The Government Accountability Office (GAO) released a report on HUD’s Real Estate Assessment Center (REAC) with 14 recommendations to improve the inspection process. The report was sent to Chairwoman Susan Collins (R-ME) and Ranking Member Jack Reed (D-RI) of the Transportation, Housing and Urban Development and Related Agencies (T-HUD) Subcommittee of the Senate Committee on Appropriations and Chairman David Price (D-NC) and Ranking Member Mario Diaz-Balart (R-FL) of the T-HUD Subcommittee of the House Committee on Appropriations.

13 of the 14 recommendations direct the Deputy Assistant Secretary for REAC to:

  1. Conduct a comprehensive review of the physical inspection process.
  2. Resume calculating the sampling error associated with the physical inspection score for each property, identify what changes may be needed for HUD to use sampling error results, and consider those results when determining whether more frequent inspections or enforcement actions are needed.
  3. Develop comprehensive and organized documentation of REAC’s sampling methodology and develop a process to ensure that documentation is maintained going forward.
  4. Track on a routine basis whether REAC is conducting inspections of multifamily housing properties in accordance with federal guidelines for scheduling and coordinate with the Deputy Assistant Secretary for Multifamily Housing to minimize the number of properties that can cancel or reschedule their physical inspections.
  5. Design and implement an evaluation plan to assess the effectiveness of the Indefinite Delivery/Indefinite Quantity pilot in ensuring timely and quality inspections for properties in hard-to-staff geographic areas.
  6. Expedite implementation of the recommendations from the Rapid Response and Resolution Team along with the Deputy Assistant Secretary for Multifamily Housing
  7. Follow through on REAC’s plan to create a process to verify candidate qualifications for contract inspectors—for example, by calling references and requesting documentation from candidates that supports their completion of 250 residential or commercial inspections. The plan should also consider whether certain types of inspections—such as Federal Emergency Management Agency inspections and U.S. Army Office of Housing inspections—satisfy REAC’s requirements.
  8. Develop a process to evaluate the effectiveness of REAC’s training program—for example, by reviewing the results of tests or soliciting participant feedback.
  9. Revise training for quality assurance inspectors to better reflect their job duties. Revised training should be documented, include expanded subject matter training, and address skills that may not be included in training for contract inspectors—for example, instructing contract inspector candidate trainings and coaching and providing feedback.
  10. Develop continuing education requirements for contract and quality assurance inspectors.
  11. Develop and implement a plan for meeting REAC’s management targets for the timeliness and frequency of collaborative quality assurance reviews and quality control inspections. The plan should include consideration of resources of and demands on quality assurance inspectors, including the effect of natural disasters and other special assignments.
  12. Ensure that Quality Control’s policies and procedures for overseeing quality assurance inspectors are implemented
  13. Review quality assurance inspector performance standards and revise them to better reflect the skills and supporting behaviors that quality assurance inspectors need to effectively contribute to REAC’s mission.

The final recommendation directs the Deputy Assistant Secretary for Multifamily Housing to report to Congress on why the agency has not complied with the 2017 and 2018 Consolidated Appropriations Acts requirement to issue notices to properties when the REAC score is 60 or below, including seeking any statutory flexibilities or exceptions believed appropriate.