oversight

Review of Allied Home Mortgage Capital Corporation's Fiscal Year 2009 Financial Statements

Published by the Department of Housing and Urban Development, Office of Inspector General on 2010-11-01.

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

                                                    U.S. Department of Housing and Urban Development
                                                    Office of Inspector General, Region VI
                                                    819 Taylor Street, Suite 13A09
                                                    Fort Worth, TX 76102

                                                    (817) 978-9309 FAX (817) 978-9316
                                                     http://www.hud.gov/offices/oig/
                                                    OIG Fraud Hotline 1-800-347-3735



November 1, 2010                                    MEMORANDUM NO:
                                                    2011-FW-1801

MEMORANDUM FOR:               Vicki B. Bott
                              Deputy Assistant Secretary for Single Family Housing, HU

               //signed//
FROM:          Gerald R. Kirkland
               Regional Inspector General for Audit, 6AGA

SUBJECT:       Review of Allied Home Mortgage Capital Corporation’s Fiscal Year 2009
               Financial Statements, Assignment Number: FW 10 0030


                                       INTRODUCTION

As part of our annual audit plan objective of improving the integrity of single-family insurance
programs, we reviewed the independent public accountant’s working papers and the financial
statements of Allied Home Mortgage Capital Corporation (Allied) for fiscal year 2009. The
objective of the review was to determine whether Allied’s fiscal year 2009 financial statements
submitted to the Federal Housing Administration (FHA) accurately reported its financial
condition. Our review did not disclose any indications of inaccuracies in Allied’s fiscal year
2009 financial statements submitted to FHA.


                               METHODOLOGY AND SCOPE

The review was limited to a review of the independent public accountant’s working papers and
Allied’s fiscal year 2009 financial statements. We conducted the review in August and
September 2010.

To accomplish the objective, we reviewed

   •   Relevant guidance and criteria including
           o Government Auditing Standards;
           o Statements on Auditing Standards;
           o HUD OIG Handbook 2000.04, REV-2, CHG-1, Independent Auditors -
              Consolidated Audit Guide for Audits of HUD Programs; and
           o HUD Handbook 4060.1, REV-2, Mortgagee Approval Handbook;
   •   The independent public accountant’s working papers; and
   •   Allied’s trial balance and financial statements for fiscal year 2009.
                                        BACKGROUND

Allied was approved on September 26, 1991, as a nonsupervised loan correspondent for single-
family loans insured by FHA. Allied’s corporate headquarters is located at 6110 Pinemont,
Houston, TX. According to its Web site, Allied is the largest U. S. privately held mortgage
banker/mortgage broker with hundreds of branch offices throughout the United States and the
Virgin Islands.

                                   RESULTS OF REVIEW

We did not find any indications of inaccuracies in Allied’s fiscal year 2009 financial statements
submitted to FHA.

We reviewed the independent public accountant’s working papers and compared the tested
balances with Allied’s financial records. We determined that the information reported in the
financial statements agreed or reconciled with Allied’s records. All required statements were
supported by trial balances and/or lead schedules. The independent public accountant properly
tested and reviewed all major accounts, and its working papers sufficiently documented the work
performed and conclusions reached on the required statements.


                                   RECOMMENDATIONS

Since we did not identify any deficiencies, there are no recommendations.




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