U.S. flag

An official website of the United States government Here’s how you know

The .gov means it’s official.

Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you're on a federal government site.

The site is secure.

The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

Document
Document

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 financial reporting and (2) compliance with laws, regulations, contracts, and grant agreements and other matters.  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

  • That FHA’s financial statements as of and for the fiscal year ended September 30, 2023 and 2022, were presented fairly, in all material respects, in accordance with U.S. generally accepted accounting principles.
  • No material weaknesses for fiscal year 2023 in internal control over financial reporting, based on limited procedures performed. 
  • One significant deficiency for fiscal year 2023 in internal control over financial reporting, based on the limited procedures performed.  The significant deficiency was related to weaknesses in internal controls over loans receivable.
  • No reportable noncompliance issues for fiscal year 2023 with provisions of applicable laws, regulations, contracts, and grant agreements or other matters.

In connection with the contract, we reviewed CLA’s reports and related documentation and questioned its representatives.  Our review, as differentiated from an audit of the financial statements in accordance with U.S. generally accepted government auditing standards, was not intended to enable us to express and we do not express opinions on FHA’s financial statements or conclusions about (1) the effectiveness of FHA’s internal control over financial reporting and (2) FHA’s compliance with laws, regulations, contracts, and grant agreements or other matters.  CLA is responsible for the attached Independent Auditors’ Report, dated November 13, 2023, and the conclusions expressed therein.  Our review disclosed no instances in which CLA did not comply, in all material respects, with U.S. generally accepted government auditing standards.

FHA’s audited financial statements are included in FHA’s Annual Management Report which can be found at- FHAFY2023ANNUALMGMNTRPT.PDF (hud.gov).

Recommendations

Housing

  •  
    Status
      Open
      Closed
    2024-FO-0002-001-A
    Closed on August 27, 2024

    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.

  •  
    Status
      Open
      Closed
    2024-FO-0002-001-B
    Closed on June 18, 2024

    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.

  •  
    Status
      Open
      Closed
    2024-FO-0002-001-C
    Closed on April 08, 2024

    Consider accounting implications to the gross HECM loans receivable balance for the $20 million lost in security interests.

  •  
    Status
      Open
      Closed
    2024-FO-0002-001-D
    Closed on May 07, 2024

    Record an adjusting entry to remove the duplicate $44 million from the gross HECM loans receivable balance as of September 30, 2023.

  •  
    Status
      Open
      Closed
    2024-FO-0002-001-E
    Closed on July 11, 2024

    Identify and remove all duplicate transactions from the accounting module and prevent future occurrences.

  •  
    Status
      Open
      Closed
    2024-FO-0002-001-F
    Closed on August 14, 2024

    Develop and enhance training for servicing the HECM portfolio.

  •  
    Status
      Open
      Closed
    2024-FO-0002-001-G
    Closed on August 15, 2024

    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.