$500 Billion

Miscalculation Discovered at HUD

by Shawn M. Griffiths in Legislation Apr 6, 2017

From time to time, a huge story can be uncovered in what some might perceive as an unlikely place. Take /r/the_donald subreddit for instance. Yes, the mere mention of it will cause some to roll their eyes, but bear with me.

Sure the subreddit is full of overused terms like “snowflake” and “cuck,” but sometimes buried deep beneath even the most extreme and sensational rhetoric there is something worth reporting. Take the following post as an example:

Some people might be distracted by the post using the phrase “Obama minions” or “fraud” or mentioning Julian Castro or Ben Carson. But a deeper look at the source reveals quite a startling report.

An independent auditor’s report from the Office of Inspector General reveals that some huge and potentially criminal (the auditor would not issue an opinion on the matter) discrepancies in HUD’s financial reporting were discovered after HUD reissued its financial statements from 2015 and 2016 “due to pervasive material errors.”

From the report:

“The total amounts of errors corrected in HUD’s notes and consolidated financial statements were $516.4 billion and $3.4 billion, respectively. 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.”

That is a lot of money that had to be corrected for, and there is no explanation as to why such huge discrepancies existed in the first place. The auditor seems to suggest that at least some of the errors were possibly the result of deliberate action.

A source familiar with such accounting and financial reports said the report is a big deal because this kind of systemic coverup — if indeed it can be called a coverup — usually constitutes some type of fraud, adding that if this was a business, people would go to jail. It also adds to the long list of problems in the government housing loan industry.

© 2014 All Rights Reserved | Privacy Policy |
*We do not provide housing. If you are in need of housing related assistance, visit the following link: HELP FOR TEXANS