Federal Reports

We audited Mid America Mortgage’s, dba 1st Tribal Lending’s, Section 184 Indian Home Loan Guarantee program based on a previous U.S. Department of Housing and Urban Development (HUD), Office of Inspector General, audit and corrective action verification of the Section 184 program, which determined that HUD lacked proper oversight of the program and lenders did not always underwrite loans in accordance with HUD’s requirements. The lender was selected because it is the largest Section 184 program lender. Our audit objective was to determine whether the lender underwrote Section 184 loans in accordance with HUD’s requirements.The lender did not always follow HUD’s Section 184 program requirements. Specifically, it did not always (1) underwrite Section 184 loans in accordance with program requirements and (2) follow HUD’s quality control requirements when reviewing loan files. This condition occurred because the lender did not always exercise due diligence when underwriting loans and did not strictly follow HUD’s underwriting and quality control requirements. As a result, there was an increased risk to the Section 184 program and HUD’s Loan Guarantee Fund. There were 11 loans with material underwriting deficiencies and we recommend indemnification for 7 of these loans. The seven loans had a total unpaid mortgage balance of $1.3 million with an estimated potential loss to HUD of $607,598.We recommend that the Deputy Assistant Secretary for Native American Programs (1) request indemnification for 7 of the 11 loans that had material underwriting deficiencies and had an unpaid mortgage balance of $1.3 million with an estimated potential loss to HUD of $607,598, (2) require the lender to develop and implement enhanced policies and procedures to ensure electronic signatures from borrowers are properly supported, and (3) require the lender to fully implement its quality control plan with respect to reverifications and provide HUD with periodic reports for 12 months to ensure that its quality control reviews are conducted in accordance with the requirements.

The Child Care and Development Block Grant Act (CCDBG Act) of 2014 added new requirements for States that receive funding from the Child Care and Development Fund (CCDF) to conduct comprehensive criminal background checks on staff members and prospective staff members of child care providers every 5 years. Criminal background check requirements apply to any staff member who is employed by a child care provider for compensation or whose activities involve the care or supervision of children or unsupervised access to children.Our objective was to determine whether Hawaii’s monitoring of child care providers ensured provider compliance with State requirements related to criminal background checks established under the CCDBG Act.

The Federal Emergency Management Agency (FEMA) is not adequately managing severe repetitive loss (SRL) properties covered by the National Flood Insurance Program (NFIP). FEMA has not established an effective program to reduce or eliminate damage to SRL properties and disruption to life caused by the repeated flooding. Primarily, FEMA does not have reliable, accurate information about SRL properties. Secondly, FEMA’s Flood Mitigation Assistance (FMA) program, which aims to mitigate flood damage for NFIP policyholders, provides neither equitable nor timely relief for SRL applicants. We made three recommendations to FEMA to ensure the accuracy of the SRL list, as well as equitable and timely distribution of mitigation funding, and promoting the use of National Flood Insurance Program (NFIP) Increased Cost of Compliance coverage. FEMA concurred with all three of the recommendations

The VA Office of Inspector General (OIG) conducted a healthcare inspection to determine the validity of an allegation that a patient who sought treatment for insomnia and was out of psychiatric medications did not receive the care needed at the Memphis VA Medical Center (facility) in Tennessee. The patient died by suicide the day following a visit to the facility’s emergency department. The OIG substantiated that the patient presented to the facility’s emergency department for insomnia and psychiatric medication refills. The emergency department physician documented evaluating the patient and after a negative screen for suicidal thoughts, discharged the patient with instructions to go to the facility’s outpatient mental health clinic immediately for medication management. The OIG found no documentation that the patient registered or received treatment in the clinic. The OIG found the patient did not receive the care needed and the facility did not have a clear referral process for patients discharged from the emergency department who needed to be seen the same day in the outpatient mental health clinic.The patient received primary care from the facility and mental health care through the community. Several community care counseling sessions were not authorized timely due to deficiencies in coordination of care between the facility’s community care staff, community care providers, and the third-party administrator. Facility community care staff did not obtain medical record documentation for community care treatment and did not ensure care authorizations were current, resulting in the patient’s inability to receive several medication refills from the facility pharmacy. Facility leaders were aware of the patient’s death by suicide within three days of the patient’s death; however, the OIG could not find evidence that executive leaders were notified or that the family was contacted. The OIG made 16 recommendations to the facility director.