Open Recommendations

Require lenders to execute indemnification agreements covering a period of at least 5 years for each of the 20 loans for which the lenders did not comply with the temporary endorsement policy and related instructions, including loans for which the lenders did not execute an agreement when required or that were otherwise ineligible for insurance, and properly store the agreements and record the agreement data to put up to $1,811,238 to better use by avoiding potential losses.

Obtain guidance from the Office of General Counsel regarding the implications of allowing lenders to retroactively apply forbearance in cases in which the borrower requests forbearance after the lender submits the loan for endorsement to ensure that it consistently handles such cases.

Request and analyze data from lenders for the 3,024 loans at risk of noncompliance to identify loans that should have been subject to the temporary endorsement policy or were otherwise ineligible for insurance. The data requested should include but not be limited to the dates when the borrower requested forbearance, the loan became subject to forbearance, and the loan was submitted for endorsement.

For any of the 3,024 loans found to be subject to the temporary policy or otherwise ineligible for insurance, require the lenders to execute indemnification agreements covering a period of at least 5 years or reimburse HUD for any claims to put up to $26,840,071 to better use by protecting HUD against potential losses. For any indemnification agreements executed, HUD should properly store the agreements and record the agreement data.

Record indemnification agreement data in its system for the 34 loans for which the lender properly executed an indemnification agreement before endorsement and HUD had not recorded the agreement in its system to put up to $3,493,636 to better use by avoiding potential losses.

Review and correct indemnification agreement data in HUD's computer systems as needed for all agreements currently classified as having 2-year terms and all agreements related to 2-year agreements contained on its SharePoint site to ensure that its systems contain accurate data for monitoring and enforcement of agreements. This recommendation includes but is not limited to reviewing the agreement number, agreement term, billing lender, expiration date, refinance indicator, and source indicator.

Update indemnification agreements or obtain updated indemnification agreements for the 30 loans for which the indemnification agreements had incorrect or missing information or were not signed by HUD and upload them to its SharePoint site so that such agreements are properly executed and can be traced to HUD's computer systems for future use.

Consider evaluating whether and how a similar policy for disasters or emergencies or a permanent version of the policy could be used to manage risk to the insurance fund while increasing lender participation. This should include further studying lenders' use of the policy and the long-term performance of loans endorsed under it. It could also include reviewing the compliance, guidance, and process issues identified during this audit and through the resolution of the other recommendations to refine any future endorsement policies related to forbearance.

Continue to provide training and collaborate with program office staff, as needed, to ensure the timely and complete reconciliation of the population of transactions used for estimating improper payments to the general ledger is performed.

Continue to provide training and collaborate with program office staff, as needed, to ensure the timely and complete reconciliation of the population of transactions used for estimating improper payments to the general ledger is performed.

Collaborate with the responsible staff involved in the payment integrity reporting process to ensure timely and complete reconciliations are performed on the populations subject to sampling for improper payment reviews.

Formally document and implement appropriate preventative and monitoring controls prior to approval of 7(a) loan guaranty purchases.

Exercise effective management review controls over the statistician’s work by verifying that the documentation of the sampling and estimation methodology plans comprehensively outlines the details of the implemented sampling and extrapolation methodology, while maintaining statistical validity.

Design and document adequate review procedures to ensure that the results of the sample meet the PIIA objectives.

We recommend that the Administration for Children and Families work with State agencies to ensure compliance with Federal requirements to report missing children episodes to law enforcement for entry into the NCIC database in a timely manner.

The Commissioner, Wage and Investment, should prioritize funding and implementation of automated processing of Forms 1040-X to increase efficiencies and reduce taxpayer burden.

Coordinate with the Information Technology organization to prevent generating transcripts for manual refunds less than $100 and adjust the frequency that some transcripts are generated to help management get through the inventory more efficiently.

Coordinate with the Information Technology organization to explore adding Taxpayer Relations inventories into the CII, so that all Accounts Management inventory is located in the same inventory management system.

Review the four $200,000 Indemnity Reviews identified for CY 2020 in California and Florida, and if adequate support is not provided, recover $1,082,604 in indemnity payments.

To strengthen HHS' enterprise-wide cybersecurity program, based on our reviews across the Department, we recommend that HHS continue to work with the OpDivs to implement automated CDM solutions to increase awareness and improve mitigation efforts across all of HHS.

To strengthen HHS' enterprise-wide cybersecurity program, based on our reviews across the Department, we recommend that HHS confirm that the OpDivs contingency plan testing is being performed within the timeframe required by HHS policy.

We recommend that the HHS OCIO work with the OpDivs to ensure that all OpDivs implement the capability to deny access to mobile devices, such as smartphones and tablets, from connecting to the network if the device's software is outdated.

We recommend that the HHS OCIO work with the OpDivs to ensure that all OpDivs complete its discovery of all information systems and maintain an up- to-date inventory of systems, software, and licenses.

We recommend that the HHS OCIO work with the OpDivs to ensure that all OpDivs complete its discovery of all information systems and maintain an up- to-date inventory of systems, software, and licenses.

We recommend that the HHS OCIO work with the OpDivs to ensure that all OpDiv's SCRM policies and procedures are being consistently implemented across the organization and ensure their execution.