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September 27, 2013
  • Chief Financial Officer
2013-IE-0804

We completed an evaluation of the U.S. Department of Housing and Urban Development’s (HUD) property inventory system.  The evaluation was performed at the request of Office of Inspector General (OIG) management due to long standing issues with HUD’s property inventory system.  Our objectives were to determine why HUD did not have a properly working property inventory system in place and the status of procuring a new property inventory system.

HUD did not have a properly working property inventory system in place.  HUD had experienced significant problems and delays in getting FIRMS operational and continued to be noncompliant with the Joint Financial Management Improvement Program (JFMIP) requirements.  The main problem was the expiration of the FIRMS support contract.  As a result of the expired contract, HUD had no contractor in place to test FIRMS before changing the operating system to Windows 7 in 2013.  As of the end of our review, the planned new property inventory management system had not been purchased since the appropriate funding was not available.  Instead, HUD procured upgraded FIRMS supporting software in September 2012.  However, HUD did not obtain a contractor to upgrade and maintain FIRMS until May 2013.  At the conclusion of our review, FIRMS remained noncompliant with JFMIP standards and did not meet HUD’s needs.  As a result, HUD had no assurance that its assets were accounted for properly.  Additionally, HUD’s inventory was left vulnerable to loss, theft, or misappropriation.

We recommended that the Office of Chief Human Capital Officer test the upgraded FIRMS to determine whether the upgrade meets its needs and advise the Financial Office and Information Office of any deficiencies.  We also recommended that the Office of Chief Financial Officer adhere to the CFO Act of 1990 by ensuring that HUD has a properly working property inventory system in place and coordinate with the Human Capital Office, Information Office, and Procurement Office to develop and implement a properly working, JFMIP compliant property management system by the end of fiscal year 2014.