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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, 2021 and 2020, and to provide reports on FHA’s 1) internal control over financial reporting; and 2) compliance with laws, regulations, contracts, and grant agreements in its financial reporting.  Our contract with CLA required that the audit be performed in accordance with U.S. generally accepted government auditing standards, Office of Management and Budget audit requirements, and the Financial Audit Manual of the U.S. Government Accountability Office and the Council of the Inspectors General on Integrity and Efficiency.

In its audit of FHA, CLA reported:

  • The consolidated financial statements as of and for the fiscal year ended September 30, 2021, are presented fairly, in all material respects, in accordance with U.S. generally accepted accounting principles.
  • One material weakness and one significant deficiency in internal control over financial reporting, based on the limited procedures that it performed.
  • A material weakness existed related to FHA controls over financial accounting and reporting. 
  • A significant deficiency existed related to FHA econometric modeling activities used to estimate the agency’s loan guarantee liability.
  • No reportable noncompliance issues for fiscal year 2021 with provisions of applicable laws, regulations, contracts, and grant agreements tested and no other matters.

This report, along with the audited financial statements, is included in FHA’s Annual Management Report, which is available at https://www.hud.gov/program_offices/housing/hsgrroom/fhaamr