Federal Reports

We audited the U.S. Department of Housing and Urban Development (HUD) to determine whether HUD had adequate oversight of the physical condition of the public housing units that converted to non-Federal Housing Administration (FHA)-insured project-based vouchers (PBV) under RAD.

We found HUD needs to improve its oversight of the physical condition of converted projects.  Before the implementation of its PBV monitoring pilot program, HUD performed limited monitoring of RAD PBV projects.  HUD also did not have a standardized process for monitoring the projects for compliance with its requirements.  Additionally, for converted units that were PHA owned, HUD did not consistently receive required housing quality standards (HQS) inspection reports.

These conditions occurred because HUD did not specifically target converted projects for review.  It also did not have a system to collect and maintain information about the physical and financial condition of RAD PBV projects.  Instead, HUD relied on the contract administrators (PHAs) to oversee the converted projects.  Additionally, HUD did not have a protocol or procedures for its field offices to ensure that HQS inspection reports for PHA-owned projects had been received and reviewed, as applicable, before HUD eliminated the requirement in June 2024.  

As a result of HUD’s limited monitoring and lack of a system to collect and maintain data, HUD did not have information to assess whether the contract administrators effectively performed their oversight responsibilities of ensuring that (1) families resided in units that were decent, safe, and sanitary; (2) the converted projects’ reserve for replacement accounts were sufficiently funded to address extraordinary maintenance, repair, and replacement of capital items; and (3) project owners’ withdrawals from reserve accounts were appropriate.  When we inspected a sample of RAD PBV units from 28 converted projects associated with three PHAs, we found that more than 74 percent of the units failed to meet HQS.  Further, based on our calculations, the reserve for replacement accounts for 12 of the 28 projects were underfunded.  Therefore, unless HUD specifically selects projects for review, it is unable to adequately monitor the long-term sustainability of these projects.

We made several recommendations to HUD to improve its oversight of projects converted under RAD.  Specifically, we made recommendations related to (1) targeting projects for review and developing policies and procedures for monitoring, (2) reviewing reserve for replacement accounts to ensure sufficient account balances and compliance with applicable HUD requirements, (3) implementing a process to ensure reserve for replacement requirements in HUD’s business documents are consistent for converted projects, and (4) collecting data on projects’ reserve for replacement accounts to support the Office of Field Operations’ monitoring activities.  We also made a recommendation for HUD to provide inspection reports showing that units meet HUD’s current physical condition standards.

The Smithsonian Institution (Smithsonian) relies on funding from external sponsors such as governments, foundations, and corporations to support projects that further its mission to increase and diffuse knowledge.

The Office of Sponsored Projects (OSP) provides centralized support, guidance, and training for Smithsonian units receiving sponsored project funding. Together they manage sponsored projects in compliance with Smithsonian policies and procedures and sponsors’ terms and conditions.

OSP oversaw $189 million in sponsored project funding provided during fiscal years 2022 and 2023. 

This audit determined the extent to which OSP and recipient units complied with: (1) Smithsonian policies and procedures and (2) sponsors’ terms and conditions concerning administering and overseeing sponsored projects.

OIG reviewed a sample of 25 sponsored projects totaling $33.8 million—approximately 18 percent of sponsored project funding provided through OSP in fiscal years 2022 and 2023. OIG also analyzed OSP’s sponsored project universe for balances and transactions determined to be of higher risk of noncompliance. 

During the two fiscal years under audit, OSP managed a 65 percent increase in sponsored project funding while maintaining high-quality service reported by Smithsonian units. However, OIG identified opportunities to improve the administration and oversight of projects throughout their lifecycle.