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HUD Audit Guide

Proactively ensure compliance with HUD’s uniform reporting standards using digital audit templates

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Published August 14th, 2020

What is an HUD Audit Guide?

An HUD audit guide is a step-by-step procedure laid out by the U.S. Department of Housing and Urban Development (HUD) for standardizing the performance of program-specific audits. An HUD audit is usually conducted by independent auditors to determine whether HUD program managers, or those who offer HUD-funded public housing, have provided reliable financial data, placed internal controls, and complied with the Federal terms and conditions.

This article will briefly discuss:

  1. what is an HUD audit checklist?;
  2. what are the HUD audit requirements?;
  3. exactly what should be in an HUD consolidated audit guide?;
  4. digital solution to help proactively ensure regulatory compliance; and
  5. free HUD audit checklists you can download, customize, and use.

What is an HUD Audit Checklist?

An HUD audit checklist is a tool used by auditors to perform up-to-standard HUD audits and assure the integrity of funds. An HUD audit report is presented to program managers to help meet their stewardship responsibilities in overseeing HUD programs and act upon areas of noncompliance and internal control weaknesses. Utilizing digital HUD audit checklists can help auditors report adequate information to give audited matters perspective, especially by capturing photo evidence, and allow program managers to take necessary corrective action.

What are the HUD Audit Requirements?

HUD audit requirements are normally outlined by the Office of the Inspector General (OIG) as a list of reports to be submitted and processes to be undergone by program managers to ensure regulatory compliance. General HUD audit requirements primarily consist of a financial statement audit of the entity and a compliance audit of the entity’s major HUD programs.

As one of the most common HUD programs to be audited, here are the general requirements for FHA-approved lenders (Chapter 7):

  • Audit of the financial Statements and Supplementary Information
  • Internal Control Report
  • Compliance Report
  • Schedule of Findings and Questioned Costs
  • Corrective Action Plan

Crucial Parts of an HUD Consolidated Audit Guide

An HUD consolidated audit guide is issued by the HUDOIG to assist independent auditors in performing audits of profit-motivated program participants in selected HUD housing programs. Chapter 7 of the HUD consolidated audit guide is often searched for, so here are its compliance requirements and suggested audit procedures:

For Lenders with Title I and Title II Authorities

  • Quality Control Plan Implementation
  • Sponsor Responsibility for Third-Party Originators
  • Branch Office Operations
  • Loan Origination
  • Loan Servicing
  • Federal Financial and Activity Reports
  • Lender Annual Recertification, Adjusted Net Worth, Liquidity, and Licensing

For Lenders with Title I Authority

  • Loan Disbursement
  • Eligible Fees and Charges

For Lenders with Title II Authority

  • Loan Settlement
  • Escrow Accounts
  • Kickbacks

Digital Solution to Proactively Ensure Regulatory Compliance

In addition to the general requirements, compliance requirements, and suggested audit procedures, Chapter 7 HUD audits also cover multifamily loans reporting, reference material, and technical assistance. It is crucial for both the independent auditor and program manager to stay on top of the audit process, especially during the electronic submission of audited financial statements and compliance data, and immediately take action upon the HUD audit finding reporting.

Proactively ensure HUD audit compliance with an inspection and corrective action solution that can be learned in minutes, so you can easily evaluate your compliance, act upon issues at the onset, and have confidence in your reporting and internal controls from the get-go. With iAuditor by SafetyCulture, you can take advantage of the following benefits when you sign up for free today:

  • Easily convert paper documents into digital forms with smartscan or customize pre-built, industry templates with drag-and-drop editor
  • Use HUD audit checklists anytime, anywhere, and on any mobile device—even when offline
  • Take or attach photo evidence of areas of compliance or non-compliance and annotate images for improved visual reference
  • Assign actions with a priority level and due date to correct reported internal control weaknesses or areas of improvement
  • Auto-generate and secure HUD audit reports in the cloud and share them to key shareholders with a tap of a finger

Author

Shine Colcol

SafetyCulture Staff Writer

Shine has been professionally writing about virtually anything since her internship for a digital publisher of niche blogazines. She is passionate about building a culture of continuous improvement in the environmental, health, safety, and quality space through well-researched, engaging, and impactful content.