Fraud poses a significant risk to the integrity of federal programs and erodes public trust in government.  For the U.S. Department of Housing and Urban Development’s (HUD) disaster recovery programs, fraud results in communities and individuals not receiving needed assistance to recover from and mitigate future disasters.  Departments are required by law to develop and maintain governance structures, controls, and processes to safeguard resources and assets.

In August 2024, we issued an audit report on the California Department of Housing and Community Development’s (HCD) fraud risk management practices, finding that HCD was not adequately prepared to prevent, detect, and respond to fraud due to the lack of focus it placed on fraud risks and establishing a robust fraud risk management framework for the Coronavirus Aid, Relief, and Economic Security Act (CARES) Act funding for the Emergency Solutions Grant (ESG) program to prevent, detect, and respond to fraud (2024-LA-1001, issued August 2, 2024).

We recently issued an audit report on the City and County of Honolulu’s (City) fraud risk management practices, which determined the grantee did not adequately develop a fraud risk management framework for the Coronavirus Aid, Relief, and Economic Security (CARES) Act funding provided for the Emergency Solutions Grant (ESG) program to prevent, detect, and respond to fraud (Audit Report No. 2024-LA-1002, issued August 6, 2024). This audit follows that recent work, in which we audited the City’s ESG CARES Act program with the objective of determining if improper payments existed.  

We have reviewed the U.S. Department of Housing and Urban Development’s (HUD’s) Detailed Accounting Report and the related management assertions for National Drug Control Program activities for the fiscal year ended September 30, 2025. We also reviewed the Budget Formulation Compliance Report, which includes budget formulation information for fiscal year 2027, and the related management assertions for National Drug Control Program activities.