We contracted with the independent public accounting firm of CliftonLarsonAllen LLP (CLA) to audit the financial statements of HUD as of and for the fiscal years ended September 30, 2021 and 2020,1 and to provide reports on HUD’s 1) internal control over financial reporting; and 2) compliance with laws, regulations, contracts, and grant agreements and other matters, including whether financial management systems complied substantially with the requirements of the Federal Financial Management Improvement Act of 1996 (FFMIA). 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 HUD, 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 weakness2 and one significant deficiency3 in internal control over financial reporting, based on the limited procedures that it performed.
- A material weakness existed related to HUD and Federal Housing Administration(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.
- Two reportable matters of noncompliance with provisions of applicable laws, regulations, contracts, and grant agreements or other matters.
- Noncompliance with federal financial management system requirements, federal accounting standards, and the U.S. Standard General Ledger at the transaction level.
- Noncompliance with the Single Audit Act.
This report, along with the audited financial statements, is included in HUD’s Agency Financial Report, which is available at https://www.hud.gov/sites/dfiles/CFO/documents/afr2021.pdf