In accordance with the Chief Financial Officers Act of 1990, as amended, we are required to

annually audit the consolidated financial statements of the U.S. Department of Housing and

Urban Development (HUD) and the stand-alone financial statements of the Federal Housing

Administration and the Government National Mortgage Administration (Ginnie Mae). Our

objective was to express an opinion on the fairness of HUD’s consolidated financial statements

in accordance with U.S. generally accepted accounting principles (GAAP) applicable to the

Federal Government. This report presents our independent auditor’s report on HUD’s fiscal

years 2018 and 2017 (restated) consolidated financial statements and reports on internal controls

and compliance with laws and regulations.

 

We expressed a disclaimer of opinion on HUD’s fiscal years 2018 and 2017 (restated)

consolidated financial statements because of the significant effects of certain unresolved audit

matters, which restricted our ability to obtain sufficient, appropriate evidence to express an

opinion. These unresolved audit matters relate to (1) the $3 billion in nonpooled loan assets

from Ginnie Mae’s stand-alone financial statements that we could not audit due to inadequate

support and (2) noncompliant GAAP accounting for assets and budgetary resources. This report

contains five material weaknesses, four significant deficiencies, and five instances of

noncompliance with applicable laws and regulations. Additional details on the material

weaknesses, significant deficiencies, and instances of noncompliance with laws and regulations

and related recommendations are included in separate audit reports entitled (1) Additional

Details To Supplement Our Fiscal Years 2018 and 2017 (Restated) U.S. Department of Housing

and Urban Development Financial Statement Audit, audit report 2019-FO-0003; (2) Audit of the

Federal Housing Administration Financial Statements for Fiscal Years 2018 and 2017 (Restated),

audit report 2019-FO-0002; and (3) Audit of the Government National Mortgage Association’s

Financial Statements for Fiscal Years 2018 and 2017 (Restated), audit report 2019-FO-0001.

 

We make no recommendations in this report because it is supplemented by three separate reports

as described above to provide specific recommendations to HUD management.

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