1. HUD OIG: Common Issues and Concerns Texas NAHRO’s 2018 Conference
Senior Auditors Rick Espinoza & Lorenzo Garcia
Corpus Christi, Texas | April 10, 2018

2. Overview
What is OIG?
How do we select auditees?
Common Issues and Concern

3. Inspector General Act
The Inspector General Act of 1978, as amended, established the duties, responsibilities, and authorities of a Federal Inspector General (IG).
Conduct independent and objective audits, investigations, inspections, and evaluations off the Dept.’s programs and operations;
Promote economy, efficiency, and effectiveness;
Prevent and detect fraud, waste, and abuse;
Review pending legislation and regulation; and
Keep the agency head and the Congress fully and currently informed.
The HUD Office of inspector General became statutory with the signing of the Inspector General Act of 1978, P.L
Over the years, the Act has been amended to increase the number of agencies with statutory IGs and establish IGs in designated, independent agencies. Nearly 60 statutory IGs provide audit and investigative oversight across the Federal government.

4. Office of Investigations
The OIG’s Office of Investigations employees are are statutory federal law enforcement officers, called special agents, that specialize in criminal investigations regarding issues in and against the Department.
Carry firearms
Make arrests
Testify in Court
Serve search warrants
Serve subpoenas
OIG special agents using the following techniques:
Interview subjects/witnesses
Surveillance
Electronic monitoring
In conducting investigations, OIG Special Agents work closely with other federal, state and local law enforcement agencies, as well as with OIG auditors.

5. Office of Audit
Conducts audits, reviews, and other activities relevant to HUD’s mission.
Keeps the Secretary, Congress, and the public fully and currently informed.
Works collaboratively with HUD and program participants to ensure success of HUD program goals.

6. Office of Audit
Conducts financial audits, which determines whether HUD’s financial statements are fairly presented, internal controls are adequate and laws and regulations have been followed.
Information Systems audits, which determines the adequacy of general and application controls and whether security of information resources is adequate and complies with system development requirements.
Performance audits, which determines whether programs are achieving the desired results or benefits in an efficient and effective manner

7. Office of Investigations/ Audit-Region 6
B - 55
R - 79
G - 80
B - 79

8. How Does HUDOIG Select it’s Auditees?

9. Audit Selection 1. HUDOIG Risk Assessment
Office of Audit Annual Audit plan
Information systems – REAC, FASS, M
Congressional Inquiry
2. Complaints
Hotline –
HUD Request
Entity Request – Board, management, employee
3. Outside source
CPA Audits
News stories

10. Common Issues and Concerns

11. Eligibility No documentation Incomplete application
2. No employment, income verification
No contract-
No recertification
Incorrect Rent calculations – overhouse/underhoused, utilities, family information

12. Financial Capital funds misuse
Excessive administrative costs for travel, beverages & M I & E
Un-auditable financial records
Expenses not appropriately allocated between programs
Advance salary and leave program buy backs.
Over paid management fees
5 Year capital funds plan not followed.
Administrative costs for training and travel appeared exorbitant.

13. Housing Quality Standards
Units did not meet HQS standards for security
Units did not meet HQS standards for safety
Units did not undergo annual housing inspection
Maintenance inspectors had a Conflict of Interest

14. Procurement Conflict of Interest No Idependent Cost Estimate/Analysis
No Contract
No Solicitation – undocumented Sole Source contract
No Certifications

15. Collaboration How can you you help us help you?
Fraud, waste & abuse – must report to OIG or to HUD.
Strong Internal Controls - Quality Assurance
Ethics – should be annual & has to start at the top.
Hotline , no anonymous calls

16. More Info on HUD OIG About us News room Latest issued reports
Semiannual Report to Congress
News room
Locations and Field offices
Hotline and report fraud

17.
Theresa Carroll, Assistant Regional Inspector General, Office of Audit
(817)
Lorenzo Garcia, Office of Audit
(210)
Larry Mcmillion, Office of Audit
(210)
Joanna Varenhorst, Office of Audit
(210)
Jaime Lerma, Office of Audit
(210)
Rick Espinoza, Office of Audit
(210)