We performed an audit of the U.S. Department of Housing and Urban Development’s (HUD) property and equipment. We performed this audit as a result of recurring findings relating to HUD’s property and equipment reported in the fiscal years 2004 through 2008 management letters. Our objective was to determine whether HUD properly recorded and tracked the acquisition and disposal of its capitalized and other accountable property and equipment.

We found that not all purchases of accountable equipment were recorded in HUD’s inventory management system, the Facilities Integrated Resource Management System (FIRMS). Additionally, HUD lacked sufficient purchase documentation for accountable equipment in FIRMS. We also noted deficiencies in FIRMS and that HUD’s inventory policies and procedures need to be updated. We found that HUD was properly recording and tracking its capitalized equipment.

We recommend that the Deputy Assistant Secretary of the Office of the Chief Human Capital Officer (1) work with the Office of the Chief Information Officer to develop and implement a system which would allow OFMS to identify when equipment is purchased; (2) update and reissue the standard operating procedures for reporting the purchases of equipment and implement a set of standard operating procedures for users of purchase cards; (3) coordinate with the Office of the Chief Financial Officer, Office of the Chief Information Officer, and Office of the Chief Procurement Officer to develop and implement system interfaces; (4) develop and implement a process that can distinguish between capitalized and expensed equipment in FIRMS.

We further recommend that the Chief Procurement Officer and Chief Information Officer work with OFMS to ensure that their employees are properly trained in the procedures for identifying which equipment needs to be reported and are aware of the requirement to report the purchase and in some instances, the lease of equipment to OFMS.