Calendar
Year 2008
Issue Date: November 20, 2008
Audit
Report No.: 2009-DP-0001
File Size: 497.50KB
Title: Review of Single-Family Partial Claims Collection Process
We audited the single-family partial claims collection process
and its effectiveness in protecting the Federal Housing Administration’s
(FHA) insurance fund. Our overall objective was to determine whether
the single-family partial claims program operated effectively and
efficiently to minimize costs to the insurance fund and collect
amounts due in a timely manner. The National Service Center (NSC)
and its contractors did not properly implement a cohesive partial
claims collection process to ensure that partial claims were serviced
in a timely manner. The NSC did not (1) fully develop and implement
written policies and procedures, (2) define follow-up procedures
for the forbearance plan option, (3) promptly transfer partial claims
to the Albany Financial Operations Center, and (4) actively track
and monitor lender billing. We recommend that the Assistant Secretary
for Housing ensure that the NSC formulates and implements procedures
to comply with federal regulations and enhance training provided
to its contractors so that debts can be transferred to the Financial
Operations Center in a timely manner. We further recommend that
the Director of the Servicing and Loss Mitigation Division develop
procedures to pursue lenders for administrative offsets in a timely
manner and to improve the forbearance plans. We also recommend that
the Single Family Mortgage Asset Recovery Technology system be fully
implemented as the one system of record for partial claims.
Issue
Date: November 14, 2008
Audit
Report No.: 2009-FO-0003
File Size: 670.34KB
Title:
Additional Details to Supplement Our Report on HUD’s Fiscal Years
2008 and 2007 Financial Statements
In
this report, we provide additional details to supplement our Report
on the U.S. Department of Housing and Urban Development's (HUD)
Fiscal Years 2008 and 2007 Financial Statements, which is included
in HUD's Fiscal Year 2008 Performance and Accountability Report.
In
OIG's opinion, based on our audit and the reports of other auditors,
the financial statements were presented fairly, in all material
respects, in conformity with accounting principles generally accepted
in the United States of America.
The
report identifies (a) seven significant weaknesses, and (b) four
instances of noncompliance with applicable laws and regulations.
The report discusses each of these conditions in detail, provides
an assessment of actions taken by HUD to mitigate the deficiencies
noted, and makes recommendations for corrective actions. During
the course of the audit, OIG also identified several matters that
are not material to the financial statements and are being reported
separately to HUD management.
Issue
Date: November 7, 2008
Audit
Report No.: 2009-FO-0002
File Size: 840KB
Title:
Audit of the Federal Housing Administration’s Financial Statements
for Fiscal Years 2008 and 2007
This
report presents the results of Urbach, Kahn, and Werlin LLP's (UKW)
audit of the Federal Housing Administration's (FHA) financial statements
for the fiscal years ended September 30, 2008 and 2007.
In UKW's opinion, the financial statements present fairly, in all
material respects, FHA's financial position as of September 30,
2008 and 2007, and its net costs, changes in net position, and combined
budgetary resources for the years then ended in conformity with
accounting principles generally accepted in the United States of
America.
The
report identifies one significant deficiency on internal control
and two reportable instances of non-compliance with laws, regulations
and government-wide policies. Additionally, it discusses the issues/conditions
in detail, provides an assessment of management’s responses to the
report, and makes recommendations for corrective actions. UKW also
noted other matters involving internal control and its operations
that are not material to the financial statements and are being
communicated separately to FHA’s management.
Issue
Date: November 7, 2008
Audit
Report No.: 2009-FO-0001
File Size: 405KB
Title:
Audit of Government National Mortgage Association’s (Ginnie Mae)
Financial Statements for Fiscal Years 2008 and 2007
This
report presents the results of Carmichael, Brasher, Tuvell and Company's
(CBTC) audit of the Government National Mortgage Association's (Ginnie
Mae) financial statements for the fiscal years ended September 30,
2008 and 2007. In CBTC's opinion, the financial statements present
fairly, in all material respects, Ginnie Mae’s financial position
as of September 30, 2008 and September 30, 2007 and the results
of its operations and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the
United States of America.
The
report identifies one significant deficiency on internal control
and one reportable instance of non-compliance with laws, regulations
and government-wide policies. Additionally, it discusses the issues/conditions
in detail, provides an assessment of management’s responses to the
report, and makes recommendations for corrective actions. CBTC also
noted other matters involving internal control and its operation
that are not material to the financial statements and are being
communicated separately to Ginnie Mae's management.
Issue
Date: October 16, 2008
Audit
Report No.: 2009-NY-0001
File Size: 1.43MB
Title:
HUD Did Not Adquately Monitor Its Performance-Based Contract Adminstrator,
New York State Housing Trust Fund Corporation
We
completed an audit of the U.S. Department of Housing and Urban Development's
(HUD) monitoring of its annual contributions contract with its performance-based
contract administrator, the New York State Housing Trust Fund Corporation
(contractor). The audit was initiated in accordance with the Office
of Inspector General's (OIG) audit plan that includes performing
internal audits to evaluate HUD's execution of its fiscal responsibilities.
Our audit objective was to determine whether HUD appropriately monitored
the contractor with respect to contract performance.
The audit disclosed that HUD did not effectively assess the performance
and contractual compliance of the contractor and its subcontractor.
Specifically, HUD did not fulfill its monitoring responsibilities
regarding appeals of fee determinations, monthly invoice reviews,
and the annual compliance review. In addition, HUD headquarters
and hub management failed to keep open lines of communication to
provide clear and concise guidance. We attribute these conditions
to a lack of written policies and procedures for (1) addressing
the complexities of contractor oversight by two hubs, (2) ensuring
that consistent performance criteria were used by the hubs, and
(3) handling disagreements regarding interpretations of program
directives. As a result, more than $2.08 million in reduced administrative
fees that were reversed were unsupported, and the contractor's substandard
performance was not adequately addressed.
We
recommend that the Deputy Assistant Secretary for Multifamily Housing
require the Director of Housing Assistance Contract Administration
Oversight to (1) establish policies and procedures defining the
roles and responsibilities of hub staff, (2) provide training to
hub staff in monitoring the contractor's performance, and (3) examine
the appeals and ensure that the appropriate supporting documentation
exists for the more than $2.08 million in fees reimbursed to the
contractor. In addition, we recommend that the Deputy Assistant
Secretary for Multifamily Housing require the HUD New York and Buffalo
multifamily hubs to develop policies and procedures for monitoring
the Section 8 contract administration initiative and reviewing challenges
to HUD's fee determination, the monthly invoice review, and the
annual compliance review.
Issue
Date: September 30, 2008
Audit Report No.: 2008-DP-0802
Title:
OIG Response to Questions from the Office of Management and Budget
under the Federal Information Security Management Act of 2002
(Report Not Available to Public)
The
Federal Information Security Management Act of 2002 (FISMA) directs
the Office of the Inspector General (OIG) to perform an annual independent
evaluation of the U.S. Department of Housing and Urban Development's
(HUD) information security program and practices. This memorandum
presents the results of the OIG's evaluation of HUD’s compliance
with FISMA. The OIG has determined that the contents of this memorandum
would not be appropriate for public disclosure and has therefore
limited its distribution to selected officials.
Issue
Date: September 30, 2008
Audit
Report No.: 2008-AT-0803
File Size: 331.57KB
Title:
Corrective Action Verification, The Housing Authority of the City
of Cuthbert, Georgia, Public Housing Programs
HUD
OIG performed corrective action verification for an audit recommendation
cited in the audit report, Cuthbert Housing Authority, Public Housing
Programs (2004-AT-1001) issued January 15, 2004. The purpose of
the corrective action verification was to determine whether the
selected audit recommendation was implemented and expended its funds
in accordance with HUD regulations.
The
Authority did not comply with its HUD-approved agreement to obtain
repayment of $327,326 advanced to one of its affiliates, the Development
Corporation, and did not stop advancing funds until November 2004,
although it agreed it would stop by June 2004. The Authority collected
sporadic payments from the Development Corporation after the agreement
was executed, leaving a current balance of $224,494. In addition
to the $224,494, we verified two other receivables of $148,305 and
$126,609 advanced by the Authority to the Development Corporation.
Also, the Authority paid a law firm $9,000 to lobby the Georgia
state legislature to eliminate barriers to developing affordable
housing in rural Georgia.
OIG
recommended that the Director of HUD's Atlanta Office of Public
Housing continue to work with the Authority to collect $224,449
from the Development Corporation and reimburse its operating fund,
require the Authority to collect $274,914 from the Development Corporation
and reimburse its operating fund, apply appropriate sanctions if
the Authority does not comply with its payback agreement, and require
the Authority to reimburse its operating fund $9,000 from nonfederal
sources.
Issue
Date: September 30, 2008
Audit
Report No.: 2008-CH-0003
File Size: 2.04MB
Title:
The U.S. Department of Housing and Urban Development Needs to Improve
Its Existing Procedures and Controls Regarding Its Management of
Human Capital
The
U.S. Department of Housing and Urban Development’s (HUD) Office
of Inspector General reviewed HUD's management of human resources.
We initiated the review based on our annual audit plan and our strategic
plan to help HUD resolve its major management challenges. The review
also addressed a complaint to our Hotline regarding the adequacy
of HUD’s Total Estimation and Allocation Mechanism (TEAM) system.
Our objectives were to determine the adequacy of HUD’s staffing
resources in meeting its program objectives and whether HUD’s offices
used HUD’s Resource Estimation and Allocation Process (REAP) studies
when they had the ability to hire. This is the second of three audit
reports planned on HUD’s management of its human resources.
HUD
lacked a valid basis for assessing its human resource needs and
allocating staff within its program offices. Three of the five offices
statistically selected for review could not provide adequate documentation
to support their assessment of human resource needs and allocation
of staff among their headquarters and field office locations. As
a result, HUD lacked assurance that its allocation of staff was
based on supportable need and it accurately determined the human
resources required to meet its performance goals under the Government
Performance Results Act (GPRA).
HUD’s
program offices used the REAP studies when they had the ability
to hire; however, they lacked adequate documentation to support
their hiring practices. In particular, five of the seven HUD program
offices selected for review were unable to provide adequate documentation
to support their hiring of staff. As a result, HUD lacked assurance
that its program offices’ hiring was appropriate.
Lastly,
the complainant’s allegation regarding the adequacy of HUD’s TEAM
system lacked a supportable basis as he did not have a complete
understanding of the system.
We
recommend that HUD’s Chief Financial Officer implement a plan detailing
how HUD’s program offices will use REAP and the TEAM systems to
determine which program offices need to be reassessed, continue
providing training, and obtain feedback from the Office of Fair
Housing and Equal Opportunity regarding the pilot of the TEAM system’s
allocation module. If the pilot is determined to be successful,
HUD’s Chief Financial Officer should take the necessary steps to
implement the allocation module in HUD’s other program offices.
Issue
Date: September 30, 2008
Audit
Report No.: 2008-KC-0007
File Size: 150.95KB
Title:
HUD Inappropriately Authorized the Use of Residual Receipts in Lieu
of Reserve for Replacement or Operating Funds
The
U.S. Department of Housing and Urban Development's (HUD) Office
of Inspector General audited HUD's use of residual receipts in lieu
of reserve for replacement funds. The objective of the audit was
to determine whether HUD appropriately authorized residual receipt
withdrawals in lieu of reserve for replacement funds for new regulation
multifamily projects.
HUD inappropriately authorized the use of more than $3.2 million
in residual receipt funds for new regulation multifamily projects
for ineligible costs. Regional and field office staff nationwide
were either not familiar with or overlooked the residual receipt
use requirements for new regulation multifamily projects. As a result,
HUD lost $3.2 million that it could have used more effectively for
additional housing subsidies and other authorized taxpayer purposes.
We
recommend that HUD, on a project-by-project basis for the 14 projects
reviewed, ensure that the project reimburses the residual receipts
account with reserve for replacement or operating funds, unless
this action negatively affects the project. In addition, HUD needs
to ensure that regional and field office staff fully understands
and complies with the requirements regarding the use of residual
receipts for new regulation multifamily projects.
Issue
Dated: September 29, 2008
Audit
Report No.: 2008-CH-0002
File Size: 87.06KB
Title:
HUD Did Not Always Ensure That FHA Lenders Complied with Federal
Requirements When Submitting Loans for New Construction Properties
Located in FEMA’s Designated Special Flood Hazard Areas
The
U.S. Department of Housing and Urban Development’s (HUD) Office
of Inspector General audited HUD's oversight of the underwriting
of Federal Housing Administration (FHA)-insured loans for new construction
properties located in the Federal Emergency Management Agency’s
(FEMA) designated special flood hazard areas. We initiated the audit
as part of the activities in our 2007 annual audit plan. Our objective
was to determine whether HUD had adequate oversight of the underwriting
of FHA loans for new construction properties located in FEMA’s designated
special flood hazard areas.
HUD
did not always ensure that FHA-approved lenders complied with federal
requirements when they submitted 399 loans, totaling more than $55
million in original mortgage amounts, to HUD for insurance endorsement.
The loans were to finance the purchase of newly constructed properties
located in FEMA’s designated special flood hazard areas. However,
the lenders failed to provide evidence of a letter of map revision/amendment
or flood elevation certificate when the loans were submitted to
HUD for insurance endorsement. Therefore, these loans were not eligible
for FHA insurance. Further, for 195 loans, totaling nearly $27 million
in original mortgage amounts, the lenders did not ensure that borrowers’
escrow accounts included payments for flood insurance at the time
the loans closed.
HUD also did not ensure that lenders servicing FHA-insured loans
for 163 properties, totaling nearly $22 million in original mortgage
amounts and located in FEMA’s designated special flood hazard areas,
kept apprised of whether borrowers maintained required flood insurance.
Further, 30 FHA lenders incorrectly certified to the integrity of
the data supporting the underwriting deficiencies and that the loans
were eligible for HUD mortgage insurance for 242 loans.
As a result, HUD inappropriately approved loans for FHA mortgage
insurance; therefore, the risk to the FHA insurance fund is increased
if HUD pays insurance claims and incurs losses on the resale of
the properties associated with these ineligible FHA-insured loans.
Further, the lenders’ failure to ensure that borrowers maintained
flood insurance throughout the life of the loans would pose a significant
risk if another natural flood disaster was to occur such as Hurricanes
Rita or Katrina or the flooding that has recently devastated parts
of the Midwest.
We
recommend that the Assistant Secretary for Housing-Federal Housing
Commissioner (1) seek appropriate administrative action for the
active loans if the lenders cannot provide documentation, such as
a letter of map amendment/revision, to show that the properties
are not located in FEMA’s designated special flood hazard areas
or the required elevation certification showing that the properties
meet elevation requirements and are covered by flood insurance;
(2) require the applicable lenders to reimburse HUD for any future
losses from claims paid if they cannot provide the elevation certifications
or letters of map revision/amendment; (3) require the lenders for
the loans lacking flood insurance to provide evidence showing that
the properties have flood insurance or are no longer located in
FEMA’s designated special flood hazard areas or seek appropriate
administrative action; (4) and improve the Office of Single Family
Housing’s existing procedures and controls to ensure that lenders
follow HUD’s underwriting requirements for new construction properties
located in FEMA’s designated special flood hazard areas. These improved
procedures and controls should result in a potential savings to
the FHA insurance fund of nearly $261,000 over the next year.
We
also recommend that HUD’s Acting Associate General Counsel for Program
Enforcement determine legal sufficiency and if legally sufficient,
pursue remedies under the Program Fraud Civil Remedies Act against
the lenders with incorrect certifications cited in this audit report.
Issue
Date: September 29, 2008
Audit
Report No.: 2008-CH-0001
File Size: 87.06KB
Title:
HUD Did Not Always Ensure That FHA Lenders Complied with Federal
Requirements Regarding Home Equity Conversion Mortgages
The
U.S. Department of Housing and Urban Development’s (HUD) Office
of Inspector General audited HUD's oversight of the Federal Housing
Administration (FHA)-insured home equity conversion mortgages (HECM)
program. We initiated the audit as part of the activities in our
2008 annual audit plan. Our audit objective was to assess elements
of HUD’s oversight of the HECM program. This is the first of two
audit reports regarding the HECM program and focuses on lender notification
of borrower deaths and payment of debenture interest.
HUD
did not ensure that FHA lenders reported borrowers’ death in accordance
with federal requirements. For the 31 loans reviewed, HUD’s contractor
failed to provide documentation to support that FHA lenders notified
HUD of borrowers’ deaths in writing. Further, the lenders failed
to notify the contractor of borrowers’ deaths for 11 of the 31 loans
and for 13 loans, did not report in a timely manner the dates of
borrowers’ death.
HUD
failed to pay debenture interest on HECM loans. For 13 of the 30
loans in which HUD paid claims during the period March 1, 2006,
through February 29, 2008, it did not pay debenture interest to
the lenders in accordance with federal requirements.
As a result, HUD could not be assured that FHA lenders appropriately
met HUD’s time requirements for initiating the foreclosure process
or for recording the deeds-in-lieu to take possession of the property,
which impacts the amount of the lenders’ insurance claims. Additionally,
as a result of HUD’s failure to pay lenders debenture interest on
HECM loans from the loans’ due date to the claim payment date, it
owes lenders debenture interest on HECM loans.
We recommend that the Assistant Secretary for Housing-Federal Housing
Commissioner require that HUD’s Office of Single Family Housing
improve its existing procedures and controls to ensure that lenders
follow HUD’s requirements for servicing HECM loans and implement
adequate procedures and controls to ensure that the Office of Single
Family Housing complies with federal requirements in the administration
of the HECM program, including the proper payment of claims, and
curtail interest payments to the appropriate lenders for the loans
identified in this audit report that HUD determines failed to meet
all of its time requirements.
Issue
Date: September 11, 2008
Audit Report No.: 2008-DP-0007
Title:
Evaluation of HUD ’s Security Controls over Databases (Report Not
Available to Public)
We
have completed an Evaluation of HUD’s Security Controls over Databases.
Our overall objective was to determine if the security implemented
on HUD’s network provides adequate controls to prevent abuse or
unauthorized access to the Department’s information resources. We
reviewed HUD’s database environment by evaluating security measures
in place that guard these assets, scanning identified databases,
and identifying vulnerabilities and suspect configurations that
place information at risk. For criteria, we used recommendations
from the following Special Publications issued by the National Institute
of Standards and Technology: NIST SP 800-53, “Recommended Security
Controls for Federal Information Systems Standards,” and NIST SP
800-40, “Procedures for Handling Security Patches.” We also used
requirements from the Federal Information Security Management Act
of 2002. The OIG has determined that the contents of this report
would not be appropriate for public disclosure and have limited
its distribution to selected HUD officials.
Issue
Date: September 8, 2008
Audit
Report No.: 2008-KC-0006
File Size: 386.46KB
Title:
HUD’s Office of Single Family Housing Had Not Fully Implemented
an Internal Control Structure in Accordance with Requirements
The
U.S. Department of Housing and Urban Development (HUD), Office of
Inspector General, audited HUD's Office of Single Family Housing
(Single Family) due to concerns over the expected increase in Federal
Housing Administration (FHA)-insured loans generated by newly implemented
and proposed FHA programs. The objective of our audit was to determine
whether Single Family had implemented an internal control structure
in accordance with Government Accountability Office (GAO) internal
control standards and HUD requirements.
We
concluded that Single Family had not fully implemented an internal
control structure in accordance with GAO internal control standards
and HUD requirements. Specifically, it did not (1) perform a formal,
systematic annual risk assessment of its programs and administrative
functions, (2) plan and conduct ongoing management control reviews
or alternative management control reviews of its programs, (3) establish
an overall strategy regarding its risk-based monitoring of program
activities and participants, or (4) identify corrective actions
required to improve its management controls in a timely manner.
We
recommended that HUD ensure that Single Family managers and staff
fully implement an acceptable internal control structure by preparing
and implementing effective written policies and procedures that
comply with the GAO internal control standards and HUD Handbook
1840.1 requirements.
Issue Date: September 4, 2008
Audit
Report No.: 2008-LA-0003
File Size: 332.95KB
Title:
Implementation Weaknesses Existed in All Major Phases of the FHA
Appraiser Review Process
We
audited HUD's appraiser review process as part of our annual plan.
The audit was proposed in response to a single-family loan origination
audit that raised concerns regarding HUD's oversight of FHA appraisers.
This is the second of two audits covering HUD's controls over the
appraiser review process. The first audit report, 2008-LA-0002,
focused on HUD's oversight of the FHA appraiser roster; whereas
this audit report focuses on the appraiser review procedures conducted
by the homeownership centers and HUD's oversight of the appraiser
review process.
We found that HUD's appraiser review process was not adequate to
reliably and consistently identify and remedy deficiencies associated
with an appraiser. Additionally, HUD did not maintain information
necessary to assess the effectiveness of its review process. For
each major phase of the appraiser review process we noted problems
such as inadequate or incomplete HUD guidance, weak quality controls
over implementation of review procedures, and inconsistent application
of rating standards and sanctioning timeframes.
We
recommend that HUD develop and implement adequate oversight and
controls over the appraiser review process to address the weaknesses
identified in this report and to ensure that headquarters continuously
evaluates the efficiency and effectiveness of the process.
Issue
Date: August 27, 2008
Audit
Report No.: 2008-NY-0002
File Size: 1.00MB
Title:
Weaknesses in the Office of Fair Housing and Equal Opportunity's
2007 Award Process for the Fair Housing Initiative Program, National-Based
Media Campaign
We
performed a limited scope audit of the Office of Fair Housing and
Equal Opportunity to determine whether the Office complied with
the requirements of 42 U.S.C. (United States Code) Chapter 45, Subpart
I, Section, 3616a(d), entitled Fair Housing Intiatives Program,
Education and Outreach, when it published the 2007 Fair Housing
Initiatives Program notice of funding availability. The audit disclosed
that the Office generally complied with the applicable requirements;
however, it issued the 2007 Fair Housing Initiatives Program notice
of funding availability with an error related to applicant eligibility
and it did not fully document criteria to determine eligibility
of the applicant awarded the 2007 Education and Outreach Initiative
national program media campaign. This condition occurred because
the Office broadly defined who was eligible to apply and did not
obtain legal guidance regarding applicants qualifying as nonprofit
organizations representing groups protected under the Fair Housing
Act. Additionally, the Office of Fair Housing and Equal Opportunity
lacked a policy regarding whether a portion of each fiscal year's
Education and Outreach Initiative funds were to be used for a national
program for Fair Housing Month activities.
We recommend that the Assistant Secretary, Office of Fair Housing
and Equal Opportunity, (1) strengthen its internal control procedures
regarding the development of future super notices of funding availability
to ensure that notice language complies with statutory requirements,
(2) obtain guidance on the meaning of a nonprofit organization representing
groups of persons protected under the Fair Housing Act, and (3)
develop policy on whether funds from each fiscal year's Fair Housing
Initiatives Program appropriation is intended to be used for a national
program specifically for annual Fair Housing Month activities.
Issue
Date: July 29, 2008
Audit
Report No.: 2008-FW-0001
File Size: 1.49MB
Title:
HUD's Community Development Block Grant Set-Aside for Colonias Was
Not Used for Its Intended Purposes
The
U. S. Department of Housing and Urban Development's (HUD) Office
of Inspector General audited HUD's administration of the Community
Development Block Grant (CDBG) set-aside for colonias (colonia set-aside).
We performed the review because of concerns that surfaced during
an audit survey of the state of Texas's colonia set-aside funds.
That review showed that HUD had not issued regulations or handbooks
that required compliance with Section 916 of the Cranston-Gonzalez
National Affordable Housing Act of 1990 (Act). In addition, HUD
could not determine whether Texas used its colonia set-aside funds
in the most efficient and effective manner or whether it accomplished
the intended purposes of providing water and sewage systems to the
most needy colonia residents. Our audit objective was to determine
whether HUD ensured that the states of New Mexico, Arizona, Texas,
and California (states) expended colonia set-aside funds in compliance
with the Act.
We
found that HUD did not issue regulations or handbooks specific to
the administration of the set-aside funds or develop performance
measures to track accomplishments. Thus, it did not ensure that
the states expended the funds in compliance with the Act and could
not track accomplishments. Rather, HUD allowed the states to define
colonias and determine how to distribute the funds. The states had
different definitions of colonias and did not always prioritize
funding to the colonias with the greatest needs as required. As
a result, between 2004 and 2007, New Mexico and Arizona allocated
or expended more than $8.4 million in colonia set-aside funds for
projects that did not meet the requirements of the Act and did not
meet the intended beneficiaries' basic health and safety needs.
In addition, HUD could not report on the progress or effect of the
set-aside funds in meeting the colonia residents' needs regarding
water, sewage, and housing.
We
recommend that HUD require the states of New Mexico and Arizona
to support or repay more than $8.4 million. Further, HUD should
implement effective internal controls to ensure that the states
comply with the Act and implement performance measures specific
to the colonia set-aside to help ensure that funds are used effectively
to meet water, sewage, and housing needs of the colonia residents.
By implementing effective controls, HUD can put more than $2.8 million
to better use over the next 12 months.
Issue
Date: July 23, 2008
Audit Report No.: 2008-DP-0006
Title:
Review of HUD’s Information Technology Security Program
(Report Not Available to the Public)
We have completed a review of HUD’s information technology security
program. The overall objective of our audit was to evaluate HUD’s
entity-wide information security program’s compliance with FISMA
requirements. Specifically, we evaluated the overall quality of
HUD’s certification and accreditation process for its systems; HUD
program officials and system owners’ implementation of their assigned
information security responsibilities; and whether HUD’s Office
of the Chief Information Officer developed security policies and
implemented and monitored enterprise-wide controls. The OIG has
determined that the contents of this report would not be appropriate
for public disclosure; therefore, we have limited its distribution
to selected HUD officials.
Issue
Date: July 21, 2008
Audit Report No.: 2008-DP-0005
Title:
Review of Controls Over the Removal of Local and Remote User Access
(Report Not Available to the Public)
We
audited the U.S. Department of Housing and Urban Developments’ (HUD)
processes and controls to remove the computer system access rights
of retired employees. This audit was initiated based upon work performed
during our fiscal year 2007 review of information system controls
in support of the annual financial statement audit. The OIG has
determined the contents of this report would not be appropriate
for public disclosure; therefore, we have limited its distribution
to select HUD officials.
Issue
Date: July 15, 2008
Audit
Report No.: 2008-KC-0005
File Size: 51.02KB
Title:
HUD’s Office of Multifamily Housing Generally Met Requirements While
Administering the Opt-Out Process for Section 8 Projects
The
U.S. Department of Housing and Urban Development's (HUD) Office
of Inspector General reviewed HUD's oversight of projects that opted
out of the Section 8 program between January 1, 2004, and December
31, 2007. We reviewed the opt-out process because it involved large
amounts of funds potentially not accounted for or remitted to HUD.
With
a few minor exceptions, HUD complied with applicable requirements
while administering the opt-out process for the nine Section 8 projects
in our sample. In addition, for all nine projects, the responsible
depository properly remitted residual receipts to HUD or released
the residual receipts to the project owners, or the balance in the
residual receipts account was zero so no action was required.
We communicated the minor exceptions to HUD in a separate management
letter. Since we did not identify any significant deficiencies,
the report contains no recommendations.
Issue Date: June 24, 2008
Audit
Report No.: 2008-KC-0004
File Size: 295.58KB
Title:
HUD’s Office of Single Family Housing Could Improve the Reliability
of Its Process for Reporting Performance Measure Results
We
concluded that Single Family could improve the reliability of its
process for reporting performance measure results. Single Family
has a performance measurement process in place; however, it could
make the process more reliable if it routinely evaluated data used
for performance measure results and formally documented its structure
and process for developing, monitoring, and reporting on performance
measures.
We
recommended that HUD establish and implement effective written policies
and procedures for routinely evaluating the data used to report
performance measure results to ensure that the data are the most
accurate and appropriate data available. We also recommended that
HUD establish and implement effective written policies and procedures
for developing, monitoring, and reporting on performance measures.
Issue
Date: June 12, 2008
Audit Report No.: 2008-DP-0004
File Size: 802.33KB
Title:
Review of Selected FHA Major Applications’ Information Security
Controls (Report Not Available to the Public)
We audited the Federal Housing Administration’s (FHA) management
of its information technology resources and compliance with U.S.
Department of Housing and Urban Development (HUD) and other federal
information security requirements. Our overall objective was to
determine whether FHA effectively managed security controls relating
to its information technology resources. This audit supported our
financial statement audits of FHA and HUD as well as our annual
Federal Information Security Management Act review. The OIG has
determined that the contents of this report would not be available
for public disclosure; therefore, we have limited its distribution
to selected HUD officials.
Issue
Date: May 21, 2008
Audit
Report No.: 2008-BO-0002
File Size: 337.20KB
Title:
Maintenance of Effort Requirements Are Needed to Ensure Intended
Use of CDBG Program Funds
As
part of the Office of Inspector General (OIG) annual goals for internal
audits, we reviewed U.S. Department of Housing and Urban Development
(HUD) policies prohibiting the use of funds from the Community Development
Block Grant (CDBG) program to supplant general government funds.
Congress stated in a 2006 House congressional report that CDBG funds
were never meant “to be used to replace local general government
funds on projects communities should underwrite, regardless of whether
grant dollars are available” and that “[t]he congressional prohibition
against supplanting notwithstanding, HUD lacks the ability to determine
whether funds are supplanted for general revenue funds because it
does not collect the necessary data.”
Our
objective was to determine whether the HUD Office of Community Planning
and Development (CPD) had management controls that were sufficient
to ensure that CDBG grantees had effective procedures to preclude
them from supplanting general government funds with CDBG program
funds. We also examined whether there were practical ways to measure
whether grantees used CDBG program funds to supplant general state
or local government funds and indicators that grantees might be
using federal program funds to supplant general government funds.
HUD
could not identify whether federal funds were used to supplant general
government funds because it had not implemented management controls
to provide assurances that CDBG grantees did not supplant their
local budgets with CDBG program funds. Specifically, HUD could not
identify whether a grantee supplanted its local budget because it
had not identified the requirements for maintenance of effort included
in the Housing and Community Development Act of 1974 (HCDA), either
in policy or CDBG program regulations.
According
to CPD program officials and as discussed in a 1980 U.S. Government
Accountability Office (GAO) report, when the program was implemented,
there was a consensus that the requirement for maintenance of effort
was difficult, if not impossible, to enforce because it called for
an external judgment on what grantees would have done if federal
funds were not available. However, GAO has reported more recently
on the maintenance of effort requirements, and also other federal
agencies have established maintenance of effort requirements, ways
to measure compliance, and indicators of noncompliance. HUD indicated
that it was taking initial steps by discussing the requirement with
its grantees but that this activity was not a high priority. However,
without maintenance of effort management controls, CDBG program
funds may be at risk for substitution by grantees.
HUD
should initiate efforts to address and establish maintenance of
effort requirements and continue its dialogue with its grantees
to consider stakeholder input for establishing maintenance of effort
compliance requirements and determine whether to or how to implement
maintenance of effort requirements for the program after consideration
of stakeholders’ input.
Issue
Date: May 14, 2008
Audit
Report No.: 2008-AT-0003
File Size: 162.37
Title:
HUD Lacked Adequate Controls over the Physical Condition of Section
8 Voucher Program Housing Stock
As
part of the U.S. Department of Housing and Urban Development (HUD),
Office of the Inspector General’s (OIG) strategic plan, we audited
HUD’s controls over the physical condition of Section 8 housing
stock for the Housing Choice Voucher program. Our objective was
to determine whether HUD had adequate controls to ensure that its
Section 8 housing stock was in material compliance with housing
quality standards.
We
found that HUD did not have adequate controls to ensure that its
Section 8 housing stock was in material compliance with housing
quality standards. This condition occurred because HUD had not fully
implemented its Section 8 Management Assessment Program. As a result,
it could not ensure that the primary mission of the Section 8 program,
paying rental subsidies so that eligible families can afford decent,
safe, and sanitary housing, was met. In addition, HUD’s lack of
knowledge regarding the condition of its Section 8 housing stock
resulted in inflated performance ratings for public housing agencies
administering the program. Consequently, HUD routinely rated some
agencies as being high performers when a significant percentage
of the units they administered were in material noncompliance with
housing quality standards. HUD was revising its Section 8 regulations.
These revisions included developing a physical inspection system
to help ensure that HUD’s Section 8 housing stock is in material
compliance with housing quality standards.
Our
recommendations included completion of the departmental clearance
process of the proposed revised Section 8 regulations by the end
of fiscal year 2008, allowing the proposed revisions to Section
8 Management Assessment Program and housing quality standards to
go through the proper process and carefully consider all questions
and comments made by the affected parties (HUD Office of Public
and Indian Housing staff, tenants, landlords, Real Estate Assessment
Center, HUD OIG, etc.) before publishing the final rule, and fully
developing and implementing a physical inspection system for the
tenant-based Housing Choice Voucher program within three years of
the issue date of this report.
Issue
Date: May 12, 2008
Audit
Report No.: 2008-AT-0802
File Size: 141.31KB
Title:
Corrective Action Verification Opelika Housing Authority Public
Housing Programs
HUD
OIG performed a corrective action verification of audit recommendations
cited in the audit report, Opelika Housing Authority, Public Housing
Programs (2004-AT-1011) issued July 23, 2004. The purpose of the
corrective action verification was to determine whether the selected
audit recommendations were implemented and the deficiencies cited
in the report were corrected. The Authority implemented the necessary
corrective action for the recommendations. As a result, the recommendations
are resolved and no further action is required.
The
Authority's Section 8 general ledger contained a receivable in the
amount of $57,900, due from Opelika Housing Development Corporation
a not-for-profit corporation affiliated with the Authority,. The
receivable represents ineligible Section 8 payments made to the
Opelika Housing Development Corporation by the Section 8 program.
HUD recovered the ineligible payments during 2005 through offset
of Section 8 administration fees from the Authority's Section 8
program. However, the Opelika Housing Development Corporation did
not reimburse the Authority for the ineligible payments.
OIG
recommended that the Director of HUD's Birmingham Office of Public
Housing require the Authority to collect $57,900 from the Opelika
Housing Development Corporation.
Issue Date: April 24, 2008
Audit
Report No.: 2008-AT-0002
File Size: 189.42KB
Title:
The Miami Dade Housing Agency, Miami, Florida, Did Not Maintain
Adequate Controls over Its Capital Fund Program
HUD-OIG
audited the Miami Dade Housing Agency (Agency) capital fund program.
The objective of the audit was to determine whether the Agency had
adequate controls to ensure that contracts were awarded in accordance
with regulations and U.S. Department of Housing and Urban Development
(HUD) requirements.
The
Agency did not have adequate controls to ensure that contracts were
awarded in accordance with regulations and HUD requirements. It
did not maintain documentation supporting that contracts were awarded
with full and open competition. This condition occurred because
the Agency did not have effective internal controls for documenting
the procurement process and disregarded federal procurement requirements.
As a result, it could not ensure that more than $12.1 million for
contract payments was awarded through full and open competition
and that the costs were reasonable. In addition, the Agency did
not properly support multiple drawdowns of capital funds. It drew
down capital funds from HUD to reimburse itself for expenses associated
with 2003 and 2004 capital fund program grants. It then transferred
these expenses to close out a 2002 capital fund program grant and
drew down additional capital funds from HUD using these same expenses
as justification. It could not provide documentation to support
that HUD was reimbursed for the excess funds used to close out the
grant. This condition occurred because the Agency did not have effective
controls in place to track excess funds that needed to be returned
to HUD. As a result, we have no assurance that excess funds of more
than $1.8 million were repaid to HUD.
OIG
recommended that HUD require the Agency to (1) provide supporting
documentation to justify the eligibility and reasonableness of more
than $12.1 million disbursed for five contracts and to Miami Dade
County (County) for seven transactions or reimburse the capital
fund program more than $2.2 million and the HOPE VI program almost
$9.9 million from nonfederal funds, (2) ensure that federal procurement
requirements for maintaining supporting documentation are implemented
and enforced, and (3) ensure that any services obtained through
the County are purchased in compliance with federal procurement
requirements. In addition, HUD should require the Agency to (1)
provide documentation to support that the excess drawdown of more
than $1.8 million was returned to HUD or reimburse the capital fund
program from nonfederal funds; (2) develop a system to track excess
drawdowns and reimbursement of capital funds to HUD and maintain
supporting documentation for both; (3) hire an independent accounting
firm to reconcile capital fund program grants between HUD's Line
of Credit Control System and the Agency financial system; and (4)
incorporate the tracking system, maintenance of supporting documentation,
and the reconciliation of capital fund program grants into existing
procedures.
Issue
Date: April 14, 2008
Audit
Report No.: 2008-KC-0003
File Size: 189.17KB
Title:
Enterprise Income Verification Users Did Not Always Take Advantage
of HUD’s Training and Guidance
The
U.S. Department of Housing and Urban Development’s (HUD) Office
of Inspector General audited HUD’s Enterprise Income Verification
(EIV) system. HUD implemented the EIV system nationwide for public
housing authorities to use to identify and reduce tenant income
and subsidy errors within the Section 8 and public housing programs.
Our objective was to determine whether HUD provided adequate guidance
and training to its EIV coordinators and housing authority users.
We
found that HUD provided adequate guidance and training to its EIV
coordinators and housing authority users. However, EIV users did
not always take advantage of HUD’s EIV training and guidance. Since
use of EIV is not yet mandatory, HUD did not require housing authorities
to ensure that their users take EIV training prior to granting them
access to the EIV system. As a result, housing authority users may
not fully understand EIV’s capabilities and their responsibilities
when using the system.
We recommend that the Deputy Assistant Secretary for Public Housing
and Voucher Programs consider enhancing existing requirements to
require housing authorities to certify that their EIV users have
received EIV training prior to granting access to the EIV system.
The housing authorities would keep the certifications on file and
have them available for review.
Issue
Date: March 28, 2008
Audit
Report No.: 2008-AO-0801
File Size: 238.07KB
Title:
Review of Duplication of Participants Benefits under HUD’s Katrina
Disaster Housing Assistance Program and Disaster Voucher Program
We
audited the U.S. Department of Housing and Urban Development’s (HUD)
Katrina Disaster Housing Assistance Program (KDHAP) and Disaster
Voucher Program (DVP) administered by various public housing agencies.
Our audit objective was to determine whether HUD established controls
to ensure that the Housing Authority of New Orleans (HANO) pre-Hurricane
Katrina Housing Choice Voucher program participants did not receive
duplicate assistance under KDHAP and/or DVP.
We
determined that in most cases HUD ensured that KDHAP/DVP participants
receiving assistance were not also receiving assistance under HANO’s
Housing Choice Voucher program. However, in a few instances (4 of
51), the participants received duplicate assistance. In all four
cases, this occurred because HUD allowed Housing Choice Voucher
Homeownership program (Homeownership program) participants to execute
and receive KDHAP/DVP payments on their behalf while continuing
to receive mortgage payments under the Homeownership program. HANO
has continued to pay participants Homeownership program assistance
payments after Hurricane Katrina to avoid placing the participants
into foreclosure. Since the Housing Choice Voucher and KDHAP/DVP
program regulations prohibit families from receiving assistance
while receiving another housing subsidy or receiving assistance
for more than one unit or a unit in which they do not reside, $13,147
in Homeownership program funds was misspent. In addition, two of
the four participants also received Community Development Block
Grant (CDBG) funding totaling $161,090 to rebuild their property,
and the other two applied for assistance but had not received it
as of October 2007. Finally, all four participants had also received
duplicate rental assistance funding from FEMA totaling $14,655 as
of September 2006. In addition, there is a risk that additional
duplicate participants exist that were not detected by our testing
methodology, as Social Security number information in HANO's register
was not always reliable.
We
recommend that the HUD’s Director of Housing Choice Voucher Programs
take appropriate actions to recover the ineligible funding totaling
$13,147 for four duplicate participants, prevent duplicate payments
by working with the lenders to rework the mortgages and suspending
payment or seek a waiver for the duplicate payment prohibition for
Homeownership program participants, and work with FEMA and HUD’s
Office of Community Planning and Development to ensure that their
assistance did not duplicate HUD’s rental assistance and recover
any ineligible duplicate assistance payments, which currently totals
$14,655.
Issue
Date: March 26, 2008
Audit
Report No.: 2008-PH-0001
File Size: 120.37KB
Title:
HUD's Process for Tracking the American Dream Downpayment Initiative
Had Weaknesses
As
part of our strategic plan, we audited the United States Department
of Housing and Urban Development's (HUD) American Dream Downpayment
Initiative (Initiative). Our audit objective was to determine whether
HUD had adequate controls to ensure that its grantees did not exceed
allowable downpayment assistance limits and that funds were used
as required.
HUD
had controls in place to ensure that grantees did not exceed allowable
downpayment assistance limits and that funds were used as required,
but the control had weaknesses. Specifically, HUD relied heavily
on its Integrated Disbursement and Information System, which did
not have adequate capability to specifically track the Initiative's
activities. Further, regardless of the total amount of downpayment
assistance provided to the homebuyers reported via the system, the
accomplishment reports prepared by HUD and used to report the total
amount of the Initiative's funding disbursed always reflected the
grantees' budgeted funding limits. If grantees exceeded downpayment
assistance limits, HUD charged the excessive amount to the participating
jurisdiction's HOME Investment Partnerships Act formula allocation.
We recommend that HUD perform periodic analyses to ensure that information
reflected on the Initiative's accomplishment reports is accurate
and coincides with the grantees' HUD-approved consolidated plans.
If any of the reported information is found to be inaccurate, HUD
needs to correct the appropriate reports and monetary figures.
Issue
Date: March 24, 2008
Audit
Report No.: 2008-KC-0002
File Size: 333.99KB
Title:
HUD Did Not Ensure That Housing Authorities Properly Administered
the Community Service and Self-Sufficiency Requirement
The
U.S. Department of Housing and Urban Development's (HUD) Office
of Inspector General audited HUD's community service and self-sufficiency
requirement (the requirement) as a result of news media reports
that the requirement is rarely enforced. Our audit objective was
to determine whether HUD ensured that housing authorities properly
administered the requirement.
We
found that HUD did not have adequate controls to ensure that housing
authorities properly administered the requirement. Specifically,
HUD did not have sufficient guidelines, adequate data collection
and reporting systems, or effective enforcement mechanisms. Of 68
statistically selected households, 44 households did not comply
with the requirement and were, therefore, ineligible for continued
occupancy. Based on these results, we estimate that housing authorities
improperly renewed or extended the leases of at least 85,000 ineligible
households costing an estimated $21.5 million in monthly operating
subsidies.
We
recommend that HUD improve its controls to ensure that housing authorities
properly administer the requirement, resulting in more than $257
million being put to better use annually. We also recommend that
HUD require housing authorities to take corrective action against
the 44 ineligible households identified as part of our statistical
sample review.
.Issue
Date: March 4, 2008
Audit Report No.: 2008-DP-0003
File Size: 1.07MB
Title:
Fiscal Year 2007 Review of Information Systems Controls in Support
of the Financial Statements Audit
(Report Not Available to the Public)
We
reviewed general and application controls for selected information
systems to assess management controls over the U.S. Department of
Housing and Urban Development’s (HUD) computing environments as
part of the Office of Inspector General’s (OIG) audit of HUD’s financial
statements for fiscal year 2007 under the Chief Financial Officer’s
Act of 1990. Our review was based on the Government Accountability
Office (GAO) "Federal Information Systems Controls Audit Manual"
and information technology guidelines established by the Office
of Management and Budget (OMB), and the National Institute of Standards
and Technology (NIST).
We
found weaknesses and deficiencies in controls that stem from HUD’s
noncompliance with (i) requirements for internal controls established
by OMB, (ii) guidance issued by NIST for securing information systems,
and (iii) HUD’s own policies and procedures. We recommend that HUD
take steps to ensure compliance with OMB requirements, NIST guidelines,
and HUD's own internal policies and procedures.
Issue
Date: March 4, 2008
Audit
Report No.: 2008-LA-0002
File Size: 948.86KB
Title:
HUD Did Not Have Adequate Internal Controls over Its FHA Appraiser
Roster
We
audited HUD's controls over the FHA appraiser roster in response
to a single-family loan origination audit that had raised concerns
about FHA appraisers and appraisals. We reviewed HUD's appraiser
roster (roster) to determine whether HUD's controls over the roster
were adequate to ensure that only qualified/eligible appraisers
were placed on the roster and whether the oversight and maintenance
of the roster were sufficient to ensure that only currently eligible
appraisers remained on the roster. HUD had significant weaknesses
in its internal controls used to maintain the roster. These weaknesses
caused the roster to contain unreliable data which included the
listing of 3,480 appraisers with expired licenses and 119 appraisers
that had been state sanctioned. Additionally, 28 of the appraisers
listed with expired licenses and eight of the sanctioned appraisers
conducted appraisals.
Specifically,
HUD
Did not conduct roster quality control reviews in accordance with
its written roster quality control plan;
Did not perform regular monitoring of the roster to ensure
data reliability;
Instructed and/or approved its contractor to use logic statements
when developing the software program that updates the roster, which
were not in accordance with HUD regulations and did not always work
properly; and
Did not retain initial application packages for all active
appraisers listed on its roster as required by HUD's record disposition
schedule.
We
recommend that HUD implement stronger internal controls to ensure
that only eligible appraisers are placed on its roster and that
oversight and maintenance of the roster are sufficient to ensure
that only eligible appraisers remain on the roster.
Issue
Date: February 14, 2008
Audit
Report No.: 2008-BO-0001
File Size: 77.63KB
Title:
Office of Multifamily Housing Boston Hub Staff Effectively Used
Contract Fee Inspectors
We
reviewed the use of contract fee inspectors by the Office of Multifamily
Housing Boston Hub (Boston Hub) as part of our 2007 annual audit
plan. This review was initiated because U.S. Department of Housing
and Urban Development (HUD) staff rely on contract fee inspectors
to oversee the work of contractors performing renovation work on
HUD-insured properties. Our objective was to determine whether the
Boston Hub effectively used contract fee inspectors to monitor and
oversee contractors renovating HUD-insured properties located within
the Boston Hub in Region 1.
Our audit did not disclose any indication that the Boston Hub did
not use contract fee inspectors effectively to monitor and oversee
contractors renovating HUD-insured properties located within the
Boston Hub in Region 1. The audit also did not disclose any indication
that the internal control structure for monitoring renovations was
not effective. We did identify a minor deficiency, which was communicated
separately through a memorandum, dated February 14, 2008, to the
Acting Director of the Boston Hub.
Based on our audit, we did not identify any reportable conditions
or deficiencies; therefore, we are not making any recommendations.
Issue
Date: February 11, 2008
Audit
Report No.: 2008-AT-0801
File Size: 327.85KB
Title:
Corrective Action Verification Miami-Dade Housing Agency Did Not
Ensure Section 8-Assisted Units Met Housing Quality Standards, Audit
Report 2006-AT-1001
HUD
OIG performed a corrective action verification of the audit recommendations
cited in the audit report, Miami-Dade Housing Agency (Agency) Did
Not Ensure Section 8-Assisted Units Met Housing Quality Standards
(2006-AT-1001) issued December 21, 2005. The purpose of the corrective
action verification was to determine if the selected audit recommendations
were implemented and the deficiencies reported in the audit report
corrected.
The
Agency disregarded the management decisions and did not implement
the promised corrective action. The Agency did not correct the housing
quality standards violations we cited in our prior audit and failed
to implement its revised Section 8 administrative plan. As a result,
the deficiencies reported in our audit report were not corrected,
and the Agency continued to violate HUD requirements.
OIG
recommended and HUD agreed with reopening recommendations 1A and
1B from our previous audit report 2006-AT-1001 because the Agency
did not implement the agreed upon corrective actions.
Issue Date: January 14, 2008
Audit
Report No.: 2008-KC-0001
File Size: 307.43KB
Title:
HUD’s Quality Assurance Division Did Not Always Resolve Materially
Deficient or Potentially Fraudulent Loans Consistently
HUD
OIG audited the U.S. Department of Housing and Urban Development's
(HUD) Quality Assurance Division because the results of some previous
OIG audits indicated that the Quality Assurance Division might not
have consistently followed its requirements.
Our objective was to determine whether HUD's Quality Assurance Division
consistently required Federal Housing Administration (FHA)-approved
lenders to indemnify loans with similar material deficiencies and
whether it appropriately handled potentially fraudulent loans.
We concluded that HUD's Quality Assurance Division did not always
resolve materially deficient or potentially fraudulent loans consistently.
As a result, HUD increased its risk of treating lenders differently
in similar situations. In addition, OIG did not have the opportunity
to pursue actions against parties responsible for fraudulent loans,
and the FHA insurance fund incurred unnecessary losses and remains
at risk for additional losses on fraudulent loans.
We recommended that HUD develop and implement effective policies
and procedures to ensure uniform resolutions to loan underwriting
deficiencies and handling potentially fraudulent loans. We also
recommended that HUD coordinate with OIG to reevaluate the agreement
between HUD and OIG regarding referring potentially fraudulent loans
to OIG. Further, we recommended that HUD require lenders to indemnify
16 insured loans that contained evidence of fraud.
Issue
Date: January 10, 2008
udit
Report No.: 2008-AT-0001
File Size: 240.82KB
Title:
The Atalanta Office of Public and Indian Housing Did Not Ensure
That the Housing Authority of DeKalb County Accurately Implemented
Its Memorandum of Agreement
As
part of HUD OIG's strategic plan, an audit was conducted of HUD's
Atlanta Office of Public and Indian Housing oversight of the Housing
Authority of DeKalb County's compliance with its memorandum of agreement.
The primary objective was to determine whether Public Housing adequately
monitored the Authority's implementation of operating improvements
required in the agreement. Specifically, the objective was to determine
whether Public Housing management controls and oversight processes
used to monitor the implementation of the agreement were adequate.
Public
Housing did not ensure that the Authority accurately implemented
its agreement. The Authority did not implement some tasks related
to financial management and procurement. As a result, the Authority
was released from its agreement without fully completing and implementing
it. Thus, HUD could not be assured that the Authority's public housing
program was managed in a manner consistent with sound financial
practices.
OIG recommended that the Deputy Assistant Secretary for Public and
Indian Housing Field Operations perform a comprehensive review of
the procurement function at the Authority to ensure the procurement
function is operating in accordance with federal and state regulations,
and perform either staff or independent public accountant on-site
review of the financial management internal controls to ensure that
the Authority has adequate financial internal controls regarding
the disbursement of funds prior approval.
Issue
Date: December 31, 2007
Audit
Report No.: 2008-NY-0001
File Size:1.68MB
Title:
HUD's Monitoring Controls and Procedures Regarding the Community
Development Block Grant Program Were Not Adequate
We
audited the U.S. Department of Housing and Urban Development's (HUD)
administration of the Community Development Block Grant (CDBG) program.
Our audit objectives were to determine whether HUD (1) had a system
to measure the impact and outcome of its significant investment
in grantees, which specifically determined whether (a) investments
demonstrated increases in neighborhood health and (b) the primary
CDBG objective of developing viable urban communities was attained,
and (2) had implemented a system to measure the impact of its monitoring
efforts for improving grantee performance and effectiveness.
HUD
performance measurements did not demonstrate how grantees were increasing
neighborhood health and attaining the primary CDBG objective of
developing viable urban communities. In addition, while HUD monitoring
of CDBG entitlement communities identified numerous grantee deficiencies
and offered meaningful recommendations for corrective actions, grantee
performance had often not improved over time.
We
recommend that HUD's Office of Community Planning and Development
(CPD) implement a system to measure the impact of its monitoring
efforts for improving grantee performance and effectiveness. Specifically,
we recommend that HUD design a performance measurement system that
allows HUD to report meaningful outcomes and not just outputs. HUD
needs to design a ranking and rating system for individual grantees
so that HUD and its stakeholders can identify and address both good
and poor performance. Further, we recommend that HUD establish controls
to ensure that CPD monitoring efforts emphasize high-impact activities
so that recommendations can focus on promoting improvements in program
participants' performance. Also, HUD should assess the impact of
its CPD monitoring on performance and increase incentives to improve
grantee performance and compliance by using all of its available
sanction authority.
Issue
Date: December 4, 2007
Audit
Report No.: 2008-AO-0001
File Size: 722.28KB
Title:
HUD Had a Less Than 1 Percent Error Rate in Housing Ineligible Participants
for KDHAP and DVP Disaster Housing Assistance
We
audited the U.S. Department of Housing and Urban Development’s (HUD)
Katrina Disaster Housing Assistance Program (KDHAP) and Disaster
Voucher Program (DVP) administered by public housing agencies. We
initiated the audit as part of our examination of relief efforts
provided by the federal government in the aftermath of Hurricanes
Katrina and Rita. Our audit objectives were to determine whether
HUD (1) properly determined the eligibility of KDHAP/DVP participants
and (2) implemented adequate measures to prevent KDHAP/DVP participants
from receiving duplicate housing assistance from other HUD housing
programs.
HUD
did not always ensure that only eligible KDHAP/DVP participants
received disaster housing assistance. This condition occurred because
during its development of the Disaster Information System, HUD included
names of participants who were not residing in HUD-assisted dwellings
immediately before the Hurricane Katrina evacuation. In addition,
HUD did not specify in the family eligibility requirements for KDHAP/DVP
that families with regular vouchers that were searching for housing
but never had a housing assistance payments contract executed on
their behalf in the disaster area were ineligible for these programs.
As a result, as of August 31, 2007, $760,317 in federal funds had
been misspent for 84 KDHAP/DVP participants who were ineligible
for disaster assistance. If ineligible costs continue to be incurred,
HUD could spend an additional $153,808 on ineligible participants
from September 2007 to the end of the program. However, these 84
participants count as less than 1 percent of the total number of
participants according to the KDHAP Information System.
We
will report the results of our review regarding the adequacy of
HUD’s measures to prevent duplicate housing assistance in a separate
audit report.
We
recommend that HUD’s Director of Housing Voucher Programs take appropriate
actions deemed necessary to recover or write off the $760,317 in
federal funds that was misspent on 84 ineligible participants, immediately
cease paying funding on the participants ineligible for KDHAP and/or
DVP to prevent misspending $153,808 in federal funds, and take appropriate
actions to remove any other ineligible participants from the Disaster
Information System.
Issue
Date: November 14, 2007
Audit
Report No.: 2008-FO-0003
File Size: 489.25KB
Title:
Additional Details to Supplement Our Report on the U.S. Department
of Housing and Urban Development's Fiscal Years 2007 and 2006 Financial
Statements
In
this report, we provide additional details to supplement our Report
on the U.S. Department of Housing and Urban Development's (HUD)
Fiscal Years 2007 and 2006 Financial Statements, which is included
in HUD's Fiscal Year 2007 Performance and Accountability Report.
In OIG'S opinion, based on our audit and the reports of other auditors,
the financial statements were presented fairly, in all material
respects, in conformity with accounting principles generally accepted
in the United States of America.
The
report identifies (a) two material weaknesses, (b) eight significant
weaknesses, and (c) one instance of noncompliance with applicable
laws and regulations. The report discusses each of these conditions
in detail, provides an assessment of actions taken by HUD to mitigate
the deficiencies noted, and makes recommendations for corrective
actions. During the course of the audit, OIG also identified several
matters that are not material to the financial statements and are
being reported separately to HUD management.
Issue
Date: November 8, 2007
Audit
Report No.: 2008-FO-0002
File Size: 7.21MB
Title:
Audit of the Federal Housing Administration’s Financial Statements
for Fiscal Years 2007 and 2006
This
report presents the results of Urbach Kahn and Werlin LLP's audit
of the Federal Housing Administration's (FHA) financial statements
for the years ended September 30, 2007 and 2006.
In Urbach Kahn and Werlin's opinion, FHA's principal financial statements
are presented fairly, in all material respects, in conformity with
accounting principles generally accepted in the United States of
America.
The report identifies three significant deficiencies. Two of those
significant deficiencies, relating to FHA's Home Equity Conversion
Mortgage system and subsidy cash flow model, are considered to be
material weaknesses. The report did not identify any instances of
non-compliance with laws and regulations. During the course of the
audit, Urbach, Kahn, and Werlin also noted other matters that are
not material to the financial statements and are being separately
communicated to FHA management.
Issue
Date: November 7, 2007
Audit
Report No.: 2008-FO-0001
File Size: 358.62KB
Title:
Audit of the Government National Mortgage Association’s (Ginnie
Mae) Financial Statements for Fiscal Years 2007 and 2006
This
report presents the results of Carmichael, Brasher, Tuvell and Company's
audit of the Government National Mortgage Association's (Ginnie
Mae) financial statements for the years ended September 30, 2007
and 2006.
In
Carmichael, Brasher, Tuvell and Company's opinion, the financial
statements present fairly, in all material respects, the financial
position of Ginnie Mae as of September 30, 2007 and September 30,
2006 and the results of its operations and its cash flows for the
years then ended, in conformity with accounting principles generally
accepted in the United States of America.
In addition to Carmichael, Brasher, Tuvell and Company's unqualified
opinion on Ginnie Mae's financial statements, the audit report contains
one significant deficiency in Ginnie Mae's internal controls and
no material weaknesses or reportable instances of noncompliance
with laws, regulations, and provisions of contracts. Carmichael,
Brasher, Tuvell and Company noted other matters involving internal
control and its operation that are not material to the financial
statements and are being reported separately to Ginnie Mae's management.
Issue
Date: November 5, 2007
Audit
Report No.: 2008-LA-0001
File Size: 1.28MB
Title:
The Los Angeles Multifamily Hub Did Not Properly Monitor Its Performance-Based
Contract Administrator, Los Ang |