Gov’t Watchdog: HUD’s Financial Books Are Impossible To Audit

Andrew Harrer-Pool/Getty Images

Daily Caller News Foundation logo
Ethan Barton Editor in Chief
Font Size:

A government watchdog says it can’t audit billions in Department of Housing and Urban Development (HUD) spending because the agency’s financial books are kept so poorly.

HUD’s financial statements and systems are missing records, inaccurate and sometimes even violated federal laws, according to a HUD inspector general report released Monday. Included among the programs with useless financial accounting records is nearly $20 billion at the Government National Mortgage Association.

“This audit report contains nine material weaknesses, eight significant deficiencies in internal controls and six instances of noncompliance with applicable laws and regulations,” the report says. “These weaknesses were due to an inability to establish a compliant control environment, implement adequate financial accounting systems, retain key financial management staff and identify appropriate accounting principles.”

HUD’s financial office “recognized there were some weaknesses within its operations,” but “did not have adequate time to sufficiently” confirm the IG’s findings, the report says.

The IG can’t audit $19.8 billion in Ginnie Mae’s purse “because of the inaccurate reporting from its budgetary system,” the report says. Specifically, Ginnie Mae — a HUD agency — is missing documents needed to audit the funds.

The IG also can’t audit $5.4 million of Ginnie Mae’s loan assets because accounting documents “did not completely transfer” after the agency switched contractors maintaining the records, the report says. “As a result, Ginnie Mae was unable to provide appropriate supporting documentation and data to enable us to audit the completeness and accuracy of these asset balances.”

Also, HUD’s financial management system faces problems “because of HUD’s inability to modernize its legacy financial systems,” the report says. “Program offices compensated for system limitations by using less reliable manual processes to meet financial management needs.”

Additionally, HUD’s accounting has lacked oversight for a decade.

“Multiple deficiencies existed in HUD’s internal controls over financial reporting, resulting in misstatements on the financial statements and noncompliance with laws and regulations,” the report says. “We have reported on HUD’s administrative control of funds in our audit reports and management letters since fiscal year 2005. HUD continued to not have a fully implemented and complete administrative control of funds system that provided oversight of both obligations and disbursements.”

Follow Ethan on Twitter

Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact