The U.S. Department of Housing and Urban Development – Office of Inspector General audited HUD’s fiscal year 2013 compliance with the user fee requirements in Office of Management and Budget Circular A-25 and the Chief Financial Officers (CFO) Act of 1990.  We initiated the audit based on observations in our audit of the Federal Housing Administration (FHA) annual lender renewal process (Audit Report No. 2010-KC-0002, issued August 6, 2010).  We noted that FHA had not updated its user fees for participation in the FHA program since 1993.  Our audit objective was to determine whether HUD complied with the user fee requirements of The CFO Act and Circular A-25.

HUD’s Office of the Chief Financial Officer (OCFO) had not always implemented its user fee policy in HUD CFO Handbook 1830.6, REV-1, which is designed to comply with Circular A-25 and CFO Act requirements for user fee reviews.  OCFO did not consider other user fees material in comparison to primary collections from insurance fees and loan guarantee fees at FHA and the Government National Mortgage Association.  As a result, HUD may not recover potential fee revenue from beneficiaries of its programs.

We recommend that HUD implement HUD CFO Handbook 1830.6, REV-1, publish a user fee schedule, and address HUD’s user fees in its CFO report.  OCFO planned to implement the HUD CFO Handbook 1830.6, REV-1, procedures in the next HUD budget process.