We audited the U.S. Department of Housing and Urban Development’s (HUD) grant closeout processes and compliance with the Grants Oversight and New Efficiency (GONE) Act. The GONE Act required that we conduct a risk assessment to determine whether an audit of HUD’s grant closeout process was warranted. We initiated this review based on the results of our risk assessment conducted in fiscal year 2018, which found that an audit was warranted. Our objectives were to determine whether HUD (1) implemented adequate grant closeout processes to ensure compliance with GONE Act requirements and (2) ensured that reports related to its compliance with the GONE Act were accurate.
HUD did not implement adequate GONE Act grant closeout processes, and related data and reports were not always accurate. Specifically, it implemented bulk closeout procedures that bypassed requirements, and its data used to compile reports included inconsistencies and incorrect information. These conditions occurred because HUD (1) focused on closing its backlog of expired grants as quickly as possible; (2) did not have adequate controls over its GONE Act grant closeout, data, and reporting processes; and (3) had not developed and implemented clear and consistent guidance on GONE Act requirements for its program offices. As a result, HUD made errors in grant closeouts and was unable to ensure that related data and reports to Congress and other stakeholders were accurate. Although HUD’s reporting responsibilities under the GONE Act have ended, it should address the weaknesses identified to ensure future compliance with grant closeout requirements and consistent and accurate reporting of grant information to stakeholders.
We recommend that HUD develop and implement controls (1) for use of the bulk grant closeout process going forward to ensure that grants are closed in accordance with all applicable requirements and (2) to ensure that future grant data reporting to stakeholders is consistent and accurate.