Perform a complete agency-wide fraud risk assessment (which incorporates the fraud risk assessments performed at the program level) and use the results to develop and implement an agency-wide plan to move HUD’s fraud risk management program out of the ad hoc phase.

Status

HUD has made steady progress in building its Fraud Risk Management program. In FY2024, HUD received Congressional approval to establish the Office of the Chief Risk Officer (OCRO). With its Fraud Risk Management Policy in place since 2022, OCRO worked with the HUD Risk Management Council to develop the Department’s approach and establish a cross-functional approach for Fraud Risk Management program accountability. The CRO also completed a fraud risk exposure assessment method that enables the Department to provide a risk-based approach to prioritize program fraud risk assessments and a department-level Fraud Risk Management Playbook to align HUD’s cross-functional activities and accountability to the GAO Fraud Risk Framework and CFO Council practices. The CRO is also working on tools and templates that are being customized for HUD program offices to help them complete their fraud risk assessments. Priority program offices are targeted to complete fraud risk assessments in 2025.

Analysis

While HUD has made progress in the area of fraud risk management, there is still work to be done for HUD to complete an entity wide fraud risk assessment. HUD's exposure analysis will help it to determine where to focus its efforts. The Department still needs to conduct program specific fraud risk assessments. Based on the demonstration by MFH, we believe that MFH has made great progress in its fraud risk assessment, and we are encouraged that it has identified areas of weakness that it plans to target. However, PIH and CPD have not been able to demonstrate progress in this area. We believe that the tools and templates the OCRO is developing, along with the continued support, will help PIH and CPD to complete these assessments.

To fully address this recommendation, HUD must provide evidence that it has performed an agency-wide fraud risk assessment performed at the program level, adopted and implemented its fraud risk assessment program departmental policy and that each HUD program office has established office-specific risk programs.