Carson’s HUD Didn’t Stop Fraud And Broke The Law By Not Reporting On It

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Thomas Phippen Associate Editor
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The agency responsible for providing low-income housing assistance has failed to comply with laws that require agencies to report wasted funds for years, and that trend continues under President Donald Trump.

For the fifth year in a row, the Department of Housing and Urban Development failed to complete mandatory audits and reviews designed to ensure that agencies are tracking and recovering improper payments.

Reducing improper payments is part of Secretary of Housing Ben Carson’s vision to re-imagine the way HUD works. Carson wrote in September that he intends to reform internal processes that “organize and deliver HUD services more effectively to the American people,” which would require “enhancing the working conditions and training at HUD itself, while eliminating improper payments and waste, fraud and abuse.”

HUD began to change how it goes about complying with the Improper Payments Elimination and Recovery Act (IPERA) at the beginning of the 2017 fiscal year, but had not gotten far enough in the process to change the trajectory, the Office of the Inspector General (IG) wrote in a report released Tuesday.

Specifically, HUD has failed to conduct risk assessments for fraud and improper payments in all its programs, and also failed to release estimates of how much each program spends improperly. The term “improper payments” refers to any time the government spends more or less than it should in an individual transaction, or pays the wrong recipient. After five years of compiling IPERA data, however, the House Committee on Oversight found that 90 percent of improper payments were overpayments.

“As a result of HUD’s failure to risk assess all of its programs, opportunities to identify HUD programs vulnerable to significant improper payments would likely be missed, which could lead to the unnecessary waste of government resources,” the IG stated in its report.

HUD failed to publish the improper payment rates for several programs, including the Federal Housing Administration’s single family insurance claims program, which was designated a high-risk program. The program itself estimates that $837 million went to improper payments each year. (RELATED: HUD Let Nearly $2 Billion Go To People Barred From Getting Federally Protected Loans)

HUD also failed to complete risk assessments on a number of programs.

“Of 55 programs that needed a risk assessment, only 41 assessments had been completed,” according to the IG’s report. “HUD did not realize that it had failed to perform risk assessments for the remaining 14 programs.”

Difficulty in completing financial audits and improper use of taxpayer money is not a new trend at HUD, and the IG recognized the department is taking steps to address those issues.

“While this process is underway, HUD will continue to miss opportunities to reduce and recover improper payments in its programs,” the report stated.

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