Consider accounting implications to the gross HECM loans receivable balance for the $20 million lost in security interests.
Publication Report
2024-FO-0002 | November 13, 2023
Audit of FHA’s Fiscal Years 2023 and 2022 Financial Statements
We contracted with the independent public accounting firm of CliftonLarsonAllen LLP (CLA) to audit the financial statements of FHA as of and for the fiscal years ended September 30, 2023 and 2022, and to provide reports on FHA’s (1) internal control over… moreRelated Recommendations
Housing
Develop a plan and a timeline that ensures all due and payable partial claims are transferred to the FOC, and subsequently processed by the FOC.
Develop and implement procedures to i) monitor the transfer of due and payable partial claims from NSC to the FOC for collection, ii) determine the financial statement impact of not referring due and payable partial claims to the FOC, and iii) decide when FHA will record a reclassification entry to accounts receivable for those due and payable partial claims that are not transferred to the FOC timely.
Record an adjusting entry to remove the duplicate $44 million from the gross HECM loans receivable balance as of September 30, 2023.
Identify and remove all duplicate transactions from the accounting module and prevent future occurrences.
Develop and enhance training for servicing the HECM portfolio.
Develop corrective procedures to bring the HECM portfolio servicing current, initiate collection proceedings for due and payable loans, redeem the tax certificates for properties for which FHA lost its security interest, and implement a solution to monitor tax payments to prevent tax delinquencies and avoid FHA’s risk of loss in loan security interest.