GAO Urges More Comprehensive REAC Changes

Regulation | July 06, 2021 | by Linda Couch

On July 6, the Government Accountability Office released its updated list of priority recommendations for HUD.

On July 6, the Government Accountability Office released its updated list of priority recommendations for HUD. These are issues that “warrant priority attention” from heads of key departments or agencies because their implementation could save large amounts of money; improve congressional and/or executive branch decision-making on major issues; eliminate mismanagement, fraud, and abuse; or ensure that programs comply with laws and funds are legally spent, among other benefits.

HUD currently has 125 open recommendations from the GAO, of which 13 priority recommendations fall into six major areas:

  1. Improving the Real Estate Assessment Center's physical inspection process.
  2. Addressing Ginnie Mae's risk management and staffing-related challenges.
  3. Strengthening processes to address lead paint hazards.
  4. Enhancing oversight of the Moving to Work program.
  5. Improving cybersecurity risk management and workforce planning practices.
  6. Improving information technology management.

Regarding improving the Real Estate Assessment Center's physical inspection process, the GAO had recommended HUD improve the identification of physical deficiencies at HUD multifamily properties in 2019, noting several weaknesses in HUD’s REAC physical inspection process. While HUD told the GAO the recommendation had been addressed, the GAO found HUD’s April 2021 response lacking and not comprehensive.

In 2019, GAO noted some contract inspectors were conducting inspections that did not meet REAC’s quality inspection standards, such as by not reviewing all of the required buildings and units, and some property owners were misrepresenting the physical condition of their properties by covering up rather than addressing deficiencies—such as by using mulch on a building exterior to hide erosion. LeadingAge members are well aware of HUD’s revision of its physical inspection standards through REAC’s new NSPIRE protocols.

In the July 6 report, GAO calls HUD out for not addressing as many GAO recommendations as other federal agencies peers have. In the report, GAO says, “on a government-wide basis, 77% of our recommendations made 4 years ago were implemented. HUD’s recommendation implementation rate was 56%.”

Read the GAO report here.