We completed a corrective action verification regarding the recommendations made to the U.S. Department of Housing and Urban Development’s (HUD) Office of Single Family Program Development pertaining to our review of HUD’s monitoring of the Housing Counseling Assistance Program, Audit Report 2006-NY-0001, issued June 8, 2006. The purpose of the corrective action verification was to determine whether the audit recommendations had been implemented and the deficiencies cited in the report had been corrected.

HUD officials had generally implemented management decisions to address the recommendations in the report. Specifically, five of the seven recommendations cited in the report had been corrected. Thus, two management decisions had not fully corrected the deficiencies identified in the audit report since either they were ineffective or HUD officials had made additional Program changes. Specifically, the controls HUD officials established for housing counseling agencies that were intended to ensure an accurate account of clients counseled with HUD funds and the outcomes of the counseling were not effective. Also, HUD could not accurately measure the impact of grant funds on meeting the Program objectives.

We recommended that the Acting Deputy Assistant Secretary, Single Family Housing, reopen recommendations 1A and 1C in HUD’s Audit Resolution and Corrective Action Tracking System, which were to establish controls for housing counseling agencies that will ensure an accurate account of clients counseled with HUD funds and the outcome of this counseling and to provide justifications that the funds allocated to the Program are an efficient use of resources.