INSPECTORS

GENERAL

HUD Office of 

Inspector General 

Resources and Results

Report to Congressional Committees

May 2012

GAO-12-618

United States Government Accountability Office

GAO
United States Government Accountability Office

Highlights of GAO-12-618, a report to 

congressional committees 

May 2012 

INSPECTORS GENERAL 

HUD Office of Inspector General Resources and 

Results

Why GAO Did This Study

The joint explanatory statement for the 

Omnibus Appropriations Act, 2009, 

called for GAO to report on the 

resources of the HUD OIG in light of 

HUD’s recently expanded roles and 

responsibilities. In response, GAO 

(1) compared the budgets, staffing 

levels, and monetary accomplishments

of the HUD OIG to that of comparable

OIGs during recent years, and (2) 

described the results of the HUD OIG’s 

oversight of HUD’s programs. 

GAO compared the budget and staff 

resources of the HUD OIG with that of 

other Cabinet-level department OIGs 

for the 5-year period from fiscal year

2007 through 2011. GAO also 

summarized the monetary 

accomplishments of the HUD OIG and 

other OIGs as reported in their 

semiannual reports to the Congress, 

and compared the results with their 

total budgetary resources to obtain a 

return on each budget dollar received. 

In addition, GAO summarized and 

described the HUD OIG’s reported 

oversight coverage and monetary and 

nonmonetary accomplishments from 

audit and inspection reports and 

investigative cases that addressed 

HUD’s largest program offices from 

fiscal year 2007 through 2011. 

What GAO Recommends 

GAO is not making any 

recommendations in this report. The 

HUD Inspector General concurred with 

the contents of the draft report.

What GAO Found 

During the 5-year period from fiscal year 2007 through 2011, the Department of 

Housing and Urban Development’s (HUD) Office of Inspector General (OIG) had 

budget and staffing resources that were consistent with other OIGs, and a 

monetary return for each budget dollar which exceeded the average return for

Cabinet-level OIGs. During the 5-year period, the HUD OIG had total budgetary 

resources ranging from $121 million to $144 million, consistently ranking it fifth 

among all Cabinet-level OIGs. However, while the total budgetary resources for 

all Cabinet-level OIGs increased by about 45 percent over the 5-year period, the

HUD OIG’s total budgetary resources increased by 19 percent. In terms of 

staffing, the HUD OIG’s full-time-equivalent staff (FTE) consistently ranked in the 

top four or five of the Cabinet-level OIGs. Also, the HUD OIG’s FTEs increased 

by about 13 percent during the 5-year period, as compared to about a 17 percent 

average increase for all Cabinet-level OIGs. During the same 5-year period, the 

HUD OIG reported an estimated average dollar return of about $13.62 for each 

HUD OIG total budgetary dollar received, while the 16 OIGs in the Cabinet-level 

departments reported an estimated average dollar return of about $11.12 for 

each OIG total budget dollar received over the same period.

The HUD OIG reported the majority of its audit, inspection, and investigative 

coverage in the three largest HUD program offices during fiscal years 2007 

through 2011. Specifically, of the OIG’s reported 905 total audit and inspection 

reports completed over the 5-year period, 90 percent addressed programs in 

HUD’s Offices of Public and Indian Housing, Housing, and Community Planning 

and Development, which comprised about 93 percent of HUD’s fiscal year 2011 

total budgetary resources. Also, of the 6149 investigative cases opened during 

this same period, almost 95 percent involved programs in these same offices. In 

addition, the OIG’s reports and investigative cases focused on HUD’s 

responsibilities related to recent increases in hurricane and disaster relief funds 

and HUD’s implementation of the American Recovery and Reinvestment Act of 

2009 (Recovery Act), administered through these HUD program offices. Also, of 

the almost $6.94 billion in reported potential monetary savings from the OIG’s 

audits and inspections, approximately $2.46 billion (about 36 percent), were in 

the three largest HUD program offices. Of the remaining amount, approximately 

$4.45 billion (about 64 percent), was mostly from a financial control deficiency 

not directly related to the three large program offices, and an additional $28.4 

million resulted from audits and inspections of hurricane relief and disaster 

assistance not reported as part of a specific HUD program. Of the OIG’s reported

$1.39 billion in investigative recoveries during the 5-year period, approximately 

$1.2 billion (about 86 percent), was related to mortgage fraud investigations in 

programs administered by HUD’s Office of Housing. The OIG also reported an 

additional $866 million in potential savings from other investigative efforts 

throughout HUD’s programs during the 5-year period. In addition, the OIG 

reported nonmonetary accomplishments primarily from investigations in HUD’s 

three largest program offices, which resulted in 4,759 convictions, pleas, and 

mistrials, and 5,761 administrative and civil actions during the 5-year period. 

View GAO-12-618. For more information, 

contact Beryl H. Davis at (202) 512-2623 or 

davisb@gao.gov. 
Page i GAO-12-618 HUD OIG Resources and Results 

Letter 1 

Background 3

Comparison of the HUD OIG’s Budgets, Staffing, and Monetary 

Accomplishments with Other Cabinet-Level OIGs 7

HUD’s OIG Reported Oversight and Accomplishments in HUD’s 

Three Largest Program Offices 10

Agency Comments 19

Appendix I Comments from the Inspector General, Department of Housing and 

Urban Development 20

Appendix II GAO Contact and Staff Acknowledgments 21

Tables

Table 1: Percentage Change in Total Budgetary Resources of 

Cabinet-Level OIGs, Fiscal Years 2007 and 2011 7

Table 2: Percentage Change in Full-Time-Equivalent Staff of 

Cabinet-Level OIGs, Fiscal Years 2007 and 2011 8

Table 3: HUD’s OIG—Estimated Average Return on Investment of 

Total Budgetary Resource Dollars, Fiscal Years 2007 

through 2011 9

Table 4: All Cabinet-Level OIGs—Estimated Average Return on 

Investment of Total Budgetary Resource Dollars Received, 

Fiscal Years 2007 through 2011 9

Table 5: HUD’s OIG Audits and Inspections of Recovery Act 

Funding, Fiscal Years 2009 through 2011 19

Figures

Figure 1: Total Budgetary Resources of HUD’s Largest Program 

Offices, Fiscal Year 2011 4

Figure 2: FHA-Insured Mortgage Loans, Fiscal Years 2007 through 

2011 5

Figure 3: HUD’s OIG Audit and Inspection Reports in Three HUD 

Program Offices Compared with All Other Programs, 

Fiscal Years 2007 through 2011 11

Contents
Page ii GAO-12-618 HUD OIG Resources and Results 

Figure 4: HUD’s OIG Investigative Cases Opened in Three HUD 

Program Offices Compared with All Other Programs, 

Fiscal Years 2007 through 2011 12

Figure 5: HUD’s OIG Total Monetary Accomplishments from Audits 

and Inspections of Three HUD Program Offices Compared 

with All Other Programs, Fiscal Years 2007 through 2011 13

Figure 6: HUD’s OIG Total Investigative Recoveries in Three HUD 

Program Offices Compared with All Other Programs, 

Fiscal Years 2007 through 2011 15

Figure 7: HUD’s OIG Convictions, Pleas, and Mistrials in Three 

HUD Program Offices Compared with All Other Programs, 

Fiscal Years 2007 through 2011 17

Figure 8: HUD’s OIG Administrative and Civil Actions in Three 

HUD Program Offices Compared with All Other Program 

Offices, Fiscal Years 2007 through 2011 18

Abbreviations

CDBG Community Development Block Grants

CPD Community Planning and Development

FBI Federal Bureau of Investigation

FHA Federal Housing Administration

FTE Full-time-equivalent

HUD Housing and Urban Development

OH Office of Housing

OIG Office of Inspector General

OMB Office of Management and Budget

PHA public housing authority

PIH Public and Indian Housing

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Page 1 GAO-12-618 HUD OIG Resources and Results 

United States Government Accountability Office 

Washington, DC 20548

May 31, 2012

The Honorable Patty Murray

Chairman

The Honorable Susan Collins

Ranking Member

Subcommittee on Transportation, 

 Housing and Urban Development, and Related Agencies

Committee on Appropriations

United States Senate

The Honorable Tom Latham

Chairman

The Honorable John W. Olver

Ranking Member

Subcommittee on Transportation,

 Housing and Urban Development and Related Agencies

Committee on Appropriations

House of Representatives

The Department of Housing and Urban Development (HUD) administers 

programs that provide assistance for housing and community 

development throughout the nation.1 Its Office of Inspector General (OIG) 

was established by the Inspector General Act of 1978 (IG Act) to provide 

independent audits and investigations of HUD’s programs and operations; 

promote integrity, efficiency, and effectiveness; and detect and prevent 

fraud, waste, abuse, and mismanagement.2

 

1

42 U.S.C. Chapter 44.

As the market for home 

mortgages tightened in recent years, HUD saw its duties expand 

significantly as borrowers increasingly turned to federally insured or 

guaranteed mortgage loan programs such as those offered by HUD 

through the Federal Housing Administration (FHA). As of fiscal year 2011, 

FHA oversaw an insured mortgage portfolio of over $1 trillion. Along with 

its historical duties, in 2006 and 2007 HUD received about $19.5 billion in 

supplemental appropriations to assist states and communities in their 

recovery from Hurricanes Katrina and Rita.

2

Pub. L. No. 95-452, 92 Stat. 1101 (Oct. 12, 1978)(codified, as amended, at 5 U.S.C. 

App.).

 
 

Page 2 GAO-12-618 HUD OIG Resources and Results 

In the joint explanatory statement accompanying the Omnibus 

Appropriations Act, 2009, the Congress expressed concerns about the 

recent increases in demands on the department and its OIG resulting 

from HUD’s expanding role in insured mortgage loans and in disaster 

recovery. The statement directed that we study the HUD OIG’s resources 

and those of comparable OIGs in other departments. In response, this 

report (1) compares the staffing levels, budgetary resources, and returns 

on investment of the HUD OIG with other Cabinet-level OIGs between 

fiscal years 2007 and 2011; and (2) presents the HUD OIG’s reported 

results of its oversight of HUD’s largest programs for the same 5-year 

period.

To address our first objective, we obtained and compared the total 

budgetary resources and staffing levels of the 16 OIGs in the Cabinetlevel departments using budget information from the Office of 

Management and Budget (OMB).3

To address our second objective, we identified HUD’s largest programs 

from the relative size of the offices that administer these programs, based 

on our analysis of HUD’s total budgetary resources reported by OMB for 

fiscal year 2011. We summarized data on the extent of the HUD OIG’s 

reported oversight coverage in each large program office, including the 

number of audit and inspection reports, and investigative cases opened 

as reported by the OIG. We also summarized data on the OIG’s reported 

monetary accomplishments, which include potential monetary savings 

from audits and inspections and monetary recoveries from OIG 

investigations related to each of HUD’s large program offices. In addition, 

we summarized the OIG’s reported data on nonmonetary 

accomplishments, which include the number of convictions, pleas, and 

We also obtained the monetary 

accomplishments reported by the HUD OIG and the Cabinet-level OIGs in 

their semiannual reports for the 5-year period and compared these 

accomplishments to their total budgetary resources to determine an 

overall return on each budget dollar received.

 

3

The President’s Cabinet includes the Vice President and the heads of 15 executive 

departments—the Secretaries of Agriculture, Commerce, Defense, Education, Energy, 

Health and Human Services, Homeland Security, Housing and Urban Development, 

Interior, Labor, State, Transportation, Treasury, and Veterans Affairs; as well as the 

Attorney General. The Department of the Treasury has two OIGs. In addition to the 

Treasury OIG, the department’s Internal Revenue Service includes the Treasury IG for 

Tax Administration, which results in a total of 16 OIGs in the 15 Cabinet-level 

departments.
 

Page 3 GAO-12-618 HUD OIG Resources and Results 

mistrials, as well as administrative and civil actions resulting from OIG 

investigations in each large program office. We also reviewed the HUD 

OIG’s annual audit plans, strategic plans for HUD oversight, and annual 

budget justifications to determine the OIG’s reported emphasis in 

providing oversight of HUD’s programs. We interviewed OIG officials at 

HUD headquarters responsible for planning, directing, and managing the 

OIG’s resources to obtain information on their priorities and assessments 

of risks in HUD’s programs; and obtained documentation of reasonable 

assurance on the reliability of the OIG’s reported data.

We conducted our work from January 2011 to May 2012 in accordance 

with all sections of GAO’s Quality Assurance Framework that were

relevant to our objectives. The framework requires that we plan and 

perform the engagement to obtain sufficient and appropriate evidence to 

meet our stated objectives and to discuss any limitations in our work. We 

believe that the information and data obtained, and the analysis 

conducted, provide a reasonable basis for any findings and conclusions in 

this report. 

We obtained comments on a draft of this report from the HUD IG which 

are reprinted in appendix I. We also received technical comments which 

we have incorporated as appropriate.

For fiscal year 2011, HUD’s three largest offices administered programs 

that accounted for about 93 percent of HUD’s total budgetary resources 

of approximately $134.3 billion.4

The remaining 7 percent of HUD’s total budgetary resources included the 

Government National Mortgage Association (Ginnie Mae); the Offices of 

Policy Development and Research, Fair Housing and Equal Opportunity, 

and Lead-Based Paint and Poisoning Prevention; and HUD’s 

Specifically, HUD’s Office of Public and 

Indian Housing (PIH) had total budgetary resources of approximately 

$71.2 billion (about 53 percent), the Office of Housing (OH) had about 

$32.9 billion (approximately 24 percent), and the Office of Community 

Planning and Development (CPD) had about $21.4 billion (approximately 

16 percent). (See fig. 1.)

 

4

Total budgetary resources include all discretionary and emergency HUD funding.

Background
 

Page 4 GAO-12-618 HUD OIG Resources and Results 

management and administration including financial operations across all 

of HUD’s programs.

Figure 1: Total Budgetary Resources of HUD’s Largest Program Offices, Fiscal Year 

2011

PIH-administered programs are intended to ensure safe, decent, and 

affordable housing for low-income families; create opportunities for selfsufficiency and economic independence; reduce improper payments; and 

support mixed income developments to replace distressed public 

housing. These programs include grants and subsidies to public housing 

authorities (PHA) nationwide to provide affordable housing opportunities 

for about 3.3 million low-income families. Section 8 of the United States 

Housing Act of 1937, as amended,5 includes programs for tenant-based

vouchers and project-based rental assistance.6

 

5

42 U.S.C. § 1437f.

During fiscal years 2007 

through 2011, the number of PHAs increased from 3,100 to 4,150.

6

Vouchers are administered at the local level by PHAs and provide subsidies that lowincome families can use to lower their rents in the private market. Project-based rental 

assistance is a form of rental subsidy that is attached to a unit of privately owned housing 

where low-income families moving into the housing pay a reduced rent on the basis of 

their incomes.
 

Page 5 GAO-12-618 HUD OIG Resources and Results 

The OH-administered programs include FHA, which insures mortgages 

and loans made by FHA-approved lenders for single and multifamily 

housing units intended to serve borrowers who are not being adequately 

served by the conventional market, including first-time homebuyers, 

minorities, low-income families and residents of underserved 

communities. During the recent mortgage crisis, larger segments of the 

market began using FHA-insured loans, resulting in the more than 

doubling of the dollar amount of these mortgage loans from about 

$439 billion in fiscal year 2007 to over $1 trillion in fiscal year 2011. 

(See fig. 2.)

Figure 2: FHA-Insured Mortgage Loans, Fiscal Years 2007 through 2011

CPD provides funding mainly through the Community Development Block 

Grants (CDBG) Program, which is the most widely available source of 

federal assistance to state and local governments for neighborhood 

revitalization, housing rehabilitation activities, and economic 

development. Because of the funding mechanism that the CDBG 

Program already has in place to provide federal funds to states and 

localities, the program is widely viewed as a convenient tool for disbursing 

large amounts of federal funds to address emergencies. Over the past 

two decades, CDBG has repeatedly been adapted as a vehicle to 
 

Page 6 GAO-12-618 HUD OIG Resources and Results 

respond to federal disasters, such as floods, hurricanes, and terrorist 

attacks—including being used to facilitate disaster relief funds in the 

wakes of Hurricanes Katrina and Rita in 2006 and 2007.7

In addition, HUD programs are used to deliver funds for activities 

associated with the American Recovery and Reinvestment Act of 2009 

(Recovery Act), which is one of the federal government’s key efforts to 

stimulate the economy in response to the recent economic crisis.8

The Cabinet-level OIGs, including the HUD OIG, were established by the 

IG Act which, among other things, requires each OIG to report specific 

accomplishments in semiannual reports provided for the Congress.

The 

goals of the Recovery Act include helping preserve and create jobs, 

promoting economic recovery from the recent economic recession, 

providing investments to increase economic efficiency by spurring 

technological advances, and investing in infrastructure to provide longterm economic benefits. Under the Recovery Act, HUD received 

$13.6 billion in appropriations to be used to fund several housing program 

areas, and the OIG received an additional $15 million to its annual 

appropriation for the oversight and audit of HUD programs, grants, and 

activities funded by the act.

9

 

7

Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes 

in the Gulf of Mexico and Pandemic Influenza Act, 2006, Pub. L. No. 109-148, 119 Stat. 

2680, 2779-2780 (Dec. 30, 2005); Emergency Supplemental Appropriations Act for 

Defense, the Global War on Terror, and Hurricane Recovery, 2006, Pub. L. No. 109-234, 

120 Stat. 418, 472 (June 15, 2006); and Department of Defense Appropriations, Pub. L. 

No. 110-116, 121 Stat. 1295, 1343 (Nov. 13, 2007).

This 

includes the number of audit reports issued and the questioned costs, 

unsupported costs, and funds to be put to better use, identified by the

OIGs’ audits. As defined by the IG Act, questioned costs include either 

alleged violations of laws, regulations, contracts, grants, or agreements 

governing the expenditure of funds; costs not supported by adequate 

supporting documentation; or the expenditure of funds for an intended 

purpose that was unnecessary or unreasonable. In addition, unsupported 

costs are defined as costs that do not have adequate supporting 

documentation, and funds to be put to better use are inefficiencies 

identified by the OIG in the use of agency funds. The OIGs also include 

8

Pub. L. No. 111-5, 123 Stat. 115 (Feb. 17, 2009).

9

5 U.S.C. App. § 5.
 

Page 7 GAO-12-618 HUD OIG Resources and Results 

investigative accomplishments in their semiannual reports. These can 

include monetary accomplishments such as fines and restitutions 

resulting from settlements or court-ordered actions resulting from illegal 

activities investigated by the OIGs, and nonmonetary accomplishments 

such as cases opened, convictions, and administrative actions.

For the 5-year period from fiscal year 2007 through 2011, the HUD OIG 

had total budgetary resources that were consistently fifth highest out of 

the 16 Cabinet-level OIGs. (See table 1.) Over the same 5-year period, 

the total budgetary resources for all16 OIGs increased from about 

$1.5 billion to almost $2.2 billion, or about 45 percent. In comparison, the 

HUD OIG’s budgets increased approximately 19 percent, from about 

$121 million to about $144 million, or less than half of the percentage 

increase for the total Cabinet-level OIG budgets.10

Table 1: Percentage Change in Total Budgetary Resources of Cabinet-Level OIGs, 

Fiscal Years 2007 and 2011

Dollars in millions

Cabinet-level OIGs Fiscal year 2007 Fiscal year 2011 Percentage change

1 Department of Health 

and Human Services $285 $393 38%

2 Department of 

Defense $221 $330 49%

3 Treasury IG for Tax 

Administration $135 $157 16%

4 Department of 

Homeland Security $128 $155 21%

5 Department of Housing 

and Urban 

Development $121 $144 19%

Total for all 16 

Cabinet-level OIGs $1.499 $2.176 45%

Source: GAO analysis of OMB data.

 

10The HUD OIG’s fiscal year 2011 budgetary resources of about $144 million include

temporary supplemental funding for oversight of HUD’s disaster relief efforts and HUD’s 

Recovery Act activities.

Comparison of the 

HUD OIG’s Budgets, 

Staffing, and 

Monetary 

Accomplishments 

with Other CabinetLevel OIGs
 

Page 8 GAO-12-618 HUD OIG Resources and Results 

When comparing the full-time-equivalent (FTE) staff of the Cabinet-level 

OIGs during the same period, the HUD OIG was fifth in fiscal year 2011. 

In prior years the HUD OIG ranked fourth, immediately ahead of the 

Department of Homeland Security OIG during fiscal years 2007 through 

2009, and immediately behind the same OIG during fiscal years 2010 and 

2011. (See table 2.) The HUD OIG increased its level of FTEs by about 

13 percent during the 5-year period, a similar but somewhat smaller 

increase than the approximately 17 percent average increase in FTEs for 

all the Cabinet-level OIGs.

Table 2: Percentage Change in Full-Time-Equivalent Staff of Cabinet-Level OIGs, 

Fiscal Years 2007 and 2011

Cabinet-level OIGs Fiscal year 2007 Fiscal year 2011 Percentage change

1 Department of Health 

and Human Services

1,513 1,745 15%

2 Department of 

Defense

1,387 1,613 16%

3 Treasury IG for Tax 

Administration

792 823 4%

4-5 Department of 

Homeland Security

550 728 32%

4-5 Department of 

Housing and Urban 

Development

632 712 13%

Total for all 16 

Cabinet-level OIGs

8,387 9,843 17%

Source: GAO analysis of OMB data.

During each year of the 5-year period, from fiscal years 2007 through 

2011, the HUD OIG’s reported monetary accomplishments compared with 

its total budgetary resources resulted in estimated annual returns on each 

total budget resource dollar received. These returns ranged from a low of 

$10.73 in fiscal year 2010 to a high of $18.70 in fiscal year 2009. In 

addition, HUD’s OIG reported that total monetary accomplishments from 

audits, inspections, and investigations over the 5-year period were 

approximately $9.2 billion. When compared to the HUD OIG’s total 

budgetary resources for the entire 5-year period of $675 million, the 

estimated average return for each total budgetary resource dollar 

received was about $13.62. (See table 3.)

Monetary 

Accomplishments 

Reported by the HUD OIG 

and Other Cabinet-Level 

OIGs
 

Page 9 GAO-12-618 HUD OIG Resources and Results 

Table 3: HUD’s OIG—Estimated Average Return on Investment of Total Budgetary Resource Dollars, Fiscal Years 2007 

through 2011

HUD OIG

Fiscal year 

2007

Fiscal year 

2008

Fiscal year 

2009

Fiscal year 

2010

Fiscal year 

2011 Totals

Total budgetary resources 

(dollars in millions)

$121 $122 $142 $146 $144 $675

Monetary accomplishments 

(dollars in millions)

$1,347 $1,749 $2,656 $1,566 $1,878 $9,196

Estimated average dollar return on 

each total budgetary resources 

dollar received

$11.13 $14.34 $18.70 $10.73 $13.04 $13.62

Source: GAO analysis of the HUD OIG’s semiannual reports and OMB data.

When compared to the average 5-year return on total budgetary resource 

dollars for all 16 Cabinet-level OIGs, HUD OIG’s return was again similar, 

but somewhat higher. Specifically, the 16 Cabinet-level OIGs reported 

monetary accomplishments in their semiannual reports that totaled about 

$106.2 billion over the same period. When compared to their combined 

total budgetary resources of approximately $9.547 billion, these OIGs had 

an overall estimated average return on investment of about $11.12 for 

each total budgetary resource dollar received. (See table 4). The OIGs’ 

combined estimated average return on total budgetary resource dollars 

during this 5-year period ranged from a low of $7.54 in fiscal year 2007 to 

a high of $14.33 in fiscal year 2011.

Table 4: All Cabinet-Level OIGs—Estimated Average Return on Investment of Total Budgetary Resource Dollars Received, 

Fiscal Years 2007 through 2011

Cabinet-level OIGs

Fiscal year 

2007

Fiscal year 

2008

Fiscal year 

2009

Fiscal year

2010

Fiscal year 

2011 Totals

Total budgetary resources 

(dollars in billions)

$1.499 $1.603 $2.074 $2.195 $2.176 $9.547

Total monetary 

accomplishments 

(dollars in billions)

$11.305 $13.006 $25.981 $24.808 $31.191 $106.20

Estimated average dollar return

on each total budgetary 

resource dollar received

$7.54 $8.11 $12.48 $11.30 $14.33 $11.12

Source: GAO analysis of OIG semiannual reports and OMB data.
 

Page 10 GAO-12-618 HUD OIG Resources and Results 

The HUD OIG reported providing the majority of audits and inspections in 

HUD’s three largest program offices during fiscal years 2007 through 

2011. Specifically, the OIG reported a total of 905 audit and inspection

reports, which included reviews of the efficiency and effectiveness of 

HUD’s management and program operations, and audits of HUD’s 

financial statements during the 5-year period. Of these reports, 810—

about 90 percent—addressed HUD programs administered by PIH, OH, 

and CPD.

The OIG reported coverage of PIH-administered programs with a total of 

339 audit and inspection reports, which was the greatest number of 

reports in any of HUD’s program offices. (See fig. 3.) The emphasis on 

the PIH programs is a result of the OIG’s concerns with the overpayment 

of housing assistance in the Section 8 programs. The OIG addressed 

CPD-administered programs through 270 reports with an emphasis on 

the oversight of funding that goes to nonprofit organizations that have 

historically not participated in federal programs and may lack the capacity 

to comply with all grant requirements. Also, according to OIG officials, the 

OIG’s 201 audit and inspection reports of OH-administered programs are 

a result of the OIG’s recognition that FHA’s share of mortgage 

originations has been at an all-time high over the past few years.

HUD’s OIG Reported 

Oversight and 

Accomplishments in 

HUD’s Three Largest 

Program Offices
 

Page 11 GAO-12-618 HUD OIG Resources and Results 

Figure 3: HUD’s OIG Audit and Inspection Reports in Three HUD Program Offices 

Compared with All Other Programs, Fiscal Years 2007 through 2011

The HUD OIG also reported opening a total of 6,149 investigative cases, 

with most of them providing investigative coverage of HUD’s three largest

program offices during the 5-year period. Specifically, of these cases,

5,841 (about 95 percent), were in programs administered by PIH, OH, 

and CPD. The OIG opened 2,944 investigative cases to address alleged 

fraud in PIH-administered programs, which included rental assistance 

programs and the administration of public housing authorities. (See fig. 

4.) In addition, through expanded mortgage fraud initiatives to address 

the unprecedented increase in the number of new and refinanced FHA 

loans, the OIG reported opening 2,018 investigative cases in OHadministered programs. The OIG also reported opening 879 investigative 

cases into alleged public corruption within the management of housing 

projects as well as the administration of grant programs funded to state 

and local governments through CPD-administered programs.
 

Page 12 GAO-12-618 HUD OIG Resources and Results 

Figure 4: HUD’s OIG Investigative Cases Opened in Three HUD Program Offices 

Compared with All Other Programs, Fiscal Years 2007 through 2011

The HUD OIG’s total monetary accomplishments of approximately 

$9.196 billion reported during fiscal years 2007 through 2011 includes 

about $6.94 billion11

 

11This includes $28.4 million in monetary accomplishments resulting from audits and 

inspections of hurricane relief and disaster assistance not reported by the OIG as part of a 

specific HUD program.

 in potential savings from audit and inspection 

reports, about $1.39 billion in monetary recoveries from investigations, 

and about $866 million from additional related investigative efforts. These 

include the monetary amounts of funds put to better use; questioned 

costs identified by audits and inspections; and investigative recoveries 

from fines, settlements, and restitutions.

HUD’s OIG Reported 

Monetary and 

Nonmonetary 

Accomplishments
 

Page 13 GAO-12-618 HUD OIG Resources and Results 

Of the almost $6.94 billion in reported potential monetary savings from 

audits and inspections, approximately $2.46 billion (about 36 percent), 

was in HUD’s three largest program offices. Of the remaining amount, 

about $4.45 billion (approximately 64 percent), was mostly from a 

financial control deficiency and not directly related to HUD’s large

program offices. (See fig. 5.) The majority of this figure—approximately 

$4.27 billion (about 96 percent), is related to ongoing significant 

deficiencies reported by the OIG in HUD’s financial process for reviewing 

outstanding obligations and recapturing amounts no longer needed to 

fund them. This process was reported by the HUD OIG as a significant 

deficiency in fiscal year 2011 and in prior years because it allowed invalid 

obligations to remain in HUD’s accounting records.

Figure 5: HUD’s OIG Total Monetary Accomplishments from Audits and Inspections 

of Three HUD Program Offices Compared with All Other Programs, Fiscal Years 

2007 through 2011
 

Page 14 GAO-12-618 HUD OIG Resources and Results 

The HUD OIG identified about $1.25 billion in monetary accomplishments 

over the 5-year period from audits and inspections of PIH-administered 

programs, particularly the Section 8 programs. These monetary 

accomplishments were from audits and inspections of tenant eligibility 

issues, the accuracy of rental assistance payments, the quality of 

housing, and the cost of administering the programs.

Over the 5-year period, the OIG reported monetary accomplishments 

from audits and inspections of CPD-administered programs of 

approximately $835.7 million. These audits and inspections focused on 

the control systems in place, especially for subrecipients of HUD grant 

funds, to determine whether these controls provide the review and 

oversight necessary to ensure funds are spent on eligible activities and 

put to good use.

Also, over the same period, the HUD OIG reported monetary 

accomplishments of about $381.3 million related to OH-administered 

programs. The HUD OIG’s audits and inspections target FHA lenders 

based on a number of high-risk indicators. In fiscal year 2010, the OIG 

conducted Operation Watchdog that involved reviewing the underwriting 

of 284 mortgages. Of these mortgages, the OIG concluded that almost 

50 percent never should have been insured and resulted in an estimated 

loss in excess of $11 million. The OIG recommended that HUD take 

administrative actions against each lender and that HUD develop and 

implement a risk-based selection of loans to verify that the loans met FHA 

requirements.

The HUD OIG reported a total of about $1.392 billion in investigative 

recoveries during fiscal years 2007 through 2011. Approximately 

$1.2 billion (about 86 percent), of these recoveries were from 

investigations in OH’s housing programs administered by FHA. (See fig.

6.) The OIG reported mortgage fraud investigations into FHA’s programs 

as a continuing priority and reported working closely with the Federal 

Bureau of Investigation (FBI) to coordinate mortgage fraud initiatives. OIG 

investigations focused on various frauds perpetrated by mortgage 

companies and brokers, title companies, loan officers, real estate agents, 

closing attorneys, appraisers, builders, and nonprofit entities. For 

example, a HUD OIG investigation found that HUD, Ginnie Mae, and 

other financial entities had realized losses in excess of $1.9 billion due to 

bank, wire, and securities fraud committed by the chairman of a former 

FHA-approved lender. The chairman was sentenced to 30 years in prison 

and ordered to forfeit $38.5 million. For investigative recoveries related to 

other HUD offices, the OIG reported about $94.5 million in PIH-
 

Page 15 GAO-12-618 HUD OIG Resources and Results 

administered programs, and investigations of CPD-administered 

programs resulted in about $63.4 million in investigative recoveries during 

the same 5-year period.

Figure 6: HUD’s OIG Total Investigative Recoveries in Three HUD Program Offices 

Compared with All Other Programs, Fiscal Years 2007 through 2011

Regarding nonmonetary accomplishments in HUD’s three largest

program offices, the HUD OIG reported that its PIH-related investigative 

priorities include Section 8 rental assistance fraud committed by tenants 

and landlords, Section 8 administrators, and PHAs. An important part of 

the investigative efforts in this area included outreach by the OIG staff to 

meet with executive directors of housing authorities, provide training 

seminars for the identification of fraud, and develop liaisons for referrals. 

As a result, during fiscal years 2007 through 2011, the OIG reported 

participating in almost 3,000 convictions, pleas, and mistrials (See fig. 7.), 

and 3,655 administrative and civil actions to address wrongdoing in PIHadministered programs. (See fig. 8.)
 

Page 16 GAO-12-618 HUD OIG Resources and Results 

The OIG also reported full-time participation on the FBI National 

Mortgage Team with mortgage fraud task forces at over 40 locations 

throughout the country. These activities led to increased investigations, 

as well as civil actions, to address fraud in HUD’s single family programs. 

As a result the OIG reported 1,440 convictions, pleas, and mistrials and 

1,680 administrative and civil actions in OH-administered programs.

With respect to recent increases in HUD oversight responsibilities, the 

HUD OIG reported investigative activities that focused on CDBG grants 

that included federal funding for hurricane and disaster assistance. As a 

result, the OIG reported a total of 308 convictions, pleas, and mistrials 

and 200 administrative and civil actions during the 5-year period. For 

example, a 2010 OIG investigation resulted in a Gulf Coast resident being 

charged in U.S. District Court with making false statements in the theft of 

government funds after receiving $300,000 in CDBG disaster assistance 

funds for damaged property that was not the recipient’s primary residence

during Hurricane Katrina and therefore did not qualify for disaster 

assistance.
 

Page 17 GAO-12-618 HUD OIG Resources and Results 

Figure 7: HUD’s OIG Convictions, Pleas, and Mistrials in Three HUD Program 

Offices Compared with All Other Programs, Fiscal Years 2007 through 2011
 

Page 18 GAO-12-618 HUD OIG Resources and Results 

Figure 8: HUD’s OIG Administrative and Civil Actions in Three HUD Program Offices 

Compared with All Other Program Offices, Fiscal Years 2007 through 2011

In fiscal year 2009, the Congress provided the HUD OIG with additional 

funding of $15 million to provide oversight of Recovery Act funds through 

HUD’s programs. This resulted in an increased focus by the OIG on 

HUD’s Recovery Act responsibilities. The coverage and accomplishments 

reported by the OIG include a total of 177 audit and inspection reports 

that address the Recovery Act, as well as about $133.7 million in related 

monetary accomplishments during fiscal years 2009 through 2011.12

 

12The OIG’s investigative activities related to the Recovery Act are included in the 

information reported by the OIG for each of HUD’s programs. For example, the Recovery 

Act funds made available through CDBG programs are included in the OIG’s oversight of 

CPD and the accomplishments are reported with all other CPD results.

 (See 

table 5.)

Recovery Act
 

Page 19 GAO-12-618 HUD OIG Resources and Results 

Table 5: HUD’s OIG Audits and Inspections of Recovery Act Funding, Fiscal Years 

2009 through 2011

Audit and inspections 

reports

Fiscal year 

2009

Fiscal year 

2010

Fiscal year 

2011 Totals

Number of Recovery Act 

audit and inspections 

reports

31 62 84 177

Monetary accomplishments 

(dollars in millions)

$36.8 $32.3 $64.6 $133.7

Source: GAO analysis of HUD OIG ‘s semiannual reports.

The HUD OIG considers Recovery Act activities to be high risk with the 

potential for housing-related fraud because significant allocations of these 

funds are processed in an unusually short time frame. The OIG’s 

Recovery Act audits and inspections included determining whether funds 

are awarded and distributed in a prompt, fair, and reasonable manner. In 

addition, the OIG’s audits are to help to determine whether recipients and 

users of funds are transparent to the public, whether funds are used for 

the authorized purposes, and whether program goals are achieved.

In written comments on a draft of this report, the HUD IG generally 

concurred with the report contents. We also received technical 

suggestions which we incorporated as appropriate.

We are sending copies of this report to the HUD IG and interested 

congressional committees. In addition, this report will be available at no 

charge on the GAO website at http://www.gao.gov. If you have any 

questions or would like to discuss this report, please contact me at 

(202) 512-2623 or davisb@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. Major contributors to this report are listed in appendix II. 

Beryl H. Davis

Director

Financial Management and Assurance

Agency Comments
Appendix I: Comments from the Inspector 

General, Department of Housing and Urban 

Development

Page 20 GAO-12-618 HUD OIG Resources and Results 

Appendix I: Comments from the Inspector 

General, Department of Housing and Urban 

Development 
Appendix II: GAO Contact and Staff 

Acknowledgments

Page 21 GAO-12-618 HUD OIG Resources and Results 

Beryl H. Davis, (202) 512-2623

In addition to the contact named above, Jackson Hufnagle, 

Assistant Director; Clarence Whitt; Francis Dymond; Jacquelyn Hamilton; 

Katherine Lenane; Arkelga Braxton; Jessica Butchko; Pierre Kamga; and 

Janaya Davis Lewis made key contributions to this report.

Appendix II: GAO Contact and Staff 

Acknowledgments 

GAO Contact

Staff 

Acknowledgments

(197218)
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