HUD Audit Guide
Proactively ensure compliance with HUD’s uniform reporting standards using digital audit templates
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:
- what is an HUD audit checklist?;
- what are the HUD audit requirements?;
- exactly what should be in an HUD consolidated audit guide?;
- digital solution to help proactively ensure regulatory compliance; and
- free HUD audit checklists you can download, customize, and use.
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.
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
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
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
Featured HUD Audit Checklists
HUD Audit Checklist
An HUD audit checklist is a tool used by auditors to ensure regulatory compliance when auditing specific HUD program managers. Use this checklist to help you audit FHA-approved lenders more efficiently and accurately as it encompasses the general audit requirements, electronic submission of audited financial statements and compliance data, and more.
Indicate whether an audit item is “done”, or performed according to standard, “in progress”, or you and/or the program manager is already working on it, “not available”, or the data, report, and/or a certain audit process step has yet to be accomplished, or “not applicable”.
For compliance requirements and suggested audit procedures, specific whether an audit item is “compliant”, “non-compliant”, “partly compliant”, or “not applicable. Upon reported non-compliance or internal control weakness, assign an action to assist project managers improve their HUD compliance instantly.
HUD Audit Template
This template can be used by HUD-approved property appraisers as an FHA home inspection checklist to thoroughly inspect the entire property. Inspect the grounds, structure, exterior, roof, windows, doors, interior, rooms, crawl space, heating/cooling system, electrical, plumbing, and other sections of the home. Complete the inspection with your comments and other observations about the property, affix your digital signature, and generate reports in different file formats depending on your needs.
HUD Compliance Audit Checklist
This HUD compliance audit checklist contains the compliance requirements and suggested audit procedures for FHA-approved lenders with Title I and Title II authority. Use this HUD compliance audit checklist to ensure the quality control plan implementation, sponsor responsibility for 3rd-party originators, branch office originators, federal financial and activity reports, and lender annual recertification, adjusted net worth, liquidity, and licensing. Customize this checklist using iAuditor’s drag-and-drop template editor to easily add sections such as loan origination, servicing, disbursement, and settlement, or delete audit items to tailor this digital checklist according to your needs.
HUD Audit Report Template
An HUD audit report template is used by auditors to accurately record the findings of an HUD audit, specifically for Chapter 7. Use this template to ensure that the content of finding, corrective action in progress, and corrective action completed are adequately documented. Every flagged item will instantly notify those with iAuditor Analytics access, so non-compliance can be addressed at the onset. You can add some notes, also with speech-to-text capability, for other observations or recommendations and complete this template by affixing your digital signatures.