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Thursday, April 6, 2017

HUD Accounting Errors Are Abysmal


Ben Carson Finds $500 Billion (Billion!) In Errors During Audit Of Obama HUD

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Ben Carson was the first neurosurgeon to successfully separate conjoined twins, so, he's kind of a super hero.
But apparently, he's also not a bad accountant.
President Trump picked Carson to head the Department of Housing

and Urban Development, whose budget grew by leaps and bounds

under Barack Obama.

In one of his first acts as HUD Secretary, Carson ordered an audit of

the agency. What he found was staggering: $520 billion in

bookkeeping errors.
"The total amounts of errors corrected in HUD’s notes and consolidated

financial statements were $516.4 billion and $3.4 billion,

respectively," the auditors wrote.
But there were plenty of other problems, too.
There were several other unresolved audit matters, which

restricted our ability to obtain sufficient, appropriate

evidence to express an opinion. These unresolved audit

matters relate to (1) the Office of General Counsel’s

refusal to sign the management representation letter,

(2) HUD’s improper use of cumulative and first-in, first-

out budgetary accounting methods of disbursing

community planning and development program funds,

(3) the $4.2 billion in nonpooled loan assets from Ginnie

Mae’s stand-alone financial statements that we could

not audit due to inadequate support, (4) the improper

accounting for certain HUD assets and liabilities, and

(5) material differences between HUD’s subledger and

general ledger accounts. This audit report contains 11

material weaknesses, 7 significant deficiencies, and 5

instances of noncompliance with applicable laws and

regulations.
The same problems were detailed for each of the last three audits,

and the auditors say the continued problems “were due to an inability

to establish a compliant control environment, implement adequate

financial accounting systems, retain key financial staff, and identify

appropriate accounting principles and policies."
So, look for Carson to get out his scalpel and start operating. Or

perhaps he'll use a machete.e unresolved audit matters relate to (1)

the Office of General Counsel’s refusal to sign the management representation letter, (2) HUD’s improper use of cumulative and first-in, first-out budgetary accounting methods of disbursing community

planning and development program funds, (3) the $4.2 billion in nonpooled loan assets from Ginnie Mae’s stand-alone financial statements that we could not audit due to inadequate support, (4) the improper accounting for certain HUD assets and liabilities, and (5) material differences between HUD’s subledger and general ledger accounts. This audit report contains 11 material weaknesses, 7

significant deficiencies, and 5 instances of noncompliance with

applicable laws and regulations.
The same problems were detailed for each of the last three audits, and the
auditors say the continued problems “were due to an inability to establish a
compliant control environment, implement adequate financial accounting
 systems, retain key financial staff, and identify appropriate accounting principles
 and policies."
So, look for Carson to get out his scalpel and start operating. Or perhaps he'll
 use a machete.