Audits of For-Profit Program Participants
Profit-motivated program participants, such as HUD-approved lenders, mortgage-backed security issuers, multifamily project owners, and others, are subject to the U.S. Department of Housing and Urban Development’s (HUD) uniform financial reporting standards set forth in 24 CFR (Code of Federal Regulations) Part 5, Subpart H; and 24 CFR Part 202.5(g) and related mortgagee letters. HUD requires an audit that consists of two components: a financial statement audit of the entity and a compliance audit of the entity’s major HUD programs.
The audit, conducted by an independent certified public auditor, must be performed in accordance with generally accepted auditing standards (GAAS), issued by the American Institute of Certified Public Accountants (AICPA), and generally accepted government auditing standards (GAGAS), issued by the Comptroller General of the United States. For Securities and Exchange Commission registrants, the financial statement audit may be performed in accordance with the standards of the Public Company Accounting Oversight Board (PCAOB) and GAGAS.
The compliance audit is to be conducted in accordance with the HUD Consolidated Audit Guide, which requires that the auditor perform procedures that enable the auditor to opine on whether the entity has complied with laws, regulations, and the provisions of contracts or grant agreements applicable to its major HUD programs.
Single Audits for Non-Federal Program Participants
Non-federal program participants, such as states, local governments, and non-profit organizations, are subject to reporting standards according to the Single Audit Act Amendments of 1996 and the Office of Management and Budget (OMB) Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). The single audit is generally conducted by an independent certified public accountant or state auditor and is intended to assess whether the recipient spends federal funds properly.
HUD and HUD OIG’s role in Single Audits
HUD provides assistance to independent public accountants who have questions on HUD program requirements and procedures.
In addition, HUD queries the Federal Audit Clearinghouse to identify single audit reports that contain HUD findings affecting HUD programs and evaluates the findings contained in these reports. HUD ensures management decisions and corrective action plans are documented. HUD also performs quality assurance reviews of independent public accountants (IPAs) who perform audits and attestations of HUD-assisted multifamily projects, public housing agencies (PHAs), and single family lenders.
HUD Office of the Inspector General's (OIG) single audit coordinator provides technical assistance on questions about audit procedures for HUD-required and single audits.
Contacts for HUD or HUD OIG staff
For questions about audit procedures contact the HUD OIG Single Audit Coordinator at HUDOIGSingleAuditCoordinator@hudoig.gov or 866-492-1740. Please provide your name, a brief description of the issue, and your contact information. We aim to respond to you within 24 hours during normal business hours.
For questions about HUD program requirements or procedures:
*included in the 2017 Compliance Supplement
For questions to HUD program management on specific HUD program requirements and procedures included in the Consolidated Audit Guide:
|Multifamily Housing, chapter 3||(202) 402-3730|
|Development Cost Certifications, chapter 5||(202) 708-0614, ext. 2559|
|Ginnie Mae Issuer of Mortgage-Backed Securities, chapter 6||(202) 708-1535|
|FHA-Approved Lenders Audit Guidance, chapter 7||(202) 755-7400|
HUD contact numbers are also located in the Consolidated Audit Guide for Audits of HUD Programs.
Information for Independent Public Accountants and Clients About Audits of HUD Programs
- HUD Consolidated Audit Guide
The audit guide is intended to assist independent auditors in performing audits of profit-motivated program participants in selected HUD Housing and Ginnie Mae programs that are subject to HUD’s uniform financial reporting standards (See 24 CFR (Code of Federal Regulations) Part 5, Subpart H, and 24 CFR Part 202.5(g)).
- Office of Management and Budget (OMB)
The OMB home page provides Internet users access to a broad range of OMB documents, including the President’s budget and related material, OMB circulars and bulletins, status reports on OMB’s regulatory and paperwork management programs, Federal Register submissions, and other OMB significant reports.
- U S. Government Accountability Office (GAO)
The Generally Accepted Government Auditing Standards, also known as the Yellow Book, provides a framework for conducting high-quality audits with competence, integrity, objectivity, and independence. The Yellow Book is used by auditors of government entities, entities that receive government awards, and other audit organizations performing Yellow Book audits. It outlines the requirements for audit reports, professional qualifications for auditors, and audit organization quality control. Auditors of federal, state, and local government programs use these standards to perform their audits and produce their reports.
The 2018 revision of the Yellow Book is effective for financial audits, attestation engagements, and reviews of financial statements for periods ending on or after June 30, 2020, and for performance audits beginning on or after July 1, 2019. Early implementation is not permitted.
- Federal Audit Clearinghouse
The Federal Audit Clearing House operates on behalf of the OMB. Its primary purposes are to:
- Distribute single audit reporting packages to Federal agencies.
- Support OMB oversight and assessment of Federal award audit requirements.
- Maintain a public database of completed audits.
- Help auditors and auditees minimize the reporting burden of complying with Circular A-133 audit requirements.
- AICPA Government Audit Quality Center (GAQC)
The AICPA Government Audit Quality Center (GAQC) promotes the importance of quality governmental audits and provides critical and time sensitive information about governmental audit developments, single audit practice aids, and other resources to CPA firms and state audit organizations that perform governmental audits.
- CIGIE Guide for Quality Control Reviews
This guide is effective for QCRs of single audits conducted in accordance with the Uniform Guidance for audits of fiscal years beginning on or after December 26, 2014. It is intended that this guide serve as the minimum documentation to support the QCR. This guide revision addresses the changes to Single Audits under the Uniform Guidance.
Agencies may modify or supplement this guide to meet their needs.
- Determine whether the audit was conducted in accordance with applicable standards, which include Generally Accepted Government Auditing Standards (GAGAS) and Generally Accepted Auditing Standards (GAAS), and meets the requirements of Office of Management and Budget (OMB) Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).
- Identify any follow-up work needed to support the conclusions and opinions contained in the reporting package.
- Identify issues that may require appropriate management official attention. The QCRs performed with this guide may provide evidence of the reliability of the Uniform Guidance single audits for auditors of Federal agency financial statements, such as those required by the Chief Financial Officers Act, and others.