We conducted an attestation review of the U.S. Department of Housing and Urban Development (HUD), Office of Special Needs Assistance Continuum of Care Program, regarding reporting of drug control accounting and associated management assertions for fiscal year 2017.  The objective of our attestation review was to and to provide negative assurance on HUD’s drug control accounting reporting to the Office of National Drug Control Policy (…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited Federal Housing Administration (FHA)-insured loans from calendar year 2016.  Our audit objective was to determine whether FHA insured loans to borrowers with delinquent Federal debt or who were subject to Federal administrative offset for delinquent child support.FHA insured an estimated 9,507 loans worth $1.9 billion, which were not eligible…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), conducted a review of a Federal Housing Administration (FHA) home equity conversion mortgage (HECM) underwritten by MetLife Home Loans, LLC.  MetLife is an FHA-approved mortgage lender with its principal place of business located in Irving, TX. On June 9, 2017, HUD notified MetLife and the borrower’s son of their potential liability under the…

We audited information system controls over the U.S. Department of Housing and Urban Development’s (HUD) computing environment.  This review was conducted as part of our audit of HUD’s financial statements for fiscal year 2017 under the Chief Financial Officer’s Act of 1990.  Our objective was to assess general controls over HUD’s computing environment for compliance with HUD information technology policies and Federal information…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited CitiMortgage’s processing of partial claims.  Our audit objective was to determine whether CitiMortgage filed for partial claims only after completing the loan modifications and reinstating the loans. CitiMortgage improperly filed for 66 partial claims before completing the loan modifications and reinstating the loans. The Federal Housing…

We audited the U.S. Department of Housing and Urban Development’s (HUD) process for ensuring that nonpayment orders adequately prevented the payment of claims on Federal Housing Administration (FHA) loans.  The audit was initiated in response to an Office of Inspector General preaudit analysis of HUD data, which determined that nonpayment orders may not always prevent claims from being paid.  Our audit objective was to determine…

We audited general and application controls over selected Federal Housing Administration (FHA) information systems and the credit reform estimation and reestimation process as part of the internal control assessments required for the fiscal year 2017 financial statement audit under the Chief Financial Officer’s Act of 1990.  Our objective was to review the controls for compliance with U.S. Department of Housing and Urban Development (HUD)…

The U.S. Department of Housing and Urban Development, Office of Inspector General (HUD OIG), has completed its annual risk assessment of HUD’s charge cards as required by the Government Charge Card Abuse Prevention Act of 2012, Public Law 112-194, and Office of Management and Budget (OMB) Memorandum M-13-21.  Our objective was to analyze the risks of illegal, improper, or erroneous purchases in HUD’s fiscal year 2016 travel and purchase…

This briefing paper highlights challenges the Department of Housing and Urban Development (HUD) faces in managing and improving its Information Technology (IT) program.  This document analyzed past HUD OIG and GAO IT related reports and recommendations to highlight key management challenges in HUD’s IT program. We are highlighting these challenges so HUD leadership is aware of and can be better prepared to address them. The OIG has…

HUD has a contract with Leidos Innovations Corporation for E-Discovery services using the E-Discovery Management System.  The process for collecting electronically stored information (ESI) and delivering it to customers has two major subprocesses: (1) an initial ESI collection and (2) a keyword search to refine the initial collection results.  OGC’s and Leidos’ collection of ESI does not meet customer demand because processing ESI…

In accordance with the Chief Financial Officers Act of 1990, as amended, we are required to annually audit the consolidated financial statements of the U.S. Department of Housing and Urban Development (HUD) and the stand-alone financial statements of the Federal Housing Administration and the Government National Mortgage Administration (Ginnie Mae). Our objective was to express an opinion on the fairness of HUD’s consolidated financial…

This report was reissued on December 6, 2017 to correct an error in recommendation 2G found in Finding 2.  Recommendation 2G now reflects the correct prior year recommendation that must be reopened. We are required to audit the consolidated financial statements of the U.S. Department of Housing and Urban Development (HUD) annually in accordance with the Chief Financial Officers Act of 1990 as amended. This report supplements our…

In accordance with the statutory requirements of the Digital Accountability and Transparency Act of 2014 (DATA Act) and standards established by the Office of Management and Budget (OMB), we audited the U.S. Department of Housing and Urban Development’s (HUD) Office of the Chief Financial Officer’s (OCFO) compliance with the DATA Act for the second quarter of fiscal year 2017. In the DATA Act Compliance Audit of the U.S. Department of Housing…

The Federal Information Security Modernization Act of 2014 (FISMA) directs Inspectors General to conduct an annual evaluation of the agency information security program.  FISMA, Department of Homeland Security (DHS), Office of Management and Budget (OMB) and National Institute of Standards and Technology (NIST) establish information technology (IT) security guidance and standards for Federal agencies. We conducted this evaluation to assess…

We audited BLM Companies LLC, a contracted field service manager in HUD’s real estate-owned Management and Marketing III program, as part of the activities included in our 2017 annual audit plan and because it was the sole contractor performing property preservation and protection services for U.S. Department of Housing and Urban Development (HUD)-acquired properties located in Ohio.  Our audit objective was to determine whether BLM…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General audited HUD’s rulemaking process for its single family note sales program.  This is the second in a series of audits on the note sales program.  The previous audit, 2017-KC-0006, reported that HUD did not conduct rulemaking or develop formal procedures for its single-family note sales program.  This audit examines a different aspect of the…

We audited the U.S. Department of Housing and Urban Development’s (HUD) oversight of safe water requirements for Federal Housing Administration (FHA)-insured loans nationwide.  We conducted the audit based on news reports that identified lead contamination in public water systems across the country and also because of an audit in which we found that HUD did not have adequate controls to ensure that FHA-insured properties located in Flint,…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Department of Justice (DOJ) and the U.S. Attorney’s Offices, District of New Jersey, District of Minnesota, and Southern District of Florida, in the civil investigation of PHH Corporation, PHH Mortgage Corporation (PHHMC), and PHH Home Loans, LLC (PHHHL), collectively referred to as PHH.  PHH was a direct endorsement lender…

The U.S. Department of Housing and Urban Development (HUD), Office of Inspector General (OIG), assisted the U.S. Department of Justice (DOJ) and the U.S. Attorney’s Office for the Southern District of New York in a civil investigation of Residential Home Funding Corp.  Residential Home is a Federal Housing Administration (FHA)-approved mortgage lender having its principal place of business in White Plains, NY. On September 18, 2017,…

We audited the functionality of the U.S. Department of Housing and Urban Development’s (HUD) New Core Financial Management Solution as part of the internal control assessments required for the fiscal year 2017 financial statement audit under the Chief Financial Officer’s Act of 1990.  Our objective was to determine whether effective business processes and interface processing controls were in place for the New Core Financial Management…