HUD's Accounting Systems for Mortgage Insurance Premiums and Property Tax Liabilities
Highlights
The Department of Housing and Urban Development's (HUD) accounting systems for mortgage insurance premiums and for property tax liabilities have resulted in many problems. In May 1976 and December 1976, GAO reported to the Secretary of HUD on the need for the Department to collect delinquent mortgage insurance premiums due from mortgages, improve its collection procedures, improve its accounting system, and improve its supporting automatic data processing (ADP) system. HUD sends about 25,000 premium billings in error each month because the Offices of Finance and Accounting and ADP Operations do not use established internal controls to ensure that all mortgage transactions sent in by mortgages are completely and accurately entered in the master billing file. HUD annually loses about $14.6 million in interest due to insurance premium collection policies. There are opportunities for substantial savings in the HUD mortgage insurance premium payment system. Improvements are still needed in the HUD accounting system for paying property taxes.