GAO Releases Report on HUD Inspections Process

Date Published: 
April 10th, 2019

In March, the Government Accountability Office (GAO) released a report on improvements for HUD’s physical inspection process. The report followed a provision in the 2017 Consolidated Appropriations Act that instructed the GAO to report on the Real Estate Assessment Center’s (REAC) methods for identifying property deficiencies, selecting and training inspectors, and their oversight of these processes. The report is based on a review of REAC policies and interviews with HUD staff, inspectors, and industry groups, and includes several recommendations to HUD to improve their inspections of multifamily and public housing properties.

Focusing on their directive of inspection protocols and training, the GAO found room for improvement in the quality of the inspection process, REAC’s methodology for using scores to generalize about the condition of multiple units within a property and to account for inspector error, and the process used to hire, train, and evaluate inspector performance. Issues with the inspections process that the GAO raised are likely very familiar to PHAs, including the focus on property deficiencies that do not affect livability, lack of consistent scoring across inspections and inspectors, and weak enforcement actions for property owners with multiple failing scores.

In addition to flaws in the inspections process, the GAO pointed to several flaws in inspector training and evaluation that may be contributing to ongoing challenges with the inspection process. These flaws include HUD’s failure to verify contract inspector qualifications prior to hiring and inadequate training for quality assurance inspectors, who review the work of REAC’s contract inspectors. The GAO also found that REAC had not met its targets for quality assurance reviews, and that its system for evaluating quality assurance inspectors’ performances was not well-aligned with the position’s duties.

After outlining these issues, the GAO made 14 recommendations to HUD:

•             Conduct a comprehensive review of the inspection process to improve is reliability and replicability

•             Resume sampling error calculation for accounting for inspector error and develop a process for using sampling error results

•             Fully document sampling methodology used by REAC to produce generalizable estimates of all property conditions

•             Track multifamily inspections to minimize the practice of canceling and rescheduling inspections

•             Evaluate REAC’s inspection hiring pilot being used to staff inspections in hard-to-staff geographic areas

•             Implement recommendations from HUD’s 2016 internal review of REAC inspections process

•             Create a process for verifying qualifications of inspector applicants

•             Evaluate REAC’s inspector training program

•             Revise and more fully document the quality assurance inspector training process

•             Develop continuing education requirements for both contract and quality assurance inspectors

•             Develop a plan for meeting the timeliness and frequency of quality assurance reviews

•             Implement policies for more adequate oversight of quality assurance inspectors

•             Review and revise REAC’s performance standards for quality assurance inspectors

•             Report to Congress as to why the Multifamily Office has not complied with a provision of the Consolidated Appropriations Act requiring HUD to issue notices to properties receive a score of 60 or below

In its response, HUD agreed with 11 recommendations, partially agreed with two, and neither agreed nor disagreed with one. HUD’s full response is available in the report as an appendix, and notice of their REAC inspection overhaul was announced via press release in February 2019. For questions about the report, please contact Senior Research & Policy Analyst Emily Warren at ewarren@clpha.org.

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