The Department of Housing and Urban Development has fallen short of the Digital Accountability and Transparency Act’s required reporting deadline, an inspector general found.
IG officials said the agency’s chief financial officer failed to implement the data standards required by the Office of Management and Budget and the Department of Treasury, causing HUD to underreport billions in obligations and outlays, and submit incomplete and inaccurate data in its second quarter spending reports.
“Our review of HUD’s seven required files supporting the second quarter of fiscal year 2017 found widespread errors, inconsistencies, omissions and false values, which were reported to USASpending.gov,” the report said.
The DATA Act required federal agencies to submit standardized spending information by May 2017 in an effort to improve transparency. OMB and Treasury developed 57 data definition standards to assist agencies in standardizing spending data.
But investigators found that HUD didn’t allocate enough funding toward DATA Act implementation efforts, including carrying out necessary information system upgrades to ensure that spending information from HUD, the Federal Housing Administration and the Government National Mortgage Association — also known as Ginnie Mae — fit the DATA Act Information Model Schema.
“To subsequently allocate limited funding to system upgrades, HUD leveraged resources from a preexisting agreement with an independent contractor, which were insufficient to complete implementation,” the report said. “The agency continued to remain dependent on financial systems with differing technologies and data elements, which contributed to the issues noted.”
The report also notes the CFO provided limited staff and resources to implementation efforts, which further delayed HUD’s DATA Act transition.
But despite the Treasury Department providing a DATA Act Playbook on how to conduct implementation and the IG offering HUD eight recommendations on how to meet the May deadline, agency officials disregarded the recommendations and “inaccurately represented” their progress to the House of Representatives in a December 2016 hearing.
A lack of agency guidance on implementation and weak internal controls on DATA Act reporting further complicated efforts, leading to information inconsistencies.
“FHA contributed to a total absolute value of $17.3 billion in obligations incurred and $16.6 billion in outlays, and Ginnie Mae contributed to a total of $558.3 million in obligations incurred and $215.8 million in outlays, which were excluded from DATA Act reporting and not reported on USASpending.gov,” the report said. “Additionally, $4.2 billion in apportionments was not reported to USASpending.gov.”
The IG offered five new recommendations on how HUD could achieve DATA Act compliance:
- Designate additional HUD personnel and establish an internal reporting structure to complete DATA Act implementation, while sustaining reliable DATA Act reporting for later periods.
- Validate, certify and submit all reportable FHA and Ginnie Mae data through the DATA Act broker and report the data on USASpending.gov.
- Complete data quality and error resolution for HUD’s loan programs to ensure inclusion in HUD’s subsequent submissions.
- Allocate the financial resources to ensure that reconciliations are performed in the consolidation of source system data to the DATA Act submission files.
- Establish and implement internal control policies and procedures for consolidating and reconciling data from HUD, Ginnie Mae and FHA source systems are documented and include a governance structure, including roles, responsibilities and personnel completing DATA Act reporting procedures.
HUD officials offered responses to nine comments made within the report, but did not comment on the additional recommendations.