Skip to Highlights
Highlights

GAO reviewed the Department of Housing and Urban Development's (HUD) second-year implementation of the Federal Managers' Financial Integrity Act of 1982 to determine the: (1) improvements in internal controls and the process used by HUD to evaluate and correct control weaknesses; (2) status of HUD accounting systems; and (3) accuracy and completeness of the Secretary's annual report on internal controls and accounting systems.

Skip to Recommendations

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Housing and Urban Development 1. To strengthen the internal control review (ICR) process and to be in a better position to assess the reasonableness of HUD internal controls, the Secretary of Housing and Urban Development should direct the Assistant Secretary for Administration to revise: (1) vulnerability assessment guidelines to provide examples of the type and specificity of documentation needed to support the vulnerability rating assigned; and (2) the vulnerability assessment form to provide space for identifying weaknesses requiring immediate corrective actions and the proposed actions.
Closed - Implemented
The HUD vulnerability assessment process was changed to reflect revisions in Office of Management and Budget Circular A-123 on internal controls. The revised circular requires a change in the approach to conducting vulnerability assessments.
Department of Housing and Urban Development 2. To strengthen the ICR process and to be in a better position to assess the reasonableness of HUD internal controls, the Secretary of Housing and Urban Development should direct the Assistant Secretary for Administration to revise the preliminary review guidelines to require evaluators to identify specific sources of information supporting conclusions reached and clearly explain the nature and extent of the weaknesses and the specific actions necessary to correct them.
Closed - Implemented
HUD, as part of its restructing effort, will no longer conduct preliminary reviews.
Department of Housing and Urban Development 3. To strengthen the ICR process and to be in a better position to assess the reasonableness of HUD internal controls, the Secretary of Housing and Urban Development should direct the Assistant Secretary for Administration to require that ICR reports and/or supporting documentation clearly identify the testing performed to determine whether control techniques are in place and operating as intended.
Closed - Implemented
HUD officials agreed with the requirement that testing performed should be clearly described in ICR reports and/or supporting documentation. HUD plans to meet this requirement on all of its ICR in the future.
Department of Housing and Urban Development 4. The Secretary of Housing and Urban Development should clearly state in his annual report the extent to which all of the HUD accounting systems do or do not conform to the Comptroller General's principles, standards, and related requirements.
Closed - Implemented
HUD has taken appropriate action on this recommendation.
Department of Housing and Urban Development 5. The Secretary of Housing and Urban Development should also direct the Assistant Secretary for Administration to complete the evaluations of its systems for which conformance with the Comptroller General's principles, standards, and related requirements has not been determined. The evaluations should include testing to ensure that the systems are operating as designed.
Closed - Implemented
HUD has taken appropriate action on this recommendation.

Full Report