HUD's Second-Year Implementation of the Federal Managers' Financial Integrity Act

GAO reviewed the Department of Housing and Urban Development's (HUD) second-year implementation of the Federal Managers' Financial Integrity Act of 1982 to determine the: (1) improvements in internal controls and the process used by HUD to evaluate and correct control weaknesses; (2) status of HUD accounting systems; and (3) accuracy and completeness of the Secretary's annual report on internal controls and accounting systems.

GAO found that: (1) HUD is correcting known internal control problems and is continuing to make progress in developing its process for evaluating and correcting internal controls; (2) HUD needs to strengthen several aspects of its process for measuring and correcting program vulnerability; and (3) the accounting systems identified in the Secretary's report were not in conformance with GAO requirements. GAO also found that: (1) regional office vulnerability assessments did not identify weaknesses requiring immediate corrective action; (2) the nature and extent of the weaknesses and corrective actions were not clearly defined; (3) preliminary reviews did not involve testing of internal controls to determine whether they were operating as intended; and (4) HUD has made a number of system improvements but it will be several years before its systems will conform with Comptroller General accounting standards and requirements.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Sarah P. Frazier Team: General Accounting Office: Resources, Community, and Economic Development Division Phone: (202) 275-7783