Independent Attestation Review: U.S. Department of Housing and Urban Development, DATA Act Readiness Review

Published by the Department of Housing and Urban Development, Office of Inspector General on 2016-08-26.

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

     * * om   i  *                             U.S. DEPARTMENT OF
                                  HOUSiNG AND URBAN DEVELOPMENT
                                         OFFICE OF INSPECTOR GENERAL

      N       /
                                                   August 26, 2016
                                                                                  MEMORANDUM NO:
                                                                                       201 6-FO-0802

TO:               Courtney Timberlake, Deputy Chief Financial Officer, F
                  Joseph Hungate, Assistant Chief Financial Officer for Systems, FY

FROM:             Thomas R. McEn1y
                  Director, FinanciI Audits Division, GAF

SUBJECT:          Independent Attestation Review: U.S. Department of Housing and Urban
                  Development, DATA Act Implementation Efforts

                                  Independent Accountant’s Report

We have reviewed the U.S. Department of Housing and Urban Development’s (HUD) efforts as
of July 15, 2016, to comply with steps 1-4 of the U.S. Department of the Treasury DATA Act’
Playbook to determine whether HUD is positioned to meet the statutory May 2017, deadline.
HUD’s management is responsible for taking steps to comply with applicable guidance. This
report provides the results of our attestation review and recommendations, which are detailed in
appendix A.

Our review was conducted in accordance with attestation standards established by the U.S.
Government Accountability Office and the American Institute of Certified Public Accountants.
A review is substantially narrower in scope than an examination, the objective of which is the
expression of an opinion on management’s assertions. Accordingly, we do not express such an

‘Digital Accountability and Transparency Act of 2014. Pub. L. No. 113-101 implementing guidance provided in
Office of Management and Budget Memorandum M- 15-12. Treasury prepared a DATA Act Playbook as guidance
for agencies.
 The Council of the Inspectors General on Integrity and Efficiency (CIGIE) identified a timing anomaly in which
Congress has mandated that the first Office of Inspector General reports are due in November 2016, while the
DATA Act does not require agencies to report their fmancial and payment information until May 2017 (exact date
pending confirmation). CIGIE recommended that Federal inspectors general delay the financial and payment report
until November 2017 while recommending that they undertake DATA Act “readiness reviews.”
Emphasis of Matter
HUD is Not on Track To Report Comprehensive Departmentwide Spending by the May 2017
DATA Act Reporting Deadline
While HUD has taken steps to implement the DATA Act, it is not on track to provide complete,
departmentwide reporting by the May 2017 deadline. HUD’s DATA Act team has been
hindered by management turnover and indecision. HUD has had three different senior
accountable officials in a 6-month span, and the conclusion that the DATA Act applied to the
Federal Housing Administration (FHA) and the Government National Mortgage Association
(Ginnie Mae) was not made until approximately May 2016. These conditions have delayed
implementation efforts and precluded the reasonable expectation that the deadline will be met.
in addition to the FFIA and Ginnie Mae delays, as of July 15, 2016, HtJD had not completed its
inventory of data elements or the mapping of agency data to the DATA Act schema. HUD had
also been unable to resolve data quality issues that have impeded the complete and accurate
reporting of departmental contract, grant, loan, and other financial assistance awards in

While HUD has represented that its work on Treasury Playbook steps 3 and 4 is in progress and
on time, plan dates significantly exceed previous Treasury and Office of Management and
        3 and may not have been sufficiently monitored. These challenges are due to
Budget guidance
HUD’s reliance on numerous legacy and current financial systems with differing technologies
and data elements and limited resources, compared to the level of effort required to modify
systems and perform the data inventory and mapping. Refer to appendix A for our
recommendations. HUD management has identified many of these challenges in its
representations. Refer to appendix B for management’s representations.

Based on our review, except for what is noted in the Emphasis of Matter paragraph above,
nothing came to our attention that caused us to believe that HUD’s efforts to comply with steps
1-4 of Treasury’s DATA Act Playbook is not an accurate reflection of the status of compliance
as of July 15, 2016.

While this report is an unrestricted public document, it is intended solely for the information and
use of HUD management, Treasury, the Office of Management and Budget, and Congress and is
not intended to be and should not be used by anyone other than these specified parties.

Thank you for the cooperation and participation of HUD personnel in completing the attestation.
if you have any questions or comments to be discussed, please contact me at (202) 402-8216.

Sara1i Lyberg, Assistant Chief Financial Officer for Budget, FO

 GAO-16-698; DATA Act Implementation Plans; imp: gao.goysçts 680 678765df

Appendix A: Recommendations

 We recommend that HUD’s Deputy Chief Financial Officer and senior accountable official

 1.     Identif’ the universe of all program obligations and disbursements, including the
        appropriations account level of obligations and outlays by program activity and by object
        class for compliant USASpending.gov reporting.

2.      Prepare and execute a plan to resolve errors already identified in programmatic
        expenditure information transferred to USASpending.gov before full implementation and
        ensure that similar types of errors are timely identified and promptly resolved prior to

 3.     Finalize required project plan documentation for HIJD, which includes the updated
        implementation plan due to Treasury and the Office of Management and Budget.

 4.     Complete the project plan documentation for the FHA and Ginnie Mae components.

Appendix B: Management Representations

                                     OFFICE OF THE CHIEF FINANCIAL OFFICER
                                          WASHINGTON, DC 20410-1000

  July 22, 2016

  Randy W. McGinnis
  Assistant Inspector General for Audit, Office of Audit
  U.S. Department of Housing and Urban Development Office of the Inspector General
  451 7
         Street Southwest
  Washington, DC 20410

   Dear Mr. McGinnis,

  This letter is in connection with your readiness review of HUD’s Digital Accountability and
  Transparency Act of 2014 (DATA Act; Pub. L. 113-101)’ and 0MB Memorandum M-15-12      .
  You conducted your readiness review to (1) provide assurance that nothing came to the attention
  of the 010 which would cause you to believe our agency’s future submission of DATA Act
  requirements was presented other than fairly in all material respects and (2) report whether
  HUD’s DATA Act submission was in compliance with all applicable laws and regulations.

   We understand and acknowledge that HUD’s management is responsible for the fair presentation
   of the information included within the submission of the DATA Act in accordance to applicable
   requirements. We are responsible for making all related information availahle to you to conduct
   your readiness review. Further, we agree to communicate to you the discovery of any material
   misstatements which could affect the fair presentation of the DATA Act submission. The
   readiness review does not relieve us of the aforementioned responsibilities.

   We confirm, to the best of our knowledge and belief, the following representations and assertions
   made to you during the readiness review. These representations pertain to HUD’s May 2017
   DATA Act submission.

   Representations in accordance with Laws and Re2ulations

       1. We are responsible for MUD’s compliance with all applicable laws and regulations.

       2. We have identified and disclosed to you all laws, regulations, and related financial
          records that have a direct and material effect on the determination of amounts reported
          within the submission of the DATA Act.

       3. Thereareno
             a. violations or possible violations of laws or regulations whose effects we should
                evaluate for disclosure in the DATA Act submission of May 2017 or,

     The text of the DATA Act can be found at:
          Memorandum can be found at:

           b. unasserted claims or assessments that are probable of assertion and must be
              disclosed that have not been disclosed

    4. We are not aware of any violations of the DATA Act; Pub. L. 113-101 or 0MB M-15-12
       that we must report to the Congress and the President (and provide a copy of the report to
       the Comptroller General) in our DATA Act submission (or, we have reported all known
       violations of the DATA Act; Pub. L. 113-101 or 0MB M-15-12) and through the date of
       this letter.

Assertions in accordance with DATA Act re2ulations

    1. HUD has completed and is on track to complete steps 1-4 from the DATA Act Playbook.
       Steps 1 and 2 have been completed, while steps 3 and 4 are in progress and on time.
           a. A DATA Act work group has been established and includes the impacted
               communities within HUD.
          b. A Senior Accountability Officer (SAO) has been designated.
          c. HIJD has reviewed the list of DATA Act elements and participated in data
               definitions standardization. HUD is performing an inventory of agency data and
               associated business processes and systems.
          d. HUD is working on a design and strategy document that captures the changes to
               systems and business processes which capture financial, procurement, and
              financial assistance data.

   2. Challenges related to FIUD’s implementation of the DATA Act consist of:
         a. Data Universal Numbering System DUNS)
         b. Program Activity Codes (PACs) and Budget Object Class (BOC) data
         c. FHA and GNMA scope and expectation
         d. Establishment of eVMS and EDW
         e. Lack of dedicated resources and funding

       HUD executive leadership is aware of the challenges HUD currently faces.

Josepl.k1uigate 111
Deputy Chief Financial Officer