We audited the U.S. Department of Housing and Urban Development's ability to comply with the requirements of Office of Management and Budget (OMB) Circular A-127, which was revised in January 2009 and became effective on October 1, 2009. We conducted the audit as a component of the audit of HUD's consolidated financial statements for fiscal year 2010 under the Chief Financial Officer's Act of 1990. We found that HUD did not fully comply with the requirements of OMB Circular A-127. Specifically, HUD had not (1) initiated plans to review financial management systems for compliance with computer security and internal control guidelines; and (2) accurately identified HUD's financial management systems within its financial system inventory listing. Additionally, although progress has been made, we continue to have concerns regarding HUD's integrated core financial system. We recommended that the Office of the Chief Financial Officer take appropriate steps to move into compliance with the requirements of OMB Circular A-127.