12/10/15 HUD Audit


The Securities and Exchange Commission regulates publicly-held companies.  These are the businesses that have public shareholders.

The SEC has complex rules that companies must follow.  Break the rules and they risk facing civil or criminal penalties.  In some cases, executives could find themselves in prison. 

For example, a public company must issue an annual report, an overview of the company’s financial health.  It must include audited financial statements accounting for every single penny.

Of course, Washington doesn’t follow the same rules. There are entire agencies that spend billions of dollars annually without little or no accountability. 

The Department of Housing and Urban Development spent more than 40 billion dollars this past fiscal year.  The HUD Inspector General has concluded the agency’s records are so sloppy and incomplete that it’s literally impossible to audit.

The I.G. found four major discrepancies.

HUD didn’t use generally accepted accounting principles.  The same accounting standards the federal government requires public companies to use.

The records of Ginnie Mae were so bad the I.G. couldn’™t account for nearly 20 billion dollars.

The department couldn’t account for about one billion dollars in various grants and housing funds.

And, the agency didn’t use the standards required of all federal agencies to account for its financial liabilities.

By the way, this is the second year in a row HUD couldn’™t get through a clean audit.

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