Audit of the Government National Mortgage Association’s Financial Statements for Fiscal Years 2017 and 2016 (Restated)

Date Issued: 
Tuesday, November 14, 2017
Publication/Report Type: 
Audit Reports
Report Number: 
2018-FO-0002
Program Area(s): 
Government National Mortgage Association
State: 
District of Columbia
Summary: 

This report presents the results of our audit of Ginnie Mae’s fiscal years 2017 and 2016 (restated) financial statements, including our report on Ginnie Mae’s internal control and test of compliance with selected provisions of laws and regulations applicable to Ginnie Mae. 

In fiscal year 2017, for the fourth consecutive year, we were unable to obtain sufficient, appropriate evidence to express an opinion on the fairness of the $3.6 billion (net of allowance) in nonpooled loan assets from Ginnie Mae’s defaulted issuers’ portfolio as of September 30, 2017.  Ginnie Mae also continued to improperly account for Federal Housing Administration reimbursable costs as an expense instead of capitalizing them.  Additionally, critical information needed to perform the audit was not provided to us in sufficient time to audit the guaranty asset and guaranty liability financial statement line items.  The combination of these unresolved issues for a number of years was both material and pervasive because it impacted multiple financial statement line items across all of Ginnie Mae’s basic financial statements.  As a result of the scope limitation in our audit work and the effects of material weaknesses in internal control, we have not been able to obtain sufficient, appropriate evidence to provide a basis for an audit opinion on Ginnie Mae’s fiscal years 2017 and 2016 (restated) financial statements.  Based on the results of our work, we identified four material weaknesses, one significant deficiency, and one reportable noncompliance with selected provisions of laws and regulations.

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