oversight

Financial Management: Information on the Mandated Transfer of HUD's Appropriation Law Function to the Chief Financial Officer

Published by the Government Accountability Office on 2003-11-21.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

United States General Accounting Office
Washington, DC 20548




          November 21, 2003

          The Honorable Christopher S. Bond
          Chairman
          The Honorable Barbara A. Mikulski
          Ranking Minority Member
          Subcommittee on Veteran Affairs, HUD and Independent Agencies
          Committee on Appropriations
          United States Senate

          Subject: Financial Management: Information on the Mandated Transfer of HUD’s
          Appropriation Law Function to the Chief Financial Officer

          The Departments of Veterans Affairs and Housing and Urban Development (HUD),
          and Independent Agencies Appropriations Act, 2003 (the Appropriation Act)1 gave
          HUD’s Chief Financial Officer (CFO), in consultation with the HUD Budget Officer,
          the “sole authority” to investigate potential or actual violations under the Anti-
          Deficiency Act2 and all other statutes and regulations related to the obligation and
          expenditure of funds made available in any act. Further, the Appropriations Act
          provided that the CFO shall determine whether violations occurred and submit the
          final reports required by law. Finally, the Appropriation Act required the Secretary of
          HUD to transfer no fewer than four appropriation law attorneys from its Office of
          General Counsel (OGC) to its Office of Chief Financial Officer (OCFO).

          These provisions and HUD’s actions to implement the Appropriation Act’s
          requirements raised a number of potential implementation issues and led to your
          request that we review and provide information on the impact that these provisions
          have had at HUD. Specifically, you asked for information pertaining to the following
          five questions, which we have provided in a question and answer format in this
          report. As discussed with your staff, the responses to these questions are primarily
          based on information obtained from interviews with various HUD and HUD Office of
          Inspector General (OIG) officials who were affected by the Appropriation Act.

          1. What functions were transferred to OCFO and how has HUD implemented the
             administration of these functions within OCFO?


          1
              Pub. L. No. 108-7, Div. K, 117 Stat. 11, 474 (2003).
          2
              31 U.S.C. §§ 1341, 1342, 1350, 1517, 1519 (2000).


                                                                GAO-04-272R HUD Appropriation Law Issues
2. Is there any conflict between the CFO’s traditional duties and responsibilities and
   (a) the sole authority to investigate and report on potential or actual violations of
   statutes and regulations related to the obligation and expenditure of funds or
   (b) the added responsibility of sole authority to opine on all appropriations law
   issues?

3. What steps has HUD taken to ensure that any conflict of interest has been
   identified and eliminated?

4. Are there any issues associated with removing the HUD General Counsel from
   being able to review any appropriations law actions of the CFO or the HUD
   Budget Officer and render timely, needed advice to the HUD Secretary on any
   aspect of appropriations law?

5. Does the “sole authority” to investigate and report provided to the CFO by the
   Appropriation Act conflict with or undermine the authority provided to the
   Inspector General by the Inspector General Act?

To address your request, we obtained and reviewed the relevant provisions of the
Appropriation Act and related conference and committee reports. We interviewed
several senior level HUD officials affected by the Appropriation Act’s provisions,
including the General Counsel and several other attorneys from HUD’s OGC; HUD’s
Deputy Chief Financial Officer3 and staff from his office, including the head
appropriations law attorney and HUD’s budget officer; and senior officials from
HUD’s program offices who receive legal services from HUD’s attorneys. We also
interviewed officials from HUD’s OIG and reviewed the OIG’s March 2002 report on
the Office of Multifamily Housing Assistance Restructuring (OMHAR) Anti-Deficiency
          4
Act case. We also reviewed the Anti-Deficiency Act, the Chief Financial Officers Act
of 1990, and the Inspector General Act of 1978, as amended (IG Act). Finally, we
reviewed the department’s revised funds control handbook dated December 18, 2002,
which was updated and issued just prior to the enactment of the Appropriation Act
                                                                                   5
and which lays out HUD’s process for handling future Anti-Deficiency Act issues. We
requested comments on a draft of this report from the Secretary of Housing and
Urban Development and HUD’s Inspector General or their designees. We conducted
our work from August 2003 through November 2003 in accordance with U.S.
generally accepted government auditing standards.

Summary

There was general agreement among the HUD officials we spoke with that the
OMHAR Anti-Deficiency Act investigation was contentious and highlighted the need
for changes to strengthen the department’s funds control system and to improve the

3
  HUD’s Chief Financial Officer position is currently vacant.
4
  HUD Office of Inspector General Audit Memorandum Report 2002-DE-0801 (March 22, 2002),
“Alleged Violations of the Anti-Deficiency Act and the HUD Reform Act by the Office of Multifamily
Housing Assistance Restructuring (OMHAR).” There was consensus among HUD officials that HUD’s
handling of this Anti-Deficiency Act case played a significant role in the events leading to enactment of
the Appropriation Act’s provisions that are the subject of this request.
5
  HUD is currently revising its funds control handbook (Handbook No. 1830.2 Rev-4) to incorporate the
organizational changes mandated by the fiscal year 2003 Appropriation Act.


Page 2                                           GAO-04-272R HUD Appropriation Law Issues
department’s process for responding to Anti-Deficiency Act issues. Some HUD
officials also told us that tension over the handling of Anti-Deficiency Act issues led
to changes in OGC’s provision of legal assistance to OCFO, which hindered timely,
informal communications between OCFO and OGC’s appropriation law attorneys.
However, there were differing views on how to address these matters and on various
implementation issues raised about provisions included in the Appropriation Act.

There was agreement on what functions and roles OCFO assumed pursuant to the
Appropriation Act. HUD transferred four appropriations law attorneys from OGC to
OCFO as required. Also, in addition to OCFO’s typical responsibilities of accounting,
financial reporting, budgeting, and establishing and maintaining the department’s
funds control system, the HUD officials concurred that OCFO is now responsible for
all appropriation law matters, including providing legal interpretations on
appropriation law to HUD’s Secretary and program offices and leading all Anti-
Deficiency Act investigations that may arise within the department. There also was
general consensus that having OCFO as a designated focal point within HUD for
addressing Anti-Deficiency Act matters was a positive development.

Regarding the remaining questions you raised, there was much less consensus
concerning potential conflicts of interest and the respective roles of OCFO, OGC, and
the IG. Responses to the remaining questions revealed different perspectives, most
notably over the implication of the Appropriation Act providing OCFO with “sole
authority” to investigate and determine violations of appropriation law and
transferring attorneys from OGC to OCFO.

Certain HUD officials and the OIG officials we spoke with believe there is a conflict
of interest, or at least the appearance of a conflict, by having OCFO solely
responsible for investigating, determining, and reporting on potential or actual Anti-
Deficiency Act violations in situations involving breakdowns in HUD’s funds control
system. The OIG officials cited the OMHAR Anti-Deficiency Act case as a prime
example of the existence of a conflict as two of the four individuals deemed
responsible for that violation worked within OCFO. Others, particularly within
HUD’s OCFO, while acknowledging these concerns, did not necessarily feel that the
Appropriation Act’s provisions created a conflict. Instead they said it was their
management responsibility, even without the legislation, to be involved with and lead
investigations of potential or actual Anti-Deficiency Act violations. Nevertheless,
OCFO has taken certain steps that it believes will help minimize the potential for, or
the appearance of, a conflict of interest by establishing and documenting the process
that will be followed if and when future Anti-Deficiency Act violations arise.
Additionally, OCFO is also now finalizing the establishment of a new division within
OCFO that will be headed by an individual with no budgetary or funds control
responsibilities to oversee and report on future Anti-Deficiency Act investigations.

The HUD program officials and most of the attorneys, including the head
appropriations law attorney in OCFO, we spoke with who work with the program
offices every day did say that despite HUD’s best efforts to implement the new
mandated structure and ensure collaboration among the two groups of attorneys, the
transfer of the appropriations law attorneys from OGC to OCFO caused initial and
lingering confusion over which group of attorneys should be consulted for legal
assistance. According to the General Counsel, this confusion delays legal advice,


Page 3                                   GAO-04-272R HUD Appropriation Law Issues
provides the opportunity for program officials to “shop” for legal interpretations, and
hampers his ability to provide timely, needed legal advice not only to the Secretary
but also to the HUD program offices. Further, numerous officials said they were not
sure how differing legal views would be resolved. Historically, the General Counsel
has made the final interpretation. On the other hand, officials from OCFO said the
transfer of the appropriation attorneys was necessary because at some point during
the OMHAR Anti-Deficiency Act investigation the General Counsel began restricting
access to the appropriation law attorneys by requiring formal written requests for all
appropriation law services. As a result, an official in HUD’s OCFO said that his office
and the program offices could not obtain needed assistance on appropriation law
issues in a timely manner.

Finally, OIG officials told us that they see two conflicts, or at least possible conflicts,
between the literal language of the Appropriations Act and the language of the IG Act.
First, they said that by providing OCFO with “sole authority” to investigate potential
or actual Anti-Deficiency Act violations, the Appropriations Act conflicts with the
language of the IG Act that generally authorizes the OIG to investigate HUD matters.
In response to this conflict, the OIG is referring all potential Anti-Deficiency Act
issues to HUD’s OCFO. Second, the OIG officials said they believe there is a possible
conflict between OCFO’s sole authority to report on Anti-Deficiency Act violations
under the Appropriation Act and the OIG’s authority to report criminal violations to
the Attorney General under the IG Act. On the other hand, officials from HUD’s
OCFO said that the OIG should not routinely be involved in an Anti-Deficiency Act
violation until an official determination has been made by the department. At that
time, the OCFO official said it would be appropriate for the OIG to review the work
that went into the investigation, and more importantly and pursuant to their
authority, to investigate and determine whether criminal acts may have been
committed.

Background
                 6
In its report on the fiscal year 2003 Departments of Veterans Affairs and Housing
and Urban Development, and Independent Agencies Appropriations Bill, the House
Appropriations Committee noted that in prior years it and others, including GAO and
the Office of Management and Budget (OMB), had raised concerns about HUD’s
system of funds control and compliance with the Anti-Deficiency Act. Congress
enacted the Anti-Deficiency Act and has amended it over many years to prohibit
agencies from making obligations and expenditures in excess of the appropriations
provided to them. Among other things, the Anti-Deficiency Act prohibits officers or
employees of the United States government, unless otherwise authorized by law,
from (1) making or authorizing an obligation or expenditure in excess of an available
appropriation or fund, (2) involving the government in any contract or obligation in
advance of appropriations, or (3) making obligations or expenditures in excess of an
apportionment or the amount permitted by agency regulations. To help protect
against violating the Anti-Deficiency Act’s prohibitions, Congress amended the Anti-
Deficiency Act on several occasions to establish requirements for agency systems of
funds control. When violations do occur, the Anti-Deficiency Act requires that
agency heads report to the President and Congress and subjects the officers and
6
    H.R. Rep. No. 107-740, at 78-79 (2002).


Page 4                                        GAO-04-272R HUD Appropriation Law Issues
employees responsible for the violation to possible adverse personnel actions and
criminal penalties.7

The House Appropriations Committee report also noted that these concerns and
three recent Anti-Deficiency Act violations8 that were brought to the Committee’s
attention prompted an investigation by the Committee’s Survey and Investigations
staff into HUD’s procedures to investigate and enforce the Anti-Deficiency Act.
According to the House Appropriations Committee report, the House investigators
determined that HUD lacked adequate funds control policies and procedures with
respect to oversight, checks and balances, automated systems, audits, and training.

On the basis of these findings, the House Appropriations Committee included bill
language and additional funding to assist HUD’s efforts to improve funds control and
its financial management systems. Additional bill language vested the sole authority
to investigate, determine, and report compliance with the Anti-Deficiency Act and all
other appropriations law with HUD’s OCFO. The bill language also required the
transfer of no fewer than four appropriation law attorneys from OGC.

The Senate’s version of the fiscal year 2003 appropriations bill for HUD did not
contain any similar provisions. The Departments of Veterans Affairs and Housing and
Urban Development, Independent Agencies Appropriations Act, 2003, was ultimately
enacted on February 20, 2003, as part of the Consolidated Appropriations Resolution,
2003.9 The appropriations for HUD “Management and Administration, salaries and
expenses” essentially adopted the language from the House bill that involved OCFO’s
responsibilities for Anti-Deficiency Act and other appropriation law matters and the
transfer of four appropriation law attorneys.10 In the conference report11 on the
Consolidated Appropriations Resolution, 2003, the conferees reiterated the concerns
expressed in the House report about the severe chronic funds control problems at
HUD, including the department’s failure to make timely, formal determinations of the
violations of the Anti-Deficiency Act and other appropriations statutes. As of March
2003, HUD had completed the mandated transfer of the four appropriation law
attorneys from OGC to OCFO.




7
   OMB Circular A-11 provides requirements for funds control and instructions for required agency head
reports if the agency head determines that an Anti-Deficiency Act violation occurred. For an extensive
discussion of the Anti-Deficiency Act, see chapter 6 of GAO’s Principles of Federal Appropriations
Law.
8
   The most significant Anti-Deficiency Act violation involved HUD’s Office of Multifamily Housing and
Assistance Restructuring’s (OMHAR) use of technical assistance grant funds. HUD’s investigation into
this matter was lengthy and resulted in mixed opinions about whether an Anti-Deficiency Act violation
actually occurred. Both HUD’s General Counsel and the Office of Inspector General concluded that
with respect to the OMHAR case no Anti-Deficiency Act violation occurred. However, HUD’s
Secretary ultimately concluded there was an Anti-Deficiency Act violation and reported it.
9
   Pub. L. No. 108-7, Div. K, 117 Stat. 11, 474 (2003).
10
   117 Stat. at 499-500.
11
   H.R. Conf. Rep. No. 108-10, at 1427 (2003).


Page 5                                          GAO-04-272R HUD Appropriation Law Issues
Questions and Answers

1. What functions were transferred to OCFO and how has HUD implemented
the administration of these functions within OCFO?

Provisions in the Appropriations Act, gave OCFO, in consultation with the Budget
Officer, the “sole authority” to investigate potential or actual violations of the Anti-
Deficiency Act and all other statutes and regulations related to the obligation and
expenditure of funds. In addition, OCFO is to determine whether violations exist and
is to submit the final reports on violations to the Secretary, the President, OMB, and
Congress.

As required by the Appropriations Act, HUD transferred four attorneys from the
Legislation Division, Office of Legislation and Regulations, Office of General Counsel
to OCFO. Two of these attorneys had what HUD described as “significant”
appropriations law experience, while the other two had lesser amounts of
appropriations law experience. OCFO’s appropriations law function is now
responsible for providing legal assistance on all appropriations law matters to HUD’s
program offices as well as the HUD Secretary. The appropriation law attorneys are
supervised by a GM-15 attorney and are currently reporting to HUD’s Deputy CFO,
who is not an attorney.


2. Is there any conflict between the CFO’s traditional duties and
responsibilities and (1) the sole authority to investigate and report on
potential or actual violations of statutes and regulations related to the
obligation and expenditure of funds or (2) the added responsibility of sole
authority to opine on all appropriations law issues?

HUD’s OCFO typically has been responsible for the department’s accounting,
financial reporting, and budgeting functions, as well as for creating and maintaining
HUD’s system of funds control to ensure appropriated funds are used lawfully and as
intended. Given these responsibilities, several of the HUD officials and the OIG
officials we interviewed told us that they do believe the new responsibilities provided
in the Appropriation Act have led to or increased the potential for a conflict of
interest or at least the appearance of a conflict of interest. A chief concern is that
OCFO is now solely responsible for investigating potential Anti-Deficiency Act
violations that involve breakdowns in the funds control system, which it is
responsible for administering. Also, OCFO attorneys are now in the position of
having to render legal interpretations that may directly implicate the performance of
the CFO for whom they now work. Additionally, there were some concerns raised
about the supervision and rating of the OCFO attorneys. The OIG officials cited the
OMHAR Anti-Deficiency Act case as prime example of why the Appropriation Act
created a conflict of interest. In the Secretary’s OMHAR Anti-Deficiency Act report,
two of the four persons or positions deemed responsible for the violation worked
within OCFO.

Others at HUD, principally in OCFO, told us they do not believe there is a clear
conflict. Their belief is that since OCFO has been delegated responsibility for funds



Page 6                                   GAO-04-272R HUD Appropriation Law Issues
control within the department, management of that responsibility dictates that OCFO
should also be responsible for and involved with assessing where that system failed,
and if an Anti-Deficiency Act violation occurred. Further, HUD’s budget officer
believes the Anti-Deficiency Act and OMB circulars make it clear that the funds
control responsibilities rest within OCFO.

The Deputy CFO and some others said the Appropriation Act was useful in that it
clearly establishes who within HUD has responsibility for leading and making future
Anti-Deficiency Act violation determinations. During the OMHAR Anti-Deficiency
Act investigation, these responsibilities were not clearly defined and this hampered
the investigation. HUD’s updated funds control handbook now specifies individuals’
responsibilities with respect to future Anti-Deficiency Act issues. Further, the Deputy
CFO stated that the appropriation law attorneys now assigned to his office can focus
on reviewing newly required funds control plans, which he and others believe are a
key component in strengthening HUD’s system of funds control to prevent future
Anti-Deficiency Act violations.

The Deputy CFO said that OCFO did recognize that others have concerns about the
potential for an appearance of a conflict of interest and therefore, as discussed in the
response to question 3, has taken or plans certain actions to help mitigate these
concerns.


3. What steps has HUD taken to ensure that any conflict of interest has been
identified and eliminated?

Given the responsibilities of HUD’s OCFO, it would be difficult to completely
eliminate the potential for a conflict of interest or the appearance of a conflict of
interest. However, HUD has taken or is planning to take certain steps to try to
mitigate this risk. Specifically, we were told that OCFO is in the process of
establishing a new division within OCFO that is to be headed by an individual with no
funds control or budget responsibilities to lead future Anti-Deficiency Act inquiries.
The investigative team is also to be comprised of staff not associated with the activity
where the Anti-Deficiency Act violation is alleged. We were told that OCFO
appropriations law attorneys would provide legal assistance to this group and the
new division would submit its report – a report that we were told will serve as the
department’s report as required by the Anti-Deficiency Act and OMB Circular A-11--
to the CFO and HUD Secretary for acceptance. A HUD official told us that this
division is staffed and ready to begin work pending notification to Congress.

Additionally, prior to the enactment of the Appropriations Act, HUD’s OCFO made
substantial revisions to its funds control handbook. Included in this revised
handbook is a chapter that lays out the department’s process for responding to future
Anti-Deficiency Act issues. The process spells out who to notify when an Anti-
Deficiency Act violation is suspected, delineates responsibilities for conducting the
investigation, and prescribes the documentation that is to be maintained. HUD is
now in the final stages of updating the funds control handbook again to reflect the
organizational changes mandated by the Appropriations Act and the establishment of
the new division within OCFO that will lead future Anti-Deficiency Act investigations.



Page 7                                    GAO-04-272R HUD Appropriation Law Issues
4. Are there any issues associated with removing the HUD General Counsel
from being able to review any appropriations law actions of the CFO or the
HUD Budget Officer and render timely, needed advice to the HUD Secretary
on any aspect of appropriations law?

In our discussions concerning this question, agency officials had different views.
Most of the attorneys we interviewed from HUD’s OGC, including the General
Counsel, shared the opinion that the current organizational structure does not lend
itself to ensuring the Secretary receives the best, most timely legal advice. In fact,
there was broad consensus among those we spoke to that the current organizational
structure is awkward. On the other hand, officials in OCFO said the transfer of
attorneys was necessary because in the wake of the OMHAR Anti-Deficiency Act
investigation, OGC restricted access to the appropriation law attorneys making it
very cumbersome for OCFO staff and program office officials to obtain timely,
needed advice on appropriation issues. We were told that collaboration occurred
informally prior to the OMHAR Anti-Deficiency Act investigation. At some point
during the OMHAR Anti-Deficiency Act investigation, OGC instituted a policy of
requiring formal written requests for all appropriation law services.

The General Counsel expressed three key concerns about the change in
organizational structure mandated by the Appropriations Act. First, he was
concerned that under the current structure his office might not be informed of all
legal issues that arise within the department, including those that should be elevated
to the Secretary’s attention. Second, he and others commented that now the
Secretary and even the program assistant secretaries could be presented with two
conflicting legal interpretations and that there is currently no mechanism for
resolving these differences. In the past the General Counsel, after hearing the
opposing views, would make the final interpretation of law. Third, he thought that
under the current structure there was a greater risk for program office officials to
“shop” for the legal interpretation that best met their goals. He said having all the
attorneys placed within OGC reduces that risk because all legal issues ultimately
were subject to review and resolution by the General Counsel.

Officials within OCFO told us that they believe the creation of a separate
appropriations law function within OCFO has resulted in an increase in the level of
legal staff effort and service devoted to appropriations law issues, and that this
increased focus and effort should be sustained regardless of its organizational
placement within HUD. An OGC official told us that prior to their transfer to OCFO,
the four appropriation law attorneys assigned to her spent less than half their time on
appropriation law issues.

Several HUD officials from both OGC and OCFO said that the OMHAR Anti-
Deficiency Act investigation highlighted the need for additional resources and
expertise in its appropriation law function and that prior to the enactment of the
Appropriation Act, OGC had hired an additional attorney with considerable
appropriations law experience to bolster that function. However, this attorney was
not one of those transferred to OCFO because, according to HUD’s General Counsel,
at the time of the transfer this individual was not assigned to the division that was
specifically identified in the Appropriation Act as having to transfer staff.


Page 8                                   GAO-04-272R HUD Appropriation Law Issues
While most of the HUD attorneys we spoke with, including the head OCFO
appropriations law attorney, believed that HUD has done its best under the new
structure to ensure that coordination between the program attorneys and the
appropriation law attorneys continues, nearly all acknowledged that there was initial
and even lingering confusion in some situations as to what group of attorneys has
responsibility over a particular issue. The HUD program office officials raised the
same issue.

Two attorneys stated that it is often difficult to seperate appropriation law issues
from other legal issues, which highlights the need for good coordination and
communication between all of HUD’s attorneys. There was further concern raised
that as the attorneys in OGC and OCFO change over time the level of coordination
between the two groups could deteriorate under the current structure. Currently,
OGC and OCFO attorneys have the benefit of long-standing working relationships
with one another.


5. Does the “sole authority” to investigate and report provided to the CFO
by the Appropriations Act conflict with or undermine the authority provided
to the Inspector General by the Inspector General Act?

The IG Act provides that IGs shall have the duty and responsibility to “conduct,
supervise, and coordinate … investigations relating to the programs and operations
of the agency.”12 The IG Act also provides that an IG “shall report expeditiously to
the Attorney General whenever the Inspector General has reasonable grounds to
                                                              13
believe there has been a violation of Federal criminal law.” The OIG identified these
provisions of the IG Act as being in conflict, or at least potentially in conflict, with the
literal language of the Appropriations Act.

The HUD OIG officials we met with, including the counsel to the Inspector General,
pointed to the language in the Appropriations Act that provides the OCFO with “sole
authority to investigate potential or actual violations under the Anti-Deficiency Act”
as conflicting with the language of the IG Act providing the IG with general authority
to investigate HUD matters. They believe the literal language of the Appropriations
Act precludes the OIG from investigating potential Anti-Deficiency Act violations,
including those that might be identified during routine or ongoing OIG jobs or those
that are reported via the Inspector General’s fraud hotline. As a result, the OIG
officials said they are referring all potential Anti-Deficiency Act matters to OCFO.

The OIG also brought up that, in addition to providing OCFO with the sole authority
to investigate potential or actual Anti-Deficiency Act violations, the language in the
Appropriations Act provides that OCFO shall determine whether violations exist and
                                    14
submit final reports on violations. The OIG said that there is a possible conflict

12
   5 U.S.C. Appendix § 4(a)(1)(2000). Other provisions of the IG Act also support the IG’s authority to
investigate.
13
   5 U.S.C. Appendix § 4(c).
14
   The Anti-Deficiency Act provides for heads of agencies to report violations to the President and
Congress. 31 U.S.C. §§ 1351, 1517(b).


Page 9                                           GAO-04-272R HUD Appropriation Law Issues
between this language and the language in section 4(c) of the IG Act, which directs
the IG to report to the Attorney General if the IG reasonably believes there has been a
                          15
violation of criminal law. The OIG is unclear how to reconcile this provision with
OCFO’s current authority. OIG officials told us that they have not yet been faced
with a situation that required resolution of this issue.

An OCFO official expressed a somewhat different view of the Appropriation Act’s
potential effect on the IG. The officials stated that the OIG should not routinely be
involved in an Anti-Deficiency Act violation until the department has determined
whether an actual violation has occurred. At that time, the OCFO official said it
would be appropriate for the OIG to review the work that went into the investigation,
and more importantly and pursuant to their authority to investigate, determine
whether criminal acts may have been committed.


Agency Comments and Our Evaluation

On November 19, 2003, HUD’s Assistant Inspector General for Audits provided us
with oral comments expressing the Office of Inspector General’s agreement with the
information presented that pertained to or was attributable to the OIG. HUD did not
take an official position on the issues discussed in this report but instead provided
separate letters containing technical comments from its Deputy Chief Financial
Officer and the Deputy General Counsel. We considered these comments and as we
deemed appropriate made revisions to the report.



As agreed with your offices, unless you publicly announce the contents of this report
earlier, we plan no further distribution until 14 days from its date. At that time, we
will send copies to the Secretary of Housing and Urban Development, the Inspector
General, and interested congressional committees. We will also provide copies to
others on request. The report will also be available at no charge on the GAO Web site
at http://www.gao.gov.

If you have any questions about this report, please contact me at (202) 512-9508, or
Phillip McIntyre, Assistant Director, at (202) 512-4373. You may also reach us by E-
mail at calboml@gao.gov or mcintyrep@gao.gov. Other key contributors to this
report were Jeffrey Jacobson and Jack Hufnagle.




Linda M. Calbom
Director, Financial Management and
  Assurance

(190107)

15
     An Anti-Deficiency Act violation may be subject to criminal penalty. 31 U.S.C. §§ 1350, 1519 (2000).


Page 10                                             GAO-04-272R HUD Appropriation Law Issues
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