We audited the Office of the Chief Procurement Officer’s (procurement office) procedures for closing out completed and expired Government National Mortgage Association (Ginnie Mae) contracts in compliance with applicable regulations. This audit was part of our audit plan for fiscal year 2010. Our objective was to determine whether the procurement office performed timely closeouts on completed and expired Ginnie Mae contracts.

The procurement office did not obtain documentation from Ginnie Mae to close out completed and expired Ginnie Mae contracts in a timely manner. The procurement office did not follow the Federal Acquisition Regulation (FAR) and U.S. Department of Housing and Urban Development (HUD) guidelines for contract closeout procedures. In addition, Ginnie Mae did not follow HUD’s guidelines for contract closeout. The procurement office did not have access to Ginnie Mae’s financial systems or data and Ginny Mae did not always retain documentation needed to close aged contracts.

We recommended that HUD’s Chief Procurement Officer (1) ensure that her staff follows the closeout procedures and the FAR time standards for closing out contracts and (2) clearly define the type and frequency of financial data Ginnie Mae needs to provide to the procurement office to close out contracts.

We recommended that the President of Ginnie Mae require his staff to (1) follow the procurement office’s policies and procedures for closing out contracts, (2) retain complete contract files until contracts are formally closed, and (3) routinely provide the required financial data to HUD’s procurement office.