HUD OIG OFFICE OF AUDIT

Tracey Carney, Acting Regional Inspector GeneralPatrick Bannon, Disaster Recovery LiaisonNikita Irons, Assistant Regional Inspector General

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Objectives What is HUD OIG?

How OIG assists HUD

How do we select auditees?

HUD programs affected by Hurricanes Katrina and Rita

CDBG disaster funding

Types of audits

Audit resolution

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What is HUD OIG?3

The HUD Office of Inspector General (OIG) was created with the signing of

the Inspector General Act of 1978 (Public Law 95-452). The Act sets out certain authorities that permit the OIG

to initiate, carry out, and complete audits and investigations of HUD

programs and operations.4

OIG is an independent office within HUD.

Serves under the “general supervision” of the Secretary of HUD.

Dual independent reporting relationship to the agency head and to the Congress.

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Inspectors General are authorized to:

Conduct audits and investigations

Access all records and information of the agency and program participants

Issue subpoenas for records and documents

Hire staff and control budget resources

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Conducting audits, investigations, and other activities relevant to the HUD mission.

Keeping the Secretary, Congress, and the public fully and currently informed.

Working collaboratively with HUD and program participants to ensure success of HUD program goals.

We Conduct our Mission by:

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Kenneth Donohue, Inspector GeneralMichael Stephens, Deputy Inspector GeneralJames Heist, Assistant Inspector General for AuditBrenda Patterson, Deputy Assistant Inspector

General for Audit

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Gulf Coast Region– Office of Audit

Louisiana Mississippi

Tracey Carney, Acting Regional Inspector GeneralPatrick Bannon, Disaster Recovery Liaison

Nikita Irons, Assistant Regional Inspector General9 Staff Auditors

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Creation of Gulf Coast Region Office of Audit

The Office of Audit has been tasked to review HUD’s activities related to Gulf Coast hurricane disaster reliefefforts. This effort resulted in the establishment of a GulfCoast Region to be the focal point for all audits in thecoming years relating to HUD’s relief efforts and tocoordinate with other agencies’ OIGs that are involvedin the overall effort.

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How OIG Assists HUD

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OIG’s Strategic PlanStrategic Goal 1 – Help HUD resolve its “Major Management Challenges” by being a relevant and problem-solvingadvisor to the Department. A new major challenge to HUDis addressing disaster relief in response to natural disasters. Pursuant to this goal, the strategic plan lays outfour objectives.

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Objective 1: Contribute to Improving the Integrity of Single-Family Insurance Programs.

Objective 2: Contribute to a Reduction in Erroneous Payments in the Rental Assistance Programs.

Objective 3: Contribute to Improving HUD’s Execution and Accountability of Fiscal Responsibilities.

Objective 4: Contribute to Resolving Significant Issues Raised or Confronted by HUD and OIG’sStakeholders.

Goal 1 Objectives

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Office of Audit Activities

Designed to: Promote economy, efficiency, and

effectiveness in the administration of HUD’s programs.

Detect and prevent fraud, waste, and abuse in HUD programs and operations.

Ensure compliance with applicable laws and regulations.

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How do we select auditees?

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Selecting Audits

Potential audit areas are developed through: Discussions with HUD staff Complaints Congressional requests Reviews of proposed legislation, regulations,

and other HUD issuances High-risk programs

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Why the focus on Supplemental Funding? Funding

Programs have inherent risks as related to fraud, waste, and abuse

Congressional and Presidential interest in the use of hurricane funds to ensure that they are reaching those who need them.

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HUD PROGRAMS

Supplemental Funding

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Katrina Disaster Housing Assistance Program

Katrina Disaster Housing Assistance Program (KDHAP) $79 Million funded to HUD by FEMA to relocate

almost 102,000 families in PDD Public Housing Agencies in 44 states accepted

evacuees Program expired on March 11, 2006 and any

recipients still in this program were transferred to the new Disaster Voucher Program

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Disaster Voucher Program

Disaster Voucher Program (DVP) – Congress appropriated $390,000,000 to HUD to implement the program. Currently assisting 22,413 families These are Portable Section 8 Vouchers Program expires September 30, 2007 Criteria

Living in HUD Rental Assistance Program prior to Hurricane

Living in emergency shelters and/or homeless20

Disaster Housing Assistance Program

Disaster Housing Assistance Program (DHAP) – FEMA initiated rental program No HUD Public Housing or Section 8

tenants Up to 45,000 families ($560 Million) Direct payments to families and

landlords HUD assumed responsibility December 1,

200721

Challenges of the American Recovery Act

1. Rapid disbursement2. Transparency3. Reporting requirements4. Need for program offices involvement to report

instances of fraud

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Disaster Community Development Block Grants

Gulf Coast States

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Traditional Community Planning Development

Major Grant Programs: Community Development Block Grants The HOME Program Emergency Shelter Grants Housing Opportunity for Person with AIDS

(HOPWA) National CPD Funding:

FY 2006 Budget = $11 billion FY 2005 Budget = $8 billion

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Disaster Community Development Block Grant (Hurricanes Katrina and Rita)

Over $19 Billion to five Gulf Coast States (until expended) Alabama $ 95,613,574 Florida $ 182,970,518 Louisiana $ 13,410,000,000 Mississippi $ 5,481,221,059 Texas $ 503,194,849

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Types of Audits

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Types of Audits

Internal (HUD) External (State Of Louisiana,

Mississippi Development Authority, Subrecipients, etc.)

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Internal Audits (HUD)

Participant Eligibility Management Oversight

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Potential Audit Objectives

Proper determination of participant eligibility

Implementation of controls to prevent duplicate and fraudulent payments

Provision of adequate management oversight

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External Audits

Participant eligibility Monitoring/oversight of subrecipients and/or

contractors Implementation of controls National objectives Eligibility of costs Compliance with grant agreement(s)

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Potential Audit Objectives

Proper determination of participant eligibility Grantee monitoring of subrecipients and/or

contractors to ensure provision of services Policies and procedures developed in

accordance with HUD rules/regulations Implementation of system controls Eligibility of costs (i.e., administrative,

program, etc) 31

Audit Resolution

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How do audits get resolved?

OIG keeps the auditee informed throughout the audit except in the case of fraud.

OIG and the auditee discuss the findings at an exit conference.

Auditees are given a draft report and are allowed to comment on the findings.

The report is addressed to HUD.

HUD is responsible for resolving the recommendations.

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Possible Audit Resolution Outcomes

Criminal referrals

Debarments/suspensions

Repayment agreements

Development and implementation of adequate internal controls

Recognition for a job well done

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Audit Resolution Process in BriefHUD Handbook 2000.06, REV-3, contains the Department’s comprehensive instructions for the Audits Management System. Theseinstructions clarify audit resolution requirements for recommendationscontaining costs and final action processing.

At Report Issuance - OIG records the amounts discussed in the findings andrecommendations in the system as part of the initial cost entry.

At Management Decision - Management must take a position on all costs included in therecommendation. Until OIG concurs with management’s determination, therecommendation has no management decision. Upon OIG concurrence with themanagement decision, the amount to be disallowed or allowed must be recorded in thesystem. There can be no undecided balance on costs contained in the originalrecommendation to record a management decision unless action on the recommendationis suspended due to judicial, legislative, or investigative actions. If one of these specialcategories exists, the decision may be recorded without deciding the costs.

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How do you get more information on completed OIG audits?

Semiannual Report to Congress

OIG’s Web Site –http://www.hud.gov/oig/oigindex.html

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HOW TO CONTACT THE OIG HOTLINE

There are four ways to contact the OIG Hotline:

You can call us toll-free at: 1-800-347-3735You can fax us at: 202-708-4829 You can e-mail us at: hotline@hudoig.gov

You can write us at:HUD OIG Hotline (GFI)451 7th Street, SWWashington, DC 20410

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Questions?38