The U. S. Department of Housing and Urban Development (HUD), Office of Inspector General audited HUD’s Real Estate Assessment Center (REAC) to determine whether it ensured that independent auditors followed Statement on Auditing Standards (SAS) 99 audit requirements.

REAC did not always ensure that independent auditors followed SAS 99 requirements. It did not identify deficiencies in 10 of the 11 deficient engagements we reviewed. For the one other engagement, REAC identified a SAS 99 deficiency but did not include it in its report. This condition occurred because REAC did not have standard procedures for addressing each SAS 99 requirement on its review checklist.

We recommend that the Deputy Assistant Secretary for Public and Indian Housing create and implement standard procedures that address each SAS 99 requirement and conclusions made on its review checklist.