This report presents the results of our audit of the U.S. Department of Housing and Urban Development’s (HUD) fiscal year 2016 compliance with the Improper Payments Elimination and Recovery Act of 2010 (IPERA).

For the fourth consecutive fiscal year,  we determined that HUD did not comply with IPERA.  Of the six requirements, HUD complied with four (compliance determinations a, c, d, and f) and did not comply with the remaining two (compliance determinations b and e).  HUD also did not comply with IPERA in fiscal years 2013, 2014, and 2015.  Specific areas of noncompliance for fiscal year 2016 were related to HUD’s failure to (1) conduct an annual risk assessment in accordance with the Office of Management and Budget guidance and (2) meet its annual improper payment reduction target.  This was the same issue we noted in our fiscal year 2015 audit report.  Additionally, we found similar issues again in fiscal year 2016 concerning (1) the completeness and reliability of HUD’s improper payment data reporting, including payment recapture audit plans, and (2) the reliability of HUD’s improper payment estimate for its Rental Housing Assistance Programs.

We made five new recommendations in this year’s report to address new issues identified.  We expect these recommendations will help remediate issues identified in HUD’s payment recapture audit plans and reporting of improper payment information in the agency financial report.