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 whether HUD had adequate controls to prevent improper claims from being paid.
HUD’s use of nonpayment orders adequately prevented claims on FHA loans from being paid. Our review of 17 claims that had an active nonpayment order and 10 claims that had an inactive nonpayment order for the first entry did not identify any improper claims that were paid. There are no recommendations.
Please note that OIG determined some contents of this audit report would not be appropriate for public disclosure and those items have been redacted from this report.