We audited the U.S. Department of Housing and Urban Development’s (HUD) field review appraisal process. This audit was conducted as part of the HUD Office of Inspector General’s (OIG) fiscal year 2011 annual audit plan and was designed to follow up on selected findings in OIG’s Audit Report 2008-LA-0003 on the appraiser review process. Our objective was to determine whether HUD (1) ensured that field review appraisers complied with the appraisal review process requirements and (2) paid contractors according to the scope of work performed.

We found that HUD had ensured that the field review appraisers complied with the interior review inspection requirements and the contract field reviews appraisers were paid according to the scope of work performed. However, HUD’s statement of work for appraisal field review services did not always require sufficient confirmation of an interior review. As a result, we recommend that the Acting Deputy Assistant Secretary for Single Family Housing amend the statement of work for appraisal field review services to require that an interior photograph be taken in all instances in which an interior review is performed.