCE WITH THE PURCHASE CARD 

PROGRAM FOR FISCAL YEARS 2017 AND 2018

HUD OIG audited HUD’s compliance with the purchase card program 

requirements for fiscal years 2017 and 2018, based on its risk assessment, 

to determine whether HUD maintained accurate records of cardholders 

and transactions; HUD employees took purchase card training when 

required; and HUD purchase cards were used for potentially illegal, 

improper, or erroneous transactions.

HUD did not have accurate and complete records of cardholders and 

transactions, including errors in cardholder closure dates, errors in training 

dates, inadequate tracking of merchant category code overrides, and 

incomplete transactional data. In addition, purchase cardholders and 

approving officials did not always take purchase card training when 

required. Further, OIG identified 10 instances in which HUD purchase 

cards were used for improper purchases and incurred improper interest 

charges totaling more than $29,000.

31 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
OIG recommended that HUD (1) implement processes to periodically 

audit or reconcile the shared service provider’s records, (2) review ratios of 

cardholders to approving officials, (3) ensure that training is taken when 

required, (4) suspend cardholders or approving officials who fail to take 

training or repeatedly cause HUD to pay interest, and (5) research the 

incomplete monthly transactional data and identify a solution. In addition, 

OIG recommended that HUD (1) enhance the process to periodically 

analyze data for split transactions or improper merchant category codes, 

(2) improve notifications to employees, and (3) follow up on any potential 

issues identified. (Audit Report: 2020-KC-0001) 

(HUD OIG Priority Area: Financial Management)

REVIEW OF HUD’S COMPLIANCE WITH THE TRAVEL CARD 

PROGRAM FOR FISCAL YEAR 2018

HUD OIG audited HUD’s compliance with the travel card program 

requirements for fiscal year 2018, based on its risk assessment, to 

determine whether HUD travel cards were used for potentially illegal, 

improper, or erroneous purchases and whether travel cards were used 

when required.

From a sample of transactions identified as high risk, OIG found that HUD’s 

travel cards were used for 166 potentially illegal, improper, or erroneous 

purchases totaling nearly $23,000. In addition, 19 employees used their 

personal sources of payment instead of the government travel card in 

violation of the Federal Travel Regulations.

OIG recommended that HUD (1) take appropriate actions against the 

employees identified, (2) improve controls to ensure the proper use of the 

travel cards and detect employees who do not use their government travel 

cards when required, and (3) provide employees with appropriate training 

on the issues identified and ensure that all cardholder training is up to 

date. (Audit Report: 2020-KC-0002) 

(HUD OIG Priority Area: Financial Management)

EVALUATION

OVERVIEW OF HUD’S HOUSING ASSISTANCE PROGRAMS

At the request of Senator Enzi, HUD OIG reviewed HUD’s housing 

assistance programs based on their purpose, types of assistance, and 

eligible participants. This report also includes the 5-year funding history 

for each HUD program office that administers housing assistance 

programs.

HUD administers 73 housing assistance programs that promote home 

ownership, provide rental assistance, and support public housing. Six HUD 

program offices administer the 73 active housing assistance programs, 

including the Office of Housing, the Office of Community Planning and 

Development, the Office of Public and Indian Housing, the Office of Fair 

Housing and Equal Opportunity, Ginnie Mae, and the Office of Lead 

Hazard Control and Healthy Homes. Of the 73 active housing assistance 

programs, 23 programs provide home-ownership assistance, 28 programs 

provide rental housing assistance, and 22 programs provide both types 

of housing assistance. There are no specific areas of significant program 

overlap across HUD’s 73 active housing assistance programs. From fiscal 

years 2014 to 2018, Congress appropriated approximately $257.90 billion 

to HUD’s housing assistance programs. (Evaluation Report: 2019-OE0004) 

(HUD OIG Priority Area: Monitoring and Oversight)

32 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
MANAGEMENT ALERT: RECORDS AND PRIVACY 

PROTECTION ISSUES IDENTIFIED DURING FISCAL YEAR 

2019 FISMA EVALUATION

During the HUD OIG Federal Information Security Modernization 

Act of 2014 (FISMA) evaluation, OIG reviewed HUD’s records 

and privacy programs. Based on the initial findings, OIG issued 

a management alert due to HUD’s failure to meet basic records 

management and privacy requirements for more than 1 billion 

records containing personally identifiable information. Specifically, 

HUD is unable to identify, categorize, and adequately secure 

all of its electronic and paper records that contain personally 

identifiable information. This management alert does not contain 

any recommendations, although further work is being conducted 

to provide HUD with a comprehensive report and associated 

recommendations. (Evaluation Product: 2019-OE-0007) 

(HUD OIG Priority Area: Information Technology and 

Cybersecurity)

33 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
LEGISLATION, REGULATIONS,

AND OTHER DIRECTIVES

Notices, Mortgagee Letters, 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 750 hours to reviewing 

143 issuances. The draft directives consisted of 102 notices, 7 mortgagee 

letters, and 34 other directives. OIG provided comments on 37 (or 26 percent) 

of the issuances and nonconcurred on 18 (or 13 percent) but lifted 10 

nonconcurrences. Of the 34 other directives, OIG reviewed two proposed rules 

and three final rules, taking no position on three and providing comments on 

two; 25 handbooks or guidebooks; one research report; two U.S. Department 

of Housing and Urban Development (HUD) legislative referral memorandum 

reports; and one set of frequently asked questions regarding Community 

Development Block Grant (CDBG) Disaster Recovery acquisition activities. The 

following is a summary of selected reviews for this 6-month period.

OFFICE OF SINGLE FAMILY HOUSING

Updates to FHA’s Single Family Housing Policy Handbook - On October 

24, 2019, the Federal Housing Administration (FHA) issued HH 4000.1, 

FHA Single Family Housing Policy Handbook, effective October 15, 2019, 

incorporating the final rule in Federal Register Notice FR-5715-F-02 and 

Mortgagee Letter 2019-17. The rule provided 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 provided 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. The mortgagee letter provided 

updated origination requirements for home equity conversion mortgages 

(HECM) (reverse mortgages) on condominium units. The mortgagee letter 

also established borrower eligibility requirements for prospective HECM 

borrowers seeking to use the single-unit approval process to obtain FHA 

insurance on an individual condominium unit. OIG previously provided a 

no position response on the rule and the mortgagee letter and provided a 

no position response to the issuance of the handbook. 

Maximum rehabilitation costs in qualified opportunity zones for 

limited 203(k) mortgages – On November, 22, 2019, HUD issued 

Mortgagee Letter 2019-18, increasing the maximum rehabilitation costs in 

qualified opportunity zones for limited 203(k) mortgages from $35,000 to 

$50,000. OIG provided a no position response regarding this mortgagee 

letter.

Credit risk retention regulations – On December 20, 2019, HUD issued a 

Federal Register Notice, Docket No. FR-6172-N-01, seeking comments on 

beginning the review of the definition of qualified residential mortgage, 

the community-focused residential mortgage exemption, and the 

exemption for qualifying three- to four-unit residential mortgage loans, 

in each case as currently set forth in the Credit Risk Retention Regulations 

adopted by the Department. HUD made this commitment jointly with the 

U.S. Treasury, Office of the Comptroller of the Currency; Board of Governors 

of the Federal Reserve System; Federal Deposit Insurance Corporation; 

CHAPTER 7

34 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
U.S. Securities and Exchange Commission; and Federal Housing Finance 

Agency. OIG provided a no position response regarding this notice.

Mortgagee electronic funds transfer accounts – On January 29, 2020, 

HUD issued Mortgagee Letter 20-02, eliminating the manual process to 

establish and maintain electronic funds transfer (EFT) accounts. FHA is 

leveraging technology to allow lenders to establish and maintain EFT 

accounts through the Lender Electronic Assessment Portal. OIG provided a 

no position response regarding this notice.

Foreclosure and eviction moratorium in connection with the 

presidentially declared COVID-19 national emergency – On March 

18, 2020, HUD issued Mortgagee Letter 2020-04, informing lenders of 

a foreclosure and eviction moratorium for all FHA-insured single-family 

mortgages (all FHA Title II forward and HECM reverse mortgage programs) 

for a period of 60 days. The moratorium applies to the initiation of 

foreclosures and to the completion of foreclosures in process. Similarly, 

evictions of persons from properties secured by FHA-insured singlefamily mortgages are also suspended for a period of 60 days. In addition, 

deadlines of the first legal action and reasonable diligence timelines are 

extended by 60 days. This mortgagee letter did not come through the 

clearance process; therefore, OIG did not have an opportunity to review 

and comment on it.

Reverification of employment and exterior-only and desktop-only 

appraisal scope of work options for FHA single-family programs 

impacted by COVID-19 – On March 27, 2020, HUD issued Mortgagee 

Letter 2020-05, informing lenders and appraisers of FHA’s single-family 

modification to the reverification of employment requirements due to the 

presidentially declared COVID-19 national emergency and exterior-only or 

desktop-only appraisal inspection option, which limits face-to-face contact 

for certain transactions affected by the declaration. The reverification of 

employment guidance in this mortgagee letter is effective immediately 

for cases closed on or before May 17, 2020. The appraisal guidance in 

this mortgagee letter is effective immediately for appraisal inspections 

completed on or before May 17, 2020. This mortgagee letter did not come 

through the clearance process; therefore, OIG did not have an opportunity 

to review and comment on it.

OFFICE OF PUBLIC AND INDIAN HOUSING

30-day notice of proposed information collection: National Standards 

for the Physical Inspection of Real Estate demonstration – On 

December 12, 2019, HUD published a notice (Federal Register7011-N-55) 

in which HUD is requesting information from PHAs, owners, and agents 

(POA) that participate in the National Standards for the Physical Inspection 

of Real Estate (NSPIRE) multistage demonstration to identify potential 

adjustments to standards, protocols, and processes. Through this notice, 

HUD is requesting from the POAs the following: an annual self-inspection 

report or work order receipts, a property profile, copies of building system 

certificates, local code violations over the rolling calendar year, and 

participation in feedback sessions. HUD is developing a standardized 

electronic system and data exchange standard for this collection and will 

distribute self-inspection software for properties to collect and submit 

these data electronically. OIG’s review of the notice resulted in a comment 

that the demonstration for HUD to collect data to identify potential 

adjustments to standards, protocols, and processes does not address 

what action, if any, HUD will take against the expected 60,000 participants 

if their self-reported information indicates violations of HUD’s housing 

quality standards or the local codes. Further, OIG stated that the proposed 

demonstration does not seem to have a clear beginning or ending 

35 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
date. HUD issued the notice with a change to the number of expected 

participants, reducing the count from 60,000 to 35,000. There were no 

other changes made to the notice.

OFFICE OF MULTIFAMILY HOUSING PROGRAMS

Green mortgage insurance premium compliance reporting 

guidance – On January 8, 2020, HUD issued Notice 2020-1 (related to 

Mortgagee Letter 2020-01), which reiterates the requirements to all 

multifamily accelerated processing lenders and borrowers regarding 

how to report and maintain compliance with green mortgage insurance 

premium (MIP) requirements according to the rider to the regulatory 

agreement, “Borrowers Obligation to Maintain Projects Energy 

Performance as Consideration for MIP Reduction.” This notice outlines a 

compliance monitoring framework that applies to all properties that have 

a green MIP in the FHA multifamily-insured portfolio. OIG provided a no 

position response regarding this notice.

Delegated processing for certain capital advance projects – On 

February 11, 2020, HUD issued Housing Notice H-20-2, which updates and 

replaces Notice 2013-12 that defined HUD’s procedures for processing 

certain Section 202 Supportive Housing for the Elderly projects and 

Section 811 Supportive Housing for Persons With Disabilities under a 

delegated processing system. According to the notice, the delegated 

processing procedures complement the Department’s capital advance 

processing mechanism. The program enhances the Department’s ability 

to provide timely, high-quality underwriting, while streamlining the 

compliance process for sponsors and owners undertaking mixed-finance 

transactions. Further, the delegated processing program gives selected 

State and local agencies the choice to review and process capital advance 

projects. OIG provided a no position response regarding this notice.

Revision of the Section 223(f) policy requiring 3 years of 

postconstruction sustained occupancy – On March 2, 2020, HUD issued 

Housing Notice H 20-03 (related to Mortgagee Letter 2020-03), which 

revises HUD’s policy that applications for refinancing or acquisition of 

existing properties under Section 223(f) of the National Housing Act may 

not be accepted unless and until 3 years have passed since completion of 

construction or substantial rehabilitation of the property. Applications for 

refinancing of newly built or substantially rehabilitated properties will now 

be accepted as soon as properties achieve the applicable programmatic 

debt service coverage ratio for not less than 1 full month. This notice 

supersedes all previous guidance concerning the time elapsed between 

construction completion and the date of an application for Section 

223(f) mortgage insurance, including the 2016 Multifamily Accelerated 

Processing Guide. To mitigate risks to the FHA Insurance Fund, this notice 

also outlines limitations that will apply to applications for properties with 

less than 3 years elapsed since completion of construction. This notice 

applies to all applications for mortgage insurance under Section 223(f) 

except health care properties under Section 232. OIG provided a no 

position response regarding this notice.

Rental Assistance Demonstration Program: revised notice – On 

October 10, 2019, HUD published a notice (Federal Register FR-5630-N-13), 

which announces the posting of the fourth revision to the Rental 

Assistance Demonstration Program (RAD) notice and solicits public 

comment on changed eligibility and selection criteria. Some of the key 

changes to RAD include establishing a mechanism for public housing 

agencies (PHA) to enter into partnerships in order to pool resources or 

capacity with each other so as to effectively convert properties through 

RAD and broadening the use of “tiered” environmental reviews so that 

36 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
streamlined submissions are needed for certain 24 CFR (Code of Federal 

Regulations) part 50 reviews. This notice also includes new waivers and 

alternative requirements that subject any non-RAD Project-Based Voucher 

Program (PBV) units located in the covered project to certain waivers and 

alternative requirements applicable to RAD units. Some of these waivers 

and alternative requirements include waiving the site selection provisions 

related to deconcentrating poverty and expanding housing and economic 

opportunity for the existing site, specifying alternative requirements to 

allow for the phase-in of tenant rent increases caused purely as a result 

of conversion, and specifying an alternative requirement to ensure that 

applicants on the PHA’s communitywide public housing waiting list have 

been offered placement on a covered project’s site-based PBV waiting 

list. OIG’s review of the notice resulted in comments to the Department, 

which include suggesting that HUD consider how the partnerships to 

pool resources or capacity will work and how they will impact residents 

and communities; whether there are sufficient policies, procedures, and 

controls in place to ensure that HUD and responsible entities continue to 

comply with the National Environmental Policy Act of 1969 and 24 CFR 

parts 50 and 58; how to ensure that the public is able to understand and 

participate in the environmental review process; and how these changes 

impact the affordability of housing, current tenants, and those on waiting 

lists. HUD issued the notice without making any changes in these areas. 

OFFICE OF COMMUNITY PLANNING AND DEVELOPMENT

Four-year completion requirement for HOME-assisted projects – On 

January 8, 2020, HUD issued Notice CPD-20-01, providing guidance 

to HOME Investment Partnerships program participating jurisdictions 

regarding the requirement that HOME-assisted projects be completed 

within 4 years of the commitment of HOME funds and outlining the 

process for resolving noncompliance. For HOME projects that do not 

meet the 4-year completion requirement, the participating jurisdiction 

must take additional steps to resolve the noncompliance. Generally, if a 

project has not been completed within 4 years of the commitment date, 

the participating jurisdiction must repay all HOME funds disbursed for 

the project. The participating jurisdiction may request a voluntary grant 

reduction in lieu of repayment. It may request a 1-year extension by 

submitting a letter to the Office of Community Planning and Development 

director in its local HUD field office. The notice explains the steps for 

requesting an extension. OIG Provided a no position response on this 

notice.

Disaster funding – HUD published Notice FR-6182-N-01 on January 27, 

2020, announcing the allocation of $3.8 billion in CDBG Disaster Recovery 

funds appropriated by the Supplemental Appropriations for Disaster 

Relief Act, 2019, and the Additional Supplemental Appropriations for 

Disaster Relief Act, 2019. The notice contained clarifications on waivers 

and alternative requirements included in prior notices. Section IV.B.2 of 

the notice states, “Grantees must comply with procurement requirements 

for states or for local governments, as applicable, in the Prior Notices 

(as amended).” During the clearance review process, OIG previously 

nonconcurred with HUD regarding State procurement processes because 

HUD does not require States to comply with requirements at 24 CFR 

200.318 through 200.326. For example, FR-6109-N-02, dated August 23, 

2019, stated, “A State has proficient procurement policies and processes 

if HUD determines that its procurement processes/standards uphold the 

principles of full and open competition and include an evaluation of the 

cost and price of the property or service, and if its procurement processes/

standards either 

37 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
9

This section requires State grantees to comply with procurement requirements at 24 CFR 570.489(g) and evaluate the cost or price of the product or service.

a. adopted 2 CFR 200.318 through 200.326; or 

b. follows its own procurement policies and procedures and 

establishes requirements for procurement policies and procedures 

for local governments and subrecipients based on full and open 

competition pursuant to 24 CFR 570.489(g), and the requirements 

applicable to the State, its local governments, and subrecipients 

include evaluation of the cost or price of the product or service; or 

c. adopted 2 CFR 200.317, meaning that it will follow its own State 

procurement policies and procedures and evaluate the cost or price 

of the product or service, but impose 2 CFR 200.318 through 200.326 

on its subgrantees and subrecipients. A grantee must demonstrate 

that its procurement policies and procedures will allow the grantee 

to comply with the procurement requirements in section V.A.26.9

 of 

this notice.” 

OIG nonconcurred because the notice did not reference 2 CFR part 200, 

which required grantee procurement standards to be equivalent to 

200.318 through 200.319, and did not address 200.319, which identified 

situations considered to be restrictive of competition. HUD informed OIG 

that it would not address OIG’s nonconcuring comments because they 

were the same issues OIG has had for approximately 5 years. Because 

OIG’s nonconcurrences of the past 5 years had not been resolved, OIG 

did not nonconcur but commented that it continues to believe that HUD 

should include references to 2 CFR part 200 in the State procurement 

requirements. 

ADMINISTRATIVE AND OTHER PROGRAM AREAS

White House Council on Eliminating Regulatory Barriers to Affordable 

Housing – On November 22, 2019, for consistency with President 

Trump’s Executive Order 13878, “Establishing a White House Council on 

Eliminating Regulatory Barriers to Affordable Housing,” dated June 25, 

2019, HUD published Federal Register Notice FR-6187-N-01, requesting 

public comment on Federal, State, local, and tribal laws, regulations, land 

use requirements, and administrative practices that artificially raise the 

costs of affordable housing development and contribute to shortages 

in the housing supply. It also seeks data, other information, analyses, 

and recommendations on methods for reducing these regulatory 

barriers. While HUD welcomed comments on all aspects of developing 

a plan for reducing barriers to affordable housing development, HUD 

was particularly interested in receiving information, data, analyses, and 

recommendations on the following: 

• Federal, State, and local barriers to affordable housing development 

• Basis for reducing barriers to affordable housing development

• Plan and development implementation

OIG had no position on the notice.

Fair Housing Act design and construction requirements; adoption 

of additional safe harbors – On January 15, 2020, HUD published a 

proposed rule, FR-6138-P-01, which proposed amending HUD’s Fair 

Housing Act design and construction regulations by incorporating 

by reference the 2009 edition of the International Code Council (ICC) 

Accessible and Usable Building and Facilities (ICC A117.1-2009) standard as 

38 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
a safe harbor. The Accessible and Usable Buildings and Facilities standard 

is a technical standard for the design of facilities that are accessible 

to persons with disabilities. HUD proposed to determine whether 

compliance with ICC A117.1-2009 satisfies the design and construction 

requirements of the Fair Housing Act and its amendments. This rule 

also proposes to designate the 2009, 2012, 2015, and 2018 editions 

of the International Building Code (IBC) as safe harbors under the Fair 

Housing Act. The IBC is a model building code and not law, but it has 

been adopted as law by various States and localities. The IBC provides 

minimum standards for public safety, health, and welfare as they are 

affected by building construction. OIG provided a comment regarding the 

accessibility of the hyperlinks contained in the proposed rule. 

Adjustment of civil monetary penalty amounts for 2020 – On March 6, 

2020, HUD published a final rule, FR-6196-F-01, which provides for 2020 

inflation adjustments of civil monetary penalty amounts required by the 

Federal Civil Penalties Inflation Adjustment Act of 1990, as amended by the 

Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015. 

The annual adjustment is based on the percentage change between the 

U.S. Department of Labor’s Consumer Price Index for All Urban Consumers 

(CPI-U) for the month of October preceding the date of the adjustment 

and the CPI-U for October of the prior year (28 U.S.C. (United States Code) 

2461 note, section (5)(b)(1)). Based on that formula, the cost-of-living 

adjustment multiplier for 2019 is 1.01764. Because HUD is not applying 

these adjustments retroactively, the 2020 increases apply to violations 

occurring on or after this rule’s effective date. OIG provided a no position 

response regarding this final rule. 

39 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
REPORT RESOLUTION

CHAPTER 8 AUDIT REPORTS ISSUED BEFORE START OF PERIOD WITH NO 

MANAGEMENT DECISION AS OF MARCH 31, 2020

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. 

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, “Significant Audit Reports for Which 

Final Action Had Not Been Completed Within 12 Months After the Date of the 

Inspector General’s Report.”

40 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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 began to make progress on this recommendation 

by completing a performance of work statement to obtain a contractor 

to design and implement an Enterprise Voucher Management System 

(eVMS) that would address the issue. PIH expected portions of this 

system to be implemented in fiscal year 2020; however, in March 2020, 

PIH informed OIG that although the contractor had completed phase 

1 of the performance of work statement, there had been unexpected 

delays. Currently, eVMS cannot be placed into production until OCIO and 

the Office of the Chief Procurement Officer (OCPO) take further actions, 

including (1) the release of eVMS phase II funding, (2) the completion of 

a securities and vulnerabilities assessment to lift the moratorium OCIO 

placed on a data warehouse that eVMS must access for family-level Public 

and Indian Housing Information Center data, and (3) onboarding of a new 

contractor because the initial contract has ended. The eVMS application 

is also pending future funding to complete phase II development and 

operations and maintenance support. PIH is hesitant to provide a 

management decision because of the remaining unknowns. Therefore, as 

of March 31, 2020, HUD had not submitted a new proposed management 

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

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. 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 

41 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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, which supports OIG’s position. 

OIG has had past 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. In March 2020, OIG restarted discussions with 

HUD and plans to seek OIG Office of Legal Counsel guidance regarding 

statute of limitations provisions that may affect the resolution of this audit. 

(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 

42 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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 decisions 

on four of the nine management decisions that it previously rejected. As a 

result, there are now five audit recommendations without a management 

decision. OIG’s audit recommendations request 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 March 

31, 2020, the five recommendations previously referred to the Deputy 

Secretary remained unresolved. (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 and Ginnie 

Mae 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 management’s plan of action did not fully address OIG’s 

recommendation. The methods identified were neither sufficient nor 

adequate to address OIG’s (1) finding “that management had an ineffective 

monitoring tool in place” and (2) 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 (1) no checks 

43 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
and balances and (2) 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 three unresolved recommendations. OIG reviewed the 

information and concluded that the information did not adequately 

address the recommendations. As of March 31, 2020, OIG was awaiting a 

decision from the Deputy Secretary on these recommendations. (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 (1) accounting for liabilities for PIH 

programs in accordance with GAAP and FFMIA and (2) 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 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. In 2016, PIH’s position was that it did 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 believed that 

adjusting the prepaid expense was the most practical way to account 

for the cash reconciliation activities. OIG did not agree that this position 

complied with GAAP because adjusting the prepaid expense after 

payables have been paid is not accrual accounting. In March 2020, PIH 

submitted documentation indicating that it has changed its position 

and now believes that the implementation of eVMS will address this 

recommendation. OIG plans to meet with PIH in April 2020 to discuss 

a possible management decision. However, OIG maintains that this 

recommendation cannot be resolved until PIH’s cash management process 

is automated, as detailed in Audit Report 2014-FO-0003. As of March 

31, 2020, PIH had not submitted a new management decision for the 

recommendation 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 (1) requested final action target dates that were too far 

44 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
into the future, (2) claimed that the deficiencies had been addressed by 

the new processes implemented by New Core when they had not, and 

(3) did not provide sufficient detail to support that the recommendations 

would be fully addressed. OIG communicated these issues to HUD on 

March 7, 2016, and April 6, 2017. HUD submitted new proposals for four 

of the eight recommendations, which OIG accepted. On December 19, 

2019, OCFO submitted a revised management decision for one of the four 

remaining management decisions, which OIG accepted. As of March 31, 

2020, OIG had not received new proposed management decisions for the 

three remaining 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 programrelated 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 

March 31, 2020, had not received a decision. (Audit Report: 2016-PH0001)

45 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
10Public Law 113-2, dated January 29, 2013

112015-PH-1003, dated June 4, 2015

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 (1) allowed conflicting 

information on its certification checklists, (2) did not ensure that required 

supporting documentation was included with the certification checklists, 

and (3) did not adequately evaluate the supporting documentation 

submitted by the grantees. These conditions occurred because HUD did 

not have adequate controls over the certification process. Due to the 

weaknesses identified, HUD did not have assurance that State grantees 

had proficient procurement processes in place, and the Secretary’s 

certifications did not meet the intent of the Disaster Relief Appropriations 

Act of 2013.10

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. 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.11 OIG 

has two main areas of disagreement with the decision: (1) 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 (2) 

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 

46 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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 March 31, 2020, 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 the19 recommendations 

issued, OIG did not reach consensus on the necessary corrective actions 

for 2 audit recommendations. 

The first disagreement was associated with the 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 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 cannot 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 auditors attempted to review Ginnie Mae’s support for the advances 

writeoff, OIG 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 were 

considered unauditable ($130 million). Ginnie Mae could not explain the 

other $68 million. Further, the audit showed that the $248 million residual 

balance may contain advances related to unliquidated nonpooled loans. 

Specifically, in fiscal year 2016, Ginnie Mae informed HUD 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 loan impairment 

allowance on the 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 

47 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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 or 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. 

OIG referred both disagreements to the Deputy Secretary on August 24, 

2017. In December 2019, Ginnie Mae provided additional documentation 

for both disagreements, but OIG was unable to complete the review 

before the end of this reporting period. (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 

rejected HUD’s initial management decision on April 24, 2017, as it did 

not contain adequate evidence to provide closure. OIG referred this 

recommendation to the Deputy Secretary on July 24, 2017; however, as of 

March 31, 2020, OIG had not received a decision. (Audit Report: 2017-

FO-0003)

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. These conditions occurred 

because of funding shortfalls as well as HUD’s decisions to (1) separate 

phase 1 of the project into smaller releases, (2) move forward with the 

implementation despite unresolved issues, and (3) 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 

48 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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 March 

31, 2020, 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 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. 

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 cannot 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 

49 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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 ultimately 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 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 March 31, 2020, had not received 

a decision from the Deputy Secretary. (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 HIV-AIDS.

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 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 

50 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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 illegalundocumented aliens. However, because 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 

12Audit 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

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,12 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. 

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 March 31, 2020, OIG was 

awaiting a decision from the Deputy Secretary. (Audit Memorandum: 

51 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
13Before 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.

142015-PH-1003, dated June 4, 2015

15Senate Report 1115-138, dated July 27, 2017

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 200.32613 (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.14 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 legislation15 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 and necessitates performing 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 

52 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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 the disagreement, OIG 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. 

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 these recommendations 

to the Deputy Secretary on March 16, 2018, and as of March 31, 2020, 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 (1) entered addresses of assisted properties into its system, (2) 

provided proper notice to affected citizens before changing the use of 

assisted properties, (3) adequately determined the fair market value of 

assisted properties at the time of disposition, and (4) 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 is 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.

53 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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, 2018, and March 8, 2018. On March 

28, 2018, the Deputy Assistant Secretary for Grant Programs submitted a 

revised proposal. CPD proposed to (1) ensure that its staff is aware of a 

recent CPD notice; (2) ensure that its staff and grantees are aware of the 

record retention requirements related to change-of-use and reversion-ofasset requirements; (3) 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; (4) identify, create, 

or revise a report that lists acquisition-related activities or includes 

addresses and accomplishment data for staff to use for monitoring; and 

(5) 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 (1) 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 (2) did not 

commit to changes that would result in a process to 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 HUD’s 

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 March 31, 2020, OIG was awaiting a 

decision from the Deputy Secretary. (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 

OCPO to address the deficiency of not maintaining adequate records 

for interagency agreements (IAA) in its procurement system of record, 

ARC’s PRISM. OIG issued a referral regarding two recommendations to 

address this deficiency to OCPO on March 22, 2018, but could not reach an 

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 

54 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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 March 31, 2020, OIG had not received 

a decision from the Deputy Secretary. (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 program. OIG found that although OBGA had managed 

billions in Disaster Recovery funds since 2002, it had not codified the CDBG 

Disaster Recovery 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 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 Disaster 

Recovery program presented challenges to the grantees. For example, 

59 grantees with 112 active Disaster Recovery 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 Disaster Recovery program would (1) ensure 

that a permanent framework is in place for future disasters, (2) reduce the 

existing volume of Federal Register notices, (3) standardize the rules for all 

grantees, and (4) ensure that grants are closed in a timely manner.

In April 2019, OBGA acknowledged that issuance of multiple Federal 

Register notices created a compliance burden for CDBG Disaster Recovery 

grantees, but it disagreed that codification was necessary. OBGA stated 

that OIG did not consider the following items:

1. There is no requirement for codification.

2. Congress has not established CDBG Disaster Recovery as an 

authorized program.

3. Publication of the Federal Register notices is predicated on the 

authorities granted in each appropriation.

Further, OBGA made the following statements to support why it will not 

implement the recommendation: (1) codification is not necessary, (2) 

Federal Register notices are required, and (3) codification has limited or no 

applicability for future disasters.

On September 30, 2019, OIG referred the disagreement and 

recommendation to the Deputy Secretary for resolution, and as of March 

31, 2020, OIG was awaiting a decision. (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 Disaster Recovery-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.

55 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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 (1) were substantially 

damaged and (2) 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 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, but 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 Disaster Recovery 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 Principal Deputy Assistant Secretary for Community Planning and 

Development proposed management decisions on October 2019. As of 

March, 31, 2020, OIG was reviewing the proposed management decisions. 

(Audit Report: 2019-NY-1001)

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

ISSUE DATE: MAY 29, 2019

HUD OIG audited the State of New York’s CDBG Disaster Recovery-funded 

New York Rising Buyout and Acquisition program. OIG’s objectives 

were to determine whether the State ensured that (1) the appraised fair 

market values used to determine award amounts under its program were 

supported and (2) appraisal costs for its program complied with applicable 

requirements and were for services performed in accordance with Federal, 

State, and industry standards.

OIG found that the State did not ensure that (1) appraised fair market 

values used to determine award amounts under its program were 

supported and (2) 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. These 

issues occurred because the State did not have adequate controls over its 

program. As a result, HUD and the State did not have assurance that (1) 

more than $367.3 million paid to purchase properties was supported; (2) 

more than $3.4 million disbursed for appraisal services was for costs that 

56 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
were reasonable, necessary, and adequately documented; and (3) appraisal 

services were properly procured and performed. If the State improves 

controls over its program, it can ensure that up to $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 Disaster Recovery 

funds used for appraisal services are for costs that are reasonable, 

necessary, supported, and for services that comply with applicable 

requirements.

The Deputy Assistant Secretary for Grant Programs did not propose 

management decisions to address the 10 recommendations contained 

in the audit report. In an attempt to reach agreement, OIG held 

discussions with CPD officials on June 17, 2019, September 10, 2019, and 

September 24, 2019. Due to not reaching agreement, OIG referred the 10 

recommendations to the Assistant Secretary for Community Planning and 

Development on October 3, 2019. In another attempt to reach agreement, 

OIG held a discussion with CPD officials on November 21, 2019, but 

when agreement was not reached, OIG referred the recommendations 

to the Deputy Secretary on February 20, 2020. On February 26, 2020, 

CPD indicated that it was preparing management decisions. However, 

as of March 31, 2020, OIG had not received a decision from the Deputy 

Secretary. (Audit Report: 2019-NY-1002)

THE NORTH CAROLINA DEPARTMENT OF COMMERCE DID NOT 

ADMINISTER ITS NEIGHBORHOOD STABILIZATION PROGRAM GRANTS 

AS REQUIRED BY HUD

ISSUE DATE: JUNE 14, 2019

HUD OIG audited the North Carolina Department of Commerce’s 

Neighborhood Stabilization Program (NSP) grants because the 

Department received more than $57 million in NSP1 and NSP3 funding. 

OIG’s audit objective was to determine whether the Department 

administered its NSP1 and NSP3 grants in accordance with HUD 

requirements.

The Department did not administer its NSP1 and NSP3 grants in 

accordance with HUD 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. These conditions occurred 

primarily due to a lack of written and implemented policies and 

procedures. As a result, the Department (1) allowed more than $417,000 

in grant funds to remain unused, (2) improperly reallocated $1.3 million in 

grant funds, (3) used more than $1.1 million in grant expenditures without 

adequate supporting documentation, (4) underreported at least $6.1 

million in program income to HUD, and (5) 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 

NSP income reported to HUD, (4) develop and implement a remediation 

plan to show that national objectives have been met as required to 

57 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
support more than $11.9 million in program funds, and (5) establish and 

implement written policies and procedures and provide adequate training 

to staff to recapture and reallocate unused NSP funds in a timely manner 

and to help ensure accurate reporting of program income. OIG also 

recommended that HUD (1) work with the Department so that it plans 

properly to ensure that the six activities identified in this report meet a 

national objective, thereby avoiding extended delays, and (2) review the 

Department’s expenditure of the more than $736,000 in remaining NSP1 

grant funding before its drawdowns. 

HUD agrees with the majority of OIG’s recommendations. However, HUD 

disagrees with OIG on the recommendation related to the Department’s 

inability to support that a national objective was met in accordance with 

24 CFR 570.200(a)(2). 

HUD states that it was unreasonable to question the cost as unsupported 

because the NSP rules do not require the Department to achieve a national 

objective within a set timeframe and the activities are still in the process 

of being implemented. HUD stated that it has granted control of how 

long a grant remains open to the NSP grantees, such as the Department; 

therefore, HUD has no authority in this situation to force the Department 

to complete the activity. Further, HUD stated that the field office has these 

grant awards on its books and will continue to track implementation and 

be available for technical assistance and that it will provide guidance and 

review when the Department is ready to close its NSP awards. Lastly, HUD 

stated that the field office will validate the Department’s achievement 

of a national objective and identify any unsupported costs. HUD further 

asserted that it is, therefore, already positioned to ensure that national 

objectives are achieved and does not require this recommendation to 

remain open.

At the time of OIG’s review, two of the six activities did not have an 

expected activity completion date specified. Implementing the 

recommendation and developing and using a remediation plan for 

the six NSP activities to show that the national objectives have been 

met as required to support $11.9 million in program funds drawn will 

assist the Department and HUD in avoiding extended delays adversely 

impacting potential program beneficiaries and ensuring compliance and 

achievement of the program’s goals.

OIG has explained that the documentation to close the recommendation 

would be the remediation plan that the Department would develop and 

that the recommendation would stay open until the remediation plan was 

fully implemented, showing that the national objectives have been met as 

required to support the program funds drawn down for the six activities. 

OIG acknowledged that program regulations do not impose a timeframe 

for meeting a national objective due to incompleteness of the activities. 

While timeframes are not imposed, this does not mean that grantees have 

indefinite and unlimited time to meet program requirements, such as 

meeting the national objectives. NSP is an inactive program, and no new 

funding is available as it was authorized by Congress from 2008 to 2011. 

In other words, it has been nearly 10 years since NSP ended; however, the 

activities remained open. Extended delays adversely impact potential 

program beneficiaries.

OIG cannot accept the management decision until the decision is revised 

to implement the recommendation or it can be demonstrated that the 

six activities have met a national objective since the time this audit report 

was issued. OIG rejected HUD’s proposed management decision to not 

implement and close the recommendation and referred these issues to 

the Deputy Assistant Secretary for Operations on March 31, 2020. (Audit 

Report: 2019-AT-1004)

58 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
HUD PAID RENTAL SUBSIDIES TO BENEFIT PUBLIC HOUSING AND 

VOUCHER TENANTS REPORTED AS EXCLUDED FROM FEDERAL 

PROGRAMS OR DECEASED

ISSUE DATE: JUNE 25, 2019

HUD OIG audited HUD to determine whether it provided PHAs with access 

to the information contained in the Do Not Pay system. OIG performed 

this audit because the Housing Opportunity Through Modernization Act 

of 2016 requires HUD to ensure that PHAs have access to information 

contained in the Bureau of Fiscal Services’ Do Not Pay system established 

by the Improper Payments Elimination and Recovery Improvement Act 

of 2012. Do Not Pay is a collection of data sources, one of which is the 

General Services Administration’s System for Award Management (SAM) 

database of excluded parties.

OIG found, among other things, that HUD paid potentially improper rental 

subsidies to benefit 1,550 tenants who were reported as excluded from 

Federal programs. OIG recommended that HUD issue guidance to PHAs 

to ensure that any applicant for or tenant of public or assisted housing 

whose name appears on the SAM excluded parties list is reviewed by PHAs 

to determine eligibility in a manner consistent with the regulations in 2 

CFR parts 180 and 2424 so that ineligible applicants or tenants are not 

admitted or recertified to put up to an estimated $13.7 million in annual 

rental subsidies to better use.

In its October 8, 2019, management decision, PIH disagreed with this 

recommendation. PIH submitted a legal opinion from HUD’s Office of 

General Counsel in support of its position. PIH maintains that persons 

included on the excluded parties list are eligible for admission to and 

continued occupancy in public housing and the Housing Choice Voucher 

Program. PIH also asserted that section 102(E) of the Housing Opportunity 

Through Modernization Act of 2016 addresses electronic income 

verification but HUD provides a mechanism for compliance through the 

Enterprise Income Verification system. Further, the Act requires only that 

HUD give PHAs access to the Do Not Pay system and does not explicitly 

mandate that HUD require PHAs to deny admission and terminate the 

tenancy of individuals on the excluded parties list. HUD has never 

mandated that individuals be ineligible on the basis of being on the 

excluded parties list. 

OIG rejected this management decision because it does not resolve the 

recommendation. It is the position of OIG that 2 CFR parts 180 and 2424 

apply to the tenants indicated in the report. Office of Management and 

Budget (OMB) guidance does not limit the reach of its debarment and 

suspension provisions to procurement transactions. The purpose of 

the nonprocurement debarment and suspension system is to protect 

the public interest by ensuring the integrity of Federal programs by 

conducting business only with responsible persons. In this regard, 

contracts of assistance and subsidies are considered nonprocurement 

covered transactions under OMB regulations, and HUD regulations define 

subsidized tenants as being covered by this restriction. OMB guides 

agencies to check the governmentwide SAM exclusions to determine 

whether a person is excluded and whether that person is ineligible 

as a result. HUD’s regulations define recipients under HUD assistance 

agreements as well as ultimate beneficiaries of HUD programs as principals 

or participants in the transaction. Assisted or subsidized tenants are either 

recipients under HUD assistance agreements, ultimate beneficiaries of 

HUD programs, or both. Therefore, OIG continues to recommend that HUD 

issue guidance to PHAs to ensure that any applicant for or tenant of public 

or assisted housing whose name appears on the SAM excluded parties list 

is reviewed by PHAs to determine eligibility.

59 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Because OIG did not reach agreement with the Deputy Assistant Secretary 

for Public Housing and Voucher Programs, on February 19, 2020, OIG 

referred its disagreement to the Assistant Secretary for Public and Indian 

Housing. However, OIG did not reach agreement with the Assistant 

Secretary for Public and Indian Housing on the actions necessary to 

correct the deficiencies identified in the report. Therefore, OIG referred 

the recommendation to the official serving in the Deputy Secretary role on 

March 31, 2020, for his final decision as the Departmental Audit Resolution 

Official. (Audit Report: 2019-KC-0002)

EVALUATION REPORTS ISSUED BEFORE START OF PERIOD WITH NO 

MANAGEMENT DECISION AS OF MARCH 31, 2020 

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, two of which remain open. OIG has 

not reached an agreed-upon management decision for either of these 

recommendations. 

To address one of these recommendations, HUD plans to develop 

protocols that would provide data-driven referrals to DEC on financial and 

physical performance failures. HUD plans to develop two: 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 February 2020, OIG met with 

DEC officials to discuss the status of the recommendation and learned 

that the new National Standards for the Physical Inspection of Real Estate 

demonstration may impact the implementation of the recommendation. 

During the next reporting period, OIG will contact REAC on DEC’s behalf 

to encourage the collaboration necessary to resolve and close this 

recommendation.

To address the other recommendation, HUD needs to strengthen DEC’s 

authority to enforce program requirements. In April 2019, OIG changed 

the status of this recommendation to resolved-open based on HUD’s 

proposed actions in response to a U.S. Government Accountability Office 

report. However, after reviewing the protocols developed between DEC 

and PIH, OIG determined that the protocol does not strengthen DEC’s 

authority to enforce program requirements or include any provisions 

60 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
for DEC to make independent assessments. Therefore, OIG changed the 

status of this recommendation to unresolved-open. On March 31, 2020, 

OIG referred this recommendation to the Deputy Secretary for final action. 

(Evaluation Report: 2014-OE-0002)

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, two of which remain open. OIG has 

not reached an agreed-upon management decision for one of these 

recommendations. 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. To 

date, CPD has not provided this information. During this next reporting 

period, OIG will refer this recommendation to the Deputy Secretary for 

final action. (Evaluation Report: 2016-OE-0004S)

HUD WEB APPLICATION SECURITY EVALUATION

ISSUE DATE: JUNE 6, 2018

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 OCIO. 

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 a priority 

61 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
focus on providing OIG with management decisions for the fiscal years 

2017 and 2018 Federal Information Security Modernization Act of 

2014 evaluations, management decisions for this report have not been 

provided. HUD OCIO is working closely with OIG to provide management 

decisions and estimated completion dates for the recommendations. OIG 

agreed to close one recommendation due to technology changes in the 

HUD IT environment, leaving eight open recommendations. (Evaluation 

Report: 2016-OE-0002)

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 Programs’ (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. OIG observed that (1) a newly 

developed IT system, called the Loan Origination System (LOS), had 

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) 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) LOS had no capability to conduct loan servicing 

and claims, which are still conducted using Excel spreadsheets; and (4) 

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. OIG received a management decision for the fourth 

recommendation from HUD OCIO. However, due to the LOS contract 

lapse in September 2018 and the inability to award a new contract, HUD 

and ONAP have been unable to provide management decisions for the 

remaining four recommendations. ONAP has been in regular contact with 

OIG and states that a new contract for maintaining LOS must be in place 

in order to coordinate with HUD on the management decisions. The LOS 

solicitation was released in March 2019 and was awarded at the beginning 

of calendar year 2020. (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 no significantly revised 

management decisions.

SIGNIFICANT MANAGEMENT DECISION WITH WHICH OIG DISAGREES

Section 5(a)(12) of the Inspector General Act, as amended, requires that OIG 

report information concerning any significant management decision with 

which OIG disagrees. 

During the reporting period, OIG did not disagree with any significant 

management decision.

62 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
FEDERAL FINANCIAL MANAGEMENT IMPROVEMENT ACT OF 1996

Section 804(b) 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 (1) Federal 

financial management system requirements, (2) Federal accounting 

standards, and (3) the United States Standard General Ledger at the 

transaction level.

As of September 30, 2019, OIG and HUD noted noncompliance with the 

three Section 803(a) elements of FFMIA. Specifically, there were eight 

financial systems16 that were noncompliant with one or more of the 

three Section 803(a) requirements. HUD has continued to implement 

its remediation plans to address the longstanding weaknesses in its 

financial management systems. The latest target date for remediation is 

April 11, 2020, and as of March 31, 2020, HUD was on track to meet the 

intermediate target dates in its remediation plans.

16The eight financial systems that were noncompliant with FFMIA as of September 30, 2019, were New Core Interface Solution, Integrated Pool Management System, Single Family Mortgage Asset 

Recovery Technology, Integrated Disbursement and Information System Online, Disaster Recovery Grant Reporting System, Tenant Rental Assistance Certification System, Federal Asset Management 

Enterprise System, and Ginnie Mae Financial Accounting System.

63 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
WHISTLEBLOWER

OMBUDSMAN

CHAPTER 9

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 with the Office of Special Counsel under the 

Whistleblower Protection Act when an employee believes that 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 is posted on OIG’s website for employees who 

could not attend in person. 

The Whistleblower Protection Coordinator meets with HUD employees 

individually, upon request. Generally, OIG will refer HUD employees with 

whistleblower retaliation complaints to the Office of Special Counsel. OIG 

does not track these matters unless the Office of Special Counsel requests 

OIG assistance in investigating a complaint. During this semiannual 

reporting period, OIG did not substantiate any whistleblower retaliation 

complaints against HUD employees. 

OIG received a number of complaints filed under 41 U.S.C (United States 

Code) section 4712. This provision 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. 

64 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Number of complainants asserting 

whistleblower status17 11 (3 referred to hotline)

Complaints referred for investigation to the HUD OIG 

Office of Investigation (OI) 8

Complaint investigations opened by OI 7

Complaints declined by OI 1

Complaints currently under review by OI 6

Employee complaint investigations closed by OI 1

17Not all complainants are found to be whistleblowers under Section 4712. For example, many complainants raise questions regarding treatment by public housing agencies (PHA) following their alleged 

disclosures of wrongdoing by the same PHA. 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.

The chart below provides further information on those complaints.

Whistleblower Ombudsman Data

65 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
PEER REVIEW REPORTING

CHAPTER 10

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.

66 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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-%20

External%20Peer%20Review%20of%20FHFA%20OIG.pdf.

Peer Review Conducted on HUD OIG

During the review period, the Office of Evaluation has not been reviewed.

67 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
APPENDIXES

68 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Internal Audit Reports

APPENDIX 1 - REPORTS ISSUED

Chief Financial Officer

2020-CH-0001 HUD’s Office of the Chief Financial Officer Generally Complied With the Digital Accountability 

and Transparency Act of 2014 With a Few Exceptions, 11/07/2019.

2020-FO-0003 Additional Details To Supplement Our Fiscal Year 2019 U.S. Department of Housing and Urban 

Development Financial Statements Audit, 02/07/2020.

2020-FO-0004 HUD’s Fiscal Year 2019 Consolidated Financial Statements Audit, 02/14/2020.

2020-KC-0002 HUD’s Travel Cards Were Used for Illegal, Improper, or Erroneous Purchases and Were Not 

Always Used When Required, 01/31/2020.

Chief Procurement Officer

2020-KC-0001 HUD’s Purchase Card Program Had Inaccurate Records, Untimely Training, and Improper 

Purchases, 01/31/2020. Questioned: $1,807. Unsupported: $1,807.

Community Planning and Development

2020-LA-0001 The Office of Special Needs Assistance Programs’ Award Review Process Generally Complied 

With HUD Continuum of Care Program Requirements, 03/31/2020.

69 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Government National Mortgage Association

2020-FO-0002 Audit of the Government National Mortgage Association’s Financial Statements for Fiscal Year 

2019, 02/07/2020.

Housing

2020-CH-0002 HUD May Be Able To Improve Its Cash Flow Model To Estimate and Reestimate the Credit 

Subsidy for Cohorts of Mortgages Within the Section 232 Program, 03/17/2020.

2020-FO-0001 Audit of the Federal Housing Administration’s Financial Statements for Fiscal Years 2019 and 

2018, 11/14/2019.

2020-FW-0001

HUD Did Not Have Adequate Oversight To Ensure That Its Payments to Subsidized Property 

Owners Were Accurate and Supported When It Suspended Contract Administrator Reviews, 

02/26/2020.

Public and Indian Housing

2020-CH-0003 HUD Lacked Adequate Oversight of Public Housing Agencies’ Compliance With the Lead Safe 

Housing Rule, 03/18/2020.

Internal Audit Reports continued...

APPENDIX 1 - REPORTS ISSUED

70 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Community Planning and Development

2020-NY-0801

Independent Attestation Review: U.S. Department of Housing and Urban Development, Office 

of Special Needs, Continuum of Care Homeless Assistance Grants Program, Regarding Drug 

Control Accounting for Fiscal Year 2019, 01/31/2020.

Housing

2020-AT-0801 HUD Had Not Established Deadlines for Reporting FHA-HAMP Nonincentivized Loan 

Modifications and Filing Nonincentivized Partial Claims, 02/04/2020.

2020-AT-0802 HUD Inaccurately Allotted Funding for Tenant Protection Assistance and Improperly Approved 

a Proposed RAD Conversion, 02/18/2020.

18The 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.

Audit-Related Memorandums18

APPENDIX 1 - REPORTS ISSUED

71 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Community Planning and Development

2020-AT-1002

The Puerto Rico Department of Housing, San Juan, PR, Should Strengthen Its Capacity To 

Administer Its Disaster Grants, 03/16/2020. Questioned: $55,010. Unsupported: $55,010. 

Better use: $361,501.

2020-DE-1001

Del Norte Neighborhood Development Corporation, Denver, CO, Failed To Provide Eight 

Units of HOME-Funded Affordable Housing for the Required 20-Year Period, 11/26/2019. 

Questioned: $37,000.

2020-LA-1001

Community Action North Bay, Fairfield, CA, Did Not Administer Its Continuum of Care Program 

in Accordance With HUD Requirements, 01/31/2020. Questioned: $647,826. Unsupported: 

$632,663. Better use: $28,576.

Lead Hazard Control

2020-CH-1001

The City of Detroit’s Housing and Revitalization Department, Detroit, MI, Did Not Administer 

Its Lead Hazard Reduction Demonstration Grant Program in Accordance With HUD’s 

Requirements, 10/02/2019. Questioned: $616,463. Unsupported: $616,463.

External Audit Reports

APPENDIX 1 - REPORTS ISSUED

72 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Public and Indian Housing

2020-AT-1001

The Christian Church Homes, Oakland, CA, Did Not Ensure That the Rental Assistance 

Demonstration Program Conversion Was Accurate and Supported for Vineville Christian Towers, 

11/04/2019. Questioned: $485,475.

2020-BO-1001 The New Hampshire Housing Finance Authority, Bedford, NH, Complied With Housing Choice 

Voucher Program Requirements, 03/04/2020.

2020-BO-1002

The Housing Authority of the City of Springfield, MA, Did Not Always Comply With Procurement 

and Contract Administration Requirements, 03/19/2020. Questioned: $954,073. Unsupported: 

$916,132. Better use: $408,968.

2020-CH-1002 The Wausau Community Development Authority, Wausau, WI, Generally Complied With HUD’s 

and Its Own Requirements Regarding Housing Quality Standards Inspections, 12/12/2019.

2020-LA-1002

The Housing Authority of the City of Long Beach, CA, Did Not Administer Its Housing 

Choice Voucher Program in Accordance With HUD Requirements, 03/05/2020. Questioned: 

$2,486,678. Unsupported: $2,481,030.

External Audit Reports continued...

APPENDIX 1 - REPORTS ISSUED

73 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Public and Indian Housing

2019-OE-0001 HUD Has Not Referred Troubled Public Housing Agencies as the Law and Regulations Require, 

2/4/2020.

Community Planning and Development

2019-OE-0004 Overview of HUD’s Housing Assistance Programs, 3/31/2020.

Evaluation Reports

Evaluation-Related Memorandums

Chief Information Officer

2019-OE-0007 Management Alert: Records and Privacy Protection Issues Identified During FY 2019 FISMA 

Evaluation, 12/19/2019.

APPENDIX 1 - REPORTS ISSUED

74 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
TABLE A

APPENDIX 2 - TABLES

Report number Title Issue date

* 2014-FO-0003 Additional Details To Supplement Our Report on HUD’s Fiscal Years 2013 

and 2012 (Restated) Financial Statements 12/16/2013

* 2014-LA-0005 HUD Did Not Always Recover FHA Single-Family Indemnification Losses 

and Ensure That Indemnification Agreements Were Extended 08/08/2014

* 2015-FO-0003 Audit of the Government National Mortgage Association’s Financial 

Statements for Fiscal Years 2014 and 2013 02/27/2015

* 2016-FO-0001 Audit of Fiscal Years 2015 and 2014 (Restated) Financial Statements 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

11/18/2015

75 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020

Audit Reports Issued Before Start of Period With No Management Decision as of March 31, 2020

*Significant Reports Described in Previous Semiannual Reports
Report number Title Issue date

* 2016-PH-0001 HUD Did Not Always Provide Adequate Oversight of Property 

Acquisition and Disposition Activities 06/30/2016

* 2016-PH-0005 HUD Did Not Always Provide Accurate and Supported Certifications of 

State Disaster Grantee Procurement Processes 09/29/2016

* 2017-FO-0001 Audit of Fiscal Years 2016 and 2015 (Restated) Financial Statements 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

11/15/2016

* 2017-DP-0001 HUD’s Transition to a Federal Shared Service Provider Failed To Meet 

Expectations 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

07/10/2017

2017-CF-0801

HUD Needs To Clarify Whether Illegal-Undocumented Aliens Are Eligible 

for Assistance Under the Housing Opportunities for Persons With AIDS 

Program

08/21/2017

* 2017-PH-0002 HUD Did Not Provide Sufficient Guidance and Oversight To Ensure That 

State Disaster Grantees Followed Proficient Procurement Processes 09/22/2017

76 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Title Issue date

* 2017-NY-0002 HUD Could Improve Its Controls Over the Disposition of Real Properties 

Assisted With Community Development Block Grant Funds 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

11/15/2017

* 2018-FW-0002 HUD’s Office of Block Grant Assistance Had Not Codified the Community 

Development Block Grant Disaster Recovery Program 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 03/29/2019

* 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

* 2019-AT-1004 The North Carolina Department of Commerce Did Not Administer Its 

Neighborhood Stabilization Program Grants as Required by HUD 06/14/2019

* 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

77 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Title Issue date

2014-OE-0002 Risk-Based Enforcement Could Improve Program Effectiveness 02/12/2016

2016-OE-0002 HUD Web Application Security Evaluation 08/13/2018

2018-OE-0004 HUD IT System Management and Oversight of the Section 184 

Program 03/29/2017

2016-OE-0004S Opportunities for Improvement Within CPD’s Risk Management 

Process for Hurricane Sandy Grants 03/29/2017

78 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020

Evaluation Reports Issued Before Start of Period With No Management Decision as of March 31, 2020
TABLE B

APPENDIX 2 - TABLES

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-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

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

79 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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-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

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

80 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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

2013-PH-1001 Luzerne County Did Not Properly Evaluate, Underwrite, and 

Monitor a High-Risk Loan, Wilkes-Barre, 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 Note 2

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

81 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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-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 05/31/2020

2014-AT-1001 The Municipality of Arecibo Did Not Properly Administer Its 

HOME Program 12/03/2013 01/24/2014 Note 1

82 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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

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-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

83 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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 05/31/2020

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 1

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

84 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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 06/30/2020

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-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 CDBGFunded Projects Met National Program Objectives, Los Angeles, 

CA

09/29/2014 01/27/2015 Note 1

2015-FW-1801 The Management of the Housing Authority of the City of Taylor, 

Taylor, TX, Did Not Exercise Adequate Oversight of Its Programs 10/02/2014 01/21/2015 06/24/2020

85 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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 Note 1

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

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-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

86 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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 FHA-Insured 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

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

87 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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-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

88 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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-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 Note 1

89 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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-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 2

90 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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 1

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 1

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 1

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

91 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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

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 HUD-Insured SingleFamily 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

92 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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-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 Note 1

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 1

93 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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 Note 2

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 1

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 Note 2

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 1

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

2017-KC-0007 HUD Subsidized 10,119 Units for Tenants Who Were 

Undercharged Flat Rents 09/12/2017 12/01/2017 Note 2

94 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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 1

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 1

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 1

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

95 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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 1

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

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 1

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 Note 2

2018-FW-1001 Jefferson Parish, Jefferson, LA, Did Not Always Properly 

Administer Its Rehabilitation Program 01/29/2018 05/22/2018 Note 2

96 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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 Note 2

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 Note 2

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 1

97 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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 1

2018-KC-0001 FHA Insured $1.9 Billion in Loans to Borrowers Barred by Federal 

Requirements 03/26/2018 07/11/2018 Note 2

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

98 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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 Note 2

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 Note 2

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 Note 2

99 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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-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 04/05/2020

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 Note 2

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 07/31/2020

100 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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 Note 2

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 Note 2

2018-NY-0001 HUD Did Not Adequately Administer Its Housing Counseling 

Program 09/24/2018 02/26/2019 03/31/2021

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 10/31/2020

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 10/01/2020

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 10/01/2020

101 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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 Note 2

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 LexingtonFayette Urban County Housing Authority09/28/2018 03/18/2019 Note 2

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 Note 2

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 07/01/2020

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

102 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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 07/31/2020

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 Note 2

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 Note 2

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 Note 2

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-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 04/11/2020

103 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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

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 07/16/2020

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

104 HUD OIG Semiannual Report to Congress for the period ending March 31, 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 March 31, 2020

Report number Report title Issue date Decision date Final action 

2019-KC-0001 FHA Improperly Paid Partial Claims That Did Not Reinstate Their 

Related Loans 04/11/2019 08/02/2019 07/31/2021

2019-FW-1001 The Little Rock Housing Authority, Little Rock, AR, Did Not Fully 

Meet Rental Assistance Demonstration Program Requirements 04/23/2019 09/20/2019 10/31/2022

2019-BO-1001 The City of Bridgeport, CT, Did Not Properly Administer Its HOME 

Program 04/25/2019 08/07/2019 07/29/2020

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 10/22/2019 08/31/2020

2019-FW-0001 CPD Did Not Enforce the Disaster Appropriations Act, 2013, 

24-Month Grantee Expenditure Requirement 05/17/2019 03/31/2020 Note 2

2019-FW-1003

Northline Point Apartments, Houston, TX, Multifamily Section 

8 Program, Subsidized Unsupported Tenants and Uninspected 

Units

06/10/2019 09/18/2019 07/01/2020

105 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

2019-AT-1004

The North Carolina Department of Commerce Did Not 

Administer Its Neighborhood Stabilization Program Grants as 

Required by HUD

06/14/2019 01/14/2020 Note 3

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 10/10/2019 09/15/2020

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 10/17/2019 Note 3

2019-FW-1005 Northlake Homeless Coalition, Mandeville, LA, Did Not Always 

Follow Continuum of Care Program Requirements 07/11/2019 10/23/2019 10/31/2020

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 10/23/2019 07/31/2020

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 10/08/2019 10/07/2020

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 11/25/2019 05/29/2020

106 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action 

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 12/03/2019 09/22/2020

2019-AT-1005 The Municipality of Yauco, PR, Did Not Always Administer Its 

CDBG Program in Accordance With HUD Requirements 08/09/2019 12/10/2019 11/29/2020

2019-FW-1006

The Bogalusa Housing Authority, Bogalusa, LA, Did Not Always 

Administer Its Public Housing Programs in Accordance With 

Requirements

08/16/2019 11/26/2019 11/30/2020

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 12/18/2019 12/01/2020

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 12/13/2019 12/31/2020

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 09/30/2019 08/01/2024

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 01/14/2020 10/31/2020

107 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
AUDITS EXCLUDED:

88 audits under repayment plans 

31 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 over 1 year old. 

2 Management did not meet the target date. Target date is under 1 year old. 

3 No Management decision 

Report number Report title Issue date Decision date Final action 

2019-KC-0003 FHA Insured at Least $13 Billion in Loans To Ineligible Borrowers 

With Delinquent Federal Tax Debt 09/30/2019 01/15/2020 01/31/2022

108 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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-ITED-0001 FY 2013 Federal Information Security Management Act (FY13 

FISMA) 11/29/2013 11/29/2013 Note 1

2014-ITED-0001 FY14 HUD Privacy Program Evaluation 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

2016-OE-0002 HUD Web Application Security Evaluation 06/06/2018 NA Note 3

2016-OE-0004S Opportunities for Improvement within CPD’s Risk Management 

Process for Hurricane Sandy Grants 03/29/2017 08/20/2019 Note 2

109 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Report number Report title Issue date Decision date Final action

2016-OE-0006 FY 2016 Federal Information Security Modernization Act (FY16 

FISMA) 11/10/2016 11/10/2016 Note 1

2017-OE-0007 FY 2017 Federal Information Security Modernization Act (FY17 

FISMA) 10/31/2017 8/16/2018 Note 1

2018-OE-0001 HUD Privacy Program Evaluation Report 09/13/2018 11/27/2018 Note 1

2018-OE-0002 Fire Safety Planning for the Weaver Building Needs Improvement 06/12/2018 11/29/2018 Note 1

2018-OE-0003 FY 2018 Federal Information Security Modernization Act (FY18 

FISMA) 10/31/2018 05/17/2019 Note 1

2018-OE-0004 HUD IT System Management and Oversight of the Section 184 

Program 08/13/2018 NA Note 2

NOTES: 

1 Management did not meet the target date. Target date is more than 1 year old.

2 No management decision

110 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
TABLE C

APPENDIX 2 - TABLES

Inspector General-Issued Reports With Questioned and 

Unsupported Costs at March 31, 2020

(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 

23 $992,809 $419,719

A2  For which litigation, legislation, or 

investigation was pending at the 

beginning of the reporting period 

1 20,157 0

A3  For which additional costs were added 

to reports in beginning inventory - 532 169

A4  For which costs were added to noncost 

reports 1 4 4

B1  Which were issued during the 

reporting period 8 5,284 4,703

B2  Which were reopened during the 

reporting period 0 0 0

Subtotals (A+B) 33 1,018,786 424,595

111 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
TABLE C CONTINUED...

19Nine audit reports also contain recommendations with funds to be put to better use. 

20One audit report also contains recommendations with funds due program participants. 

21Two audit reports also contain recommendations with funds agreed to by management. 

22The figures in brackets represent data at the recommendation level as compared to the report level. See Explanations of Tables C and D.

Audit reports Number of 

audit reports Questioned costs Unsupported costs

C     For which a management decision 

was made during the reporting period 2019 $548,834 $16,053

 (1) Dollar value of disallowed costs:

 Due HUD

 Due program participants

520

15

7,124

14,463

6,969

8,466

 (2) Dollar value of disallowed costs: 321 527,247 618

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 been made by the end of the 

reporting period 

11

<33>22

449,795

<411,508>22

408,542

<392,789>22

112 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
TABLE D

APPENDIX 2 - TABLES

Inspector General-Issued Reports With Recommendations 

That Funds Be Put to Better Use at March 31, 2020

(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 20 $15,294,662

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 - 806

A4  For which costs were added to noncost reports 0 0

B1  Which were issued during the reporting period 3 799

B2  Which were reopened during the reporting period 0 0

Subtotals (A+B) 23 15,296,267

113 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
23Nine audit reports also contain recommendations with questioned costs.

24The figures in brackets represent data at the recommendation level as compared to the report level. See Explanations of Tables C and D.

TABLE D CONTINUED...

Audit reports Number of 

audit reports Dollar value

C     For which a management decision was made during 

the reporting period 1023 $6,547,370

 (1) Dollar value of recommendations that were agreed

 to by management:

 Due HUD

 Due program participants

2

9

6,130,812

416,558

 (2) Dollar value of recommendations that were not

 agreed upon by management 0 0

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 been made by 

the end of the reporting period 

13

<7>24

8,748,897

<5,227,892>24

114 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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.

115 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
INSPECTOR GENERAL

EMPOWERMENT ACT

APPENDIX 3

SUMMARY OF REPORTS WITH NO ESTABLISHMENT COMMENT

The Inspector General Impowerment Act (IGEA) requires the Office of 

Inspector General (OIG) to report on each audit and evaluation report for 

which the U.S. Department of Housing and Urban Development (HUD) 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 March 31, 2020.

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.

OFFICE OF AUDIT

The Department currently has 1,586 outstanding (open) unimplemented 

recommendations with a combined potential cost savings of nearly $23 

billion. The following table and charts reflect the reasons why they remain 

unimplemented.

1. 1,396 recommendations have active corrective action plans in place 

or valid repayment plans, but HUD has not finished implementing 

the recommendation. 

2. 190 recommendations are currently without management decisions 

(agreement between the Department and OIG). Fifty-eight 

recommendations are beyond the 180-day statutory requirement 

due to disagreement and were reported in table A of OIG’s 

Semiannual Report to Congress (SAR). The remainder are within the 

180-day limit, during which time management and OIG can arrive at 

an agreed-upon corrective action plan.

3. 415 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.

116 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Calendar year Number of open 

recommendations

Cumulative estimated cost savings 

from open recommendations

Pre-2001 4 $1,851,998

2001 1 200,000

2002 7 1,379,626

2003 14 1,813,658

2004 8 8,303,357

2005 5 3,006,373

2006 15 10,843,620

2007 16 5,081,749

2008 33 72,339,854

2009 27 78,907,224

2010 21 23,773,119

2011 40 100,074,028

2012 25 15,245,514

2013 79 378,486,540

2014 153 517,097,667

2015 138 855,372,119

2016 205 7,859,218,641

2017 188 1,038,294,638

2018 257 4,533,736,967

2019 219 7,115,521,980

2020 131 4,944,439

Total 1,586 22,625,493,111

Office of Audit Summary

117 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
OFFICE OF EVALUATION

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.

The following table summarizes OE’s open recommendations by calendar year.

Calendar year Number of open recommendations

2013 10

2014 21

2015 24

2016 6

2017 22

2018 59

2019 0

2020 5

Total 147

118 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Statistical Table Showing Investigative Report Metrics 

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.

25Includes approved reports of investigations

26Includes all charging documents reported: criminal complaints, indictments, informations, and superseding indictments

Reporting Period: FY 2020, Period 1 (SAR 83) October 1, 2019, Through March 31, 2020

Measure Total

A. Total number of investigative reports issued during 

the reporting period25 228

B. Total number of persons referred to the U.S. 

Department of Justice for criminal prosecution during 

the reporting period 

157

C. Total number of persons referred to State and local 

prosecuting authorities for criminal prosecution during 

the reporting period 

60

D. Total number of indictments and criminal 

informations during the reporting period that resulted 

from any prior referral to prosecuting authorities26

92

119 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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.

HUD OIG initiated an investigation regarding allegations that a senior 

U.S. Department of Commerce (DOC) OIG official directed an OIG staff 

member to create an internal memorandum regarding a phone call 

his ex-wife made to his office to inquire about his salary. Additionally, 

the complainant alleged that the official reviewed and edited the 

memorandum and directed the employee to provide him with a copy. The 

official also improperly removed a copy of this document from DOC OIG 

without authorization and improperly presented it in court in connection 

with his personal divorce litigation. The allegations were substantiated, 

and the official resigned after a request to do so by the Council of the 

Inspectors General on Integrity and Efficiency (CIGIE). The investigation 

was not referred for criminal 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.

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.

OIG has no instances of attempts to interfere with OIG independence to 

report in this SAR period.

120 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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.

OFFICE OF AUDIT

The office of audit did not close any audits this semiannual period that 

were not disclosed to the public.

OFFICE OF INVESTIGATION

During the current reporting period, OIG has four investigative reports that 

were closed but not disclosed to the public. The allegations include the 

following:

1. HUD OIG initiated an investigation regarding allegations that a 

senior DOC OIG official directed an OIG staff member to create an 

internal memorandum regarding a phone call his ex-wife made to 

his office to inquire about his salary. Additionally, the complainant 

alleged that the official reviewed and edited the memorandum 

and directed the employee to provide him with a copy. The official 

also improperly removed a copy of this document from DOC OIG 

without authorization and improperly presented it in court in 

connection with his personal divorce litigation. The allegations were 

substantiated, and the official resigned after a request to do so by 

CIGIE. The investigation was not referred for criminal prosecution.

2. HUD OIG initiated an investigation regarding allegations that a 

senior HUD employee colluded with outside trade organizations 

to enact unnecessary Federal regulations for the benefit of some 

housing manufacturers over others and to implement billions of 

dollars in subsidies, which were not needed. The complainant also 

alleged that the employee may have participated in a blackmail 

attempt against the editor of a trade periodical, which was critical of 

HUD regulation. The investigation was referred to the U.S. Attorney’s 

office for criminal prosecution but was declined. The allegations 

were not substantiated, and the investigation was closed. The 

employee retired before completion of the investigation. 

3. HUD OIG initiated an investigation regarding allegations that 

a former HUD OIG supervisor committed prohibited personnel 

practices by hiring an employee. The complainant also alleged that 

the employee bragged to several people that she was going to be 

offered the job by the supervisor before the official selection was 

made. The allegations were not substantiated, and the investigation 

was closed. The investigation was not referred for criminal 

prosecution.

4. HUD OIG initiated an investigation regarding allegations that a 

senior HUD official misused her position to benefit a particular 

Federal Housing Administration lender. The allegations were not 

substantiated. HUD OIG closed this investigation with no referral to 

the Department for action. The investigation was not referred for 

criminal prosecution.

121 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
OFFICE OF EVALUATION

Open Information Technology and Privacy Program 

Recommendations Issued to the U.S. Department of Housing 

and Urban Development by the Office of Inspector General’s 

Office of Evaluation

HUD OIG reviewed the status of all information technology (IT) 

and privacy program recommendations issued to HUD by OIG OE 

through fiscal year 2019. At the time of issuance of this report, of the 

265 IT and privacy program recommendations OE had issued since 

fiscal year 2014, 113 have been closed, and 152 remain open. Four 

recommendations have overdue management decisions. The report 

analyzes the number of recommendations by functional area and the 

progress made toward closing recommendations. In addition, the report 

lists OIG’s understanding of some of HUD’s key challenges to closing 

recommendations and provides possible steps toward increasing HUD’s 

effectiveness in addressing and resolving its open recommendations.

To ensure success in remediating these weaknesses and strengthening 

HUD’s IT, cybersecurity, and privacy programs, it will be essential that 

adequate staff and resources are allocated to implement IT plans and 

projects. The Office of the Chief Information Officer and OE conduct 

at least quarterly working meetings to discuss and address all open 

IT and cybersecurity evaluation recommendations and are working 

closely together to improve the process for tracking and closing those 

recommendations. (Evaluation Topic Brief: 2019-OE-0006) 

122 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
27Unsupported costs are a subset of questioned costs that the Inspector General Act requires be identified separately from the cumulative questioned costs identified.

Source requirement Pages

Section 4(a)(2)-review of existing and proposed legislation and regulations. 34-39

Section 5(a)(1)-description of significant problems, abuses, and deficiencies relating to the 

administration of programs and operations of the Department.

11-27,

64-65

Section 5(a)(2)-description of recommendations for corrective action with respect to 

significant problems, abuses, and deficiencies. 40-63

Section 5(a)(3)27-identification of each significant recommendation described in previous Semiannual Report on which corrective action has not been completed.

Appendix 3,

table B, 79

Section 5(a)(4)-summary of matters referred to prosecutive authorities and the prosecutions 

and convictions that have resulted. 11-27

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

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.

REPORTING REQUIREMENTS

APPENDIX 4

123 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Source requirement Pages

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 1, 

69

Section 5(a)(7)-summary of each particularly significant report. 11-27

Section 5(a)(8)-statistical tables showing the total number of audit reports and the total dollar 

value of questioned and unsupported costs.

Appendix 2,

table C, 111

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 2,

table D, 113

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 2,

table A, 75

Section 5(a)(11)-a description and explanation of the reasons for any significant revised 

management decisions made during the reporting period. 62

Section 5(a)(12)-information concerning any significant management decision with which the 

Inspector General is in disagreement. 62

Section 5(a)(13)-the information described under section 05(b) of the Federal Financial 

Management Improvement Act of 1996. 63

REPORTING REQUIREMENTS CONTINUED...

124 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
ACRONYMS AND ABBREVIATIONS

ACD....................................................................Accelerated Claims Disposition

ARC....................................................................Administrative Resource Center

ASC..............................................................Accounting Standards Codification

CDBG....................................................Community Development Block Grant

CDBG-DR........Community Development Block Grant Disaster Recovery

CFR............................................................................Code of Federal Regulations

CIGIE..........Council of the Inspectors General on Integrity and Efficiency

CPD..................................Office of Community Planning and Development

CPI-U....................................Consumer Price Index for All Urban Consumers

CWCOT.......................................................Claims Without Conveyance of Title

DEC...............................................................Departmental Enforcement Center

DHS......................................................U.S. Department of Homeland Security

DOC......................................................................U.S. Department of Commerce

DoD............................................................................U.S. Department of Defense

DOT...............................................................U.S. Department of Transportation

EFT.....................................................................................electronic funds transfer

eVMS...............................................Enterprise Voucher Management System

FFMIA.............................Federal Financial Management Improvement Act

FHA.....................................................................Federal Housing Administration

FHFA................................................................Federal Housing Finance Agency

FISMA................Federal Information Security Modernization Act of 2014

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

HUD........................U.S. Department of Housing and Urban Development

IAA......................................................................................interagency agreement

IBC...............................................................................International Building Code

ICC................................................................................................................International Code Council

IDIS.................................................................Integrated Disbursement and Information System

IGEA.........................................................................................Inspector General Empowerment Act

IT..........................................................................................................................information technology

LOS....................................................................................................................Loan Origination System

LTW................................................................................................Louisiana, Texas, and West Virginia

MHI........................................................................................................mortgage held for investment

MIP.........................................................................................................mortgage insurance premium

MSS...............................................................................................................................master subservicer

NCIS.............................................................................................................New Core Interface System

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

OMB..............................................................................................Office of Management and Budget

ONAP.........................................................................................Office of Native American Programs

PBV.....................................................................................................Project-Based Voucher Program

PHA.......................................................................................................................public housing agency

PIH...............................................................................................Office of Public and Indian Housing

POA.................................................................................................................PHAs, owners, and agents

PRDOH......................................................................................Puerto Rico Department of Housing

PRWORA........................Personal Responsibility and Work Opportunity Reconciliation Act

RAD................................................................................Rental Assistance Demonstration Program

REAC.....................................................................................................Real Estate Assessment Center

REO.................................................................................................................................real estate owned

SAM.....................................................................................................System for Award Management

SAR......................................................................................................Semiannual Report to Congress

SIR..............................................................................................................Systemic Implication Report

U.S.C............................................................................................................................United States Code

USDA....................................................................................................U.S. Department of Agriculture

APPENDIX 5

125 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
Headquarters 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

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 AUDIT

Headquarters Washington, DC 202-708-0430

OFFICE OF EVALUATION

OIG TELEPHONE DIRECTORY

APPENDIX 6

126 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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

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

 

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

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

OFFICE OF INVESTIGATION

Minneapolis- 612-370-3130

St. Paul, MN

OIG TELEPHONE DIRECTORY CONTINUED...

127 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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.

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

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.

128 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
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.

129 HUD OIG Semiannual Report to Congress for the period ending March 31, 2020
www.hudoig.gov

Report fraud, waste, and mismanagement

in HUD programs and operations by

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

Online at

https://www.hudoig.gov/hotline

Scan to Report Fraud

Report #83