We audited the Lake View Towers Apartments’ Section 8 housing assistance payments program based on our analysis of risk factors related to multifamily projects in Region 5’s jurisdiction and the activities included in our fiscal year 2019 annual audit plan.  Our audit objective was to determine whether the management agent administered the project’s program in accordance with the owner’s contract with the U.S. Department of…

We audited PK Management, LLC, based on (1) media coverage of problems associated with Essex Village, an apartment complex in Virginia that it managed, and (2) issues identified in our prior audit of PK Management in Birmingham, AL.  Our audit objective was to determine whether PK Management assisted eligible tenants and maintained documentation to support the housing assistance payments it received for residents of the…

We completed a corrective action verification (CAV) of recommendations 1A and 1C from prior OIG audit report 2015-LA-0001 (issued April 20, 2015).  The CAV was initiated based on preliminary analysis, which identified potential ineligible partial claims.  The prior audit determined that the Federal Housing Administration’s (FHA) claim payment system failed to identify two types of ineligible partial claims.  As part of…

We audited selected general and application controls over the Federal Housing Administration’s Computerized Homes Underwriting Management System as part of the internal control assessments required for the fiscal year 2018 financial statement audit under the Chief Financial Officer’s Act of 1990.  Our objective was to review the effectiveness of controls for compliance with HUD information technology policies and Federal…

We audited the Civic Towers, LLLP, and Civic Towers Senior, LLLP, Section 8 project-based housing assistance payment (HAP) program.  We selected the Civic Towers and Civic Towers Senior Section 8 project-based properties for review based on a referral from our Office of Investigation regarding a potential duplication of benefits between the U.S. Department of Housing and Urban Development (HUD) and the Federal Emergency…

The Chief Financial Officers Act of 1990 (Public Law 101-576), as amended, requires the Officeof Inspector General to audit the financial statements of the Federal Housing Administration(FHA) annually. We audited the accompanying financial statements and notes of FHA as of andfor the fiscal years ending September 30, 2018 and 2017 (restated), which are comprised of thebalance sheets, related statements of net cost and changes in net…

We audited Rainbow Terrace Apartments based on our analysis of risk factors related to multifamily projects in Region 5’s jurisdiction and the activities included in our fiscal year 2018 annual audit plan.  Our objective was to determine whether the project’s owner and management agent operated the project in accordance with the regulatory agreement and the U.S. Department of Housing and Urban Development’s (HUD) requirements.…

The U.S. Department of Housing and Urban Development, Office of Inspector General, audited the lender, Berkeley Point Capital, and the underwriting for the Second and Delaware project loan.  We initiated the review of the loan underwriting based on a previous review of the Second and Delaware project, which focused on the construction and development of the project.  The almost $46 million project is Federal Housing…

We audited the U.S. Department of Housing and Urban Development’s (HUD) Federal Housing Administration’s (FHA) preforeclosure sale claim process based on an internal Office of Inspector General audit suggestion noting that existing regulations may allow excessive preforeclosure claim interest costs.  Our audit objective was to determine the amount of unnecessary preforeclosure claim interest and other costs that resulted from…

We performed a review of the U.S. Department of Housing and Urban Development’s (HUD) Housing Counseling Program, located within the Office of Housing Counseling.  We selected this program based on an audit suggestion that was included in our annual audit plan to help address HUD’s strategic goal to strengthen the housing market to bolster the economy and protect consumers.  Our objective was to determine whether HUD…

We audited the U.S. Department of Housing and Urban Development’s (HUD) tracking of partial claim notes.  The audit was initiated in response to an Office of Inspector General preaudit analysis of HUD’s Single Family Data Warehouse (SFDW) data, which determined that partial claim notes may not have been properly tracked in HUD’s Single Family Mortgage Asset Recovery Technology (SMART) system (see Scope & Methodology section…

The U.S. Department of Housing Urban Development (HUD), Office of Inspector General audited HUD to determine whether it identified and collected outstanding partial claims out of surplus proceeds from nonconveyance foreclosures.  We initiated this audit because we learned while doing unrelated audit work that a trustee attorney held surplus proceeds from two nonconveyance foreclosures and HUD had not claimed these funds to offset…

We audited Towne Mortgage Company, a Federal Housing Administration (FHA) nonsupervised lender, as part of the activities in our fiscal year 2018 annual audit plan.  We selected Towne Mortgage based on our analysis of risk factors for single-family servicing lenders in Region 5’s jurisdiction.[1]  Our audit objective was to determine whether Towne Mortgage properly implemented its Loss Mitigation program for FHA-insured…

We audited the U.S. Department of Housing and Urban Development’s (HUD) monitoring of the financial performance of Section 232 nursing homes based on the size of their program, the inherent risks in the program, the length of time since our last audit, and the inclusion of this review in the annual audit plan.  Our audit objective was to determine whether HUD had sufficient financial information and used this information to…

The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General audited the Meeker Family and Elderly Housing project based on a referral from HUD’s Office of Multifamily Housing Programs in Denver, CO.  The project is owned and managed by the Meeker Housing Authority.  HUD alleged that the owner had failed to file audited financial statements or make mortgage payments to HUD for the past 10 years.…

The U.S. Department of Housing and Urban Development’s (HUD) Office of Inspector General audited HUD’s single-family note sales program.  This is the third in a series of audits on the note sales program.  The first audit, 2017-KC-0006, reported that HUD did not conduct rulemaking or develop formal procedures for its single-family note sales program.  The second audit, 2017-KC-0010, reported that HUD generally ensured…

We audited the multifamily Section 8 Project-Based Rental Assistance (PBRA) program at the Louis Manor Apartments.  We selected Louis Manor in accordance with our goal to review the U.S. Department of Housing and Urban Development’s (HUD) multifamily housing programs and because our analysis of Tenant Rental Assistance Certification System data showed red flag indicators at Louis Manor that appeared to be similar to the…

On February 28, 2018, Deloitte entered into a settlement agreement with the Federal Government, agreeing to pay $149.5 million, of which $115 million was restitution.  Deloitte settled allegations for alleged conduct in connection with its role as the independent outside auditor of TBW for TBW’s fiscal years that ended April 30, 2002, through April 30, 2008.  The settlement agreement was neither an admission of liability by…

We audited the U.S. Department of Housing and Urban Development’s (HUD) approval of Section 232 Federal Housing Administration (FHA)-insured loans based on our initiative to focus HUD management’s attention on problems areas with the Section 232 program.  Our audit objective was to determine whether HUD approved Section 232 FHA-insured loans for projects that qualified for mortgage insurance in accordance with HUD requirements.…

We audited the Eastwood Terrace Apartments multifamily Section 8 Project-Based Rental Assistance (PBRA) program.  We selected Eastwood Terrace in accordance with the Office of Inspector General’s (OIG) goal to review HUD’s multifamily housing programs and because the OIG Office of Investigation conducted an investigation and suggested that the complex might not have had appropriate controls to ensure tenant eligibility.  Our…