GAO Audits of Accounting and Financial Management Systems at the Federal Housing Administration

GAO discussed its efforts to conduct financial statement audits of the Federal Housing Administration (FHA) and the financial management problems at FHA. GAO found that: (1) it has been unable to perform full financial statement audits of FHA since 1975 because of serious FHA accounting and internal control deficiencies, including unrecorded transactions, lack of detailed supporting records, and lack of reconciliation of several key accounts to supporting records; (2) for fiscal year (FY) 1987, an independent accounting firm could only audit the FHA statement of financial position due to continued problems, but planned to conduct a full audit for FY 1988; and (3) serious deficiencies in FHA financial operations have been long-standing and well documented, and correction of these problems will require multiyear solutions and a long-term commitment by top management.