U.S. Department of Housing and
Urban Development, Washington, DC
Fiscal Years 2016 and 2015 (Restated) Consolidated
Financial Statements Audit
Office of Audit, Financial Audits Division Audit Report Number: 2017-FO-0004
Washington, DC November 18, 2016
To: Courtney Timberlake, Deputy Chief Financial Officer, F
/signed/
From: Thomas R. McEnanly, Director, Financial Audits Division, Washington DC, GAF
Subject: Fiscal Years 2016 and 2015 (Restated) U.S. Department of Housing and Urban
Development Consolidated Financial Statements Audit
Attached is the U.S. Department of Housing and Urban Development (HUD), Office of Inspector
General’s (OIG) independent auditor’s report on HUD’s consolidated financial statements and
reports on internal controls over financial reporting and compliance with laws and regulations.
HUD Handbook 2000.06, REV-4, sets specific timeframes for management decisions on
recommended corrective actions. For each recommendation without a management decision,
please respond and provide status reports in accordance with the HUD Handbook. Please furnish
us copies of any correspondence or directives issued because of the audit.
The Inspector General Act, Title 5 United States Code, section 8M, requires that OIG post its
publicly available reports on the OIG Web site. Accordingly, this report will be posted at
http://www.hudoig.gov.
If you have any questions or comments about this report, please do not hesitate to call me at
202-402-8216.
Audit Report Number: 2017-FO-0004
Date: November 18, 2016
Fiscal Years 2016 and 2015 (Restated) U.S. Department of Housing and
Urban Development Consolidated Financial Statements Audit
Highlights
What We Audited and Why
In accordance with the Chief Financial Officers Act of 1990, as amended, we are required to
annually audit the consolidated financial statements of the U.S. Department of Housing and
Urban Development (HUD) and the stand-alone financial statements of the Federal Housing
Administration and the Government National Mortgage Administration (Ginnie Mae). Our
objective was to express an opinion on the fairness of the financial statements in accordance with
U.S. generally accepted accounting principles applicable to the Federal Government. This report
presents the results of our audit of fiscal years 2016 and 2015 (Restated) HUD consolidated
financial statements, including our report on HUD’s internal control and test of compliance with
applicable laws and regulations.
What We Found
We expressed a disclaimer of opinion on HUD’s fiscal years 2016 and 2015 (Restated)
consolidated financial statements because of HUD’s inability to deliver principal financial
statements for the fiscal years ending September 30, 2016 and 2015 (Restated) and
accompanying notes in a timely manner. In addition, there were several other unresolved audit
matters, which restricted our ability to obtain sufficient, appropriate evidence to express an
opinion. These unresolved audit matters relate to (1) OGC’s declination of signing the
management representation letter; (2) HUD’s improper use of cumulative and first-in, first-out
budgetary accounting methods of disbursing community planning and development program
funds; (3) the $4.2 billion in nonpooled loan assets from Ginnie Mae’s stand-alone financial
statements that we could not audit because Ginnie Mae could not provide adequate support for us
to test these asset balances; (4) the improper accounting for HUD’s assets and liabilities related
to grant accruals; loan guarantees; property, plant, and equipment; accounts receivable; payables;
and prepayments; and (5) material differences between HUD’s subledger and general ledger
accounts. This audit report contains 11 material weaknesses, 7 significant deficiencies in
internal controls, and 5 instances of noncompliance with applicable laws and regulations. These
weaknesses were due to an inability to establish a compliant control environment, implement
adequate financial accounting systems, retain key financial management staff, and identify
appropriate accounting principles and policies.
What We Recommend
Our recommendations regarding each of the components’ findings were made in audit reports
2017-FO-0001, 2017-FO-0002, and 2017-FO-0003.
Table of Contents
Independent Auditor’s Report................................................................................3
Appendixes ..............................................................................................................24
A. Auditee Comments .................................................................................................... 24
B. Schedule of Questioned Costs and Funds To Be Put to Better Use ...................... 26
C. HUD’s Fiscal Years 2016 and 2015 (Restated) Consolidated Financial
Statements and Notes ................................................................................................ 27
2
U.S. DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT
OFFICE OF INSPECTOR GENERAL
Independent Auditor’s Report 1
To the Secretary,
U.S. Department of Housing and Urban Development:
Report on the Financial Statements
The Chief Financial Officers Act of 1990 (CFO Act) requires the U.S. Department of Housing
and Urban Development (HUD) to prepare the accompanying consolidated balance sheets as of
September 30, 2016 and 2015 (Restated); the related consolidated statements of net cost, changes
in net position, and combined statement of budgetary resources for the fiscal years then ended;
and the related notes to the financial statements. We were engaged to audit those financial
statements in accordance with generally accepted government auditing standards accepted in the
United States of America and Office of Management and Budget (OMB) Bulletin 15-02.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements
in accordance with accounting principles generally accepted in the United States of America,
which include the design, implementation, and maintenance of internal controls relevant to the
preparation and fair presentation of financial statements that are free from material misstatement,
whether due to fraud or error.
1
This report is supplemented by three separate reports issued by the HUD Office of Inspector General (OIG) to
provide a more detailed discussion of the internal control and compliance issues and to provide specific
recommendations to HUD management. The findings have been included in the internal control and compliance
with laws and regulations sections of the independent auditor’s report. The supplemental reports are available on
the HUD OIG Internet site at https://www.hudoig.gov and are entitled (1) Additional Details To Supplement Our
Fiscal Years 2016 and 2015 (Restated) U.S. Department of Housing and Urban Development Financial Statement
Audit (audit report 2017-FO-0003, issued November 15, 2016); (2) Audit of Federal Housing Administration
Financial Statements for Fiscal Years 2016 and 2015 (Restated) (audit report 2017-FO-0002, issued November 14,
2016); and (3) Audit of the Government National Mortgage Association’s Financial Statements for Fiscal Years
2016 and 2015 (Restated) (audit report 2017-FO-0001, issued November 14, 2016).
3
Auditor’s Responsibility
The OIG is required by the CFO Act, as amended by the Government Management Reform Act
of 1994 and implemented by OMB Bulletin 15-02, Audit Requirements for Federal Financial
Statements, to audit HUD’s principal financial statements or select an independent auditor to do
so.
Our responsibility is to express an opinion on the fair presentation of these principal financial
statements in all material respects, in conformity with accounting principles generally accepted
in the United States of America. Because of the matters described in the Basis for Disclaimer of
Opinion section, however, we were not able to obtain sufficient, appropriate audit evidence to
provide a basis for an audit opinion. The audit was conducted in accordance with government
auditing standards generally accepted in the United States of America, which require the auditor
to plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
Basis for Disclaimer of Opinion
Due to late restatements performed by HUD’s component entities, the Government National
Mortgage Association (Ginnie Mae) and Federal Housing Administration (FHA), and delays in
HUD’s reporting process, HUD was unable to provide final consolidated financial statements
and accompanying notes in a timeframe that would allow us to obtain sufficient, appropriate
evidence to determine if they were free from material misstatement. Therefore, we are unable to
provide an opinion on the fiscal year 2016 and 2015 (Restated) consolidated financial statements
and accompanying notes at this time.
In addition, during our fiscal year 2016 audit, HUD’s general counsel refused to sign off on certain
matters included in the management representation letter concerning all known actual or possible
litigation, claims, and assessments related to HUD, including its component entities. OIG believes
that HUD’s legal counsel is responsible for and knowledgeable about those matters that should be
considered in OCFO management’s preparation and fair presentation of the financial
statements. Due to legal counsel’s refusal to sign off on these matters, which is a scope limitation,
we lacked assurance that all known actual or possible litigation, claims and assessments had been
properly accounted for or disclosed in the consolidated financial statements in accordance with
generally accepted accounting principles.
Lastly, we identified several other matters for which we were unable to obtain adequate audit
evidence to provide a basis of opinion on the fiscal years 2016 and 2015 (restated) financial
statements. When evaluating these areas and their impacts on the financial statements as a
whole, we determined that multiple material financial statement line items were impacted and the
issues identified were pervasive and material to the fiscal years 2016 and 2015 consolidated
financial statements. There were no other satisfactory audit procedures that we could adopt to
obtain sufficient, appropriate evidence with respect to these unresolved matters. These
additional matters would have contributed to a disclaimer of opinion if consolidated financial
statements and notes and disclosures were made available in a timeframe that allowed for our
4
review and validation. Readers are cautioned that amounts reported in the financial statements
and related notes may not be reliable.
The other matters that we identified related to (1) improper budgetary accounting; (2) disclaimer
of opinion on Ginnie Mae’s financial statements; (3) unvalidated grant accrual estimates; (4)
improper and unreliable accounting for assets and liabilities; and (5) significant unreconciled
subledger to general ledger differences. Additional details are discussed below.
Improper budgetary accounting. HUD continued to use budgetary accounting for the
Office of Community Planning and Development (CPD) programs that was not performed
in accordance with Federal generally accepted accounting principles (GAAP), which
resulted in misstatements in HUD’s combined statement of budgetary resources.
Therefore, we could not assess whether the balances reported were reasonable.
HUD used a cumulative and first-in first-out (FIFO) method 2 to disburse and commit CPD
program funds that was not in accordance with GAAP for Federal grants. These methods
were used to determine the amount of uncommitted HOME Investment Partnerships
Program grant funds that would be subject to reallocation and recapture under section
218(g) of the HOME Investment Partnership Act and to process disbursements for CPD
formula programs, respectively. The effects of these methodologies were considered
pervasive because of the dollar risk exposure and volume of CPD grant activities from
several thousand grantees (as of September 30, 2016, approximately $2.7 billion in
disbursements and $2.4 billion in undisbursed obligations were impacted that are related to the
HOME program, Community Development Block Grant, Housing for Persons with AIDS,
and Emergency Shelter Grant) and the system limitations of HUD’s grant management and
mixed accounting system to properly account for these grant transactions in accordance
with the statutory requirements and GAAP.
Due to these issues, we determined that financial transactions related to CPD’s formula-
based programs that entered HUD’s accounting system had been processed incorrectly.
Although FIFO has been removed for disbursements made from fiscal year 2015 and
forward grants, this method will not be removed retroactively from prior-year grants.
Thus, based on the pervasiveness of their effects, in our opinion, the obligated and
unobligated balance brought forward and obligated and unobligated balances reported in
HUD’s combined statement of budgetary resources for fiscal year 2015 and in prior years
2
The Federal Accounting Standards Advisory Board (FASAB) Handbook defines FIFO as a cost flow assumption.
The first goods purchased or produced are assumed to be the first goods sold (FASAB Handbook, Version 13,
appendix E, page 30, dated June 2014). In addition, the Financial Audit Manual states that the use of “first-in, first-
out” or other arbitrary means to liquidate obligations based on outlays is not generally acceptable (GAO-PCIE (U.S.
Government Accountability Office-President’s Council on Integrity and Efficiency) Financial Audit Manual,
Internal Control Phase, Budget Control Objectives, page 395, F-3). In the context of HUD’s use of this method, the
first funds appropriated and allocated to the grantee are the first funds committed and disbursed, regardless of the
source year in which grant funds were committed for the activity.
5
were materially misstated. The related amount of material misstatements for these CPD
programs in the accompanying combined statement of budgetary resources could not be
readily determined to reliably support the budgetary balances reported by HUD at yearend
due to the inadequacy of evidence available from HUD’s mixed accounting and grants
management system.
Disclaimer of opinion on Ginnie Mae financial statements. In fiscal year 2016, for the
third consecutive year, Ginnie Mae could not bring its material asset balances related to its
nonpooled loan assets into an auditable state. Specifically, we were unable to obtain
sufficient, appropriate evidence to express an opinion on the fairness of the $4.2 billion (net
of allowance) in nonpooled loan assets from Ginnie Mae’s defaulted issuers’ portfolio, and
Ginnie Mae continued to improperly account for FHA reimbursable costs as an expense
instead of capitalizing the costs as an asset.
A number of Ginnie Mae balance sheet line items made up the $4.2 billion in nonpooled
loan assets, 3 which were consolidated into the other-non-credit reform loans reported on
HUD’s consolidated balance sheet. This condition occurred because Ginnie Mae lacked
financial management systems capable of handling Ginnie Mae’s loan-level transaction
accounting requirements. Therefore, we were again unable to perform all of the audit
procedures needed to obtain sufficient, appropriate evidence. As a result, we determined
that our audit scope was insufficient to express an opinion on Ginnie Mae’s $4.2 billion in
nonpooled loan assets as of September 30, 2016.
Ginnie Mae continued to improperly account for FHA reimbursable costs as an expense
instead of capitalizing the costs as an asset in fiscal year 2016. This practice caused Ginnie
Mae’s asset and net income line items to be misstated, resulting in misstatements in HUD’s
consolidated assets, expenses, and net position. Due to multiple years of incorrect
accounting, we believe the cumulative effect of the errors identified was material.
However, we were unable to determine with sufficient accuracy a proposed adjustment to
correct the errors due to insufficient available data.
Unvalidated grant accrual estimates. In reporting on HUD’s liabilities, HUD’s principal
financial statements were not prepared in accordance with the requirements of the Federal
Government and Federal Accounting Standards Advisory Board (FASAB) Technical
Release (TR) 12. FASAB TR 12 provides guidance to agencies on developing reasonable
estimates of accrued grant liabilities to report on their financial statements. We were
unable to obtain sufficient, appropriate audit evidence that the fiscal years 2015 and 2016
estimates were reasonable. This lack of evidence was due to (1) CPD’s not validating its
accrued grant liability estimates, (2) CPD’s inability to provide adequate supporting
documentation for grant disbursements in a timely manner, and (3) insufficient time to
3
These are (1) mortgage loans held for investment, net ($3.47 billion); (2) claims receivable, net ($709 million); (3)
accrued interest receivable, net ($19 million); and (4) acquired property, net ($41 million).
6
perform all of the audit procedures we deemed necessary to obtain sufficient, appropriate
audit evidence to form an opinion on the estimate in lieu of adequate validation procedures
by CPD. There were no other compensating audit procedures that could be performed to
obtain reasonable assurance regarding CPD’s accrued grant liability estimates. Therefore,
we could not form an opinion on CPD’s accrued grant liability estimates for fiscal years
2016 and 2015. CPD’s estimated accrued grant liabilities were $2.3 billion and $2 billion
for fiscal years 2016 and 2015, respectively. These amounts accounted for 85 percent of
HUD’s total $2.7 billion accrued grant liabilities for fiscal year 2016 and 84 percent of
HUD’s total $2.4 billion accrued grant liabilities in fiscal year 2015.
Improper and unreliable accounting for assets and liabilities. HUD did not properly
account for several types of assets and liabilities reported on its balance sheet, causing
misstatements or unreliable balances. Specifically, (1) balances reported for non-FHA loan
guarantees and property, plant, and equipment balances could not be relied upon; (2)
payments advanced to Indian Housing Block Grant (IHBG) grantees for investment
purposes were not recorded as advances; and (3) loans receivable related to the Emergency
Homeowners’ Loan Program (EHLP) could not be audited.
During fiscal year 2016, HUD was undergoing a reconciliation and cleanup effort for
balances related to its non-FHA loan guarantee programs. Many discrepancies had been
identified and adjustments had been processed during the fiscal year to address some of the
discrepancies identified totaling $17.3 billion. However, as of September 30, 2016, HUD
was in the process of researching and resolving additional discrepancies identified, and the
review was ongoing. As a result, we could not rely on HUD’s non-FHA loan guarantee
balances, including its loan guarantee liability ($303 million), foreclosed property ($36
million), unpaid obligations ($22.4 million), and memorandum accounts used to track the
status of loan guarantee authority. There were no other compensating audit procedures that
could be performed to obtain reasonable assurance regarding these balances.
HUD’s accounting for its property, plant, and equipment did not comply with Federal
GAAP. Specifically, HUD could not support balances related to internal use software
totaling $254.3 million. In addition, HUD did not adequately record property, plant, and
equipment balances related to furniture and equipment and leasehold improvements.
Therefore, the total HUD proper property, plant, and equipment balance of $297 million
could not be relied upon.
HUD authorized recipients of Federal funds to retain funding advanced to it before
incurring eligible expenses; however, HUD did not recognize these funds as advances on
its financial statements in accordance with Statements on Federal Financial Accounting
Standards 1. As of June 30, 2016, as much as $260.1 million was being held in investment
accounts with IHBG grantees, which represented an advance in accordance with the
standards. HUD elected to present these as expenses on its statement of net cost once they
were disbursed. Therefore, we believe the Office of Public and Indian Housing (PIH)
prepayment reported on HUD’s consolidated balance sheet and expenses reported on
HUD’s consolidated statement of net cost were likely misstated as of September 30, 2016.
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Lastly, weaknesses in the accounting for the EHLP loans receivable portfolio continued,
which limited our ability to audit during the fiscal year. A data review was performed
during the fiscal year as a result of serious deficiencies in the accuracy of the loan balances
identified in our prior-year audit report. 4 However, adjustments to correct the loan data
were being made as of the end of our fieldwork. Therefore, we were unable to obtain
sufficient, appropriate evidence to express an opinion on the fairness of the balances
reported in the direct loan and loan guarantees line item reported on HUD’s consolidated
balance sheet as of September 30, 2016, related to EHLP. The total loan principal issued
under this program was $246 million; however, we were unable to determine whether the
current balance recognized on the consolidated balance sheet of $103.2 million was an
accurate net realizable value of the portfolio.
Significant unreconciled subledger to general ledger differences. During the fiscal year,
HUD initiated a subledger review and identified material differences between its
subledgers and general ledger accounts. As of September 30, 2016, its subledger review
was ongoing, and there was an unreconciled balance of $29.4 billion. These differences
remained unresolved mainly because HUD could not identify and locate sufficient
documentation to support material United States Standard General Ledger (USSGL)
accounts. The reconciling differences were material and pervasive and impacted several
USSGL accounts and financial statement line items. A total of $27.9 billion represented
differences in unpaid obligation balances. The remaining $1.5 billion difference impacted
the PIH prepayments (advances), liability for nonentity assets not reported on statement of
custodial activity (other liabilities), loan guarantee liability, and account receivable
balances reported on HUD’s consolidated balance sheet. While progress had been made in
the resolution of differences since September 30, 2016, differences remained that,
combined, were material to the financial statements. Due to HUD’s inability to support the
balances recorded in the USSGL with sufficient, adequate documentation, we were unable
to rely on the balances presented in HUD’s consolidated balance sheet and the combined
statement of budgetary resources.
Disclaimer of Opinion
Because of the significance of the matters described in the Basis for Disclaimer of Opinion
section above, we were not able to obtain sufficient, appropriate audit evidence to provide an
audit opinion on HUD’s principal financial statements and accompanying notes as of September
30, 2016 and 2015 (restated), and its net costs, changes in net position, and budgetary resources
for the fiscal year then ended. Accordingly, we do not express an opinion on the financial
statements.
4
Audit Report 2015-DP-0004, Loan Accounting System, issued December 9, 2014
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Emphasis of Matter
Restatement
At the time of issuance of this auditor’s report and as discussed in note 31 to the financial
statements, the 2015 financial statements have been restated for the correction of errors related to
(1) Ginnie Mae’s improper budgetary closing process and (2) FHA’s improper use of the raw
data used to establish FHA’s maintenance and operating expense rate management assumption.
Our opinion was not modified with respect to these matters.
However, there were other material misstatements in the fiscal year 2016 financial statements in
which no adjustments had been made. Specifically, (1) regarding the use of the FIFO method to
liquidate obligations under CPD’s formula grant programs, no adjustments had been made
because the specific amount of misstatements and their related effects were unknown and (2)
regarding advanced funds held by grantees for IHBG grantees, which totaled as much as $260
million as of June 30 30, 2016, an amount could not be reasonably determined as of September
30, 2016, because HUD could not provide the information needed to quantify the amount. These
amounts were not included in the financial statements due to HUD’s disagreement regarding the
presentation of these advances. Additional details on these items can be found in note 31 to the
financial statements.
Prior-Period Financial Statements
In our report, dated November 18, 2015, we reported that FHA’s financial statements for fiscal
years 2015 and 2014, respectively, fairly presented the financial position of FHA’s financial
statements as of September 30, 2015 and 2014, and its net costs, changes in net position, and
budgetary resources for the years then ended in accordance with GAAP. However, in fiscal year
2016, new information concerning material errors affecting the 2015 and 2014 FHA financial
statements were identified. For this reason, the opinion expressed in FHA’s 2015 and 2014 audited
financial statements was no longer appropriate because the financial statements as published at that
time contained material misstatements. Accordingly, our opinion on FHA’s audited financial
statements for 2015 and 2014 is withdrawn because the statements can no longer be relied upon and
is replaced by the auditor’s report on the restated financial statements. As a result, the basis for
disclaimer expressed on HUD’s consolidated 2015 and 2014 audited financial statements is
expanded to include the material errors that affected those financial statements, which are further
described in note 31.
FHA’s Loan Guarantee Liability
FHA’s loan guarantee liability is an actuarially determined estimate of the net present value of
future claims, net of future premiums, and future recoveries from loans insured as of the end of the
fiscal year. This estimate is developed using econometric models that integrate historical loan-level
program and economic data with regional house price appreciation forecasts to develop assumptions
about future portfolio performance. This year’s estimate is the mean value from a series of
projections using many economic scenarios, and FHA’s single-family liability for loan guarantee
estimates reported as of September 30, 2016, could change depending on which economic outcome
prevails. This forecast method helps project how the estimate will be affected by different
economic scenarios but does not address the risk that the models may not accurately reflect current
9
borrower behavior or may contain technical errors. Our opinion was not modified with respect to
this matter.
Other Matters
Required Supplementary Information
U.S. GAAP requires that certain information be presented to supplement the basic general-
purpose financial statements. Such information, although not a part of the basic general-purpose
financial statements, is required by FASAB, which considers it to be an essential part of financial
reporting for placing the basic general-purpose financial statements into an appropriate
operational, economic, or historical context. We did not audit and do not express an opinion or
provide any assurance on this information; however, we applied certain limited procedures in
accordance with auditing standards generally accepted in the United States of America, which
consisted principally of inquiries of management regarding the methods of preparing the
information and comparing the information for consistency with management’s responses to the
auditor’s inquiries, the basic financial statements, and other knowledge the auditor obtained
during the audit of the basic financial statements. These limited procedures do not provide
sufficient evidence to express an opinion or provide assurance on the information.
In its fiscal year 2016 agency financial report, HUD presents “required supplemental stewardship
information” and “required supplementary information.” The required supplemental stewardship
information presents information on investments in non-Federal physical property and human
capital and investments in research and development. In the required supplementary
information, HUD presents a “management discussion and analysis of operations” and
combining statements of budgetary resources. HUD also elected to present consolidating
balance sheets and related consolidating statements of changes in net position as required
supplementary information. The consolidating information is presented for additional analysis of
the financial statements rather than to present the financial position and changes in net position
of HUD’s major activities. This information is not a required part of the basic financial
statements but is supplementary information required by FASAB and OMB Circular A-136.
Other Information
Our audit was conducted for the purpose of forming an opinion on the basic financial statements
as a whole. HUD’s agency financial report contains other information that is not a required part
of the basic financial statements. Such information has not been subjected to the auditing
procedures applied in the audit of the principal financial statements, and, accordingly, we do not
express an opinion or provide assurance on it.
10
Additional details on our findings regarding HUD’s, FHA’s, and Ginnie Mae’s internal controls
are summarized below and were provided in separate audit reports to HUD management. 5 These
additional details also augment the discussions of instances in which HUD had not complied
with applicable laws and regulations; the information regarding our audit objectives, scope, and
methodology; and recommendations to HUD management resulting from our audit.
Report on Internal Control
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent or detect and correct misstatements on a timely basis. A significant deficiency is a
deficiency or combination of deficiencies in internal control that is less severe than a material
weakness yet important enough to merit attention by those charged with governance. A
material weakness is a deficiency or combination of deficiencies in internal control, such that
there is a reasonable possibility that a material misstatement of the entity’s financial statements
will not be prevented or detected and corrected on a timely basis.
Our consideration of internal control was for the limited purpose described above and was not
designed to identify all deficiencies in internal control that might be significant deficiencies or
material weaknesses. However, we noted in our reports the following nine material weaknesses
and eight significant deficiencies.
Material Weaknesses
A material weakness is a deficiency or combination of deficiencies in internal control, such that
there is a reasonable possibility that a material misstatement of the entity’s financial statements
will not be prevented or detected and corrected on a timely basis. We noted the following
deficiencies met the definition of a material weakness:
Weak Internal Controls Over Financial Reporting Led to Errors and Delays in the Preparation
of Financial Statements and Notes
Internal controls over HUD’s financial reporting process were weak, causing HUD to be unable
to provide year end financial statements and accompanying notes in a timeframe that would
allow for sufficient OIG audit review. Additionally, Ginnie Mae closed material accounts
prematurely. Finally, HUD performed 2,868 journal vouchers to adjust transactional data in its
general ledger, primarily due to data quality issues. Ineffective governance over HUD’s
transition to a Federal Shared Service Provider (FSSP), Treasury’s Administrative Resource
5
Audit Report 2017-FO-0003, Additional Details To Supplement Our Fiscal Years 2016 and 2015 (Restated) U.S.
Department of Housing and Urban Development Financial Statements, issued November 15, 2016; Audit Report
2016-FO-0002, Federal Housing Administration Fiscal Year 2016 and 2015 (Restated) Financial Statements Audit,
issued November 14, 2016; Audit Report 2017-FO-0001, Audit of the Government National Mortgage Association’s
Fiscal Years 2016 and 2015 (Restated) Financial Statements , issued November 14, 2016
11
Center (ARC), and Ginnie Mae’s budgetary accounting created an ineffective financial reporting
environment that could not prevent and detect errors in a timely manner. As a result, (1) we
could not audit HUD’s year end financial statements and accompanying notes, (2) HUD’s fiscal
year 2016 third quarter financial statement notes contained unsupported balances and errors
totaling $477 million, and (3) HUD had to restate its fiscal year 2015 statement of budgetary
resources due to an error with an absolute value of $2 billion. Further, HUD’s extensive reliance
on manual journal vouchers increased the risk of error in its general ledger and financial
statements.
HUD Assets and Liabilities Were Misstated and Not Adequately Supported
HUD did not properly account for, have internal controls over, or have adequate support for all
of its assets and liabilities. Specifically, (1) CPD did not validate its accrued grant liabilities
estimates; (2) HUD’s accounting for its cash management process did not include the recognition
of receivables and payables when incurred and understated its prepayment balance; (3) HUD did
not recognize a prepayment for funds advanced to its IHBG grantees that were used for
investment; (4) EHLP could not be audited; (5) balances related to HUD’s loan guarantee
programs were not reliable; and (6) HUD did not properly account for its property, plant, and
equipment. These problems occurred because of continued weaknesses in HUD’s internal
controls and a lack of communication between OCFO and the program offices. As a result,
several financial statement line items were misstated or could not be audited as of September 30,
2016. Specifically, (1) CPD’s accrued grant liabilities estimates could not be audited; (2) HUD’s
PIH prepayments and accounts receivable balances contained errors with an absolute value of
approximately $476.2 million and $201.2 million, respectively, and accounts payable were
understated by an unknown amount; (3) HUD’s expenses on its statement of net costs were
overstated by $293.2 million; (4) loans receivable balances for EHLP could not be audited and
were potentially misstated; (5) balances related to HUD’s loan guarantee programs were
misstated by unknown amounts; and (6) HUD’s $297 million balance for property, plant, and
equipment was not supported.
Significant Reconciliations Were Not Completed in a Timely Manner
Material differences between subsidiary ledgers and the general ledger were not resolved, and
sufficient evidence to support financial statement line items was not maintained. Further, OCFO
did not complete required cash reconciliations or intragovernmental reconciliations in a timely
manner. In fiscal year 2016, HUD began using an FSSP for financial reporting but failed to
define (1) roles and responsibilities between HUD and the FSSP, and (2) policies and procedures
for completing key reconciliations of material financial statement line items. HUD’s policies
and procedures were not effective. The lack of these internal controls increased the risk of a
material misstatement occurring in the financial statements and the potential for material
misstatements to be undetected by management.
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CPD’s Formula Grant Accounting Did Not Comply With GAAP, Resulting in Misstatements on
the Financial Statements
CPD’s formula grant program accounting continued to depart from GAAP because of its use of
the FIFO method 6 for committing and disbursing obligations. Since 2013, we have reported that
the information system used, the Integrated Disbursement Information System (IDIS) Online, a
grants management system, was not designed to comply with Federal financial management
system requirements. Further, HUD’s plan to eliminate FIFO from IDIS Online was applied
only to fiscal year 2015 and future grants and not to fiscal years 2014 and earlier. As a result,
budget year grant obligation balances continued to be misstated, and disbursements made using
an incorrect USSGL attribute resulted in additional misstatements. Although FIFO has been
removed from fiscal year 2015 and forward grants, modifications to IDIS are necessary for the
system to comply with the Federal Financial Management Improvement Act (FFMIA) and
USSGL transaction records. The inability of IDIS Online to provide an audit trail of all financial
events affected by the FIFO method prevented the financial effects of FIFO on HUD’s
consolidated financial statements from being quantified. Further, because of the amount and
pervasiveness of the funds susceptible to the FIFO method and the noncompliant internal control
structure in IDIS Online, the combined statement of budgetary resources and the consolidated
balance sheet were materially misstated. The effects of not removing the FIFO method
retroactively will continue to have implications on future years’ financial statement audit
opinions until the impact is assessed to be immaterial.
HUD’s Financial Management System Weaknesses Continued in 2016
HUD’s financial system weaknesses remained a material weakness in fiscal year 2016 due to the
combined impact of many deficiencies and limitations. While HUD took steps to modernize its
financial management system through the transition of key financial management functions to an
FSSP in 2016, it encountered significant challenges after implementation that had not been
resolved as of September 30, 2016. HUD’s inability to modernize its legacy financial systems
and the lack of an integrated financial management system resulted in a continued reliance on
disparate, legacy financial systems with various limitations. Program offices compensated for
system limitations by using less reliable manual processes to meet financial management needs.
These system issues and limitations inhibited HUD’s ability to produce reliable, useful, and
timely financial information.
6
The FASAB Handbook defines FIFO as a cost flow assumption. The first goods purchased or produced are
assumed to be the first goods sold (FASAB Handbook, Version 13, appendix E, page 30, dated June 2014). In
addition, the Financial Audit Manual states that the use of “first-in, first-out” or other arbitrary means to liquidate
obligations based on outlays is not generally acceptable (GAO-PCIE Financial Audit Manual, Internal Control
Phase, Budget Control Objectives, page 395, F-3). In the context of HUD’s use of this method, the first funds
appropriated and allocated to the grantee are the first funds committed and disbursed, regardless of the source year
in which grant funds were committed for the activity.
13
Material Asset Balances Related to Nonpooled Loans Were Not Auditable
In fiscal year 2016, for the third consecutive year, Ginnie Mae could not bring its material asset
balances related to its nonpooled loan assets into an auditable state. Therefore, we were unable
to audit the $4.2 billion (net of allowance) in nonpooled loan assets reported in Ginnie Mae’s
financial statements as of September 30, 2016. These assets related to (1) claims receivable, net
($709 million); (2) mortgage loans held for investment, net ($3.47 billion); (3) accrued interest
receivable, net ($19 million); and (4) acquired property, net ($41 million). This condition
occurred because Ginnie Mae lacked financial management systems capable of handling its loan-
level transaction accounting requirements. Therefore, we were again unable to perform all of the
audit procedures needed to obtain sufficient, appropriate evidence. As a result, we determined
that our audit scope was insufficient to express an opinion on Ginnie Mae’s $4.2 billion in
nonpooled loan assets as of September 30, 2016.
Ginnie Mae’s Internal Controls Over Financial Reporting Continued To Have Weaknesses
In fiscal year 2015, we reported that Ginnie Mae’s internal controls over financial reporting were
not effective. This condition continued, and some new issues were identified in fiscal year 2016.
These material weaknesses in internal controls were issues related to the (1) improper accounting
for FHA’s reimbursable costs and accrued interest earned on nonpooled loans; (2) accounting for
cash in transit; (3) revenue accrual accounting; and (4) several other accounting issues, such as
advances, fixed assets, and financial statement note disclosures. The first three issues were
repeat findings from prior years, and the last one was new in fiscal year 2016. These conditions
occurred because of Ginnie Mae’s failure to ensure that (1) adequate monitoring and oversight of
its accounting and reporting functions were in place and operating effectively and (2) accounting
policies and procedures were developed, finalized, and appropriately implemented. As a result,
the risk that material misstatements in Ginnie Mae’s financial statements would not be prevented
or detected increased.
The Allowance for Loan Loss Account Balances Were Unreliable
In fiscal year 2016, we identified accounting issues related to Ginnie Mae’s allowance for loan
loss accounts. Specifically, we noted that Ginnie Mae improperly (1) accounted for certain
nonpooled loan accounting transactions in its allowance for loan loss accounts and (2) booked a
provision for loan loss against a nonexisting asset account. Factors that contributed to these
issues included (1) the delayed implementation of accounting policies and procedures related to
the allowance accounts and (2) the lack of financial management systems capable of handling
loan-level transactions. Due to a combination of all of these accounting issues, we determined
the balance of the allowance for loan loss accounts reported in Ginnie Mae’s financial statements
to be unreliable.
14
HUD’s and Ginnie Mae’s Financial Management Governance Was Ineffective 7
Overall, we determined that HUD’s financial management governance remained
ineffective. Weaknesses in program and component internal control that impacted financial
reporting were able to develop in part due to a lack of financial management governance
processes that could detect or prevent significant program- and component-level internal control
weaknesses.
In fiscal year 2016, Ginnie Mae’s executive management began to address the financial
management governance problems cited in our fiscal years 2015 and 2014 audit reports. While
significant progress was made this year, more work is needed to fully address the issues cited in
our report. Specifically, these problems included issues in (1) keeping Ginnie Mae OCFO’s
operations fully functional; (2) ensuring that emerging risks affecting its financial management
operations were identified, analyzed, and responded to appropriately and in a timely manner; (3)
establishing adequate and appropriate accounting policies and procedures and accounting
systems; and (4) implementing an effective entitywide governance of the models used to
generate accounting estimates for financial reporting. Some of these conditions continued
because the implementation of the corrective action plans took longer than anticipated. This
issue again contributed to Ginnie Mae’s inability to produce auditable financial statements for
the third consecutive fiscal year.
HUD’s financial management governance remained ineffective during 2016. HUD’s transition
to an FSSP for financial management services was punctuated by operational issues that were
exacerbated by a lack of mature financial management governance practices. Additionally, as
we have reported in prior-year audits, HUD did not have reliable financial information for
reporting and continued using its outdated legacy financial systems. Weaknesses in program and
component internal control that impacted financial reporting were able to develop in part due to a
lack of financial management governance processes. As a result, there were multiple
deficiencies in HUD’s internal controls over financial reporting, resulting in misstatements on
the financial statements and noncompliance with laws and regulations.
Cash Flow Modeling Errors Were Not Detected
In fiscal years 2014 and 2015, FHA home equity conversion mortgage (HECM) net loans
receivable and liability for loan guarantee were not reported in accordance with GAAP.
Specifically, FHA did not estimate its property maintenance and operating management assumption
expense rate based on actual historical payments. This condition occurred because FHA failed to
isolate the accrued expenses in its input data in modeling its maintenance and operating expense rate
management assumption. Additionally, FHA failed to adequately review significant changes
observed in its maintenance and operating expense input data until 2016. This failure caused an
overstatement of FHA’s loan guaranty liability and an understatement of net loans receivable and
7
This was classified as a material weakness, based on the findings on financial management governance reported in
Audit Report 2017-FO-0003, Additional Details To Supplement Our Fiscal Years 2016 and 2015 (Restated) U.S.
Department of Housing and Urban Development Financial Statement Audit, and Audit Report 2017-FO-0001, Audit
of the Government National Mortgage Association’s Fiscal Years 2016 and 2015 (Restated) Financial Statements.
15
related foreclosed property line items in fiscal years 2014 and 2015. According to FHA, the
overstatement of the liability account and understatement of the asset account was $833 million and
$540 million, respectively in fiscal year 2015, and the overstatement of the liability account and
understatement of the asset account was $830 million and $542 million respectively in fiscal year
2014.
FHA’s Controls Over Financial Reporting Related to Budgetary Resources Had Weaknesses
In fiscal year 2016, we identified financial reporting control deficiencies related to FHA’s
monitoring of its budgetary resources. Specifically, we found that errors were not prevented or
detected in a timely manner. These errors were related to the (1) discrepancies identified between
proprietary and budgetary accounts and (2) system-generated accounting report used for financial
reporting. Additionally, FHA’s monitoring of its unliquidated obligation balances was not effective.
We attributed these conditions to FHA’s ineffective monitoring and processing controls. As a
result, errors with an absolute amount totaling $680.2 million were not prevented or detected in a
timely manner. Finally, FHA missed the opportunity to recapture $276.5 million in invalid
obligations.
Significant Deficiencies
A significant deficiency is a deficiency or combination of deficiencies in internal control that is
less severe than a material weakness yet important enough to merit attention by those charged
with governance. We determined that the following deficiencies met the definition of a
significant deficiency.
Weaknesses in HUD’s Administrative Control of Funds System Continued
We have reported on HUD’s administrative control of funds in our audit reports and
management letters since fiscal year 2005. HUD continued to not have a fully implemented and
complete administrative control of funds system that provided oversight of both obligations and
disbursements. Our review noted instances in which (1) the Office of Multifamily Housing
Programs did not follow HUD’s administrative control of funds; (2) funds control plans were out
of date or did not reflect the controls and procedures in place with the transition to an FSSP; (3)
program codes were not included in funds control plans and funds control documentation; and
(4) OCFO staff processed accounting changes without proper review, approval, and sufficient
supporting documentation. These conditions existed because of (1) decisions made by HUD
OCFO, (2) failures by HUD’s allotment holders to update their funds control plans and notify
OCFO of changes in their obligation process before implementation, (3) a lack of compliance
reviews in the current year, and (4) a lack of policies and procedures requiring documentation of
system accounting changes. As a result, HUD could not ensure that its obligations and
disbursements were within authorized budget limits and complied with the Antideficiency Act.
HUD Continued To Report Significant Amounts of Invalid Obligations
Deficiencies in HUD’s process for monitoring its unliquidated obligations and deobligating
balances tied to invalid obligations continued. Specifically, some program offices did not
complete their obligation reviews in a timely manner, and we discovered $204.4 million in
invalid obligations not previously identified by HUD. We discovered another $93.4 million in
inactive obligations, indicating potentially additional invalid obligations. We also discovered
16
$34.6 million in obligations that HUD determined needed to be closed out and deobligated
during the fiscal year that remained on the books as of September 30, 2016. We attributed these
deficiencies to ineffective monitoring efforts and the inability to promptly process contract
closeouts. Lastly, we noted that, as of September 30, 2016, HUD had not implemented prior-
year recommendations to deobligate $100.5 million in funds. As a result, HUD’s unpaid
obligation balances on the statement of budgetary resources were potentially overstated by
$432.9 million.
HUD’s Computing Environment Controls Had Weaknesses
HUD’s computing environment, data centers, networks, and servers provide critical support to
all facets of its programs, mortgage insurance, financial management, and administrative
operations. In fiscal year 2016, we audited application controls over the New Core Interface
Solution, which exchanges data between the financial systems at ARC (Oracle Financials) and
HUD. We found that some access controls within the New Core Interface Solution were not
effective and some of the application security documentation was inaccurate. These weaknesses
occurred because of limited resources to perform the required tasks. As a result, some
contractors had inappropriate access to sensitive budget and general ledger financial transactions.
Further, inaccurate security documentation could lead to inappropriate decisions. In addition,
although HUD had taken action to address information system control weaknesses reported in
prior years, several of those weaknesses remained. Without adequate general and application
controls, there was no assurance that financial management applications and the data within them
were adequately protected
Ginnie Mae Did Not Provide Adequate Oversight To Ensure Compliance With Federal
Regulations and Guidance
Ginnie Mae did not provide adequate oversight of its pool processing agent for the Integrated
Pool Management System (IPMS) to ensure that adequate controls over business processes
complied with Federal regulations and guidance. Specifically, (1) IPMS does not have adequate
controls that automatically track overrides in the system; (2) IPMS does not have automated
controls to prevent a pool processor from making changes to the master data without prior
approval; and (3) Ginnie Mae’s lacked policies and procedures for data management. These
conditions occurred because Ginnie Mae did not have a policies for monitoring overrides and
IPMS does not sufficiently track the use of overrides or generate a report that captures changes.
As a result, Ginnie Mae’s data was susceptible to an increased risk of improper use of authority,
which could cause financial harm to Ginnie Mae by attaching its guarantee to mortgage-backed
securities.
FHA’s Controls Related to Claims Had Weaknesses
In fiscal year 2016, we found that (1) the designation of two A43C (Claims) system edits, which are
used in processing claims, was inappropriate, and (2) FHA continued to have significant delay in
billing noncompliant lenders for partial claims for which the promissory note was not provided
within 60 days. The system edit issue occurred because FHA lacked periodic monitoring to ensure
that the designation of the error codes was appropriate. The lack of alignment between FHA’s
policy and the regulatory requirements and persistent delays in initiating the collection process for
17
noncompliant mortgages was a contributing factor to FHA’s not claiming amounts due in a timely
manner. The system edit issue creates a significant vulnerability in FHA’s systems application
controls, and its risk of improper payments is increased because FHA relied heavily on system
edits to ensure that hundreds of thousands of single-family claim requests worth more than $15
billion in fiscal year 2016 were processed correctly. Additionally, delays in implementing the
collection process for noncompliant mortgagees with unsupported partial claims caused
unsupported partial claims to remain in the loans receivable inventory longer, which is neither a
good cash management practice nor a good strategy to help improve the health of the Mutual
Mortgage Insurance fund.
Weaknesses in FHA’s Controls Over Model Governance
FHA had not fully implemented an effective model risk management governance framework.
Specifically, it had not finalized or implemented policies and procedures relating to (1) model
documentation, (2) model assumption sensitivity analysis testing, and (3) data management and
validation. This condition occurred because FHA had not made establishing a model governance
framework a priority. FHA’s failure to fully implement a control mechanism, such as the model
risk management governance framework, increased the risk of inconsistencies and errors in
financial reporting occurring without being detected or prevented.
Weaknesses Were Identified in Selected FHA Information Technology Systems
Our review of the general and application controls over FHA’s Single Family Premium Collection
System – Periodic (SFPCS-P) and Single Family Acquired Asset Management System (SAMS)
found (1) weaknesses in SFPCS-P, which included the system’s being incorrectly classified as a
low-impact system instead of a moderate-impact system; (2) that software products used by SFPCS-
P were outdated; (3) that the interface reconciliation from HUD’s Single Family Insurance System
(SFIS) to SFPCS-P was not sufficiently performed; (4) that SFPCS-P had not participated in HUD’s
disaster recovery exercise for more than 4 years; (5) that segregation of duties for SFPCS-P
developers was not effectively implemented; and (6) that SFPCS-P security documents contained
inaccurate information. Additionally, we found (1) weaknesses in SAMS, which included that the
interface reconciliations from SFIS to SAMS were not sufficiently performed and (2) least privilege
and segregation of duties requirements were not fully implemented for SAMS users.
We completed an additional review of the general and application controls over SFIS and the
Claims system and determined that the information system control weaknesses previously identified
in SFIS and Claims were being addressed. However, we found (1) weaknesses in Claims, which
included inconsistencies in error code, and (2) that the configuration information and the history of
system changes were not retained for more than 5 years. Further, we found (1) weaknesses in both
SFIS and Claims systems, which included that application and user access controls were not
effectively implemented or adequately managed, and (2) that management did not adequately
implement effective application configuration management. We also found that HUD Application
Release Tracking System documents for FHA applications were not processed and maintained
properly. These conditions occurred because some application controls were not sufficient. As a
result, the appropriate confidentiality, integrity, and availability of critical information may have
been negatively impacted. In addition, the information used to provide input to the FHA financial
statements could have been adversely affected.
18
Report on Compliance With Laws and Regulations
In connection with our audit, we performed tests of HUD’s compliance with certain provisions
of laws and regulations. The results of our tests disclosed five instances of noncompliance that
are required to be reported in accordance with Government Auditing Standards, issued by the
Comptroller General of the United States, or OMB Bulletin No. 15-02, Audit Requirements for
Federal Financial Statements. However, the objective of our audit was not to provide an opinion
on compliance with laws and regulations. Accordingly, we do not express such an opinion.
HUD’s Financial Management Systems Did Not Comply With the Federal Financial
Management Improvement Act
In fiscal year 2016, we noted a number of instances of FFMIA noncompliance 8 within HUD’s
financial management system. HUD’s continued noncompliance was due to New Core
implementation challenges and a reliance on a number of legacy financial systems.
HUD Continued To Not Comply With the HOME Investment Partnership Act
HUD continued to not comply with section 218(g) of the HOME Investment Partnership Act
(also known as the HOME Statute) regarding grant commitment requirements. HUD’s
misinterpretation of the plain language in the Act, the implementation of the cumulative method
and the FIFO technique, and the current recapture policies continued to result in HUD’s
noncompliance with HOME Statute requirements. As a result, HUD continued to incorrectly
permit some jurisdictions to retain, commit, and disburse HOME Investment Partnerships
Program grant funds beyond the statutory deadline. HUD will continue to be noncompliant with
related laws and regulations until the cumulative method is no longer used to determine whether
grantees meet commitment deadlines required by the HOME Statute. Allowing grantees to
disburse funds from commitments made outside the 24-month statutory period may have caused
HUD to incur improper payments.
HUD Did Not Comply With Treasury Financial Manual’s Rules on Cash Management or 2 CFR
Part 200
Since the implementation of its cash management policies in fiscal year 2013, PIH has made
significant progress toward compliance with Treasury Financial Manual rules on cash
management. 9 However, despite considerable efforts by HUD’s Office of Housing Voucher
Programs, PHAs maintained Federal cash in excess of their immediate disbursement need for
extended periods. Specifically, Moving To Work program PHAs held between $432.4 million
and $466.5 million for the majority of the fiscal year and even after offsets performed in August
8
Compliance with Section 803(a) elements of FFMIA include (1) system requirements, (2) accounting standards,
and (3) ussgl at the transaction level.
9
Before fiscal year 2013, HUD provided housing assistance payments to its PHAs that far exceeded their need and
did not have a process in place to offset excess funding. To address this problem, PIH implemented the following
cash management polices: (1) determine future disbursement based on previous need, (2) perform quarterly cash
reconciliations and offset excess funding as it is identified, and (3) offset amounts that accumulated before the
implementation of these new processes.
19
and September 2016, held $212 million in excess of their immediate disbursement needs.
Further, PHAs accumulated $168.3 million from January to June 2016 and most likely
accumulated additional excess funds from July through September, none of which had been
offset as of September 30, 2016. These conditions occurred because HUD lacked an automated
system and real-time expense data needed to fully implement its cash management policies.
Since PHAs maintained these funds in excess of immediate disbursement need for extended
periods and were unable to quickly offset the funds against future disbursements, HUD did not
comply with Treasury’s cash management regulations 10 or 2 CFR (Code of Federal Regulations)
Part 200, 11 increasing the risk of funds being susceptible to fraud, waste, and abuse.
HUD Did Not Comply With the Improper Payments Elimination and Recovery Act of 2010
Our Improper Payments Elimination and Recovery Act (IPERA) audit 12 found that HUD did not
comply with IPERA in fiscal year 2015 because it did not conduct its annual risk assessment in
accordance with OMB guidance or meet its annual improper payment reduction target.
Specifically, HUD did not assess all low-risk programs on a 3-year cycle or consider all nine
required risk factors, making the review incomplete and noncompliant with section 3(a)(3)(B) of
IPERA. HUD also failed to meet or exceed the annual improper payment reduction targets for
its high-priority program, Rental Housing Assistance Programs (RHAP), causing noncompliance
with section 3(a)(3)(E) of IPERA. This is the third year in a row that HUD did not comply with
IPERA. Additionally, we found information published in the agency financial report did not
meet the reporting requirements of OMB Circular A-136, significant improper payments in
HUD’s RHAP continued, and HUD’s improper payment estimate and methodology for RHAP
continued to have deficiencies during fiscal year 2015.
Ginnie Mae Did Not Comply With the Debt Collection Improvement Act of 1996
In fiscal year 2016, Ginnie Mae’s noncompliance with the Debt Collection Improvement Act
(DCIA) of 1996 continued. Specifically, as reported in fiscal year 2015, Ginnie Mae had not
remediated its practice of ensuring that all debt collection tools allowed by law had been
considered before deciding to discharge certain uninsured mortgage debts owed to Ginnie Mae.
This condition occurred because Ginnie Mae’s management continued to take the position that
DCIA did not apply to Ginnie Mae; therefore, it did not need to comply with DCIA
10
Treasury Financial Manual, Vol. 1, Part 4A, Section 2045.10, Cash Advances Establishing Procedure for Cash
Advances, section 3, states, “It is the responsibility of grantor agencies to monitor the cash management practices of
their recipient organizations to ensure that Federal cash is not maintained by them in excess of immediate disbursing
needs. Agencies must establish systems and procedures to assure that balances are maintained commensurate with
immediate disbursing needs, excess balances are promptly returned to the Treasury; and advance funding
arrangements with recipient organizations unwilling or unable to comply are terminated.”
11
Regulations at 2 CFR 200.305 state, “For non-Federal entities other than States, payments methods must minimize
the time elapsing between the transfer of funds from the United States Treasury or the pass-through entity and the
disbursement by the non-Federal entity.” The regulations further state, “Advance payments to a non-Federal entity
must be limited to the minimum amounts needed and be timed to be in accordance with the actual, immediate cash
requirements of the non-Federal entity in carrying out the purpose of the approved program or project.”
12
Audit Report 2016-FO-0005, Compliance With the Improper Payments Elimination and Recovery Act, issued
May 13, 2016
20
requirements. As a result, Ginnie Mae may have missed opportunities to collect tens of millions
of dollars in debts related to losses on its mortgage-backed securities program.
Results of the Audit of FHA’s Financial Statements
We performed a separate audit of FHA’s fiscal years 2016 and 2015 (restated) financial
statements. Our report on FHA’s financial statements, 13 includes a qualified opinion on FHA’s
financial statements, along with discussion of two material weaknesses and three significant
deficiencies in internal controls.
Results of the Audit of Ginnie Mae’s Financial Statements
We performed a separate audit of Ginnie Mae’s fiscal years 2016 and 2015 (restated) financial
statements. Our report on Ginnie Mae’s financial statements, 14 includes a disclaimer of opinion
on these financial statements, along with discussion of four material weaknesses, one significant
deficiency in internal control, and one instance of noncompliance with laws and regulations.
Objectives, Scope, and Methodology
As part of our audit, we considered HUD’s internal controls over financial reporting. We are not
providing assurance on those internal controls. Therefore, we do not provide an opinion on
internal controls. We conducted our audit in accordance with Government Auditing Standards
and the requirements of OMB Bulletin 15-02. These standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of
material misstatement.
We also tested HUD’s compliance with laws, regulations, governmentwide policies, and
provisions of contract and grant agreements that could have a direct and material effect on the
financial statements. However, our consideration of HUD’s internal controls and our testing of
its compliance with laws, regulations, governmentwide policies, and provisions of contract and
grant agreements were not designed to and did not provide sufficient evidence to allow us to
express an opinion on such matters and would not necessarily disclose all matters that might be
material weaknesses; significant deficiencies; or noncompliance with laws, regulations,
governmentwide policies, and provisions of contract and grant agreements. Accordingly, we do
not express an opinion on HUD’s internal controls or its compliance with laws, regulations,
governmentwide policies, and provisions of contract and grant agreements.
With respect to information presented in HUD’s “required supplementary stewardship
information” and “required supplementary information” and management’s discussion and
analysis presented in HUD’s fiscal year 2015 agency financial report, we performed limited
testing procedures as required by AU-C 730, Required Supplementary Information. Our
13
Audit Report 2017-FO-0002, Audit of Federal Housing Administration Fiscal Years 2016 and 2015 (Restated)
Financial Statements Audit, issued November 14, 2016, was incorporated into this report.
14
Audit Report 2017-FO-0001, Audit of the Government National Mortgage Association’s Fiscal Years 2016 and
2015 (Restated) Financial Statements, issued November 14, 2016, was incorporated into this report.
21
procedures were not designed to provide assurance, and, accordingly, we do not provide an
opinion on such information.
Because of the matters described in the Basis for Disclaimer of Opinion section above, we were
not able to obtain sufficient, appropriate audit evidence to provide a basis for an audit opinion.
Agency Comments and Our Evaluation
We reviewed management’s response to the draft independent auditor’s report which can be
found in its entirety in appendix A. We noted both points of agreement and differences of
opinion. While we agree with OCFO that there is more work to do to remediate outstanding
issues, we also noted management continues to minimize internal control weaknesses and
overestimate progress. For example, this year, management disagreed with a number of
preliminary assessments and OIG findings and recommendations that were identified and
provided to OCFO early in the audit cycle. The primary basis of many of the disagreements
cited OIG’s use of “best practice” standards or criteria that HUD believed was optional. HUD’s
continued minimization and diminishment of issues throughout the course of the year resulted in
inaction and a failure to escalate the need to remediate internal control weaknesses in a timely
manner. Consequently, significant delays in the completion and delivery of final consolidated
financial statements and accompanying notes occurred and as a result, OIG was compelled to
issue a disclaimer of opinion on HUD’s 2016 and 2015 (Restated) consolidated financial
statements with a primary basis that OIG was unable to audit them in their entirety due to their
untimely delivery.
Progress was made on two material weaknesses, and a third was not resolved, but instead,
consolidated with other new findings identified during fiscal year 2016. However, two new
material weaknesses were identified during the course of the year, one of which contributed to
HUD’s inability to timely complete and deliver final consolidated financial statements and
accompanying notes. This material weaknesses could have been identified and remediated by
management early in the fiscal year, allowing for the detection and prevention of the errors and
issues identified by OIG at third quarter and possibly ensuring timely delivery of final
consolidated financial statements and accompanying notes.
With respect to the FHA restatements performed, we are not taking exception to FHA’s
reestimation process. At issue here is FHA’s failure to use best and accurate data available to
FHA at that time in its cash flow modeling process. We have sufficient appropriate evidence to
support that this control failure resulted in errors in the utilization of home equity conversion
mortgage operations and maintenance cost data. This condition occurred because of a weak
entitywide model governance structure and internal controls.
The Department’s and Ginnie Mae’s ongoing joint efforts in mapping out a path forward on its
nonpooled loan assets will bring them closer to a better state where it can potentially be ready for
audit fiscal in year 2017.
This report is intended for the information and use of the management of HUD, OMB, GAO, and
Congress and is not intended to be and should not be used by anyone other than these specified
22
23
Appendixes
Appendix A
Auditee Comments
24
25
Appendix B
Schedule of Questioned Costs and Funds To Be Put to Better Use
Audit report Funds to be put to
Unsupported 1/ better use 2/
number
2017-FO-0001 $248,016,624
2017-FO-0002 $55,350,830 276,567,940
2017-FO-0003 500,689,142
Totals 55,350,830 1,025,273,706
1/ Unsupported costs are those costs charged to a HUD-financed or HUD-insured program
or activity when we cannot determine eligibility at the time of the audit. Unsupported
costs require a decision by HUD program officials. This decision, in addition to
obtaining supporting documentation, might involve a legal interpretation or clarification
of departmental policies and procedures.
2/ Recommendations that funds be put to better use are estimates of amounts that could be
used more efficiently if an Office of Inspector General (OIG) recommendation is
implemented. These amounts include reductions in outlays, deobligation of funds,
withdrawal of interest, costs not incurred by implementing recommended improvements,
avoidance of unnecessary expenditures noted in preaward reviews, and any other savings
that are specifically identified.
26
Appendix C
HUD’s Fiscal Years 2016 and 2015 (Restated) Consolidated Financial Statements and
Notes
27
Financial Statements
Introduction
The principal financial statements have been prepared to report the financial position and results
of operations of HUD, pursuant to the requirements of 31 U.S.C. 3515(b). While the statements
have been prepared from HUD’s books and records in accordance with GAAP for Federal
entities and the formats prescribed by OMB, the statements are in addition to the financial
reports used to monitor and control budgetary resources, which are prepared from the same
books and records. The statements should be read with the realization that they are for a
component of the U.S. Government, a sovereign entity.
The following financial statements are presented:
The Consolidated Balance Sheet, as of September 30, 2016, and 2015, which presents those
resources owned or managed by HUD that are available to provide future economic benefits
(assets), amounts owed by HUD that will require payments from those resources or future
resources (liabilities), and residual amounts retained by HUD comprising the difference (net
position).
The Consolidated Statement of Net Cost, which presents the net cost of HUD operations for
the years ended September 30, 2016, and 2015. HUD’s net cost of operations includes the gross
costs incurred by HUD less any exchange revenue earned from HUD activities.
The Consolidated Statement of Changes in Net Position, which presents the change in HUD’s
net position resulting from the net cost of HUD operations, budgetary financing sources other
than exchange revenues, and other financing sources for the years ended September 30, 2016,
and 2015.
The Combined Statement of Budgetary Resources, which presents the budgetary resources
available to HUD during FY 2016 and 2015, the status of these resources at September 30, 2016,
and 2015, and the outlay of budgetary resources for the years ended September 30, 2016,
and 2015.
The Notes to the Financial Statements provide important disclosures and details related to
information reported on the statements.
28
U.S. Department of Housing And Urban Development
Consolidated Balance Sheet
For The Period Ending September 2016 and 2015
(Dollars in Millions)
2016 2015 (Restated)
Assets:
Intragovernmental:
Fund balance with Treasury (Note 4) $ 73,198 $ 94,691
Short-Term Investments ( Note 6) $ 15,954 $ 12,923
Long-Term Investments held to Maturity ( Note 6) 36,398 14,754
Accounts Receivable, Net (Note 7) 1 -
Other Assets (Note 12) 43 9
Total Intragovernmental Assets $ 125,594 $ 122,377
Cash (Note 5) $ 60 $ 45
Investments (Note 6) 31 31
Accounts Receivable, Net (Note 7) 611 780
Direct Loan and Loan Guarantees, Net (Note 8) 19,476 14,965
Other Non-Credit Reform Loans (Note 9) 2,680 3,227
General Property, Plant, and Equipment (Note 10) 381 329
PIH Prepayments (Note 11) 380 672
Other Assets (Note 12) 53 45
Total Assets $ 149,266 $ 142,471
Liabilities:
Intragovernmental
Accounts payable (Note 13) $ 24 $ 16
Debt (Note 14) 31,002 27,150
Other Intragovernmental Liabilities (Note 17) 3,024 3,148
Total Intragovernmental Liabilities $ 34,050 $ 30,314
Accounts payable (Note 13) $ 1,006 $ 966
Accrued Grant Liabilities (Note 13) 2,663 2,388
Loan Guarantees (Note 8) (2,057) 13,473
Debt Held by the Public (Note 14) 8 8
Federal Employee and Veterans Benefits (Note 15) 64 69
Loss Reserves (Note 16) 3 -
Other Governmental Liabilities (Note 17) 1,367 1,239
Total Liabilities $ 37,104 $ 48,457
Commitments and Contingencies (Note 19) $ 55 $ 55
Net Position:
Unexpended appropriations - fund from dedicated collections (Note 20) $ (342) $ (305)
Unexpended appropriations - other funds 47,257 51,420
Cumulative results of operations - funds from dedicated collections (Note 20) 22,655 21,417
Cumulative results of operations - other funds 42,592 21,482
Total Net Position $ 112,162 $ 94,014
Total Liabilities and Net Position $ 149,266 $ 142,471
The accompanying notes are an integral part of these statements
29
U.S. Department Of Housing And Urban Development
Consolidated Statement Of Net Cost
For The Period Ending September 2016 and 2015
(Dollars in Millions)
2016 2015 (Restated)
COSTS
Federal Housing Administration
Gross Costs (Note 21) $ (17,758) $ (16,203)
Less: Earned Revenues (1,218) (1,849)
Net Program Costs (18,976) (18,052)
(Gain)/Loss on pension, ORB or OPEB Assumption Changes - -
Net program costs including Assumption Changes (18,976) (18,052)
Government National Mortgage Association
Gross Costs (Note 21) $ 432 $ (234)
Less: Earned Revenues (1,646) (1,555)
Net Program Costs (1,214) (1,789)
(Gain)/Loss on pension, ORB or OPEB Assumption Changes - -
Net program costs including Assumption Changes (1,214) (1,789)
Section 8 Rental Assistance
Gross Costs (Note 21) $ 30,653 $ 29,482
Less: Earned Revenues - -
Net Program Costs 30,653 29,482
(Gain)/Loss on pension, ORB or OPEB Assumption Changes - -
Net program costs including Assumption Changes 30,653 29,482
Public and Indian Housing Loans and Grants (PIH)
Gross Costs (Note 21) $ 2,995 $ 2,835
Less: Earned Revenues 0 -
Net Program Costs 2,995 2,835
(Gain)/Loss on pension, ORB or OPEB Assumption Changes - -
Net program costs including Assumption Changes 2,995 2,835
Homeless Assistance Grants
Gross Costs (Note 21) $ 1,957 $ 1,894
Less: Earned Revenues 5 (4)
Net Program Costs 1,962 1,890
(Gain)/Loss on pension, ORB or OPEB Assumption Changes - -
Net program costs including Assumption Changes 1,962 1,890
Housing for the Elderly and Disabled
Gross Costs (Note 21) $ 974 $ 1,037
Less: Earned Revenues (109) (136)
Net Program Costs 865 901
(Gain)/Loss on pension, ORB or OPEB Assumption Changes - -
Net program costs including Assumption Changes 865 901
Community Development Block Grants (CDBG)
Gross Costs (Note 21) $ 6,286 $ 7,567
Less: Earned Revenues - -
Net Program Costs 6,286 7,567
(Gain)/Loss on pension, ORB or OPEB Assumption Changes - -
Net program costs including Assumption Changes 6,286 7,567
HOME
Gross Costs (Note 21) $ 1,167 $ 1,241
Less: Earned Revenues - -
Net Program Costs 1,167 1,241
(Gain)/Loss on pension, ORB or OPEB Assumption Changes - -
Net program costs including Assumption Changes 1,167 1,241
Other
Gross Costs (Note 21) $ 6,351 $ 6,071
Less: Earned Revenues (37) (29)
Net Program Costs 6,314 6,042
Net program costs including Assumption Changes 6,314 6,042
Costs Not Assigned to Programs 262 218
Less: Earned Revenues Not Attributed to Programs - -
Consolidated
Gross Costs (Note 21) $ 33,319 $ 33,908
Less: Earned Revenues (3,005) (3,573)
Net Cost of Operations $ 30,314 $ 30,335
The accompanying notes are an integral part of these statements
30
U.S. Department Of Housing And Urban Development
Consolidated Statement Of Changes In Net Position
For The Period Ending September 2016 and 2015
(Dollars in Millions)
2016 2015 (Restated)
Funds From Dedicated Funds From Dedicated
Collections All Other Funds Total Collections All Other Funds Total
CUMULATIVE RESULTS OF OPERATIONS:
Beginning of Period $ 21,417 $ 20,646 $ 42,063 $ 19,621 $ 5,434 $ 25,055
Adjustments:
Changes in Accounting Principles - - - - - -
Corrections and Errors (5) 835 830 (3) - (3)
Beginning Balance, As Adjusted $ 21,412 $ 21,481 $ 42,893 $ 19,618 $ 5,434 $ 25,052
BUDGETARY FINANCING SOURCES:
Other Adjustments (Rescissions, etc.) $ (1) $ - $ (1) $ - $ - $ -
Appropriations Used 89 54,372 54,461 115 52,878 52,993
Non-Exchange Revenue 5 201 206 3 - 3
Donations and Forfeitures of Cash/Equivalents - - - - - -
Transfers In/Out Without Reimbursement - - - - - -
Other Budgetary Financing Sources - - - - (0) (0)
OTHER FINANCING SOURCES (NON-EXCHANGE):
Donations and Forfeitures of Property $ - $ - $ - $ - $ - $ -
Transfers-In/Out Without Reimbursement - - - - 0 0
Imputed Financing 1 158 159 - 65 65
Other 13 (2,170) (2,157) - (4,879) (4,879)
- - -
Total Financing Sources 107 52,560 52,667 119 48,063 48,182
Net Cost of Operations 1,136 (31,450) (30,314) 1,680 (32,015) (30,335)
Net Change 1,243 21,111 22,354 1,799 16,048 17,847
CUMULATIVE RESULTS OF OPERATIONS $ 22,655 $ 42,592 $ 65,247 $ 21,417 $ 21,482 $ 42,899
UNEXPENDED APPROPRIATIONS:
Beginning of Period $ (320) $ 51,435 $ 51,115 $ (221) $ 56,442 $ 56,221
Adjustments: - - -
Changes in Accounting Principles - - - - - -
Corrections and Errors 14 (15) (1) - 574 574
Beginning Balance, As Adjusted $ (306) $ 51,420 $ 51,114 $ (221) $ 57,016 $ 56,795
BUDGETARY FINANCING SOURCES:
Appropriations Received $ - $ 51,088 $ 51,088 $ - $ 47,639 $ 47,639
Appropriations Transferred-In/Out 80 (80) - 55 (56) 0
Other Adjustments (Rescissions, etc.) (27) (799) (826) (24) (301) (325)
Appropriations Used (89) (54,372) (54,461) (115) (52,878) (52,994)
Total Budgetary Financing Sources $ (36) $ (4,163) $ (4,200) $ (84) $ (5,596) $ (5,680)
TOTAL UNEXPENDED APPROPRIATIONS $ (342) $ 47,257 $ 46,915 $ (305) $ 51,420 $ 51,115
NET POSITION $ 22,313 $ 89,849 $ 112,162 $ 21,112 $ 72,902 $ 94,014
The accompanying notes are an integral part of these statements
31
U.S. Department Of Housing And Urban Development
Combined Statement Of Budgetary Resources
For The Period Ending September 2016 and 2015
(Dollars in Millions)
2016 2015 (Restated)
Non Budgetary Credit Non Budgetary Credit
Program Financing Program Financing
Budgetary Accounts Budgetary Accounts
Budgetary Resources:
Unobligated Balance Brought Forward, October 1 $ 44,260 $ 35,616 $ 34,729 $ 49,760
Adjustments to Unobligated Balance Brought Forward, October 1 7 (3) (13) -
Unobligated Balance Brought Forward, Oct 1, As Adjusted 44,267 35,613 34,716 49,760
Recoveries of Prior Year Unpaid Obligations 1,039 463 716 397
Other Changes in Unobligated Balance (1,089) (0) (708) -
Unobligated Balance From Prior Year Budget Authority, Net 44,217 36,076 34,724 50,157
Appropriations (discretionary and mandatory) 51,256 - 47,458 -
Borrowing Authority (discretionary and mandatory) - 13,078 - 12,146
Contract Authority (discretionary and mandatory) - - - -
Spending Authority From Offsetting Collections 28,705 22,657 26,158 28,452
Total Budgetary Resources $ 124,178 $ 71,811 $ 108,340 $ 90,755
Status of Budgetary Resources:
Obligations Incurred
Direct $ 55,328 $ 51,020 $ 63,700 $ 49,732
Reimbursable 214 3,613 249 5,538
Subtotal $ 55,542 $ 54,633 $ 63,949 $ 55,270
Unobligated Balances, End of Year
Apportioned $ 12,148 $ 5,776 $ 13,115 $ 4,479
Exempt From Apportionment - - - -
Unapportioned 55,639 11,402 31,275 31,007
Unexpired unobligated balance, end of year $ 67,787 $ 17,178 $ 44,391 $ 35,485
Expired unobligated balance, end of year 849 - - -
Total Unobligated Balance, End of Year $ 68,636 $ 17,178 $ 44,391 $ 35,485
Total Status of Budgetary Resources $ 124,178 $ 71,811 $ 108,340 $ 90,755
Change in Obligated Balance
Unpaid Obligations:
Unpaid Obligations, Brought Forward, October 1 $ 39,303 $ 2,781 $ 41,087 $ 2,511
Adjustment to Unpaid Obligations, Start of Year (8) 3 13 -
Obligations Incurred 55,543 54,633 63,950 55,271
Outlays (gross) (57,520) (54,048) (65,009) (54,627)
Actual Transfers, Unpaid Obligations - - - -
Recoveries of Prior Year Unpaid Obligations (1,039) (463) (716) (397)
Unpaid Obligations, End of Year (gross) $ 36,279 $ 2,906 $ 39,325 $ 2,758
Uncollected Payments:
Uncollected Payments, Fed Sources, Brought Forward, Oct 1 $ (18) $ (56) $ (12) $ (53)
Adjustment to Uncollected Payments, Fed Sources, Start of Year - - - -
Change in Uncollected Customer Payments, Fed Sources (23) 5 (6) 1
Actual Transfers, Uncollected Payments, Fed sources - - - -
Uncollected Payments, Fed sources, End of Year $ (41) $ (51) $ (18) $ (52)
Memorandum (non-add) Entries:
Obligated Balance, Start of Year $ 39,277 $ 2,728 $ 41,088 $ 2,458
Obligated Balance, End of Year $ 36,238 $ 2,855 $ 39,307 $ 2,706
Budget Authority and Outlays, Net:
Budget Authority, Gross (discretionary and mandatory) $ 79,961 $ 35,735 $ 73,615 $ 40,598
Actual Offsetting Collections (discretionary and mandatory) (28,825) (31,889) (26,642) (41,108)
Change in Uncollected Customer Payments from Fed sources (discretionary and mandatory) (23) 5 (6) 1
Recoveries of prior year paid obligations (discretionary and mandatory) 28 - - -
Anticipated Offsetting Collections (discretionary and mandatory) - - - -
Budget Authority, Net (discretionary and mandatory) $ 51,141 $ 3,851 46,967 (509)
Outlays, Gross (discretionary and mandatory) $ 57,520 $ 54,048 $ 65,009 $ 54,627
Actual Offsetting Collections (discretionary and mandatory) (28,825) (31,889) (26,639) (41,108)
Outlays, Net (discretionary and mandatory) $ 28,695 $ 22,159 $ 38,370 $ 13,519
Distributed Offsetting Receipts (2,302) - (2,844) -
Agency Outlays, Net (discretionary and mandatory) $ 26,393 $ 22,159 $ 35,526 $ 13,519
The accompanying notes are an integral part of these statements
32
Notes to Financial Statements
September 30, 2016 and 2015
Note 1: Entity and Mission
HUD was created in 1965 to (1) provide housing subsidies for low and moderate income
families, (2) provide grants to states and communities for community development activities,
(3) provide direct loans and capital advances for construction and rehabilitation of housing
projects for the elderly and persons with disabilities, and (4) promote and enforce fair housing
and equal housing opportunity. In addition, HUD insures mortgages for single family and
multifamily dwellings; insures loans for home improvements and manufactured homes; and
facilitates financing for the purchase or refinancing of millions of American homes.
HUD’s major programs are as follows:
The Federal Housing Administration (FHA) administers active mortgage insurance programs
which are designed to make mortgage financing more accessible to the home-buying public and
thereby to develop affordable housing. FHA insures private lenders against loss on mortgages
which finance single family homes, multifamily projects, health care facilities, property
improvements, and manufactured homes.
The Government National Mortgage Association (Ginnie Mae) guarantees the timely payment of
principal and interest on Mortgage-Backed Securities (MBS) issued by approved private
mortgage institutions and backed by pools of mortgages insured or guaranteed by FHA, the
Department of Agriculture (USDA), the Department of Veterans Affairs (VA), and the HUD
Office of Public and Indian Housing (PIH).
The Section 8 Rental Assistance programs assist low- and very low-income families in obtaining
decent and safe rental housing. HUD makes up the difference between what a low- and very
low-income family can afford and the approved rent for an adequate housing unit funded by the
Housing Choice Voucher (HCV) Program.
The Low Rent Public Housing Grants program provides grants to Public Housing Agencies
(PHAs) and Tribally Designated Housing Entities (TDHEs) for construction and rehabilitation of
low-rent housing. This program is a continuation of the Low Rent Public Housing Loan program
which pays principal and interest on long-term loans made to PHAs and TDHEs for construction
and rehabilitation of low-rent housing.
The Homeless Assistance Grants program provides grants to localities to implement innovative
approaches to address the diverse facets of homelessness. The grants provide funds for the
Emergency Solutions Grant and Continuum of Care which award funds through formula and
competitive processes.
33
The Section 202/811 Supportive Housing for the Elderly and Persons with Disabilities programs
provided 40-year loans to nonprofit organizations sponsoring rental housing for the elderly or
disabled. During FY 1992, the program was converted to a grant program. The grant program
provides capital for long-term supportive housing for the elderly (Section 202) and the disabled
(Section 811).
The Community Development Block Grant (CDBG) programs provide funds for metropolitan
cities, urban counties, and other communities to use for neighborhood revitalization, economic
development, and improved community facilities and services. The United States Congress
appropriated $17.5 billion in FY 2008 and $150 million in emergency supplemental
appropriations in FY 2005 for the “Community Development Fund” for emergency expenses to
respond to various disasters such as Hurricanes Katrina and Ike. Funds of $3 billion were
disbursed as of September 30, 2016. Any remaining un-obligated balances remain available
until expended.
The Home Investments Partnerships program provides grants to states, local governments, and
Indian tribes to implement local housing strategies designed to increase home ownership and
affordable housing opportunities for low- and very low-income families.
Other Programs not included above consist of other smaller programs which provide grant,
subsidy funding, and direct loans to support other HUD objectives such as fair housing and equal
opportunity, energy conservation, rehabilitation of housing units, removal of lead hazards, and
for maintenance costs of PHAs and TDHEs housing projects. The programs provided 13 percent
of HUD’s consolidated revenues and financing sources as of September 30, 2016.
Note 2: Summary of Significant Accounting Policies
A. Basis of Consolidation
The accompanying principal financial statements include all Treasury Account Fund Symbols
(TAFSs) designated to the Department of Housing and Urban Development, which consist of
principal program funds, revolving funds, general funds and deposit funds. All inter-fund
accounts receivable, accounts payable, transfers in and transfers out within these TAFSs have
been eliminated to prepare the consolidated balance sheet, statement of net cost, and statement of
changes in net position. The SBR is prepared on a combined basis as required by OMB Circular
A-136, Financial Reporting Requirements.
The Department’s FY 2016 financial statements do not include the accounts and transactions of
one transfer appropriation, the Appalachian Regional Commission. Some laws require
departments (parent) to allocate budget authority to another department (child). Allocation
means a delegation, authorized by law, by one department of its authority to obligate and outlay
funds to another department. HUD, the child account, receives budget authority and then
obligates and outlays sums of up to the amount included in the allocation. As required by OMB
Circular A-136, financial activity is in the parent account which is also accountable for and
34
maintains the responsibility for reporting while the child performs on behalf of the parent and
controls how the funds are expended. Consequently, these balances are not included in HUD’s
consolidated financial statements as specified by OMB Circular A-136.
B. Basis of Accounting
The Department’s FY 2016 financial statements include the accounts and transactions of FHA,
Ginnie Mae, and its grant, subsidy and loan programs.
The financial statements are presented in accordance with the OMB Circular No. A-136,
Financial Reporting Requirements, and in conformance with the Federal Accounting Standards
Advisory Board’s (FASAB) Statements of Federal Financial Accounting Standards (SFFAS).
The financial statements are presented on the accrual and budgetary bases of accounting. Under
the accrual method, HUD recognizes revenues when earned, and expenses when a liability is
incurred, without regard to receipt or payment of cash. Generally, procedures for HUD’s major
grant and subsidy programs require recipients to request periodic disbursement concurrent with
incurring eligible costs. Budgetary accounting facilitates compliance with legal requirements on
the use of Federal funds.
The Department’s disbursement policy permits grantees/recipients to request funds to meet
immediate cash needs to reimburse themselves for eligible incurred expenses and eligible
expenses expected to be received and paid within three days or as subsidies payable in
accordance with the Cash Management Improvement Act of 1990. Except for PIH programs,
HUD’s disbursement of funds for these purposes are not considered advance payments but are
viewed as sound cash management between the Department and the grantees. In the event it is
determined that the grantee/recipient did not disburse the funds within the three-day time frame,
interest earned must be returned to HUD and deposited into one of Treasury’s miscellaneous
receipt accounts.
C. Use of Estimates
The preparation of the principal financial statements in conformity with generally accepted
accounting principles (GAAP) requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities, the disclosure of contingent assets and
liabilities at the date of the financial statements, and the reported amounts of revenues and
expenses during the reporting period. Actual results may differ from those estimates.
Amounts reported for net loans receivable and related foreclosed property and the loan guarantee
liability represent the Department’s best estimates based on pertinent information available.
To estimate the Allowance for Subsidy (AFS) associated with loans receivable and related
foreclosed property and the Liability for Loan Guarantees (LLG), the Department uses cash flow
model assumptions associated with the loan guarantees subject to the Federal Credit Reform Act
of 1990 (FCRA), as described in Note 8, to estimate the cash flows associated with future loan
35
performance. To make reasonable projections of future loan performance, the Department
develops assumptions based on historical data, current and forecasted program and economic
assumptions.
Certain programs have higher risks due to increased chances of fraudulent activities perpetrated
against the Department. The Department accounts for these risks through the assumptions used
in the liabilities for loan guarantee estimates. HUD develops the assumptions based on historical
performance and management's judgments about future loan performance.
The Department relies on estimates by PIH to determine the amount of funding needs for PHAs
and Indian Housing Authorities (IHAs) under the PIH Housing Choice Voucher Program. Under
the Department’s cash management program, PIH evaluates the program needs of PHAs/IHAs to
minimize excess cash balances maintained by these entities. The Department implemented a
cash management policy in calendar year 2012 over the voucher program given its significant
funding levels and the excess cash balances which PHAs/IHAs had accumulated over the years.
The cash reserves, referred to as restricted net position (RNP) are monitored by the Department
and estimated by HUD on a recurring basis. The RNP balances are the basis for PIH
prepayments recorded by the Department in its comparative financial statements for FY 2016
and FY 2015.
In response to the OIG finding, HUD implemented a grant accrual policy on September 4, 2014,
and restated its FY 2013 financial statements. The Department continues to refine its
methodologies and the underlying assumptions used by program offices to develop the estimates.
Described below are the methodologies used by our major program offices which are
Community Planning and Development (CPD), PIH and the Office of Housing.
CPD developed a statistical model for its grant programs based on recent historical data
in the Integrated Disbursement Information System (IDIS). Utilizing activity type,
funding and disbursement information in IDIS, CPD was able to extrapolate the
relationship between accrued expenses over a specified period of time and when the
services are generally billed to the government by the grantees.
PIH administrative programs use disbursement data from the Department’s Electronic
Line of Credit Control Systems (ELOCCS) and evaluated it for reasonableness based on
unaudited data using the Financial Subsystem for Public Housing (FASS-PIH).
The Office of Housing, similar to the PIH administered programs, utilizes disbursement
data recorded in ELOCCS over a 12 month period and assumes a 30 day processing time
from when the entity incurs eligible expenses and the associated drawdown of funds by
the grantee occurs.
D. Credit Reform Accounting
The primary purpose of the Federal Credit Reform Act of 1990 (FCRA), which became effective
on October 1, 1991, is to more accurately measure the cost of Federal credit programs and to
36
place the cost of such credit programs on a basis equivalent with other Federal spending. OMB
Circular A-11, Preparation, Execution, and Submission of the Budget, Part 5, Federal Credit
Programs defines loan guarantee as any guarantee, insurance or other pledge with respect to the
payment of all or a part of the principal or interest on any debt obligation of a non-Federal
borrower (Issuer) to a non-Federal lender (Investor). FHA practices Credit Reform accounting.
The FCRA establishes the use of the program, financing, and general fund receipt accounts for
loan guarantees committed and direct loans obligated after September 30, 1991, (Credit Reform).
It also establishes the liquidating account for activity relating to any loan guarantees committed
and direct loans obligated before October 1, 1991, (pre-Credit Reform). These accounts are
classified as either budgetary or non-budgetary in the Combined Statements of Budgetary
Resources. The budgetary accounts include the program, capital reserve and liquidating
accounts. The non-budgetary accounts consist of the credit reform financing accounts.
The program account is a budget account that receives and obligates appropriations to cover the
subsidy cost of a direct loan or loan guarantee and disburses the subsidy cost to the financing
account. The program account also receives appropriations for administrative expenses. The
financing account is a non-budgetary account that records all of the cash flows resulting from
Credit Reform direct loans or loan guarantees. It disburses loans, collects repayments and fees,
makes claim payments, holds balances, borrows from U.S. Treasury, earns or pays interest, and
receives the subsidy cost payment from the program account.
The general fund receipt account is a budget account used for the receipt of amounts paid from
the financing account when there are negative subsidies from the original estimate or a
downward re-estimate. In most cases, the receipt account is a general fund receipt account and
amounts are not earmarked for the credit program. They are available for appropriations only in
the sense that all general fund receipts are available for appropriations. Any assets in this
account are non-entity assets and are offset by intragovernmental liabilities. At the beginning of
the following fiscal year, the fund balance in the general fund receipt account is transferred to the
U.S. Treasury General Fund. The FHA general fund receipt accounts of the General Insurance
(GI) and Special Risk Insurance (SRI) funds are in this category.
In order to resolve the different requirements between the FCRA and the National Affordable
Housing Act of 1990 (NAHA), OMB instructed FHA to create the capital reserve account to
retain the Mutual Mortgage Insurance/Cooperative Management Housing Insurance
(MMI/CMHI) negative subsidy and subsequent downward re-estimates. Specifically, the NAHA
required that FHA’s MMI fund achieve a Capital Ratio of 2.0 percent by FY 2000. The Capital
Ratio is defined as the ratio of economic net worth (current cash plus the present value of all
future net cash flows) of the MMI fund to unamortized insurance in force (the unpaid balance of
insured mortgages). Therefore, to ensure that the calculated capital ratio reflects the actual
strength of the MMI fund, the resources of the capital reserve account, which are considered
FHA assets, are included in the calculation of the MMI fund’s economic net worth.
37
The liquidating account is a budget account that records all cash flows to and from FHA
resulting from pre-Credit Reform direct loans or loan guarantees. Liquidating account
collections in any year are available only for obligations incurred during that year or to repay
debt. Unobligated balances remaining in the GI and SRI liquidating funds at year-end are
transferred to the U.S. Treasury’s General Fund. Consequently, in the event that resources in the
GI/SRI liquidating account are otherwise insufficient to cover the payments for obligations or
commitments, the FCRA provides the GI/SRI liquidating account with permanent indefinite
authority to cover any resource shortages.
E. Operating Revenue and Financing Sources
HUD finances operations principally through appropriations, collection of premiums and fees on
its FHA and Ginnie Mae programs, and interest income on its mortgage notes, loans, and
investments portfolio.
Appropriations for Grant and Subsidy Programs
HUD receives both annual and multi-year appropriations and recognizes those appropriations as
revenue when related program expenses are incurred. Accordingly, HUD recognizes grant-
related revenue and related expenses as recipients perform under the contracts. HUD recognizes
subsidy-related revenue and related expenses when the underlying assistance (e.g., provision of a
Section 8 rental unit by a housing owner) is provided or upon disbursal of funds to PHAs.
Ginnie Mae Fees
Fees received for Ginnie Mae’s guaranty of MBS are recognized as earned. Commitment fees
represent income that Ginnie Mae earns for providing approved issuers with authority to pool
mortgages into Ginnie Mae MBS. The authority Ginnie Mae provides issuers expires 12 months
from issuance for single family issuers and 24 months from issuance for multifamily issuers.
Ginnie Mae receives commitment fees as issuers request commitment authority and recognizes
the commitment fees as earned as issuers use their commitment authority, with the balance
deferred until earned or expired, whichever occurs first. Fees from expired commitment
authority are not returned to issuers.
F. Appropriations and Moneys Received from Other HUD Programs
The National Housing Act of 1990, as amended, provides for appropriations from Congress to
finance the operations of GI and SRI funds. For Credit Reform loan guarantees, appropriations
to the GI and SRI funds are provided at the beginning of each fiscal year to cover estimated
losses on insured loans during the year. For pre-Credit Reform loan guarantees, FHA has
permanent indefinite appropriation authority to finance any shortages of resources needed for
operations.
Monies received from other HUD programs, such as interest subsidies and rent supplements, are
recorded as revenue for the liquidating accounts when services are rendered. Monies received
38
for the financing accounts are recorded as additions to the Liability for Loan Guarantee or the
Allowance for Subsidy when collected.
G. Investments
HUD limits its investments, principally comprised of investments by FHA’s MMI/CMHI Fund
and by Ginnie Mae, to non-marketable market-based Treasury interest-bearing obligations (i.e.,
investments not sold in public markets). The market value and interest rates established for such
investments are the same as those for similar Treasury issues, which are publicly marketed.
HUD’s investment decisions are limited to Treasury policy which: (1) only allows investment in
Treasury notes, bills, and bonds; and (2) prohibits HUD from engaging in practices that result in
“windfall” gains and profits, such as security trading and full scale restructuring of portfolios in
order to take advantage of interest rate fluctuations.
FHA’s normal policy is to hold investments in U.S. Government securities to maturity.
However, in certain circumstances, FHA may have to liquidate its U.S. Government securities
before maturity to finance claim payments.
HUD reports investments in U.S. Government securities at amortized cost. Premiums or
discounts are amortized into interest income over the term of the investment. HUD intends to
hold investments to maturity, unless needed for operations. No provision is made to record
unrealized gains or losses on these securities because, in the majority of cases, they are held to
maturity.
In connection with an Accelerated Claims Disposition Demonstration program (the
601 program), FHA transfers assigned mortgage notes to private sector entities in exchange for
cash and equity interest. FHA uses the equity method of accounting to measure the value of its
investments in these entities.
Multifamily Risk Sharing Debentures [Section 542(c)] is a program available to lenders where
the lender shares the risk in a property by issuing debentures for the claim amount paid by FHA
on defaulted insured loans.
H. Credit Program Receivables and Related Foreclosed Property
HUD finances mortgages and provides loans to support construction and rehabilitation of low
rent housing, principally for the elderly and disabled under the Section 202/811 program. Prior
to April 1996, mortgages were also assigned to HUD through FHA claims settlement (i.e.,
Mortgage Notes Assigned (MNAs). Single family mortgages were assigned to FHA when the
mortgagor defaulted due to certain “temporary hardship” conditions beyond the control of the
mortgagor, and when, in management's judgment, it is likely that the mortgage could be brought
current in the future. FHA’s loans receivable include MNAs, also described as Secretary-held
notes, Purchase Money Mortgages (PMM) and notes related to partial claims. Under the
requirements of the FCRA, PMM notes are considered to be direct loans while MNA notes are
39
considered to be defaulted guaranteed loans. The PMM loans are generated from the sales on
credit of FHA’s foreclosed properties to qualified non-profit organizations. The MNA notes are
created when FHA pays the lenders for claims on defaulted guaranteed loans and takes
assignment of the defaulted loans for direct collections. In addition, multifamily mortgages are
assigned to FHA when lenders file mortgage insurance claims for defaulted notes.
Credit program receivables for direct loan programs and defaulted guaranteed loans assigned for
direct collection are valued differently based on the direct loan obligation or loan guarantee
commitment date. These valuations are in accordance with the FCRA and SFFAS No. 2,
“Accounting for Direct Loans and Loan Guarantees,” as amended by SFFAS No. 18. Those
obligated or committed on or after October 1, 1991, (post-Credit Reform) are valued at the net
present value of expected cash flows from the related receivables.
Credit program receivables resulting from obligations or commitments prior to October 1, 1991,
(pre-Credit Reform) are recorded at the lower of cost or fair value (net realizable value). Fair
value is estimated based on the prevailing market interest rates at the date of mortgage
assignment. When fair value is less than cost, discounts are recorded and amortized to interest
income over the remaining terms of the mortgages or upon sale of the mortgages. Interest is
recognized as income when earned. However, when full collection of principal is considered
doubtful, the accrual of interest income is suspended and receipts (both interest and principal) are
recorded as collections of principal. Pre-Credit Reform loans are reported net of allowance for
loss and any unamortized discount. The estimate for the allowance on credit program
receivables is based on historical loss rates and recovery rates resulting from asset sales and
property recovery rates, and net of cost of sales.
Foreclosed property acquired as a result of defaults of loans obligated or loan guarantees
committed on or after October 1, 1991, is valued at the net present value of the projected cash
flows associated with the property. Foreclosed property acquired as a result in defaulted loans
obligated or loan guarantees committed prior to 1992 is valued at net realizable value. The
estimate for the allowance for loss related to the net realizable value of foreclosed property is
based on historical loss rates and recovery rates resulting from property sales, and net of cost of
sales.
I. Borrowings
As further discussed in Note 14, several of HUD’s programs have the authority to borrow funds
from the U.S. Treasury for program operations. These borrowings, representing unpaid principal
balances and future accrued interest, are reported as debt in HUD’s consolidated financial
statements. The PIH Low Rent Public Housing Loan Program and the Housing for the Elderly
or Handicapped fund were financed through borrowings from the Federal Financing Bank or the
U.S. Treasury prior to the Department’s conversion of these programs to grant programs. The
Department also borrowed funds from the private sector to assist in the construction and
40
rehabilitation of low rent housing projects under the PIH Low Rent Public Housing Loan
Program. Repayments of these long-term borrowings have terms up to 40 years.
In accordance with Credit Reform accounting, FHA also borrows from the U.S. Treasury when
cash is needed in its financing accounts. Usually, the need for cash arises when FHA has to
transfer the negative credit subsidy amount related to new loan disbursements, and existing loan
modifications from the financing accounts to the general fund receipts account (for cases in
GI/SRI funds) or the liquidating account (for cases in MMI/CMHI funds). In some instances,
borrowings are also needed to transfer the credit subsidy related to downward re-estimates from
the GI/SRI financing account to the GI/SRI receipt account or when available cash is less than
claim payments due.
J. Liability for Loan Guarantees
The net potential future losses related to FHA’s central business of providing mortgage insurance
are accounted for as Loan Guarantee Liability in the consolidated balance sheets. As required by
SFFAS No. 2, the Loan Guarantee Liability includes the Credit Reform related Liabilities for
Loan Guarantees (LLG) and the pre-Credit Reform Loan Loss Reserve (LLR).
The LLG is calculated as the net present value of anticipated cash outflows for defaults, such as
claim payments, premium refunds, property costs to maintain foreclosed properties less
anticipated cash inflows such as premium receipts, proceeds from asset sales and principal and
interest on Secretary-held notes.
HUD records loss estimates for its single family LLR and multifamily LLR mortgage insurance
programs operated through FHA. FHA records loss estimates for its single family programs to
provide for anticipated losses incurred (e.g., claims on insured mortgages where defaults have
taken place but claims have not yet been filed). Using the net cash flows (cash inflows less cash
outflows), FHA computes an estimate based on conditional claim rates and loss experience data,
and adjusts the estimates to incorporate management assumptions about current economic
factors. FHA records loss estimates for its multifamily programs to provide for anticipated
outflows less anticipated inflows. Using the net present value of claims less premiums, fees, and
recoveries, FHA computes an estimate based on conditional claim rates, prepayment rates, and
recovery assumptions based on historical experience.
Ginnie Mae also establishes loss reserves to the extent management believes issuer defaults are
probable and FHA, USDA, and PIH insurance or guarantees are insufficient to recoup Ginnie
Mae expenditures.
K. Full Cost Reporting
Beginning in FY 1998, SFFAS No. 4, Managerial Cost Accounting Concepts and Standards for
the Federal Government, required that full costing of program outputs be included in Federal
agency financial statements. Full cost reporting includes direct, indirect, and inter-entity costs.
For purposes of the consolidated department financial statements, HUD identified each
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responsible segment’s share of the program costs or resources provided by HUD or other Federal
agencies.
L. Accrued Unfunded Leave and Federal Employees Compensation Act
(FECA) Liabilities
Annual leave and compensatory time are accrued as earned and the liability is reduced as leave is
taken. The liability at year-end reflects cumulative leave earned but not taken, priced at current
wage rates. Earned leave deferred to future periods is to be funded by future appropriations. To
the extent that current or prior year appropriations are not available to fund annual leave earned
but not taken, funding will be obtained from future financing sources. Sick leave and other types
of leave are expensed as taken.
M. Retirement Plans
The majority of HUD’s employees participate in either the Civil Service Retirement System
(CSRS) or the Federal Employees Retirement System (FERS). FERS went into effect pursuant
to Public Law 99-335 on January 1, 1987. Most employees hired after December 31, 1983, are
automatically covered by FERS and Social Security. Employees hired before January 1, 1984,
can elect to either join FERS and Social Security or remain in CSRS. HUD expenses its
contributions to the retirement plans.
A primary feature of FERS is that it offers a savings plan whereby HUD automatically
contributes one percent of pay and matches any employee contribution up to five percent of an
individual’s basic pay. Under CSRS, employees can contribute up to $18,000 of their pay to the
savings plan, but there is no corresponding matching by HUD. Although HUD funds a portion
of the benefits under FERS relating to its employees and makes the necessary withholdings from
them, it has no liability for future payments to employees under these plans, nor does it report
CSRS or FERS assets, accumulated plan benefits, or unfunded liabilities applicable to its
employees’ retirement plans.
N. Fiduciary Funds
Ginnie Mae has immaterial fiduciary activities which involve the collection or receipt and
subsequent disposition of cash in which non-Federal entities have an ownership interest.
Fiduciary assets are not assets of Ginnie Mae or the Federal Government. The fiduciary assets
held by Ginnie Mae include unclaimed MBS Certificate Holders payments and escrow funds
held in trust. The amount of escrows reported by Ginnie Mae for FY 2016 and FY 2015 were
$49 million and $89 million, respectively.
O. Indian Housing Block Grant Program (IHBG)
The Indian Housing Block Grant Program (IHBG) program is authorized under the Native
American Housing Assistance and Self Determination Act of 1996 (NAHASDA). The IHBG is
a highly unusual dual-purpose grant program. Its primary purpose is to provide formula grants
42
for a range of eligible affordable housing activities (section 202 of such Act) on Indian
reservations and in other Indian areas. Under section 204(b) of such Act and implementing
regulations, recipients are authorized to invest its IHBG block grant funds for up to five years
“for the purposes of carrying out affordable housing activities in investment securities and other
obligations as approved by the Secretary.” The investments are to be made only in securities
guaranteed or insured by the United States, and income from these investments remain with the
recipients for use on housing related activities. By the five-year deadline, recipients must either
spend the funds on eligible affordable housing activities or return the funds to HUD. The control
and ownership of the funds during the investment period resides with the grantees.
IHBG recipients must meet certain criteria to be eligible to invest IHBG funds. Total invested
IHBG funds were approximately $260 million as of September 30, 2016, and $273 million as of
September 30, 2015.
Note 3: Entity and Non-Entity Assets
Non-entity assets consist of assets that belong to other entities but are included in the
Department’s consolidated financial statements and are offset by various liabilities to accurately
reflect HUD’s net position. The Department’s non-entity assets principally consist of: (1) U.S.
deposit of negative credit subsidy in the GI/SRI general fund receipt account, (2) escrow monies
collected by FHA that are either deposited at the U.S. Treasury or in minority-owned banks or
invested in U.S. Treasury securities, and (3) cash remittances from Section 8 bond refunding
deposited in the General Fund of the Treasury.
HUD’s assets as of September 30, 2016 and 2015, were as follows (dollars in millions):
Description 2016 2015
Entity Non-Entity Total Entity Non-Entity Total
Intragovernmental
Fund Balance with Treasury (Note 4) $ 73,145 $ 53 $ 73,198 $ 94,651 $ 40 $ 94,691
Short-Term Investments (Note 6) 15,954 - 15,954 12,923 - 12,923
Long-Term Investments Held-To-Maturity (Note 6) 36,398 - 36,398 14,754 - 14,754
Accounts Receivable, Net (Note 7) 1 - 1 - - -
Other Assets (Note 12) 43 - 43 9 - 9
Total Intragovernmental Assets $ 125,541 $ 53 $ 125,594 $ 122,337 $ 40 $ 122,377
Cash and Other Monetary Assets (Note 5) 60 - 60 - 45 45
Investments (Note 6) 31 - 31 31 - 31
Accounts Receivable, Net (Note 7) 493 118 611 686 94 780
Loans Receivable and Related Foreclosed Property, Net (Note 8) 19,372 104 19,476 14,832 133 14,965
Other Non-Credit Reform Loans Receivable, Net (Note 9) 2,680 - 2,680 3,227 - 3,227
General Property, Plant and Equipment, Net (Note 10) 381 - 381 329 - 329
PIH Prepayments (Note 11) 380 - 380 672 - 672
Other Assets (Note 12) 53 - 53 8 37 45
Total Assets $ 148,991 $ 275 $ 149,266 $ 142,122 $ 349 $ 142,471
43
Note 4: Fund Balance with the U.S. Treasury
The U.S. Treasury, which, in effect, maintains HUD’s bank accounts, processes substantially all
of HUD’s receipts and disbursements. HUD’s fund balances with the U.S. Treasury as of
September 30, 2016 and 2015, were as follows (dollars in millions):
Description 2016 2015
Revolving Funds $ 22,311 $ 40,170
Appropriated Funds 49,794 53,241
Trust Funds 200 14
Other 893 1,266
Total - Fund Balance $ 73,198 $ 94,691
The Department’s Fund Balance with Treasury includes receipt accounts established under
current Federal Credit Reform legislation and cash collections deposited in restricted accounts
that cannot be used by HUD for its programmatic needs. These designated funds established by
the Department of Treasury are classified as suspense and/or deposit funds and consist of
accounts receivable balances due from the public. A Statement of Budgetary Resources is not
prepared for these funds since any cash remittances received by the Department are not defined
as a budgetary resource.
In addition to fund balance, contract and investment authority are also a part of HUD’s funding
sources. Contract authority permits an agency to incur obligations in advance of an
appropriation, offsetting collections, or receipts to make outlays to liquidate the obligations.
HUD has permanent indefinite contract authority. Since Federal securities are considered the
equivalent of cash for budget purposes, investments in them are treated as a change in the mix of
assets held, rather than as a purchase of assets.
44
HUD’s fund balances with the U.S. Treasury as reflected in the entity’s general ledger as of
September 30, 2016 and 2015, were as follows (dollars in millions):
S tatus of Resources - 2016
Obligated Unfilled S tatus of
Unobligated Unobligated Not Yet Customer Total Other Total
Description Available Unavailable Disbursed Orders Resources Fund Balance Authority Resources
FHA $ 5,644 $ 48,486 $ 2,995 $ (35) $ 57,090 $ 20,820 $ 36,270 $ 57,090
Ginnie M ae 195 162 515 - 872 856 16 872
Section 8 Rental Assistance 763 166 8,902 - 9,831 9,831 - 9,831
PIH Loans and Grants 88 20 4,411 - 4,519 4,519 - 4,519
Homeless Assistance Grants 2,216 756 2,391 - 5,363 5,363 - 5,363
Section 202/811 226 411 1,642 (1) 2,278 2,278 - 2,278
CDBG 7,442 580 11,337 - 19,359 19,359 - 19,359
Home 231 34 2,965 - 3,230 3,230 - 3,230
Section 235/236 10 37 743 - 789 789 - 789
All Other 1,108 1,335 3,235 (57) 5,621 5,609 12 5,621
Total $ 17,923 $ 51,987 $ 39,136 $ (93) $ 108,952 $ 72,654 $ 36,298 $ 108,952
S tatus of Resources Covered by Fund Balance
Non-
Budgetary:
S uspense,
Obligated Unfilled Deposit and
Unobligated Unobligated Not Yet Customer Fund Receipt Total Fund
Description Available Unavailable Disbursed Orders Balance Accounts Balance
FHA $ 5,644 $ 12,216 $ 2,995 $ (35) 20,820 $ - $ 20,820
Ginnie M ae 195 146 516 - 857 523 1,380
Section 8 Rental Assistance 763 166 8,902 - 9,831 - 9,831
PIH Loans and Grants 88 20 4,411 - 4,519 - 4,519
Homeless Assistance Grants 2,216 756 2,391 - 5,363 - 5,363
Section 202/811 226 411 1,642 (1) 2,278 - 2,278
CDBG 7,442 580 11,337 - 19,359 - 19,359
Home 231 34 2,965 - 3,230 - 3,230
Section 235/236 10 37 742 - 789 - 789
All Other 1,108 1,322 3,235 (57) 5,608 21 5,629
Total $ 17,923 $ 15,688 $ 39,136 $ (93) $ 72,654 $ 544 $ 73,198
S tatus of Resources Covered by Other Authority
Obligated Unfilled Permanent
Unobligated Unobligated Not Yet Customer Indefinite Investment Borrowing
Description Available Unavailable Disbursed Orders Authority Authority Authority
FHA $ - $ 36 $ - $ - $ - $ 36 $ -
Ginnie M ae - 16 - - - 16 -
Section 8 Rental Assistance - - - - - - -
PIH Loans and Grants - - - - - - -
Section 202/811 - - - - - - -
Section 235/236 - - - - - - -
All Other - 12 - - - - 12
Total $ - $ 64 $ - $ - $ - $ 52 $ 12
S tatus of Receipt Account Balances Breakdown of All Other
Fund Fund
Description Balance Description Balance
FHA $ - All Other HUD suspense/deposit funds $ 21
Ginnie M ae 523 -
Section 8 Rental Assistance - Total $ 21
All Other 21
Total $ 544
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S tatus of Resources - 2015
Obligated Unfilled S tatus of
Unobligated Unobligated Not Yet Customer Total Other Total
Description Available Unavailable Disbursed Orders Resources Fund Balance Authority Resources
FHA $ 3,565 $ 47,154 $ 3,050 $ (15) $ 53,754 $ 39,057 $ 14,697 $ 53,754
Ginnie M ae 6 14,066 584 - 14,656 1,733 12,923 14,656
Section 8 Rental Assistance 698 92 8,902 - 9,692 9,692 - 9,692
PIH Loans and Grants 113 43 4,711 - 4,867 4,867 - 4,867
Homeless Assistance Grants 2,086 539 2,536 - 5,161 5,161 - 5,161
Section 202/811 253 188 1,964 - 2,405 2,405 - 2,405
CDBG 9,021 8 12,495 - 21,524 21,524 - 21,524
Home 237 27 3,184 - 3,448 3,448 - 3,448
Section 235/236 31 32 951 - 1,014 1,014 - 1,014
All Other 594 1,175 3,665 (56) 5,378 5,366 12 5,378
Total $ 16,604 $ 63,324 $ 42,042 $ (71) $ 121,899 $ 94,267 $ 27,632 $ 121,899
S tatus of Resources Covered by Fund Balance
Non-
Budgetary:
S uspense,
Obligated Unfilled Deposit and
Unobligated Unobligated Not Yet Customer Fund Receipt Total Fund
Description Available Unavailable Disbursed Orders Balance Accounts Balance
FHA $ 3,565 $ 32,457 $ 3,050 $ (15) $ 39,057 $ - $ 39,057
Ginnie M ae 6 1,143 584 - 1,733 409 2,142
Section 8 Rental Assistance 698 92 8,902 - 9,692 - 9,692
PIH Loans and Grants 113 43 4,711 - 4,867 - 4,867
Homeless Assistance Grants 2,086 539 2,536 - 5,161 - 5,161
Section 202/811 253 188 1,964 - 2,405 - 2,405
CDBG 9,021 8 12,495 - 21,524 - 21,524
Home 237 27 3,184 - 3,448 - 3,448
Section 235/236 31 32 951 - 1,014 - 1,014
All Other 594 1,163 3,665 (56) 5,366 15 5,381
Total $ 16,604 $ 35,692 $ 42,042 $ (71) $ 94,267 $ 424 $ 94,691
S tatus of Resources Covered by Other Authority
Obligated Unfilled Permanent
Unobligated Unobligated Not Yet Customer Indefinite Investment Borrowing
Description Available Unavailable Disbursed Orders Authority Authority Authority
FHA $ - $ 14,697 $ - $ - $ - $ 14,697 $ -
Ginnie M ae - 12,923 - - - 12,923 -
Section 8 Rental Assistance - - - - - - -
PIH Loans and Grants - - - - - - -
Section 202/811 - - - - - - -
Section 235/236 - - - - - - -
All Other - 12 - - - - 12
Total $ - $ 27,632 $ - $ - $ - $ 27,620 $ 12
S tatus of Receipt Account Balances Breakdown of All Other
Fund Fund
Description Balance Description Balance
FHA $ - All Other HUD suspense/deposit funds $ 15
Ginnie M ae 409 -
Section 8 Rental Assistance - Total $ 15
All Other 15
Total $ 424
An immaterial difference exists between HUD’s recorded Fund Balances with the U.S. Treasury
and the U.S. Department of Treasury’s records. It is the Department’s practice to adjust its
46
records to agree with Treasury’s balances at the end of the fiscal year. The adjustments are
reversed at the beginning of the following fiscal year.
As the result of one our new internal controls, HUD initiated a project which quickly identified
weaknesses in the validation of the general ledger and sub-ledger balances. Although a number
of historical items have been resolved, efforts were still underway on September 30, 2016, to
research, analyze, and resolve the remaining historical items. HUD has assessed the available
information for the remaining items and determined there are no supportable financial statement
impacts to record.
Note 5: Cash and Other Monetary Assets
Cash and other monetary assets consist of cash that is received by the Ginnie Mae’s Master
Subservicers, but has not yet been transmitted to Ginnie Mae. As of September 30, 2016
and 2015, deposits in transit were $60 million and $45 million, respectively.
Note 6: Investments
The U.S. Government securities are non-marketable intra-governmental securities. Interest rates
established by the U.S. Treasury as of September 30, 2016, were 0.11 percent. During FY 2016,
the interest rate was 0.18 percent. The amortized cost and estimated market value of investments
in debt securities as of September 30, 2016 and 2015, were as follows (dollars in millions):
Amortized
(Premium)/ Accrued Net Market
Long-Term Cost Discount, Net Interest Investments Value
FY 2016 $ 36,310 $ 54 $ 34 $ 36,398 $ 36,423
FY 2015 $ 14,731 $ 10 $ 13 $ 14,754 $ 14,764
Short-Term Cost Amortized Accrued Net Market
FY 2016 $ 15,954 $ - $ - $ 15,954 $ 15,802
FY 2015 $ 12,923 $ - $ - $ 12,923 $ 12,923
Investments in Private-Sector Entities
These investments in private-sector entities are the result of FHA’s participation in the
Accelerated Claims Disposition Demonstration program and Risk Sharing Debentures as
discussed in Note 2G.
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The following table presents financial data on FHA’s investments in Risk Sharing Debentures as
of September 30, 2016 and 2015 (dollars in millions):
Share of
Beginning Net Earnings or Return of Ending
Balance Acquisition Losses Investment Redeemed Balance
2016
601 Program $ - $ - $ - $ - $ - $ -
Risk Sharing Debentures 31 - - - - 31
Total $ 31 $ - $ - $ - $ - $ 31
2015
601 Program $ 41 $ 19 $ - $ - $ (29) $ 31
Risk Sharing Debentures - - - - - -
Total $ 41 $ 19 $ - $ - $ (29) $ 31
Note 7: Accounts Receivable (Net)
The Department’s accounts receivable represent Section 8 year-end settlements, claims to cash
from the public, state and local authorities for bond refunding, Section 236 excess rental income,
sustained audit findings, refunds of overpayment, FHA insurance premiums, and foreclosed
property proceeds.
A 100 percent allowance for loss is established for all delinquent accounts 90 days and over for
bond refunding. The allowance for loss methodology adjusts the total delinquencies greater than
90 days by the effects of economic stress factors, which include likely payoffs, foreclosures,
bankruptcies, and hardships of the project. Adjustments to the bond refunding allowance for loss
account are done every quarter to ensure they are deemed to be necessary.
For Section 236 excess rental income, the allowance for loss consists of 10 percent of the
receivables with a repayment plan plus 95 percent of the receivables without a repayment plan.
Adjustments to the excess rental income allowance for loss account are done biannually to
ensure they are deemed necessary.
Section 8 Settlements
Prior to January 1, 2005, the Housing Choice Voucher (HCV) Program’s Section 8 subsidies
were disbursed based on estimated amounts due under the contracts. At the end of each year, the
actual amount due under the contracts was determined. The excess of subsidies paid to PHAs
during the year over the actual amount due was reflected as an accounts receivable in the balance
sheet. These receivable amounts were “collected” by offsetting such amounts with subsidies due
to the PHAs in subsequent periods. On January 1, 2005, Congress changed the basis of the
program funding from a “unit-based” process with program variables that affected the total
annual Federal funding need, to a “budget-based” process that limits the Federal funding to
48
PHAs to a fixed amount. Under this “budget-based” process, a year-end settlement process to
determine actual amounts due is no longer applicable. Effective January 1, 2012, PIH reinstated
the year-end settlement process for the HCV Program in accordance with its cash management
policies. However, as reported by the OIG’s Internal Control Report, the results of PIH’s cash
reconciliation reviews are not reflected in the Department’s financial statements. The PIH
reviews have not been completed on a timely basis and the required standard general ledger
transactions have not been recorded in the Department’s accounting systems.
Bond Refunding
Many of the Section 8 projects constructed in the late 1970s and early 1980s were financed with
tax exempt bonds with maturities ranging from 20 to 40 years. The related Section 8 contracts
provided that the subsidies would be based on the difference between what tenants could pay
pursuant to a formula and the total operating costs of the Section 8 project, including debt
service. The high interest rates during the construction period resulted in high subsidies. When
interest rates came down in the 1980s, HUD was interested in getting the bonds refunded. One
method used to account for the savings when bonds are refunded (PHAs sell a new series of
bonds at a lower interest rate, to liquidate the original bonds), is to continue to pay the original
amount of the bond debt service to a trustee. The amounts paid in excess of the lower
“refunded” debt service and any related financing costs, are considered savings. One-half of
these savings are provided to the PHA, the remaining one-half is returned to HUD. As of
September 30, 2016 and 2015, HUD was due $10 million and $14 million, respectively.
Section 236 Excess Rental Income
The Excess Rental Income receivable account represents the difference between the amounts that
projects reported to HUD’s lockbox as owing (in use prior to August 2008) and the actual
amount collected. On a monthly basis, projects financed under Section 236 of the National
Housing Act must report the amount of rent collected in excess of basic rents and remit those
funds to the Department. Unless written authorization is given by the Department to retain the
excess rental income, the difference must be remitted to HUD. Generally, the individual
amounts owing under Excess Rental Income receivables represent monthly reports remitted
without payment. After 2008, any remittances owed by individuals are collected through
PAY.GOV as well as the required HUD documents.
Other Receivables
Sustained audit costs include sustained audit findings, refunds of overpayment, FHA insurance
premiums and foreclosed property proceeds due from the public.
49
The following shows accounts receivable as reflected in the Balance Sheet as of
September 30, 2016 and 2015 (dollars in millions):
2016 2015
Gross Gross
Accounts Allowance Accounts Allowance
Description Receivable for Loss Total, Net Receivable for Loss Total, Net
Intragovernmental $ 1 $ - $ 1 $ - $ - $ -
Public
Sustained Audit Costs $ 125 $ - $ 125 $ 158 $ - $ 158
Bond Refundings 10 - 10 13 - 13
Section 8 Settlements 59 - 59 17 - 17
Section 236 Excess Rental Income 5 (1) 4 5 (1) 4
Other Receivables: - -
FHA 531 (288) 243 453 (322) 131
Ginnie Mae 294 (189) 105 649 (241) 408
Other Receivables 67 (2) 65 51 (2) 49
Total Accounts Receivable $ 1,092 $ (480) $ 612 $ 1,346 $ (566) $ 780
Note 8: Direct Loans and Loan Guarantees, Non-Federal
Borrowers
HUD reports direct loan obligations or loan guarantee commitments made prior to FY 1992 and
the resulting direct loans or defaulted guaranteed loans, net of allowance for estimated
uncollectible loans or estimated losses.
The FHA insures Home Equity Conversion Mortgages (HECM), also known as reverse
mortgages. These loans are used by senior homeowners age 62 and older to convert the equity in
their home into monthly streams of income and/or a line of credit to be repaid when they no
longer occupy the home. Unlike ordinary home equity loans, a HUD reverse mortgage does not
require repayment as long as the home is the borrower’s principal residence.
The FHA also administers the HOPE for Homeowners (H4H) program. The program was
established by Congress to help those at risk of default and foreclosure refinance into more
affordable, sustainable loans.
The allowance for loan losses for the Flexible Subsidy Fund and the Housing for the Elderly and
Disabled Program is determined as follows:
Flexible Subsidy Fund
There are four parts to the calculation of allowance for loss: (1) loss rate for loans written-off,
(2) loss rate for restructured loans, (3) loss rate for loans paid-off, and (4) loss rate for loans
delinquent or without repayment activity for 30 years. Loss rates for parts 1 and 3 are based on
actual historical data derived from the previous three years. The loss rates for parts 2 and 4 are
provided by or agreed to by the Housing Office of Evaluation.
50
Housing for the Elderly and Disabled Program
There are three parts to the calculation of allowance for loss: (1) loss rate for loans issued a
Foreclosure Hearing Letter, (2) loss rate for the estimated number of foreclosures in the current
year, and (3) loss rate for loans delinquent for more than 180 days. Loss rates for parts 1 and 2
are determined by actual historical data from the previous five years. Loss rate for part 3 is
determined or approved by the Housing Office of Evaluation.
Direct loan obligations or loan guarantee commitments made after FY 1991, and the resulting
direct loans or defaulted guaranteed loans, are governed by the FCRA and are recorded as the net
present value of the associated cash flows (i.e., interest rate differential, interest subsidies,
estimated delinquencies and defaults, fee offsets, and other cash flows).
The subsidy rates disclosed pertain only to the current year’s cohorts. These rates cannot be
applied to the direct loans and guarantees of loans disbursed during the current reporting year to
yield the subsidy expense. The subsidy expense for new loans and loan guarantees reported in
the current year result from disbursement of loans from both current year cohorts and prior
year(s) cohorts. The subsidy expense reported in the current year also includes modifications
and re-estimates.
The following is an analysis of loan receivables, loan guarantees, liability for loan guarantees,
and the nature and amounts of the subsidy costs associated with the loans and loan guarantees for
FY 2016 and FY 2015:
A. List of HUD’s Direct Loan and/or Guarantee Programs:
1. FHA
a) MMI/CMHI Direct Loan Program
b) GI/SRI Direct Loan Program
c) MMI/CMHI Loan Guarantee Program
d) GI/SRI Loan Guarantee Program
e) H4H Loan Guarantee Program
f) HECM Program
2. Housing for the Elderly and Disabled
3. All Other
a) CPD Revolving Fund
b) Flexible Subsidy Fund
c) Section 108 Loan Guarantees
d) Indian Housing Loan Guarantee Fund
51
e) Loan Guarantee Recovery Fund
f) Native Hawaiian Housing Loan Guarantee Fund
g) Title VI Indian Housing Loan Guarantee Fund
h) Green Retrofit Direct Loan Program
i) Emergency Homeowners’ Loan Program
B. Direct Loans Obligated Pre-1992 (Allowance for Loss Method)
(dollars in millions):
2016
Value of
Loans Assets Related
Receivable, Interest Allowance for Foreclosed to Direct
Direct Loan Programs Gross Receivable Loan Losses Property Loans, Net
FHA
a) MMI/CHMI Direct Loan Program $ - $ - $ - $ - $ -
b) GI/SRI Direct Loan Program 8 13 (4) - 17
Housing for the Elderly and Disabled 1,167 14 (10) - 1,171
All Other -
a) CPD Revolving Fund 5 - (5) 1 1
b) Flexible Subsidy Fund 405 57 (45) - 417
Total $ 1,585 $ 84 $ (64) $ 1 $ 1,606
2015
Value of
Loans Assets Related
Receivable, Interest Allowance for Foreclosed to Direct
Direct Loan Programs Gross Receivable Loan Losses Property Loans, Net
FHA
a) MMI/CHMI Direct Loan Program $ - $ - $ - $ - $ -
b) GI/SRI Direct Loan Program 14 12 (6) - 20
Housing for the Elderly and Disabled 1,412 15 (11) - 1,416
All Other -
a) CPD Revolving Fund 5 - (5) 2 2
b) Flexible Subsidy Fund 428 72 (39) - 461
Total $ 1,859 $ 99 $ (61) $ 2 $ 1,899
52
C. Direct Loans Obligated Post-1991 (dollars in millions):
2016
Value of
Loans Assets
Receivable, Interest Allowance for Foreclosed Related to
Direct Loan Programs Gross Receivable Loan Losses Property Direct Loans
FHA
a) MMI/CHMI Direct Loan Program $ - $ - $ (3) $ - $ (3)
b) GI/SRI Direct Loan Program 554 1 27 - 582
All Other
a) Green Retrofit Program $ 57 $ 1 $ (53) $ - $ 5
b) Emergency Homeowners' Loan Program 34 - $ (35) - (1)
c) EHLP Receipt Account 104 - - - 104
Total $ 749 $ 2 $ (64) $ - $ 687
2015
Value of
Loans Assets
Receivable, Interest Allowance for Foreclosed Related to
Direct Loan Programs Gross Receivable Loan Losses Property Direct Loans
FHA
a) MMI/CHMI Direct Loan Program $ - $ - $ (3) $ - $ (3)
b) GI/SRI Direct Loan Program 103 - 34 - 137
All Other
a) Green Retrofit Program $ 63 $ 1 $ (66) $ - $ (2)
b) Emergency Homeowners' Loan Program 50 - (50) - -
c) EHLP Receipt Account 133 - - - 133
Total $ 349 $ 1 $ (85) $ - $ 265
D. Total Amount of Direct Loans Disbursed (Post-1991) (dollars in millions):
Current Prior
Direct Loan Programs Year Year
FHA Risk Sharing Program $ 452 $ 103
All Other
a) Green Retrofit Program $ - $ -
b) Emergency Homeowners' Loan Program - -
Total $ 452 $ 103
53
E. Subsidy Expense for Direct Loans by Program and Component (dollars in
millions):
E1. Subsidy Expense for New Direct Loans Disbursed (dollars in millions):
2016
Interest Fees and Other
Direct Loan Programs Differential Defaults Collections Other Total
FHA Risk Sharing Program $ (68) $ 4 $ (9) $ 21 $ (52)
All Other
a) Green Retrofit Program $ - $ - $ - $ - $ -
b) Emergency Homeowners' Loan Program - - - - -
Total $ (68) $ 4 $ (9) $ 21 $ (52)
2015
Interest Fees and Other
Direct Loan Programs Differential Defaults Collections Other Total
FHA Risk Sharing Program $ (5) $ - $ (3) $ (1) $ (9)
All Other
a) Green Retrofit Program $ - $ - $ - $ - $ -
b) Emergency Homeowners' Loan Program - - - - -
Total $ (5) $ - $ (3) $ (1) $ (9)
E2. Modifications and Re-estimates (dollars in millions):
2016
Total Interest Rate Technical Total
Direct Loan Programs Modification Re-estimates Re-estimates Re-estimates
FHA Risk Sharing Program $ - $ - $ - $ -
All Other
a) Green Retrofit Program $ - $ - $ - $ -
b) Emergency Homeowners' Loan Program - - (13) (13)
Total $ - $ - $ (13) $ (13)
2015
Total Interest Rate Technical Total
Direct Loan Programs Modification Re-estimates Re-estimates Re-estimates
FHA Risk Sharing Program $ - $ - $ - $ -
All Other
a) Green Retrofit Program $ - $ - $ - $ -
b) Emergency Homeowners' Loan Program - - - -
Total $ - $ - $ - $ -
E3. Total Direct Loan Subsidy Expense (dollars in millions):
Current Prior
Direct Loan Programs Year Year
FHA Risk Sharing Program $ (52) $ (8)
All Other
a) Green Retrofit Program $ - $ -
b) Emergency Homeowners' Loan Program (13) -
Total $ (65) $ (8)
54
F. Subsidy Rates for Direct Loans by Program and Component:
Budget Subsidy Rates for Direct Loans
2016
Interest Fees and Other
Direct Loan Programs Differential Defaults Collections Other Total
FHA Risk Sharing Program 0.0% 2.6% (7.1%) 0.0% (4.5%)
All Other
a) Green Retrofit Program 41.0% 42.6% 0.0% (1.3%) 82.3%
b) Emergency Homeowners' Loan Program 0.0% 0.0% 0.0% (97.7%) (97.7%)
2015
Interest Fees and Other
Direct Loan Programs Differential Defaults Collections Other Total
FHA Risk Sharing Program (6.1%) 0.5% (3.9%) (1.3%) (10.8%)
All Other
a) Green Retrofit Program 41.0% 42.7% 0.0% (1.3%) 82.3%
b) Emergency Homeowners' Loan Program 0.0% 0.0% 0.0% 97.7% 97.7%
G. Schedule for Reconciling Subsidy Cost Allowance Balances (Post-1991
Direct Loans) (dollars in millions):
Beginning Balance, Changes, and Ending Balance FY 2016 FY 2015
Beginning balance of the subsidy cost allowance $ 85 $ 152
Add: subsidy expense for direct loans disbursed
during the reporting years by component: - -
a) Interest rate differential costs (68) (5)
b) Default costs (net of recoveries) 4 -
c) Fees and other collections (9) (3)
d) Other subsidy costs 21 (1)
Total of the above subsidy expense components (52) (9)
Adjustments:
a) Loan modifications - -
b) Fees received 1 -
c) Foreclosed properties acquired - -
d) Loans written off (15) (31)
e) Subsidy allowance amortization 82 1
f) Other - (4)
Ending balance of the subsidy cost allowance before re-estimates 101 109
Add or subtract subsidy re-estimates by component:
a) Interest rate re-estimate 2 -
b) Technical/default re-estimate 33 (24)
Total of the above re-estimate components 35 (24)
Ending balance of the subsidy cost allowance $ 136 $ 85
55
H. Defaulted Guaranteed Loans from Pre-1992 Guarantees (Allowance for
Loss Method) (dollars in millions):
2016
Defaulted Value of Assets
Guaranteed Related to
Loans Foreclosed Defaulted
Receivable, Interest Allowance for Loan Property, Guaranteed Loans
Gross Receivable and Interest Losses Net Receivable, Net
FHA
MMI/CMHI
a) Single Family $ 21 $ - $ (5) $ 7 $ 23
b) Multi Family - - - - -
c) HECM - - - - -
GI/SRI
a) Single Family $ - $ - $ (3) $ 9 $ 6
b) Multi Family 1,780 230 (817) 1 1,194
c) HECM 4 2 (5) (2) (1)
Total $ 1,805 $ 232 $ (830) $ 15 $ 1,222
2015
Defaulted Value of Assets
Guaranteed Related to
Loans Foreclosed Defaulted
Receivable, Interest Allowance for Loan Property, Guaranteed Loans
Gross Receivable and Interest Losses Net Receivable, Net
FHA
MMI/CMHI
a) Single Family $ 22 $ - $ (7) $ 7 $ 22
b) Multi Family - - - - -
c) HECM - - - - -
GI/SRI
a) Single Family $ - $ - $ (4) $ 9 $ 5
b) Multi Family 1,946 234 (808) 1 1,373
c) HECM 4 2 (5) (2) (1)
Total $ 1,972 $ 236 $ (824) $ 15 $ 1,399
56
I. Defaulted Guaranteed Loans from Post-1991 Guarantees (dollars in millions):
2016
Defaulted Value of Assets
Guaranteed Allowance for Related to
Loans Subsidy Cost Foreclosed Defaulted
Receivable, Interest (Present Property, Guaranteed Loans
Gross Receivable Value) Gross Receivable, Net
FHA
MMI/CMHI
a) Single Family $ 10,320 $ 5 $ (7,327) $ 2,817 $ 5,815
b) Multi Family - - - - -
c) HECM 4,472 2,350 (1,580) 36 5,278
GI/SRI
a) Single Family $ 350 $ - $ (241) $ 73 $ 182
b) Multi Family 735 - (365) 1 371
c) HECM 3,594 1,830 (1,279) 132 4,277
H4H
a) Single Family $ 5 $ - $ (5) $ 1 $ 1
All Other
a) Indian Housing Loan Guarantee - - - 37 37
b) Native Hawaiian Housing Loan Guarantee - - - (1) (1)
Total $ 19,476 $ 4,185 $ (10,797) $ 3,096 $ 15,960
2015
Defaulted Value of Assets
Guaranteed Allowance for Related to
Loans Subsidy Cost Foreclosed Defaulted
Receivable, Interest (Present Property, Guaranteed Loans
Gross Receivable Value) Gross Receivable, Net
FHA
MMI/CMHI
a) Single Family $ 8,802 $ - $ (7,053) $ 3,130 $ 4,879
b) Multi Family - - - - -
c) HECM 2,182 992 (790) 10 2,394
GI/SRI
a) Single Family $ 292 $ 1 $ (233) $ 94 $ 154
b) Multi Family 655 - (272) 1 384
c) HECM 3,106 1,517 (1,172) 101 3,552
H4H
a) Single Family $ 4 $ - $ 2 $ 1 $ 7
All Other
a) Indian Housing Loan Guarantee - - - 31 31
b) Native Hawaiian Housing Loan Guarantee - - - (1) (1)
Total $ 15,041 $ 2,510 $ (9,518) $ 3,367 $ 11,400
2016 2015
Total Credit Program Receivables and Related Foreclosed Property, Net $19,476 $14,965
57
J. Guaranteed Loans Outstanding (dollars in millions):
J1. Guaranteed Loans Outstanding (dollars in millions):
2016
Outstanding
Principal,
Guaranteed Loans, Amount of Outstanding
Loan Guarantee Programs Face Value Principal Guaranteed
FHA Programs
a) MMI/CMHI Funds $ 1,207,833 $ 1,097,974
b) GI/SRI Funds 127,737 115,318
c) H4H Progam 91 83
All Other 7,855 7,850
Total $ 1,343,516 $ 1,221,225
2015
Outstanding
Principal,
Guaranteed Loans, Amount of Outstanding
Loan Guarantee Programs Face Value Principal Guaranteed
FHA Programs
a) MMI/CMHI Funds $ 1,168,560 $ 1,065,896
b) GI/SRI Funds 123,399 112,063
c) H4H Progam 98 92
All Other 7,321 7,317
Total $ 1,299,378 $ 1,185,368
J2. Home Equity Conversion Mortgage Loans Outstanding (dollars in millions):
Cumulative
2016 Current Year Current Outstanding Maximun Potential
Loan Guarantee Programs Endorsements Balance Liability
FHA Programs $ 14,612 $ 104,648 $ 148,097
Cumulative
2015 Current Year Current Outstanding Maximun Potential
Loan Guarantee Programs Endorsements Balance Liability
FHA Programs $ 15,890 $ 105,471 $ 149,645
58
J3. New Guaranteed Loans Disbursed (dollars in millions):
2016
Outstanding Principal, Amount of Outstanding
Loan Guarantee Programs Guaranteed Loans, Face Value Principal Guaranteed
FHA Programs
a) MMI/CMHI Funds $ 221,841 $ 219,866
b) GI/SRI Funds 12,224 12,168
c) H4H Program - -
All Other 980 979
Total $ 235,045 $ 233,013
2015
Outstanding Principal, Amount of Outstanding
Loan Guarantee Programs Guaranteed Loans, Face Value Principal Guaranteed
FHA Programs
a) MMI/CMHI Funds $ 213,125 $ 211,322
b) GI/SRI Funds 11,366 11,311
c) H4H Program - -
All Other 1,008 1,008
Total $ 225,499 $ 223,641
K. Liability for Loan Guarantees (Estimated Future Default Claims,
Pre-1992) (dollars in millions):
2016
Liabilities for Losses on Liabilities for Loan
Pre-1992 Guarantees, Guarantees for Post-
Estimated Future Default 1991 Guarantees Total Liabilities For Loan
Loan Guarantee Programs Claims (Present Value) Guarantees
FHA Programs $ - $ (2,360) $ (2,360)
All Other - 303 303
Total $ - $ (2,057) $ (2,057)
2015
Liabilities for Losses on Liabilities for Loan
Pre-1992 Guarantees, Guarantees for Post-
Estimated Future Default 1991 Guarantees Total Liabilities For Loan
Loan Guarantee Programs Claims (Present Value) Guarantees
FHA Programs $ 7 $ 14,733 $ 14,740
All Other - 289 289
Total $ 7 $ 15,022 $ 15,029
59
L. Subsidy Expense for Post-1991 Guarantees:
L1. Subsidy Expense for Loan Guarantees (dollars in millions):
2016
Endorsement Default Fees Other Subsidy
Loan Guarantee Programs Amount Component Component Component Amount
FHA
a) MMI/CMHI Funds, Excluding HECM $ 221,841 $ 5,587 $ (16,461) $ 1,791 $ (9,083)
b) MMI/CMHI Funds, HECM 14,612 844 (945) - (101)
c) GI/SRI Funds 12,224 181 (661) - (480)
d) H4H Program - - - - -
All Other - 12 - - 12
Total $ 248,677 $ 6,624 $ (18,067) $ 1,791 $ (9,652)
2015
Endorsement Default Fees Other Subsidy
Loan Guarantee Programs Amount Component Component Component Amount
FHA
a) MMI/CMHI Funds, Excluding HECM $ 213,125 $ 5,684 $ (18,706) $ - $ (13,022)
b) MMI/CMHI Funds, HECM 15,890 991 (1,055) - (64)
c) GI/SRI Funds 11,366 191 (703) - (512)
d) H4H Program - - - - -
All Other - 8 - - 8
Total $ 240,381 $ 6,874 $ (20,464) $ - $ (13,590)
L2. Modification and Re-estimates (dollars in millions):
2016
Total Interest Rate Technical Total
Loan Guarantee Programs Modifications Re-estimates Re-estimates Re-estimates
FHA
a) MMI/CMHI Funds $ - $ - $ (7,897) $ (7,897)
b) GI/SRI Funds - - (225) (225)
All Other - - (28) (28)
Total $ - $ - $ (8,150) $ (8,150)
2015
Total Interest Rate Technical Total
Loan Guarantee Programs Modifications Re-estimates Re-estimates Re-estimates
FHA
a) MMI/CMHI Funds $ - $ - $ (2,295) $ (2,295)
b) GI/SRI Funds - - (1,026) (1,026)
All Other - - (12) (12)
Total $ - $ - $ (3,333) $ (3,333)
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L3. Total Loan Guarantee Subsidy Expense (dollars in millions):
Loan Guarantee Programs Current Year Prior Year
FHA
a) MMI/CMHI Funds $ (17,081) $ (15,380)
b) GI/SRI Funds (704) (1,539)
c) H4H Program - -
All Other $ (17) $ (5)
Total $ (17,802) $ (16,924)
M. Subsidy Rates for Loan Guarantees by Programs and Component:
Budget Subsidy Rates for Loan Guarantees for FY 2016 Cohorts
Fees and Other
Loan Guarantee Program Default Collections Total
FHA Programs
MMI/CMHI
Single Family - Forward 2.3% (6.1%) (3.8%)
Single Family - HECM 5.8% (6.5%) (0.7%)
Single Family - Refinancing 10.0% (10.0%) 0.0%
Multi Family - Section 213 0.0% 0.0% 0.0%
GI/SRI Funds
Apartments - NC/SC 2.4% (5.2%) (2.7%)
Apartments - NC/SC04/01/2016 1.9% (4.3%) (2.4%)
Apartments - Refinance 0.3% (5.0%) (4.7%)
Apartments Refinance - 04/01/16 0.3% (3.9%) (3.6%)
Healthcare
MM - FHA Full Insurance - Health Care 4.0% (7.4%) (3.4%)
MF- - Hospitals 3.2% (6.5%) (3.2%)
H4H Programs
Single Family - Section 257 0.0% 0.0% 0.0%
All Other Programs
CDBG, Section 108(b) 0.0% 0.0% 0.0%
Loan Guarantee Recovery 50.0% 0.0% 50.0%
Indian Housing (weighted average) 0.6% 0.0% 0.6%
Native Hawaiian Housing 0.5% 0.0% 0.5%
Title VI Indian Housing 11.5% 0.0% 11.5%
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Budget Subsidy Rates for Loan Guarantees for FY 2015 Cohorts
Fees and Other
Loan Guarantee Program Default Collections Total
FHA Programs
MMI/CMHI
Single Family - Forward 2.7% (9.9%) (7.2%)
Single Family - HECM 6.2% (6.6%) (0.4%)
Single Family - Refinancing 10.1% (10.1%) 0.0%
Multi Family - Section 213 0.0% 0.0% 0.0%
GI/SRI
Multifamily
Apartments 2.5% (6.2%) (3.7%)
Apartments Refinance 0.3% (5.0%) (4.7%)
Healthcare
Residential Care 3.8% (8.0%) (4.2%)
Hospitals 2.6% (7.1%) (4.5%)
H4H
Single Family - Section 257 0.0% 0.0% 0.0%
All Other Programs
CDBG, Section 108(b) 2.4% 0.0% 2.4%
Loan Guarantee Recovery 50.0% 0.0% 50.0%
Indian Housing (weighted average) 1.3% 0.0% 1.3%
Native Hawaiian Housing 0.6% 0.0% 0.6%
Title VI Indian Housing 11.2% 0.0% 11.2%
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N. Schedule for Reconciling Loan Guarantee Liability Balances (Post-1991
Loan Guarantees) (dollars in millions):
Beginning Balance, Changes, and Ending Balance 2016 2015
Beginning balance of the loan guarantee liability $ 15,571 $ 32,919
Add: subsidy expense for guaranteed loans disbursed during
the reporting years by component:
(a) Interest supplement costs - -
(b) Default costs (net of recoveries) 6,623 6,875
(c) Fees and other collections (18,067) (20,465)
(d) Othe subsidy costs 1,791 -
Total of the above subsidy expense components $ (9,653) $ (13,590)
Adjustments:
(a) Loan guarantee modifications - -
(b) Fees Received 14,029 13,288
(c) Interest supplemental paid - -
(d) Foreclosed property and loans acquired 11,165 13,561
(e) Claim payments to lenders (22,445) (26,642)
(f) Interest accumulation on the liability balance (177) 580
(g) Other 828 364
Ending balance of the subsidy cost allowance before re-estimates $ 9,318 $ 20,480
Add or Subtract subsidy re-estimates by component:
(a) Interest rate re-estimate (3,549) -
(b) Technical/default re-estimate (6,272) (3,877)
(c) Adjustment of prior years credit subsidy re-estimates - (1,032)
Total of the above re-estimate components (9,821) (4,909)
Ending balance of the subsidy cost allowance $ (503) $ 15,571
Less: unrealized Ginnie Mae claims from defaulted loans $ (1,554) $ (2,098)
Ending balance of the subsidy cost allowance $ (2,057) $ 13,473
O. Administrative Expenses (dollars in millions):
Loan Guarantee Program 2016 2015
FHA $ 586 $ 557
All Other -
Total $ 586 $ 557
63
Note 9: Other Non-Credit Reform Loans
The following shows HUD’s Other Non-Credit Reform Loans Receivable as of
September 30, 2016 and 2015 (dollars in millions):
2016
Allowance for Loan Losess Due
Ginnie Mae Reported to Payment of Probable Claims Value of Assets Related to
Description Balances by FHA Loans
Mortgage Loans Held for Investment $ 3,471 $ (1,243) $ 2,228
Advances Against Defaulted Mortgage-Backed Security Pools, net 20 - 20
Properties Held for Sale, net 41 - 41
Foreclosed Property 595 (217) 378
Short Sale Claims Receivable 106 (93) 13
Total $ 4,233 $ (1,553) $ 2,680
2015
Allowance for Loan Losess Due
Ginnie Mae Reported to Payment of Probable Claims Value of Assets Related to
Description Balances by FHA Loans
Mortgage Loans Held for Investment $ 4,362 $ (1,334) $ 3,028
Advances Against Defaulted Mortgage-Backed Security Pools, net 119 - 119
Properties Held for Sale, net 30 - 30
Foreclosed Property 769 (719) 50
Short Sale Claims Receivable 45 (45) -
Total $ 5,325 $ (2,098) $ 3,227
Other Non-Credit Reform Loans consists of Ginnie Mae Advances Against Defaulted Mortgage-
Backed Security Pools, Mortgage Loans Held for Investment, Short Sale Claims Receivable, and
Foreclosed Property. Below is a description of each type of asset recorded by Ginnie Mae.
Mortgage Loans Held for Investment (HFI)
When a Ginnie Mae issuer defaults, Ginnie Mae is required to step into the role of the issuer and
make the timely pass-through payments to investors, and subsequently, assumes the servicing
rights and obligations of the issuer’s entire Ginnie Mae guaranteed, pooled loan portfolio of the
defaulted issuer. Ginnie Mae utilizes the MSSs to service these portfolios. There are currently
two MSSs for Single Family and one MSS for Manufactured Housing defaulted issuers. These
MSSs currently service 100 percent of all non-pooled loans.
In its role as servicer, Ginnie Mae assesses individual loans within its pooled portfolio to
determine whether the loan must be purchased out of the pool as required by the Ginnie Mae
MBS Guide. Ginnie Mae purchases mortgage loans out of the MBS pool when:
A. Mortgage loans are uninsured by the FHA, USDA, VA or PIH
B. Mortgage loans were previously insured but insurance is currently denied (collectively
with A, referred to as uninsured mortgage loans)
64
Ginnie Mae has the option to purchase mortgage loans out of the MBS pool when:
C. Mortgage loans are insured but are delinquent for more than 90 and 120 days based on
management discretion for manufactured housing and single family loans, respectively.
For the years ended September 30, 2016 and 2015, the majority of purchased mortgage loans were
bought out of the pool due to borrower delinquency of more than three months.
Ginnie Mae has the ability and the intent to hold these acquired loans for the foreseeable future
or until maturity. Therefore, Ginnie Mae classifies the mortgage loans as HFI. The mortgage
loans HFI are reported net of allowance for loan losses.
Ginnie Mae evaluates the collectability of all purchased loans and assesses whether there is
evidence of credit deterioration subsequent to the loan’s origination and if it is probable, at
acquisition, that Ginnie Mae will be unable to collect all contractually required payments
receivable. Ginnie Mae considers guarantees and insurance from FHA, USDA, VA, and PIH in
determining whether it is probable that Ginnie Mae will collect all amounts due according to the
contractual terms.
For FHA insured loans, Ginnie Mae expects to collect the full amount of the unpaid principal
balance and debenture rate interest (only for months allowed in the insuring agency’s timeline),
when the insurer reimburses Ginnie Mae subsequent to filing a claim. As a result, these loans
are accounted for under ASC Subtopic 310-20, Receivables – Nonrefundable Fees and Other
Costs. In accordance with ASC 310-20-30-5, these loans are recorded at the unpaid principal
balance which is the amount Ginnie Mae pays to repurchase these loans. Accordingly, Ginnie
Mae recognizes interest income on these loans on an accrual basis at the debenture rate for the
number of months allowed under the insuring agency’s timeline.
Ginnie Mae performs periodic and systematic reviews of its loan portfolios to identify credit
risks and assess the overall collectability of the portfolios for the estimated uncollectible portion
of the principal balance of the loan. As a part of this assessment, Ginnie Mae incorporates the
probable recovery amount from mortgage insurance (e.g., FHA, USDA, VA, or PIH) based on
established insurance rates. Additionally, Ginnie Mae reviews the delinquency of mortgage
loans, industry benchmarks, as well as the established rates of insurance recoveries from
insurers. Ginnie Mae records an allowance for the estimated uncollectible amount. The
allowance for loss on mortgage loans HFI represents management’s estimate of probable credit
losses inherent in Ginnie Mae’s mortgage loan portfolio. The allowance for loss on mortgage
loans HFI is netted against the balance of mortgage loans HFI.
Ginnie Mae records a charge-off as a reduction to the allowance for loan losses when losses are
confirmed through the receipt of assets in full satisfaction of a loan, such as the receipt of claims
proceeds from an insuring agency or underlying collateral upon foreclosure.
The fair value option was not elected by Ginnie Mae for any recognized loans on its balance
sheet in 2016 and 2015. The fair value option allows certain financial assets, such as acquired
65
loans, to be reported at fair value (with unrealized gains and losses reported in the Statement of
Revenues and Expenses). Ginnie Mae reserves the right to elect the fair value option for newly
acquired loans in future periods. As the fair value option was not elected and Ginnie Mae has
the ability and the intent to hold these acquired loans for the foreseeable future or until maturity,
the mortgage loans were classified as loans HFI and reported at amortized cost (net of allowance
for loan losses).
Management is currently pursuing marketing activities to potentially sell loans currently
recognized on Ginnie Mae’s balance sheet. Once a plan of sale is developed and loans are
clearly identified for sale, Ginnie Mae will reclassify the applicable loans from HFI to HFS (held
for sale). For loans which Ginnie Mae initially classifies as held for investment and
subsequently transfers to HFS, those loans should be recognized at the lower of cost or fair value
until sold. As of the year ended September 30, 2016 and 2015, Ginnie Mae has no loans
classified as HFS.
Please note that management is currently assessing current and historic loan accounting for
potential restatement.
Mortgage loans HFI, net as of September 30, 2016 and 2015, was $3.5 billion and $4.4 billion,
respectively based on probable claims paid by FHA and recognized as an elimination in the
Department’s financial statements.
Advances against Defaulted Mortgage-Backed Security Pools
Advances represent loan pass-through payments made to fulfill Ginnie Mae’s guaranty of timely
principal and interest payments to MBS security holders. Per U.S. GAAP, Ginnie Mae is
required to report advances net of an allowance to the extent that management believes that they
will not be collected. The allowance is estimated based on historical loss experience of future
collections from the borrowers, proceeds from the sale of the property, or recoveries from third-
party insurers such as FHA, USDA, VA, and PIH.
Once Ginnie Mae purchases the loans from the pools, the associated advances are reclassified to
the appropriate asset class. The advances balance is $21 million in FY 2016 and $119 million in
FY 2015.
Properties Held for Sale, Net
Properties held for sale represent assets for which Ginnie Mae has received the title of the
underlying collateral (e.g. completely foreclosed upon and repossessed) and intends to sell the
collateral. For instances in which Ginnie Mae does not convey the property to the insuring
agency, Ginnie Mae holds the title until the property is sold. As the properties are available for
immediate sale in their current condition and are actively marketed for sale, they are to be
recorded at the fair value of the asset less the estimated cost to sell with subsequent declines in
the fair value below the initial acquired property cost basis recorded through the use of a
valuation allowance. The Properties Held for Sale balance is one of the line items for which
66
Ginnie Mae Management is currently performing an assessment related to the recognition and
measurement as compared to US GAAP requirements. Currently, Ginnie Mae does not have
access to broker price opinions or other fair value data for acquired properties. A further
assessment of data availability is currently being performed. Properties Held for Sale, net, as of
September 30, 2016 and 2015, was $41 million and $30 million, respectively.
Foreclosed Property
Ginnie Mae records foreclosed property when a MSS receives marketable title to a property
which has completed the foreclosure process in the respective state. The asset is measured as the
principal and interest of a loan which is in the process of being conveyed to an insuring agency,
net of an allowance. These assets are conveyed to the appropriate insuring agency within six
months. Foreclosed property has previously been placed on nonaccrual status after the loan was
repurchased from a pool. These properties differ from properties held for sale because they will
be conveyed to an insuring agency, and not sold by the MSS.
The allowance for foreclosed property is estimated based on actual and expected recovery
experience including expected recoveries from FHA, USDA, VA, and PIH. The aggregate of the
foreclosed property and the allowance for foreclosed property is the amount that Ginnie Mae
determines to be collectible. Ginnie Mae records a charge-off as a reduction to the allowance for
loan losses when losses are confirmed through the receipt of assets in full satisfaction of a loan,
such as the receipt of claims proceeds from an insuring agency. Management is currently
assessing current and historic accounting practices for potential restatement. Foreclosed
Property, net as of September 30, 2016, was $596 million, and, net as of September 30, 2015,
was $769 million.
Short Sale Claims Receivable
As an alternative to foreclosure, a property may be sold for its appraised value even if the sale
results in a short sale where the proceeds are not sufficient to pay off the mortgage. Ginnie
Mae’s MSSs analyze mortgage loans HFI for factors such as delinquency, appraised value of the
loan, and market in locale of the loan to identify loans that may be short sale eligible. These
transactions are analyzed and approved by Ginnie Mae’s MBS program office.
For FHA insured loans, for which the underlying property was sold in a short sale, the FHA
typically pays Ginnie Mae the difference between the proceeds received from the sale and the
total contractual amount of the mortgage loan and interest at the debenture rate. Hence, Ginnie
Mae does not incur any losses as a result of the short sale of an FHA insured loan. Ginnie Mae
records a short sale claims receivable while it awaits repayment of this amount from the insurer.
For short sales claims receivable for which Ginnie Mae believes that collection is not probable,
Ginnie Mae records an allowance for short sales claims receivable. The allowance for short sales
claims receivable is estimated based on actual and expected recovery experience including
expected recoveries from FHA, USDA, VA, and PIH. The aggregate of the short sales
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receivable and the allowance for short sales receivable is the amount that Ginnie Mae determines
to be collectible. Ginnie Mae records a charge-off as a reduction to the allowance for loan losses
when losses are confirmed through the receipt of claims in full satisfaction of a loan from an
insuring agency. Management is currently assessing current and historic accounting practices for
potential restatement. Short Sale Claims Receivable, net as of September 30, 2016 and 2015,
was $107 and $45 million, respectively.
Note 10: General Property, Plant, and Equipment (Net)
General property, plant, and equipment consists of furniture, fixtures, equipment and data
processing software used in providing goods and services that have an estimated useful life of
two or more years. Purchases of $100,000 or more are recorded as an asset and depreciated over
their estimated useful life on a straight-line basis with no salvage value. Capitalized replacement
and improvement costs are depreciated over the remaining useful life of the replaced or
improved asset. Generally, the Department’s assets are depreciated over a four-year period,
unless it can be demonstrated that the estimated useful life is significantly greater than four
years.
The following shows general property, plant, and equipment as of September 30, 2016, and
September 30, 2015 (dollars in millions):
Description 2016 2015
Accumulated Accumulated
Depreciation and Book Depreciation and Book
Cost Amortization Value Cost Amortization Value
Equipment $ 9 $ (3) $ 6 $ 7 $ - $ 7
Leasehold Improvements - - - - - -
Internal Use Software 217 (172) 45 186 (152) 34
Internal Use Software in Development 330 - 330 288 - 288
Total $ 556 $ (175) $ 381 $ 481 $ (152) $ 329
Note 11: PIH Prepayments
HUD’s assets include the Department’s estimates for restricted net position (RNP) balances
maintained by Public Housing Authorities under the Housing Choice Voucher Program. RNP
balances represent disbursements to PHAs that are in excess of their expenses. PHAs can use
RNP to cover any valid housing assistance program (HAP) expenses. PIH has estimated RNP
balances of $209 million and $171 million for FY 2016 related to the Housing Choice Voucher
and Moving to Work Programs.
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Note 12: Other Assets
The following shows HUD’s Other Assets as of September 30, 2016 and 2015 (dollars in
millions):
2016
Description FHA Ginnie Mae Section 8 All Other Total
Intragovernmental Assets:
Other Assets $ - $ - $ 5 $ 38 $ 43
Total Intragovernmental Assets - - 5 38 43
Public:
Mortgagor Reserves for Replacement - Cash $ 30 $ - $ - $ - $ 30
Other Assets 23 - - - 23
Total $ 53 $ - $ 5 $ 38 $ 96
2015
Description FHA Ginnie Mae Section 8 All Other Total
Intragovernmental Assets:
Other Assets $ 1 $ - $ 4 $ 4 $ 9
Total Intragovernmental Assets 1 - 4 4 9
Public:
Mortgagor Reserves for Replacement - Cash $ 37 $ - $ - $ - $ 37
Other Assets 8 - - - 8
Total $ 46 $ - $ 4 $ 4 $ 54
Note 13: Liabilities Covered and Not Covered by Budgetary
Resources
The following shows HUD’s liabilities as of September 30, 2016 and 2015 (dollars in millions):
Description 2016 2015
Covered Not-Covered Total Covered Not-Covered Total
Intragovernmental
Accounts Payable $ 24 $ - $ 24 $ 16 $ - $ 16
Debt 31,002 - 31,002 27,150 - 27,150
Other Intragovernmental Liabilities 2,832 192 3,024 3,132 16 3,148
Total Intragovernmental Liabilities $ 33,858 $ 192 $ 34,050 $ 30,298 $ 16 $ 30,314
Accounts Payable 1,006 - 1,006 966 - 966
Accrued Grant Liabilities 2,663 - 2,663 2,388 - 2,388
Liabilities for Loan Guarantees (2,057) - (2,057) 13,473 - 13,473
Debt 8 - 8 8 - 8
Federal Employee and Veterans' Benefits - 64 64 - 69 69
Loss Liability 3 - 3 - - -
Other Liabilities 1,235 132 1,367 1,105 134 1,239
Total Liabilities $ 36,716 $ 388 $ 37,104 $ 48,238 $ 219 $ 48,457
HUD’s other governmental liabilities principally consist of Ginnie Mae’s deferred revenue,
FHA’s special receipt account, and the Department’s payroll costs. Further disclosures of
HUD’s other liabilities are also found in Note 17.
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Note 14: Debt
Several HUD programs have the authority to borrow funds from the U.S. Treasury for program
operations. Additionally, the National Housing Act authorizes FHA, in certain cases, to issue
debentures in lieu of cash to pay claims. Also, PHAs and TDHEs borrowed funds from the
private sector and from the Federal Financing Bank (FFB) to finance construction and
rehabilitation of low rent housing. HUD is repaying these borrowings on behalf of the PHAs and
TDHEs.
The following shows HUD borrowings, and borrowings by PHAs/TDHEs for which HUD is
responsible for repayment, as of September 30, 2016 (dollars in millions):
Beginning Net Ending
Description Balance Borrowings Balance
Debt to the Federal Financing Bank $ 103 $ 452 $ 555
Debt to the U.S. Treasury 27,047 3,400 30,447
Held by the Public 8 - 8
Total $ 27,158 $ 3,852 $ 31,010
Classification of Debt:
Intragovernmental Debt $ 31,002
Debt held by the Public 8
Total $ 31,010
The following shows HUD borrowings, and borrowings by PHAs/TDHEs for which HUD is
responsible for repayment, as of September 30, 2015 (dollars in millions):
Beginning Net Ending
Description Balance Borrowings Balance
Debt to the Federal Financing Bank $ - $ 122 $ 122
Debt to the U.S. Treasury 27,661 (633) 27,028
Held by the Public 9 (1) 8
Total $ 27,670 $ (512) $ 27,158
Classification of Debt:
Intragovernmental Debt $ 27,150
Debt held by the Public 8
Total $ 27,158
The purpose of these borrowings is discussed in the following paragraphs.
Borrowings from the U.S. Treasury
In FY 2016 and FY 2015, FHA borrowed $30.9 billion and $27 billion, respectively, from the
U.S. Treasury. In accordance with Credit Reform accounting, FHA borrows from the U.S.
Treasury when cash is needed in its financing accounts. Usually, the need for cash arises when
FHA has to transfer the negative credit subsidy amounts related to new loan disbursements and
existing loan modifications from the financing accounts to the general fund receipt account (for
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cases in GI/SRI funds) or to the capital reserve account (for cases in MMI/CMHI funds). In
some instances, borrowings are also needed to transfer the credit subsidy related to downward re-
estimates when available cash is less than claim payments due. These borrowings carried
interest rates ranging from 1.02 percent to 7.59 percent during FY 2016.
Borrowings from the Federal Financing Bank (FFB) and the Public
During the 1960s, 1970s, and 1980s, PHAs obtained loans from the private sector and from the
FFB to finance development and rehabilitation of low rent housing projects. HUD is repaying
these borrowings on behalf of the PHAs, through the Low Rent Public Housing program. For
borrowings from the public, interest is payable throughout the year.
Before July 1, 1986, the FFB purchased notes issued by units of general local government and
guaranteed by HUD under Section 108. These notes had various maturities and carried interest
rates that were one-eighth of one percent above rates on comparable Treasury obligations. The
FFB held substantially all outstanding notes, and no note purchased by the FFB has ever been
declared in default. In March of FY 2010, HUD repaid all FFB borrowings for the Low Rent
Public Housing program.
Debentures Issued to Claimants
The National Housing Act authorizes FHA, in certain cases, to issue debentures in lieu of cash to
settle claims. FHA-issued debentures bear interest at rates established by the U.S. Treasury.
There were no debentures issued in FY 2013. Interest rates related to the outstanding debentures
ranged from 4.00 percent to 13.375 percent in FY 2011. Debentures may be redeemed by
lenders prior to maturity to pay mortgage insurance premiums to FHA, or they may be called
with the approval of the Secretary of the U. S. Treasury.
Note 15: Federal Employee and Veterans’ Benefits
HUD is a non-administering agency; therefore, it relies on cost factors and other actuarial
projections provided by the Department of Labor (DOL) and Office of Personnel Management
(OPM). HUD’s imputed costs consist of two components, pension and health care benefits.
During FY 2016, HUD recorded imputed costs of $67 million which consisted of $23 million for
pension and $44 million for health care benefits. During FY 2015, HUD recorded imputed costs
of $65 million which consisted of $27 million for pension and $38 million for health care
benefits. These amounts are reported by OPM and charged to expense with a corresponding
amount considered as an imputed financing source in the Statement of Changes in Net Position.
HUD also accrues the portion of the estimated liability for disability benefits assigned to the
agency under the Federal Employee Compensation Act (FECA), administered and determined by
the DOL. The liability, based on the net present value of estimated future payments based on a
study conducted by DOL, was $64 million as of September 30, 2016, and $69 million as of
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September 30, 2015. Future payments on this liability are to be funded by future financing
sources.
In addition to the imputed costs of $67 million noted above, HUD recorded net benefit expenses
totaling $49 million for FY 2016 and $179 million for FY 2015.
Note 16: MBS Loss Liability
Liability for loss on MBS program guaranty (MBS loss liability) represents the loss contingency
that arises from the guaranty obligation that Ginnie Mae has to the MBS holders as a result of a
probable issuer default. In FY2016, Ginnie Mae recorded $3 million in loss reserves. The
issuers have the obligation to make timely principal and interest payments to investors, however,
in the event whereby the issuer defaults, Ginnie Mae steps in and continues to make the
contractual payments to investors. The contingent aspect of the guarantee is measured under
ASC Subtopic 450-20, Contingencies – Loss Contingencies.
Ginnie Mae’s Office of Enterprise Risk (ERO) utilizes Corporate Watch to assist in the analysis
of potential defaults. Corporate Watch assigns each issuer an internal risk grade using an
internally developed proprietary risk-rating methodology. The objective of the methodology is
to identify those Ginnie Mae issuers that display an elevated likelihood of default relative to their
peers. To this end, the methodology assigns each active Issuer a risk grade ranging from 1-8,
with 1 representing a low probability of default and 8 representing an elevated probability of
default. A higher probability of default would arise from an observed weakness in an entity's
financial health. Those Issuers with an elevated probability of default are assigned an internal
risk grade of 7 or 8 and are automatically included in Risk Category I of the Watch List. ERO
prepares written financial reviews on all Issuers appearing in Risk Category I of Watch List to
assess the level of on-going monitoring needed to ensure that these Issuers remain viable Ginnie
Mae counterparties or to take other mitigation actions.
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Note 17: Other Liabilities
The following shows HUD’s Other Liabilities as of September 30, 2016 (dollars in millions):
Non-
Description Current Current Total
Intragovernmental Liabilities
FHA Special Receipt Account Liability $ - $ 2,765 $ 2,765
Unfunded FECA Liability 15 - 15
Employer Contributions and Payroll Taxes - 9 9
Miscellaneous Receipts Payable to Treasury - 221 221
Advances to Federal Agencies - 14 14
Total Intragovernmental Liabilities $ 15 $ 3,009 $ 3,024
Other Liabilities
FHA Other Liabilities $ - $ 543 $ 543
FHA Escrow Funds Related to Mortgage Notes - 312 312
Ginnie Mae Deferred Income 292 20 312
Deferred Credits - 4 4
Deposit Funds - 9 9
Accrued Unfunded Annual Leave 77 - 77
Accrued Funded Payroll Benefits - 32 32
Contingent Liability 55 - 55
Other 7 16 23
Total Other Liabilities $ 446 $ 3,945 $ 4,391
The following shows HUD’s Other Liabilities as of September 30, 2015 (dollars in millions):
Non-
Description Current Current Total
Intragovernmental Liabilities
FHA Special Receipt Account Liability $ - $ 2,889 $ 2,889
Unfunded FECA Liability 16 - 16
Employer Contributions and Payroll Taxes - 5 5
Miscellaneous Receipts Payable to Treasury - 228 228
Advances to Federal Agencies - 10 10
Total Intragovernmental Liabilities $ 16 $ 3,132 $ 3,148
Other Liabilities
FHA Other Liabilities $ - $ 412 $ 412
FHA Escrow Funds Related to Mortgage Notes - 314 314
Ginnie Mae Deferred Income 273 34 307
Deferred Credits - 18 18
Deposit Funds - 13 13
Accrued Unfunded Annual Leave 79 - 79
Accrued Funded Payroll Benefits - 32 32
Contingent Liability 55 - 55
Other 7 2 9
Total Other Liabilities $ 430 $ 3,957 $ 4,387
Special Receipt Account Liability
The special receipt account liability is created from negative subsidy endorsements and
downward credit subsidy in the GI/SRI special receipt account.
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Note 18: Financial Instruments with Off-Balance Sheet Risk
Some of HUD’s programs, principally those operated through FHA and Ginnie Mae, enter into
financial arrangements with off-balance sheet risk in the normal course of their operations.
A. FHA Mortgage Insurance
The outstanding principal of FHA’s guaranteed loans (face value) as of September 30, 2016
and 2015, was $1.3 trillion and $1.3 trillion, respectively. The amount of outstanding principal
guaranteed (insurance-in-force) as of September 30, 2016 and 2015, was $1.2 trillion and $1.2
trillion, respectively, as disclosed in Note 8J. The maximum claim amount (MCA) outstanding
for FHA’s reverse mortgage insurance program (HECM) as of September 30, 2016 and 2015,
was $148 billion and $150 billion, respectively. As of September 30, 2016 and 2015, the
insurance-in-force (the outstanding balance of active loans) was $105 billion and $105 billion,
respectively, as disclosed in Note 8J. The HECM insurance in force includes balances drawn by
the mortgagee, interest accrued on the balances drawn, service charges, and mortgage insurance
premiums. The maximum claim amount is the dollar ceiling to which the outstanding loan
balance can grow before being assigned to FHA.
B. Ginnie Mae Mortgage-Backed Securities
Ginnie Mae financial instruments with off-balance sheet risk include guarantees of MBS and
commitments to guarantee MBS. The securities are backed by pools of FHA, USDA, VA, and
PIH mortgage loans. Ginnie Mae is exposed to credit loss in the event of non-performance by
other parties to the financial instruments. The total amount of Ginnie Mae guaranteed securities
outstanding at September 30, 2016 and 2015, was approximately $1.7 trillion and $1.6 trillion,
respectively. However, Ginnie Mae’s potential loss is considerably less because of the financial
strength of the Department’s issuers. Additionally, in the event of default, the underlying
mortgages serve as primary collateral and FHA, USDA, VA, and PIH insurance or guarantee
indemnifies Ginnie Mae for most losses.
During the mortgage closing period and prior to granting its guaranty, Ginnie Mae enters into
commitments to guarantee MBS. The commitment ends when the MBS are issued or when the
commitment period expires. Ginnie Mae’s risks related to outstanding commitments are much
less than for outstanding securities due, in part, to Ginnie Mae’s ability to limit commitment
authority granted to individual issuers of MBS. Outstanding commitments as of
September 30, 2016 and 2015, were $96 billion and $129 billion, respectively. Generally,
Ginnie Mae’s MBS pools are diversified among issuers and geographic areas. No significant
geographic concentrations of credit risk exist; however, to a limited extent, securities are
concentrated among issuers.
In FY 2016 and FY 2015, Ginnie Mae issued a total of $103 billion and $93 billion, respectively,
in its multi-class securities program. The estimated outstanding balance for the complete multi-
class securities program (REMICs, Platinum’s, etc.) at September 30, 2016 and 2015, were
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$474 billion and $473 billion, respectively. These guaranteed securities do not subject Ginnie
Mae to additional credit risk beyond that assumed under the MBS program.
C. Section 108 Loan Guarantees
Under HUD’s Loan Guarantee (Section 108) program, recipients of the CDBG Entitlement
Grant program funds may pledge future grant funds as collateral for loans guaranteed by HUD
(these loans were provided from private lenders since July 1, 1986). Section 108 provides
entitlement communities with a source of financing for projects that are too large to be financed
from annual grants. The amount of loan guarantees outstanding as of September 30, 2016 and
2015, was $2 billion and $2 billion, respectively. HUD’s management believes its exposure in
providing these loan guarantees is limited, since loan repayments can be offset from future
CDBG Entitlement Program Funds and, if necessary, other funds provided to the recipient by
HUD. HUD has never had a loss under this program since its inception in 1974.
Note 19: Contingencies
Lawsuits and Other
The general counsel has reviewed FHA’s legal actions and claims for FY 2016 and determined
as of September 30, 2016, that the ultimate resolution of legal actions would not affect FHA’s
consolidated financial statements. As a result, no contingent liability has been recorded.
HUD is party to a number of claims and tort actions related to lawsuits brought against it
concerning the implementation or operation of its various programs. A union grievance case,
Fair and Equitable Arbitration Remedy, FMCS No. 03-07743, 66 FLRA 867, was filed based on
alleged violations of articles of the parties’ Collective Bargaining Agreement. The grievance
alleged that HUD failed to treat employees fairly and equitably based upon the manner in which
the Agency posted and subsequently selected candidates from job advertisements and vacancy
announcements. Although the litigation is not final, the estimated potential loss is probable at
this time and as a result, the Department has recorded a contingent liability of $55 million in its
financial statements. Pending litigation on this case will likely take one or many years to
resolve. The Union’s version of compliance could cost up to $665 million, including attorney’s
fees, if the parties do not resolve this matter, and if the Union gets all of its requested
relief. Other ongoing suits cannot be reasonably determined at this time and in the opinion of
management and general counsel, the ultimate resolution of the other pending litigation will not
have a material effect on the Department’s financial statements.
Note 20: Funds from Dedicated Collections
Funds from dedicated collections are financed by specifically identified revenues and are
required by statute to be used for designated activities or purposes.
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Ginnie Mae
Ginnie Mae is a self-financed government corporation, whose program operations are financed
by a variety of fees, such as guaranty, commitment, new issuer, handling, and transfer servicing
fees, which are to be used only for Ginnie Mae’s legislatively authorized mission. In FY 2016,
Ginnie Mae was authorized to use $23 million for payroll and payroll related expense, funded by
commitment fees.
Rental Housing Assistance Fund
The Housing and Urban Development Act of 1968 authorized the Secretary to establish a
revolving fund into which rental collections in excess of the established basic rents for units in
Section 236 subsidized projects would be deposited. The Housing and Community Development
Amendment of 1978 authorized the Secretary, subject to approval in appropriation acts, to
transfer excess rent collections received after 1978 to the Troubled Projects Operating Subsidy
program, renamed the Flexible Subsidy Fund. Prior to that time, collections were used for
paying tax and utility increases in Section 236 projects. The Housing and Community
Development Act of 1980 amended the 1978 Amendment by authorizing the transfer of excess
rent collections regardless of when collected.
Flexible Subsidy
The Flexible Subsidy Fund assists financially troubled subsidized projects under certain FHA
authorities. The subsidies are intended to prevent potential losses to the FHA fund resulting
from project insolvency and to preserve these projects as a viable source of housing for low and
moderate-income tenants. Priority was given with Federal insurance-in-force and then to those
with mortgages that had been assigned to the Department.
American Recovery and Reinvestment Act Programs (Recovery Act)
The Recovery Act includes $14 billion for 17 programs at HUD which are distributed across
three themes that align with the broader Recovery goals. A further discussion of HUD’s
accomplishments under the Recovery Act program can be found at www.hud.gov/recovery.
Manufactured Housing Fees Trust Fund
The National Manufactured Housing Construction and Safety Standards Act of 1974, as
amended by the Manufactured Housing Improvement Act of 2000, authorizes development and
enforcement of appropriate standards for the construction, design, and performance of
manufactured homes to assure their quality, durability, affordability, and safety.
Fees are charged to the manufacturers for each manufactured home transportable section
produced and will be used to fund the costs of all authorized activities necessary for the
consensus committee (HUD) and its agents to carry out all aspects of the manufactured housing
legislation. The fee receipts are permanently appropriated and have helped finance a portion of
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the direct administrative expenses incurred in program operations. Activities are initially
financed via transfer from the Manufactured Housing General Fund.
The following shows funds from dedicated collections as of September 30, 2016 (dollars in
millions):
Tenant Project
Based Based Rental Manufactued Total
Rental Rental Housing Flexible Housing Fees Recovery Earmarked
Ginnie Mae Assistance Assistance Assistance Subsidy Trust Fund Act Funds Other Eliminations Funds
Balance Sheet
Fund Balance w/Treasury $ 1,379 $ 12 $ 18 $ 9 $ 433 $ 14 $ 9 $ - $ 13 $ 1,887
Cash and Other Monetary Assets 60 - - - - - - - - 60
Investments 15,954 - - - - - - - - 15,954
Accounts Receivable 113 - - 4 - - 5 - - 122
Loans Receivable 4,233 - - - 417 - - - - 4,650
Other Non-Credit Reform Loans Receivable 83 - - - - - - - - 83
General Property, Plant and Equipment - - - - - - 1 - - 1
Other - - - - - - - - - -
Total Assets $ 21,822 $ 12 $ 18 $ 13 $ 850 $ 14 $ 15 $ - $ 13 $ 22,757
Debt - Intragovernmental $ - $ - $ - $ - $ - $ - $ 5 $ - $ - $ 5
Accounts Payable - Intragovernmental - - - - - - - - -
Accounts Payable - Public 113 - - - - 3 - - - 116
Loan Guarantees - - - - - - - - - -
Loss Liability - - - - - - - - - -
Other Liabilities - Intragovernmental - - - - - - - - - -
Other Liabilities - Public 323 - - - - - - - - 323
Total Liabilities $ 436 $ - $ - $ - $ - $ 3 $ 5 $ - $ - $ 444
Unexpended Appropriations $ - $ 12 $ 18 $ (5) $ (377) $ - $ 10 $ - $ - $ (342)
Cumulative Results of Operations 21,386 - - 18 1,227 11 - - 13 22,655
Total Net Position $ 21,386 $ 12 $ 18 $ 13 $ 850 $ 11 $ 10 $ - $ 13 $ 22,313
Total Liabilities and Net Position $ 21,822 $ 12 $ 18 $ 13 $ 850 $ 14 $ 15 $ - $ 13 $ 22,757
Statement of Net Cost For the Period Ended
Gross Costs $ 432 $ 33 $ 34 $ - $ (4) $ 15 $ 16 $ - $ - $ 526
Less Earned Revenues (1,646) - - - (4) (12) - - - (1,662)
Net Costs $ (1,214) $ 33 $ 34 $ - $ (8) $ 3 $ 16 $ - $ - $ (1,136)
Statement of Changes in Net Position for the Period Ended
Net Position Beginning of Period $ 20,175 $ 8 $ 9 $ 12 $ 839 $ 14 $ 55 $ - $ - $ 21,112
Correction of Errors (7) - - - - - - - - (7)
Appropriations Received - - - - - - - - - -
Transfers In/Out Without Reimbursement - 37 43 - - - (13) - 13 80
Imputed Costs - - - - - - - - - -
Donations and Forfeitures of Cash & Cash Equivalents - - - - - - - - - -
Penalties, Fines, and Administrative Fees Revenue 4 - - - - - - - - 4
Other Adjustments - - - 1 3 - (16) - - (12)
Net Cost of Operations 1,214 (33) (34) - 8 (3) (16) - - 1,136
Change in Net Position $ 1,218 $ 4 $ 9 $ 1 $ 11 $ (3) $ (45) $ - $ 13 $ 1,208
Net Position End of Period $ 21,386 $ 12 $ 18 $ 13 $ 850 $ 11 $ 10 $ - $ 13 $ 22,313
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The following shows funds from dedicated collections as of September 30, 2015 (dollars in
millions):
Tenant Project
Based Based Rental Manufactued Total
Rental Rental Housing Flexible Housing Fees Recovery Earmarked
Ginnie Mae Assistance Assistance Assistance Subsidy Trust Fund Act Funds Other Funds
Balance Sheet
Fund Balance w/Treasury $ 2,142 $ 8 $ 9 $ 8 $ 380 $ 14 $ 42 $ - $ 2,603
Cash and Other Monetary Assets 45 - - - - - - - 45
Investments 12,923 - - - - - - - 12,923
Accounts Receivable 131 - - 4 - - 18 - 153
Loans Receivable - - - - 459 - (2) - 457
Other Non-Credit Reform Loans Receivable 5,325 - - - - - - - 5,325
General Property, Plant and Equipment 58 - - - - - - - 58
Other - - - - - - - - -
Total Assets $ 20,624 $ 8 $ 9 $ 12 $ 839 $ 14 $ 58 $ - $ 21,564
Debt - Intragovernmental $ - $ - $ - $ - $ - $ - $ 3 $ - $ 3
Accounts Payable - Intragovernmental - - - - - - - -
Accounts Payable - Public 135 - - - - - - - 135
Loan Guarantees - - - - - - - - -
Loss Liability - - - - - - - - -
Other Liabilities - Intragovernmental - - - - - - - - -
Other Liabilities - Public 314 - - - - - - - 314
Total Liabilities $ 449 $ - $ - $ - $ - $ - $ 3 $ - $ 452
Unexpended Appropriations $ 1 $ 8 $ 9 $ - $ (376) $ - $ 55 $ - $ (303)
Cumulative Results of Operations 20,174 - - 12 1,215 14 - - 21,415
Total Net Position $ 20,175 $ 8 $ 9 $ 12 $ 839 $ 14 $ 55 $ - $ 21,112
Total Liabilities and Net Position $ 20,624 $ 8 $ 9 $ 12 $ 839 $ 14 $ 58 $ - $ 21,564
Statement of Net Cost For the Period Ended
Gross Costs $ (234) $ 23 $ 16 $ (3) $ 3 $ 9 $ 79 $ - $ (107)
Less Earned Revenues (1,551) - - (2) (3) (11) - - (1,567)
Net Costs $ (1,785) $ 23 $ 16 $ (5) $ - $ (2) $ 79 $ - $ (1,674)
Statement of Changes in Net Position for the Period Ended
Net Position Beginning of Period $ 18,390 $ 31 $ 25 $ 10 $ 838 $ 12 $ 157 $ - $ 19,463
Correction of Errors - - - (3) - - - - (3)
Appropriations Received - - - - - - - - -
Transfers In/Out Without Reimbursement - - - - - - - - -
Imputed Costs 1 - - - - - - - 1
Donations and Forfeitures of Cash & Cash Equivalents - - - - - - - - -
Penalties, Fines, and Administrative Fees Revenue - - - - 1 - - - 1
Other Adjustments (1) - - - - - (23) - (24)
Net Cost of Operations 1,785 (23) (16) 5 - 2 (79) - 1,674
Change in Net Position $ 1,785 $ (23) $ (16) $ 5 $ 1 $ 2 $ (102) $ - $ 1,652
Net Position End of Period $ 20,175 $ 8 $ 9 $ 12 $ 839 $ 14 $ 55 $ - $ 21,112
Note 21: Intragovernmental Costs and Exchange Revenue
The data below shows HUD’s intragovernmental costs and earned revenue separately from
activity with the public. Intragovernmental transactions are exchange transactions made between
two reporting entities within the Federal government. Intragovernmental costs are identified by
the source of the goods and services; both the buyer and seller are Federal entities. Revenues
recognized by the Department may also be reported as non-Federal if the goods or services are
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subsequently sold to the public. Public activity involves exchange transactions between the
reporting entity and a non-Federal entity.
The following shows HUD’s intragovernmental costs and exchange revenue (dollars in
millions):
Low Rent
Federal Section 8 Public Housing Homeless Housing for Community Financial
2016
Housing Rental Loans and Assistance the Elderly Development Statement
Administration Ginnie Mae Assistance Grants Grants and Disabled Block Grants HOME All Other Eliminations Consolidating
Intragovernmental
Costs $ 1,239 $ 4 $ 49 $ 29 $ 6 $ 17 $ 18 $ 4 $ 513 $ - $ 1,879
Public Costs (18,997) 428 30,604 2,966 1,951 957 6,268 1,163 5,838 - 31,178
Subtotal Costs $ (17,758) $ 432 $ 30,653 $ 2,995 $ 1,957 $ 974 $ 6,286 $ 1,167 $ 6,351 $ - $ 33,057
Unassigned Costs $ 262 $ 262
Total Costs $ 33,319
Intragovernmental
Earned Revenue $ (1,151) $ (84) $ - $ - $ - $ - $ - $ - $ (20) $ - $ (1,255)
Public Earned Revenue (67) (1,562) - - 5 (109) - - (17) - (1,750)
Total Earned Revenue (1,218) (1,646) - - 5 (109) - - (37) - (3,005)
Net Cost of Operations $ (18,976) $ (1,214) $ 30,653 $ 2,995 $ 1,962 $ 865 $ 6,286 $ 1,167 $ 6,576 $ - $ 30,314
Low Rent
Federal Section 8 Public Housing Homeless Housing for Community Financial
2015
Housing Rental Loans and Assistance the Elderly Development Statement
Administration Ginnie Mae Assistance Grants Grants and Disabled Block Grants HOME All Other Eliminations Consolidating
Intragovernmental
Costs $ 1,206 $ 4 $ 70 $ 37 $ 13 $ 47 $ 20 $ 8 $ 316 $ - $ 1,721
Public Costs (17,409) (238) 29,412 2,798 1,881 990 7,547 1,233 5,755 - 31,969
Subtotal Costs $ (16,203) $ (234) $ 29,482 $ 2,835 $ 1,894 $ 1,037 $ 7,567 $ 1,241 $ 6,071 $ - $ 33,690
Unassigned Costs $ 218 $ 218
Total Costs $ 33,908
Intragovernmental
Earned Revenue $ (1,791) $ (128) $ - $ - $ (4) $ - $ - $ - $ (12) $ - $ (1,935)
Public Earned Revenue (58) (1,427) - - - (136) - - (17) - (1,638)
Total Earned Revenue (1,849) (1,555) - - (4) (136) - - (29) - (3,573)
Net Cost of Operations $ (18,052) $ (1,789) $ 29,482 $ 2,835 $ 1,890 $ 901 $ 7,567 $ 1,241 $ 6,260 $ - $ 30,335
79
Note 22: Total Cost and Earned Revenue by Budget Functional
Classification
The following shows HUD’s total cost and earned revenue by budget functional classification for
FY 2016 (dollars in millions):
Budget Functional Classification Gross Cost Earned Revenue Net Cost
Intragovernmental:
Commerce and Housing Credit $ 1,246 $ (1,236) $ 10
Community and Regional Development 70 (6) 64
Income Security 350 (12) 338
Administration of Justice 4 4
Other Multiple Functions 211 (1) 210
Total Intragovernmental 1,881 (1,255) 626
With the Public:
Commerce and Housing Credit $ (18,486) $ (1,749) $ (20,235)
Community and Regional Development 6,393 - 6,393
Income Security 43,145 - 43,145
Administration of Justice 74 (1) 73
Other Multiple Functions 50 - 50
Total with the Public $ 31,176 $ (1,750) $ 29,426
Not Assigned to Programs:
Income Security 262 - 262
Total with the Public $ 262 $ - $ 262
TOTAL:
Commerce and Housing Credit $ (17,240) $ (2,985) $ (20,225)
Community and Regional Development 6,463 (6) 6,457
Income Security 43,757 (12) 43,745
Administration of Justice 78 (1) 77
Other Multiple Functions 261 (1) 260
TOTAL: $ 33,319 $ (3,005) $ 30,314
80
The following shows HUD’s total cost and earned revenue by budget functional classification for
FY 2015 (dollars in millions):
Budget Functional Classification Gross Cost Earned Revenue Net Cost
Intragovernmental:
Commerce and Housing Credit $ 1,212 $ (1,920) $ (708)
Community and Regional Development 86 - 86
Income Security 424 (15) 409
Other Multiple Functions (1) (1) (2)
Total Intragovernmental 1,721 (1,936) (215)
With the Public:
Commerce and Housing Credit $ (17,734) $ (1,629) $ (19,363)
Community and Regional Development 7,659 - 7,659
Income Security 41,676 (7) 41,669
Administration of Justice 61 (1) 60
Other Multiple Functions 307 - 307
Total with the Public $ 31,969 $ (1,637) $ 30,332
Not Assigned to Programs:
Income Security 218 - 218
Total with the Public $ 218 $ - $ 218
TOTAL:
Commerce and Housing Credit $ (16,522) $ (3,549) $ (20,071)
Community and Regional Development 7,745 - 7,745
Income Security 42,318 (22) 42,296
Administration of Justice 61 (1) 60
Other Multiple Functions 306 (1) 305
TOTAL: $ 33,908 $ (3,573) $ 30,335
Note 23: Expenditures by Strategic Goals
As HUD updated its Strategic Plan to address the economic and community development issues
the nation is facing, five Strategic Goals were identified. This note presents the expenditures
incurred by HUD’s various programs in achieving these goals. A description of each Strategic
Goal is presented below and additional information is found in the Strategic Plan section of the
AFR.
Goal 1: Strengthen the nation’s housing market to bolster the economy and protect consumers
Goal 2: Meet the need for quality affordable rental homes
Goal 3: Utilize housing as a platform for improving quality of life
Goal 4: Build inclusive and sustainable communities free from discrimination
Goal 5: Transform the way HUD does business
81
The following table shows the expenditures allocated to HUD’s Strategic Goals for FY 2016
(dollars in millions):
Goal 1 Goal 2 Goal 3 Goal 4 Goal 5 Total
Programs
FHA $ (12,335) $ (2,846) $ (759) $ (3,036) $ - $ (18,976)
Ginnie Mae (910) (304) - - - (1,214)
Section 8 Rental Assistance - 25,066 200 5,387 - 30,653
Low Rent Public Housing Loans and Grants 419 2,197 75 304 - 2,995
Homeless Assistance Grants - 1,373 589 - - 1,962
Housing for the Elderly and Disabled - 538 76 251 - 865
Community Development Block Grants 1,257 314 943 3,772 - 6,286
HOME 315 630 - 222 - 1,167
All Other Programs 365 3,696 805 1,365 83 6,314
Total (10,889) 30,664 1,929 8,265 83 30,052
Costs Not Assigned To Programs $ 262
Total 30,314
The following table shows the expenditures allocated to HUD’s Strategic Goals for FY 2015
(dollars in millions):
Goal 1 Goal 2 Goal 3 Goal 4 Goal 5 Total
Programs
FHA $ (11,734) $ (2,708) $ (722) $ (2,888) $ - $ (18,052)
Ginnie Mae (1,342) (447) - - - (1,789)
Section 8 Rental Assistance - 24,109 192 5,181 - 29,482
Low Rent Public Housing Loans and Grants 396 2,080 71 288 - 2,835
Homeless Assistance Grants - 1,323 567 - - 1,890
Housing for the Elderly and Disabled - 561 79 261 - 901
Community Development Block Grants 1,513 379 1,135 4,540 - 7,567
HOME 335 670 - 236 - 1,241
All Other Programs 206 3,793 769 1,242 32 6,042
Total (10,626) 29,760 2,091 8,860 32 30,117
Costs Not Assigned To Programs $ 218
Total 30,335
Note 24: Net Costs of HUD’s Cross-Cutting Programs
This note provides a categorization of net costs for several major program areas whose costs
were incurred among HUD’s principal organizations previously discussed under Section 1 of the
report. Costs incurred under HUD’s other programs represent activities which support the
Department’s strategic goal to develop and preserve quality, healthy, and affordable homes.
82
The following table shows the cross-cutting of HUD’s major program areas that incur costs that
cross multiple program areas for FY 2016 (dollars in millions):
Public and Community
Indian Planning and
HUD's Cross-Cutting Programs Housing Housing Development Other Consolidated
S ection 8
Intragovernmental Gross Costs $ 36 $ 13 $ - $ - $ 49
Intragovernmental Earned Revenues - - - - -
Intragovernmental Net Costs $ 36 $ 13 $ - $ - $ 49
Gross Costs with the Public $ 19,869 $ 10,652 $ 83 $ - $ 30,604
Earned Revenues - - - - -
Net Costs with the Public $ 19,869 $ 10,652 $ 83 $ - 30,604
Net Program Costs $ 19,905 $ 10,665 $ 83 $ - $ 30,653
Homeless Assistance Grants
Intragovernmental Gross Costs $ - $ - $ - $ 6 $ 6
Intragovernmental Earned Revenues - - - - -
Intragovernmental Net Costs $ - $ - $ - $ 6 $ 6
Gross Costs with the Public $ - $ - $ 1,914 $ 37 $ 1,951
Earned Revenues - - - 5 5
Net Costs with the Public $ - $ - $ 1,914 $ 42 $ 1,956
Net Program Costs $ - $ - $ 1,914 $ 48 $ 1,962
CDBG
Intragovernmental Gross Costs $ - $ 17 $ - $ - $ 17
Intragovernmental Earned Revenues - - - - -
Intragovernmental Net Costs $ - $ 17 $ - $ - $ 17
Gross Costs with the Public $ 2 $ 954 $ - $ - $ 956
Earned Revenues - - - (108) (108)
Net Costs with the Public $ 2 $ 954 $ - $ (108) $ 848
Net Program Costs $ 2 $ 971 $ - $ (108) $ 865
All Other
Intragovernmental Gross Costs $ 128 $ 109 $ 38 $ 238 $ 513
Intragovernmental Earned Revenues - - - (20) (20)
Intragovernmental Net Costs $ 128 $ 109 $ 38 $ 218 $ 493
Gross Costs with the Public $ 4,812 $ 214 $ 550 $ 262 $ 5,838
Earned Revenues - - - (17) (17)
Net Costs with the Public $ 4,812 $ 214 $ 550 $ 245 $ 5,821
Net Program Costs $ 4,940 $ 323 $ 588 $ 463 $ 6,314
Costs Not Assigned to Programs $ 89 $ 104 $ 69 $ - $ 262
Net Program Costs (including indirect costs) $ 5,029 $ 427 $ 657 $ 463 $ 6,576
83
The following table shows the Department’s cross-cutting costs among its major program areas
for FY 2015 (dollars in millions):
Public and Community
Indian Planning and
HUD's Cross-Cutting Programs Housing Housing Development Other Consolidated
S ection 8
Intragovernmental Gross Costs $ 37 $ 32 $ - $ - $ 69
Intragovernmental Earned Revenues - - - - -
Intragovernmental Net Costs $ 37 $ 32 $ - $ - $ 69
Gross Costs with the Public $ 19,053 $ 10,281 $ 80 $ (2) $ 29,412
Earned Revenues - - - - -
Net Costs with the Public $ 19,053 $ 10,281 $ 80 $ (2) 29,412
Net Program Costs $ 19,090 $ 10,313 $ 80 $ (2) $ 29,481
Homeless Assistance Grants
Intragovernmental Gross Costs $ - $ - $ - $ 13 $ 13
Intragovernmental Earned Revenues - - (4) - (4)
Intragovernmental Net Costs $ - $ - $ (4) $ 13 $ 9
Gross Costs with the Public $ - $ - $ 1,850 $ 31 $ 1,881
Earned Revenues - - - - -
Net Costs with the Public $ - $ - $ 1,850 $ 31 $ 1,881
Net Program Costs $ - $ - $ 1,846 $ 44 $ 1,890
CDBG
Intragovernmental Gross Costs $ - $ - $ 20 $ - $ 20
Intragovernmental Earned Revenues - - - - -
Intragovernmental Net Costs $ - $ - $ 20 $ - $ 20
Gross Costs with the Public $ 55 $ - $ 7,456 $ 36 $ 7,547
Earned Revenues - - - - -
Net Costs with the Public $ 55 $ - $ 7,456 $ 36 $ 7,547
Net Program Costs $ 55 $ - $ 7,476 $ 36 $ 7,567
All Other
Intragovernmental Gross Costs $ 86 $ 153 $ 50 $ 27 $ 316
Intragovernmental Earned Revenues 7 (1) 4 (23) (13)
Intragovernmental Net Costs $ 93 $ 152 $ 54 $ 4 $ 303
Gross Costs with the Public $ 4,886 $ 353 $ 550 $ (34) $ 5,755
Earned Revenues - (15) - (1) (16)
Net Costs with the Public $ 4,886 $ 338 $ 550 $ (35) $ 5,739
Net Program Costs $ 4,979 $ 490 $ 604 $ (31) $ 6,042
Costs Not Assigned to Programs $ 63 $ 102 $ 53 $ - $ 218
Net Program Costs (including indirect costs) $ 5,042 $ 592 $ 657 $ (31) $ 6,260
84
Note 25: FHA Net Costs
FHA reports its insurance operations in three overall program areas: Single Family Forward
Mortgages, Multifamily/Healthcare Mortgages, and Home Equity Conversion Mortgages
(HECM). FHA operates these programs primarily through four insurance funds: Mutual
Mortgage Insurance (MMI), General Insurance (GI), Special Risk Insurance (SRI), and
Cooperative Management Housing Insurance (CMHI), with the MMI fund being the largest.
There is a fifth fund, Hope for Homeowners (H4H), which became operational in FY 2009 and
which contains minimal activity.
FHA encourages homeownership through its Single Family Forward programs (Section 203(b),
which is the largest program, and Section 234) by making loans readily available with its
mortgage insurance programs. These programs insure mortgage lenders against losses from
default, enabling those lenders to provide mortgage financing on favorable terms to homebuyers.
Multifamily Housing Programs (Section 213, Section 221(d)(4), Section 207/223(f), and
Section 223(a)(7)) provide FHA insurance to approved lenders to facilitate the construction,
rehabilitation, repair, refinancing, and purchase of multifamily housing projects such as
apartment rentals, and cooperatives. Healthcare programs (Section 232 and Section 242) enable
low cost financing of health care facility projects and improve access to quality health care by
reducing the cost of capital. The HECM program provides eligible homeowners who are
62 years of age and older access to the equity in their property with flexible terms.
The following table shows Net Cost detail for the FHA (dollars in millions):
Fiscal Year 2016
Single Family Multifamily/Healthcare Administrative
Forward Program HECM Program Program Costs Total
Costs
Intragovernmental Gross Costs $ 791 $ 234 $ 196 $ 17 $ 1,238
Intragovernmental Earned Revenues (662) (403) (85) - (1,150)
Intragovernmental Net Costs $ 129 $ (169) $ 111 $ 17 $ 88
Gross Costs with the Public $ (18,763) $ (306) $ (518) $ 591 $ (18,996)
Earned Revenues (14) (1) (53) - (68)
Net Costs with the Public $ (18,777) $ (307) $ (571) $ 591 $ (19,064)
Net Program Costs $ (18,648) $ (476) $ (460) $ 608 $ (18,976)
Fiscal Year 2015
Single Family Multifamily/Healthcare Administrative
Forward Program HECM Program Program Costs Total
Costs
Intragovernmental Gross Costs $ 955 $ 59 $ 177 $ 16 $ 1,207
Intragovernmental Earned Revenues (1,133) (584) (74) - (1,791)
Intragovernmental Net Costs $ (178) $ (525) $ 103 $ 16 $ (584)
Gross Costs with the Public $ (13,284) $ (3,994) $ (699) $ 567 $ (17,410)
Earned Revenues (11) (1) (46) - (58)
Net Costs with the Public $ (13,295) $ (3,995) $ (745) $ 567 $ (17,468)
Net Program Costs $ (13,473) $ (4,520) $ (642) $ 583 $ (18,052)
85
Note 26: Commitments under HUD’s Grant, Subsidy, and Loan
Programs
A. Contractual Commitments
HUD has entered into extensive long-term commitments that consist of legally binding
agreements to provide grants, subsidies or loans. Commitments become liabilities when all
actions required for payment under an agreement have occurred. The mechanism for funding
subsidy commitments generally differs depending on whether the agreements were entered into
before or after 1988.
With the exception of the Housing for the Elderly and Disabled and Low Rent Public Housing
Loan Programs (which have been converted to grant programs), Section 235/236, and a portion
of “All Other” programs, HUD management expects all of the programs to continue to incur new
commitments under authority granted by Congress in future years. However, estimated future
commitments under such new authority are not included in the amounts below.
Prior to fiscal 1988, HUD’s subsidy programs, primarily the Section 8 program and the
Section 235/236 programs, operated under contract authority. Each year, Congress provided
HUD the authority to enter into multiyear contracts within annual and total contract limitation
ceilings. HUD then drew on and continues to draw on permanent indefinite appropriations to
fund the current year’s portion of those multiyear contracts. Because of the duration of these
contracts (up to 40 years), significant authority exists to draw on the permanent indefinite
appropriations. Beginning in FY 1988, the Section 8 and the Section 235/236 programs began
operating under multiyear budget authority whereby the Congress appropriates the funds “up-
front” for the entire contract term in the initial year.
HUD’s commitment balances are based on the amount of unliquidated obligations recorded in
HUD’s accounting records with no provision for changes in future eligibility, and thus are equal
to the maximum amounts available under existing agreements and contracts. Unexpended
appropriations and cumulative results of operations shown in the Consolidated Balance Sheet
comprise funds in the U.S. Treasury available to fund existing commitments that were provided
through “up-front” appropriations and also include permanent indefinite appropriations received
in excess of amounts used to fund the pre-1988 subsidy contracts and offsetting collections.
FHA enters into long-term contracts for both program and administrative services. FHA funds
these contractual obligations through appropriations, permanent indefinite authority, and
offsetting collections. The appropriated funds are primarily used to support administrative
contract expenses while the permanent indefinite authority and the offsetting collections are used
for program services.
86
The following shows HUD’s obligations and contractual commitments under its grant, subsidy,
and loan programs as of September 30, 2016 (dollars in millions):
Undelivered Orders
Unexpended Permanent Investment Offsetting Undelivered Orders -
Programs Appropriations Indefinite Authority Collections Obligations, Unpaid
FHA $ 125 $ 80 $ - $ 1,989 $ 2,194
Ginnie Mae 1 - - 447 448
Section 8 Rental Assistance 8,898 - - - 8,898
Low Rent Public Housing Loans and Grants 4,041 - - - 4,041
Homeless Assistance Grants 2,215 - - - 2,215
Housing for the Elderly and Disabled 1,623 - - - 1,623
Community Development Block Grants 9,588 - - - 9,588
HOME Partnership Investment Program 2,647 - - - 2,647
Section 235/236 742 - - - 742
All Other 2,739 - - - 2,739
Total $ 32,619 $ 80 $ - $ 2,436 $ 35,135
The following shows HUD’s obligations and contractual commitments under its grant, subsidy,
and loan programs as of September 30, 2015 (dollars in millions):
Undelivered Orders
Unexpended Permanent Investment Offsetting Undelivered Orders -
Programs Appropriations Indefinite Authority Collections Obligations, Unpaid
FHA $ 140 $ 79 $ - $ 1,825 $ 2,044
Ginnie Mae 3 - - 402 405
Section 8 Rental Assistance 8,896 - - - 8,896
Low Rent Public Housing Loans and Grants 4,359 - - - 4,359
Homeless Assistance Grants 2,389 - - - 2,389
Housing for the Elderly and Disabled 1,939 - - - 1,939
Community Development Block Grants 10,950 - - - 10,950
HOME Partnership Investment Program 2,855 - - - 2,855
Section 235/236 951 - - - 951
All Other 3,336 - - - 3,336
Total $ 35,818 $ 79 $ - $ 2,227 $ 38,124
B. Administrative Commitments
In addition to the above contractual commitments, HUD has entered into administrative
commitments which are reservations of funds for specific projects (including those for which a
contract has not yet been executed) to obligate all or part of those funds. Administrative
commitments become contractual commitments upon contract execution.
87
The following chart shows HUD’s administrative commitments as of September 30, 2016
(dollars in millions):
Reservations
Permanent
Unexpended Indefinite Offsetting Total
Programs Appropriations Appropriations Collections Reservations
Section 8 Rental Assistance $ 194 $ - $ - $ 194
Low Rent Public Housing Loans and Grants 7,436 - - 7,436
Homeless Assistance Grants 226 - - 226
Housing for the Elderly and Disabled 232 - - 232
Community Development Block Grants 9 - - 9
HOME Partnership Investment Program 140 - - 140
Section 235/236 - - - -
All Other 266 - - 266
Total $ 8,503 $ - $ - $ 8,503
The following chart shows HUD’s administrative commitments as of September 30, 2015
(dollars in millions):
Reservations
Permanent
Unexpended Indefinite Offsetting Total
Programs Appropriations Appropriations Collections Reservations
Section 8 Rental Assistance $ 155 $ - $ - $ 155
Low Rent Public Housing Loans and Grants 9 - - 9
Homeless Assistance Grants 107 - - 107
Housing for the Elderly and Disabled 106 - - 106
Community Development Block Grants 7,868 - - 7,868
HOME Partnership Investment Program 227 - - 227
Section 235/236 - - - -
All Other 182 - - 182
Total $ 8,654 $ - $ - $ 8,654
Note 27: Disaster Recovery Relief Efforts
Over the past years, the Department has developed an allocation process which focuses on
unanticipated disaster recovery needs. Administered by the Office of Community Planning and
Development, disaster recovery funds supplements the Federal Management Agency, the Small
Business Administration, and the United States Army Corps of Engineers. The Department’s
funds must supplement, not replace, other sources of federal disaster recovery assistance. The
funding is provided by grants to assist cities, counties, and States recover from Presidentially-
declared disasters. Recent disaster recovery events include severe flooding in the upper
Midwest, hurricanes in the Gulf Costs and severe weather systems, including Hurricane Sandy
devastating the Mid-Atlantic region.
88
The following table shows the status of budgetary resources information for HUD’s programs
funded under the Community Development Block Grant Program to support disaster relief as of
September 30, 2016 (dollars in millions):
Budgetary Resources Total
Unobligated Balance, beginning of period $ 8,091
Recoveries -
Budget Authority -
Spending Authority from Offsetting Collections -
Non-Expenditure Transfers, net -
Other Balances Withdrawn -
Total Budgetary Resources $ 8,091
Status of Budgetary Resources
Obligations Incurred $ 1,670
Unobligated Balance, available 6,421
Unobligated Balance, not available -
Total Status of Budgetary Resources $ 8,091
Change in Obligated Balance
Obligated Balance, net beginning of period $ 6,107
Obligations Incurred 1,670
Gross Outlays (3,011)
Recoveries -
Obligated Balance, net end of period $ 4,766
Net Outlays $ 3,011
The data below displays cumulative activity for the four largest state recipients of HUD disaster
assistance since the inception of the program. The obligations incurred and gross outlays shown
above represent fiscal year activity (dollars in millions).
Obligations Outlays Unliquidated
Louisiana $ 14,621 $ 13,568 $ 1,053
Mississippi 5,539 5,220 319
Texas 3,751 3,044 707
Florida 393 380 13
Other States 2,287 2,604 (317)
Total $ 26,591 $ 24,816 $ 1,775
89
The following table shows the status of budgetary resources information for HUD’s programs
funded under the Community Development Block Grant Program to support disaster relief as of
September 30, 2015 (dollars in millions):
Budgetary Resources Total
Unobligated Balance, beginning of period $ 11,618
Recoveries -
Budget Authority -
Spending Authority from Offsetting Collections -
Non-Expenditure Transfers, net -
Other Balances Withdrawn -
Total Budgetary Resources $ 11,618
Status of Budgetary Resources
Obligations Incurred $ 3,527
Unobligated Balance, available 8,091
Unobligated Balance, not available -
Total Status of Budgetary Resources $ 11,618
Change in Obligated Balance
Obligated Balance, net beginning of period $ 6,012
Obligations Incurred 3,527
Gross Outlays (3,432)
Recoveries -
Obligated Balance, net end of period $ 6,107
Net Outlays $ 3,432
The data below displays cumulative activity for the four largest state recipients of HUD disaster
assistance since the inception of the program. The obligations incurred and gross outlays shown
above represent fiscal year activity (dollars in millions).
Obligations Outlays Unliquidated
Louisiana $ 14,621 $ 13,348 $ 1,273
Mississippi 5,539 5,060 479
Texas 3,752 2,689 1,063
Florida 393 370 23
Other States 2,287 2,478 (191)
Total $ 26,592 $ 23,945 $ 2,647
Note 28: Apportionment Categories of Obligations Incurred
Budgetary resources are usually distributed in an account or fund by specific time periods,
activities, projects, objects, or a combination of these categories. Resources apportioned by
fiscal quarters are classified as Category A apportionments. Apportionments by any other
category would be classified as Category B apportionments.
90
HUD’s categories of obligations incurred were as follows (dollars in millions):
Category A Category B Total
2016
Direct $ 912 $ 105,436 $ 106,348
Reimbursable - 3,827 3,827
Total $ 912 $ 109,263 $ 110,175
Category A Category B Total
2015
Direct $ 984 $ 112,448 $ 113,432
Reimbursable - 5,754 5,754
Total $ 984 $ 118,202 $ 119,186
Note 29: Explanation of Differences between the Statement of
Budgetary Resources and the Budget of the United States
Government
The President’s Budget containing actual FY 2016 data is not available for comparison to the
Statement of Budgetary Resources. Actual FY 2016 data will be available in the Appendix to
the Budget of the United States Government, FY 2018.
For FY 2015, an analysis to compare HUD’s Statement of Budgetary Resources to the
President’s Budget of the United States was performed to identify any differences.
The following shows the difference between Budgetary Resources reported in the Statement of
Budgetary Resources and the President’s Budget for FY 2015 (dollars in millions):
Distributed
Budgetary Obligations Offsetting Net
Resources Incurred Receipts Outlays
Combined Statement of Budgetary Resources $ 199,100 $ 119,190 $ (2,844) $ 51,883
Difference #1 - Resources related to HUD's expired accounts
not reported in the President's Budget (891) (57) - -
Difference #2 - Offsetting receipts included in the President's Budget - - 9 -
Difference #3 - Offsetting receipts not included in the President's Budget - - 3 -
Difference #4 - Ginnie Mae amounts from temporary reduction of prior year - (1) - (1)
balances
Difference #5 - Ginnie Mae amounts precluded from obligation - - - -
Difference #6 - Rounding issues 11 (3) - (1,728)
United States Budget $ 198,220 $ 119,129 $ (2,832) $ 50,154
Note 30: Reconciliation of Net Cost of Operations to Budget
This note (formerly the Statement of Financing) links the proprietary data to the budgetary data.
Most transactions are recorded in both proprietary and budgetary accounts. However, because
different accounting bases are used for budgetary and proprietary accounting, some transactions
91
may appear in only one set of accounts. The Reconciliation of Net Cost of Operations to Budget
is as follows for the periods ending September 30, 2016 and 2015 (dollars in millions):
2016 2015
Budgetary Resources Obligated
Obligations Incurred $ 110,175 $ 119,186
Spending Authority from Offsetting Collections and Recoveries (62,121) (68,862)
Obligations Net of Offsetting Collections $ 48,054 $ 50,324
Offsetting Receipts (2,302) (2,844)
Net Obligations $ 45,752 $ 47,480
Other Resources
Transfers In/Out Without Reimbursement $ 187 $ -
Imputed Financing from Costs Absorbed by Others 158 65
FHA Transfers Out to U.S. Dept. of Treasury for negative subsidies (2,601) (3,679)
CFO Other Resources - 4
Net Other Resources Used to Finance Activities $ (2,256) $ (3,610)
Total Resources Used to Finance Activities $ 43,496 $ 43,870
Resources Used to Finance Items Not Part of the Net Cost of Operations
Change in Budgetary Resources Obligated for Goods/Services/Benefits
Services Ordered but Not Yet Provided $ 3,318 $ 2,895
Credit Program Resources that Increase LLG or Allowance for Subsidy 517 (14,729)
Credit Program Resources not Included in Net Cost (Surplus) of Operations - 62,726
Resources that Finance the Acquisition of Assets or Liquidation of Liabilities (49,155) (49,265)
Resources that Fund Expenses from Prior Periods (6,886) (19)
Other Changes to Net Obligated Resources Not Affecting Net Cost of Operations 57,953 -
Other (218) 16,015
Total Resources Used to Finance Items Not Part of Net Cost of Operations $ 5,529 $ 17,623
Total Resources Used to Finance the Net Cost of Operations $ 49,025 $ 61,493
Components of Net Cost of Operations Not Requiring/Generating Resources in the
Current Period
Upward/Downward Re-estimates of Credit Subsidy Expense $ (9,737) $ (4,917)
Increase in Exchange Revenue Receivable from the Public (109) (139)
Change in Loan Loss Reserve (7) (1)
Revaluation of Assets or Liabilities - 19
Depreciation and Amortization 21 (11)
Changes in Bad Debt Expenses Related to Credit Reform Receivables 5 (42)
Reduction of Credit Subsidy Expense from Guarantee Endorsements and Modifications (9,716) (13,607)
Increase in Annual Leave Liability 57 -
Other 775 (12,460)
Total Components of Net Cost of Operations Not Requiring/Generating Resources in the
Current Period $ (18,711) $ (31,158)
Net Cost of Operations $ 30,314 $ 30,335
92
Note 31: Restatement of the Department’s Fiscal Year 2015
Financial Statements
Restatement of FHA’s Fiscal Year 2015 Financial Statements
In FY 2016, FHA corrected material misstatements identified by OIG in the Consolidated
Balance Sheet (BS), the Statement of Net Cost (SNC) and the Statement of Changes in Net
Position (SCNP) to recognize the reduction of accrued expenses in the Home Equity Conversion
Mortgage (HECM) cash flow model assumptions used to calculate the agency’s Liability for
Loan Guarantees (LLG). Historically reported property Maintenance and Operating (M&O)
management expenses inadvertently included accrued costs that resulted in FHA’s LLG to be
overstated by $830 million in FY 2014 and $833 million in FY 2015. As a result, the overstated
total gross cost of HECM expenses reported on the SNC for FY 2014 caused the cumulative
results of operations reported on the SCNP to be understated by $1.4 billion. The same
correction was made in the calculation of the FY 2015 model expense rate assumptions however,
there was less of a net impact on FY 2015 reporting. The net effect of the error for both years,
offset by the adjustment for the annual reestimates, resulted in the overall HECM gross cost
reported on the SNC in FY 2015 to be overstated by $1.4 million and the cumulative result of
operations on the SCNP to be understated by $835 million.
Maintenance and Operating (M&O) expenses represent primarily Management and Marketing
contract expenses maintained in the SAMS property management system. FHA uses M&O
expenses in the cash flow model assumptions to calculate the LLG. In FY 2014 and FY 2015,
the M&O expense reports FHA received for HECM showed significant increases in M&O
expenses over previous years. FHA initially attributed the increases to an increase in expenses
related to HECM property sales and projected the increase to level off and return to previous
levels. In FY 2016, further research of the M&O data found that accrued costs (interest, service
fees from assignment to conveyance, and mortgage insurance premiums) were being incorrectly
included in the M&O expenses. These activities were inappropriate to include since they do not
represent cash flows.
FHA has restated its FY 2015 financial statements to correct the reported balance of the LLG in
the current period. Due to the imminent publishing of the FY 2016 audited financial statements,
the FY 2015 restatement will be presented comparatively. Recalculation of the FY 2014
corrected LLG and net costs of operations are reflected in the restated FY 2015 beginning
balance of the Statement of Changes in Net Position. The restatement will affect the line
balances of the Loan Receivables and Related Foreclosed Property, Other Liabilities, LLG and
Current Year Results of Operations on the Balance Sheet; the HECM Gross Cost with the Public
on the Statement of Net Cost; the Changes in Net Position beginning balance, Other Financing
Sources and Net Costs of Operations on the Statement of Changes in Net Position; and related
footnotes.
93
Restatement of Ginnie Mae’s Fiscal Year 2015 Statement of Budgetary
Resources
Ginnie Mae’s Statement of Budgetary Resources (SBR) for fiscal year FY 2015 was restated to
correct material errors resulting from the inability of Ginnie Mae’s accounting system (GFAS) to
support and perform budgetary accounting and reporting functions. GFAS has since been
configured to perform this task. Furthermore, Ginnie Mae has completed its data migration and
reconciliation efforts related to its budgetary accounting process. The reconciliation effort
identified root causes related to the initial system configuration, as well as errors in the
unautomated budgetary resources recording process. As a result, Ginnie Mae has recorded
adjustments to obligations incurred, which was understated by $39 million. The restated SBR
also reflects an error correction, which preclosed apportioned resources with an impact of
$1 billion, thereby understating apportioned resources and overstating unapportioned resources.
94
September 30, 2015 September 30, 2015
Balance Sheet Consolidated Financial Consolidated Financial
(dollars in millions)
Statements (without Statements (with
restatement) restatement) Change
ASSETS
Intragovernmental
Fund Balance with Treasury (Note 4) $ 94,691 94,691 $ -
Short-Term Investments (Note 6) 12,923 12,923 -
Long-Term Investments Held-To-Maturity (Note 6) 14,754 14,754 -
Other Assets (Note 12) 9 9 -
Total Intragovernmental $ 122,377 122,377 $ -
Cash and Other Monetary Assets (Note 5) $ 45 45 $ -
Investments (Note 6) 31 31 -
Accounts Receivable, Net (Note 7) 780 780 -
Direct Loan and Loan Guarantees, Net (Note 8) 14,425 14,965 (540)
Other Non-Credit Reform Loans (Note 9) 3,227 3,227 -
General Property, Plant and Equipment, Net (Note 10) 329 329 -
PIH Prepayments (Note 11) 672 672 -
Other Assets (Note 12) 45 45 -
TOTAL ASSETS $ 141,931 142,471 $ (540)
LIABILITIES
Intragovernmental Liabilities
Accounts Payable (Note 13) $ 15 16 $ (1)
Debt (Note 14) 27,150 27,150 -
Other Intragovernmental Liabilities (Note 17) 2,610 3,148 (538)
Total Intragovernmental $ 29,775 30,314 $ (539)
Accounts Payable (Note 13) $ 966 966 $ -
Accrued Grant Liabilities (Note 13) 2,388 2,388 -
Loan Guarantee Liability (Note 8) 14,307 13,473 834
Debt Held by the Public (Note 14) 8 8 -
Federal Employee and Veteran Benefits (Note 15) 69 69 -
Loss Reserves (Note 16) - - -
Other Governmental Liabilities (Note 17) 1,239 1,239 -
TOTAL LIABILITIES $ 48,752 48,457 $ 295
Commitments and Contingencies (Note 19) 55 55 -
Net Position
Unexpended Appropriations - Funds From Dedicated Collections (Note 20) $ (320) (320) $ -
Unexpended Appropriations - Other Funds 51,435 51,435 -
Cumulative Results of Operations - Funds From Dedicated Collections (Note 20) 21,417 21,417 -
Cumulative Results of Operations - Other Funds 20,647 21,482 (835)
TOTAL NET POSITION - Funds From Dedicated Collections 21,097 21,097 -
TOTAL NET POSITION - All Other Funds 72,082 72,917 (835)
Total Net Position $ 93,179 94,014 $ (835)
Total Liabilities and Net Position $ 141,931 142,471 $ (540)
September 30, 2015 September 30, 2015
Statement of Net Cost Consolidated Financial Consolidated Financial
(dollars in millions)
Statements (without Statements (with
restatement) restatement) Change
Program Costs
Gross Costs $ 33,910 $ 33,908 $ 2
Less: Earned Revenue (3,573) (3,573) -
Net Program Costs $ 30,337 $ 30,335 $ 2
Net Cost of Operations $ 30,337 $ 30,335 $ 2
95
September 30, 2015 September 30, 2015
Statement of Changes in Net Position Consolidated Financial Consolidated Financial
(dollars in millions)
Statements (without Statements (with
restatement) restatement) Change
Cumulative Results of Operations:
Beginning Balances $ 23,685 $ 25,055 $ (1,370)
Adjustments -
Corrections of Errors (3) (3) -
Beginning Balances, As Adjusted $ 23,682 $ 25,052 $ (1,370)
Budgetary Financing Sources:
Other Adjustments $ - $ - $ -
Appropriations Used 52,993 52,993 -
Non-exchange Revenue 3 3 -
Other Financing Sources (Non-Exchange):
Imputed Financing $ 65 $ 65 $ -
Other (4,342) (4,879) 537
Total Financing Sources 48,719 48,182 537
Net Cost of Operations (30,337) (30,335) (2)
Net Change $ 18,382 $ 17,847 $ 535
Cumulative Results of Operations $ 42,064 $ 42,899 $ (835)
Unexpended Appropriations:
Beginning Balances $ 56,220 $ 56,221 $ (1)
Adjustments
Changes in Accounting Principles - - -
Corrections of Errors 574 574 -
Beginning Balances, As Adjusted $ 56,794 $ 56,795 $ (1)
Budgetary Financing Sources:
Appropriations Received $ 47,639 $ 47,639 $ -
Appropriations Transferred In/Out - - -
Other Adjustments (325) (325) -
Appropriations Used (52,993) (52,994) 1
Total Budgetary Financing Sources $ (5,679) $ (5,680) $ 1
Unexpended Appropriations $ 51,115 $ 51,115 $ -
Net Position $ 93,179 $ 94,014 $ (835)
96
September 30, 2015 September 30, 2015
Statement of Budgetary Resources Consolidated Financial Consolidated Financial
(dollars in millions) Statements (without Statements (with
restatement) restatement) Change
Budgetary Resources:
Unobligated Balance, Brought Forward $ 84,489 $ 84,489 $ -
Adjustments to Unobligated Balance Brought Forward, October 1 - (13) 13
Unobligated balance from prior year budget authority, net $ 84,489 $ 84,476 $ 13
Recoveries of Prior Year Unpaid Obligations 1,107 1,113 (6)
Other changes in unobligated balance (709) (708) (1)
Unobligated balance from prior year budget authority, net $ 84,887 $ 84,881 $ 6
Appropriations (discretionary and mandatory) $ 47,458 $ 47,458 $ -
Borrowing Authority (discretionary and mandatory) 12,146 12,146 -
Contract Authority (discretionary and mandatory) - - -
Budget Authority from non expenditure transfers, net - - -
Spending Authority from offsetting collections $ 54,610 $ 54,610 -
Total Budgetary Resources $ 199,101 $ 199,095 $ 6
Status of Budgetary Resources:
Direct $ 113,432 $ 113,433 $ (1)
Reimbursable 5,754 5,787 (33)
Subtotal $ 119,186 $ 119,220 $ (34)
Apportioned $ 16,604 $ 17,593 $ (989)
Exempt from Apportionment - - -
Unapportioned 63,311 62,283 $ 1,028
Subtotal $ 79,915 $ 79,876 $ 39
Total Status of Budgetary Resources $ 199,101 $ 199,096 $ 5
Change in Obligated Balance:
Unpaid Obligations:
Unpaid obligations, brought forward, Oct 1 $ 43,598 $ 43,598 $ -
Adjustments to unpaid obligations, start of year (+ or -) - 13 (13)
Obligations incurred 119,186 119,221 (35)
Outlays (gross) (-) (119,635) (119,635) -
Actual transfers, unpaid obligations (net) (+ or -) - - -
Recoveries of prior year unpaid obligations (-) (1,107) (1,113) 6
Unpaid obligations, end of year $ 42,042 $ 42,084 $ (42)
Uncollected Payments:
Uncollected payments, Fed sources, brought forward, Oct 1 (-) $ (64) $ (65) $ 1
Adjustment to uncollected payments, Fed sources, start of year (+ or -) - - -
Change in uncollected payments, Fed sources (+ or -) (6) (5) (1)
Actual Transfers, uncollected payments from Federal sources (net) (+ or -) - - -
Uncollected payments, Fed sources, end of year (-) $ (70) $ (70) $ -
Memorandum Entries
Obligated balance, start of year (+ or -) $ 43,534 $ 43,533 $ 1
Obligated balance, end of year (net) $ 41,972 $ 42,014 $ (42)
BUDGET AUTHORITY, NET:
Budget authority, gross (discretionary and mandatory) $ 114,212 $ 114,213 $ (1)
Actual offsetting collections (discretionary and mandatory) (-) (67,752) (67,751) (1)
Change in uncollected customer payments from Federal Sources - (5) 5
Anticipated offsetting collections (discretionary and mandatory) (+ or -) - - -
Budget Authority, net (discretionary and mandatory) Subtotal $ 46,460 $ 46,457 $ 3
Outlays, net (discretionary and mandatory)
Gross Outlays $ 119,635 $ 119,635 $ -
Actual offsetting collections (discretionary and mandatory) (-) (67,749) (67,748) (1)
Outlays, net (discretionary and mandatory) $ 51,886 $ 51,887 $ (1)
Distributed offsetting receipts $ (2,844) $ (2,844) $ -
Agency Outlays, net (discretionary and mandatory) $ 49,042 $ 49,043 $ (1)
97
Required Supplementary Stewardship Information
Introduction
This narrative provides information on resources utilized by HUD that do not meet the criteria
for information required to be reported or audited in HUD’s financial statements but are,
nonetheless, important to understand investments made by HUD for the benefit of the Nation.
The stewardship objective requires that HUD also report on the broad outcomes of its actions
associated with these resources. Such reporting will provide information that will help the reader
to better assess the impact of HUD’s operations and activities.
HUD’s stewardship reporting responsibilities extend to the investments made by a number of
HUD programs in Non-Federal Physical Property, Human Capital, and Research and
Development. Due to the relative immateriality of the amounts and in the application of the
related administrative costs, most of the investments reported reflect direct program costs only.
The investments addressed in this narrative are attributable to programs administered through the
following divisions/departments:
Community Planning and Development (CPD),
Public and Indian Housing (PIH), and
Office of Lead Hazard Control and Healthy Homes (OLHCHH).
Overview of HUD’s Major Programs
CPD seeks to develop viable communities by promoting integrated approaches that provide
decent housing, a suitable living environment, and expanded economic opportunities for low-
and moderate-income persons. HUD makes stewardship investments through the following CPD
programs:
Community Development Block Grants (CDBG) are provided to state and local
communities, which use these funds to support a wide variety of community development
activities within their jurisdictions. These activities are designed to benefit low- and
moderate-income persons, aid in the prevention of slums and blight, and meet other
urgent community development needs. State and local communities use the funds as they
deem necessary, as long as the use of these funds meet at least one of these objectives. A
portion of the funds supports the acquisition, construction or rehabilitation of permanent,
residential structures that qualify as occupied by and benefiting low- and moderate-
income persons, while other funds help to provide employment and job training to low-
and moderate-income persons.
Disaster Recovery Assistance (Disaster Grants/CDBG-DR) is a CDBG program that
helps state and local governments recover from major natural disasters. A portion of
these funds can be used to acquire, rehabilitate, construct, or demolish physical property.
98
The HOME Investment Partnerships Program (HOME) provides formula grants to
states and localities (used often in partnership with local nonprofit groups) to fund a wide
range of activities that build, buy, and/or rehabilitate affordable housing for low-income
persons.
Homeless – Continuum of Care (CoC) The Supportive Housing Program (SHP) was
repealed and replaced by the Continuum of Care (CoC) Program effective FY 2012. The
CoC is a body of stakeholders in a specific geographic area that plans and implements
homeless assistance strategies (including the coordination of resources) to address the
critical needs of homeless persons and facilitate their transition to jobs and independent
living.
Emergency Solutions Grants (ESG) provide formula funding to local units of
government for homelessness prevention and to improve the number and quality of
emergency and transitional shelters for homeless individuals and families.
Neighborhood Stabilization Program (NSP) stabilizes communities that have suffered
from foreclosures and abandonment. Through the purchase and redevelopment of
foreclosed and abandoned homes and residential properties, and by providing technical
assistance (NSP TA), the goal of the program is being realized.
Housing Opportunities for People with HIV/AIDS (HOPWA) provides education
assistance and an array of housing subsidy assistance and supportive services to assist
low-income families and individuals who are living with the challenges of HIV/AIDS
and risks of homelessness.
Rural Innovation Fund (RIF) offers grants throughout the nation to address distressed
housing conditions and concentrated poverty. The grants promote an ‘entrepreneurial
approach’ to affordable housing and economic development in rural areas by providing
job training, homeownership counseling and affordable housing to residents of rural and
tribal communities.
Community Compass (formerly OneCPD) provides technical assistance and capacity
building to CPD grantees including onsite and remote training, workshops, and 1:1
assistance.
PIH ensures safe, decent, and affordable housing, creates opportunities for residents’ self-
sufficiency and economic independence, and assures the fiscal integrity of all program
participants. HUD makes stewardship investments through the following PIH programs:
Indian Community Development Block Grants (ICDBG) provide funds to Indian
organizations to develop viable communities, including decent housing, a suitable living
environment, and economic opportunities, principally for low and moderate-income
recipients.
99
The Native Hawaiian Housing Block Grant (NHHBG) program provides an annual
block grant to the Department of Hawaiian Home Lands (DHHL) for a range of
affordable housing activities to benefit low-income Native Hawaiians eligible to reside
on the Hawaiian home lands. The DHHL has the authority under the NHHBG program
to develop new and innovative affordable housing initiatives and programs based on local
needs, including down payment and other mortgage assistance programs, transitional
housing, domestic abuse shelters, and revolving loan funds.
Indian Housing Block Grants (IHBG) provide funds needed to allow tribal housing
organizations to maintain existing units and to begin development of new units to meet
their critical long-term housing needs.
HOPE VI Revitalization Grants (HOPE VI) provide support for the improvement of
the living environment of public housing residents in distressed public housing units.
Some investments support the acquisition, construction or rehabilitation of property
owned by the PHA, state or local governments, while others help to provide education
and job training to residents of the communities targeted for rehabilitation.
Choice Neighborhoods grants transform distressed neighborhoods and public and
assisted projects into viable and sustainable mixed-income neighborhoods by linking
housing improvements with appropriate services, schools, public assets, transportation,
and access to jobs.
The Public Housing (PH) Capital Fund provides grants to PHAs to improve the
physical conditions and to upgrade the management and operation of existing public
housing.
The OLHCHH program seeks to eliminate childhood lead poisoning caused by lead-based paint
hazards and to address other childhood diseases and injuries, such as asthma, unintentional
injury, and carbon monoxide poisoning, caused by substandard housing conditions.
The Lead Technical Assistance Division, in support of the Departmental Lead Hazard
Control program, supports technical assistance and the conduct of technical studies and
demonstrations to identify innovative methods to create lead-safe housing at reduced
cost. In addition, these programs are designed to increase the awareness of lead
professionals, parents, building owners, housing and public health professionals, and
others with respect to lead-based paint and related property-based health issues.
Lead Hazard Control Grants help state and local governments and private
organizations and firms control lead-based paint hazards in low-income, privately owned
rental, and owner-occupied housing. The grants build program and local capacity and
generate training opportunities and contracts for low-income residents and businesses in
targeted areas.
100
RSSI Reporting – HUD’s Major Programs
Non-Federal Physical Property
Investment in Non-Federal Physical Property: Non-Federal physical property investments
support the purchase, construction, or major renovation of physical property owned by state and
local governments. These investments support HUD’s strategic goals to increase the availability
of decent, safe, and affordable housing and to strengthen communities. Through these
investments, HUD serves to improve the quality of life and economic vitality. The table below
summarizes material program investments in Non-Federal Physical Property, for fiscal years
2012 through 2016.
Investments in Non-Federal Physical Property
Fiscal Year 2012 – 2016
(Dollars in millions)
Program 2012 2013 2014 2015 2016
CPD
CDBG $1,115 $1,129 $986 $922 $996
Disaster Grants 1 $332 $330 $319 $394 $412
HOME $23 $21 $24 $18 $14
SHP/CoC - Homeless 2 $11 $1 $1 $0 $3
NSP 3 $16 $6 $1 $1 $1
RIF 4 $0 $3 $1 $0 $0
PIH
ICDBG 5 $117 $54 $60 $0 $115
NHHBG $13 $12 $10 $9 $0
IHBG 6 $271 $268 $244 $290 $208
HOPE VI $122 $127 $82 $57 $63
7
Choice Neighborhoods $0 $3 $22 $43 $70
PH Capital Fund $2,223 $1,798 $1,706 $1,916 $1,830
TOTAL $4,243 $3,752 $3,456 $3,650 $3,712
Notes:
1. Disasters are unpredictable, which causes material fluctuations resulting in the prior years’
numbers being updated.
2. Low dollar value was due to shrinking resources for new programs.
3. Program is nearing closeout, and the prior years’ numbers were updated to reflect more
accurate data.
4. Rural Innovation Fund was reported for the first time in FY 2012, however the amount was not
material to be included in the FY 2012 AFR. More than 15 grantees have completed their projects
before FY 2015 as the grant period draws to a close. Amount reported for FY 2015, estimated, due to
reports for the second half of the FY not being due until 10/30/15, is not material to be included in the
AFR.
5. Grants funded in 2015 were awarded in February, 2016.
6. Historical amounts were updated to reflect corrections made since the last report.
7. Choice Neighborhoods reported separately from HOPE VI for the first time in FY 2012,
however the amount was not material to be included in the FY 2012 AFR.
101
Human Capital
Investment in Human Capital: Human Capital investments support education and training
programs that are intended to increase or maintain national economic productive capacity. These
investments support HUD’s strategic goals, which are to promote self-sufficiency and asset
development of families and individuals; improve community quality of life and economic
vitality; and ensure public trust in HUD. The following table summarizes material program
investments in Human Capital, for fiscal years 2012 through 2016.
Investments in Human Capital
Fiscal Year 2012 – 2016
(Dollars in millions)
Program 2012 2013 2014 2015 2016
CPD
CDBG $29 $24 $26 $25 $21
Disaster Grants 1 $171 $311 $809 $379 $400
ESG $4 $3 $3 $3 $3
NSP TA 2 $1 $1 $0 $0 $0
SHP/CoC - Homeless $33 $31 $26 $25 $16
HOPWA $1 $1 $1 $0 $0
Community Compass 3 $5 $21 $29 $38 $48
PIH
IHBG $1 $1 $1 $2 $1
HOPE VI $15 $12 $14 $5 $5
Choice Neighborhoods 4 $0 $2 $3 $5 $12
OLHCHH
Lead Technical Assistance $0 $0 $1 $0 $0
TOTAL $260 $407 $913 $482 $506
Notes:
1. Prior years’ amounts were updated because Disaster Grants activities were previously
comingled with other activities.
2. Program is nearing closeout, hence the reduced expenditures in FY 2014, FY 2015 and FY
2016.
3. The FY 2016 expenditure increase is due to increased technical assistance and TA to PIH
grantees and housing authorities, as well as intensive training and direct TA for grantee
compliance with new AFFH requirements.
4. Choice Neighborhoods reported separately from HOPE VI for the first time in FY 2012,
however the amount was not material to be included in the FY 2012 AFR.
Results of Human Capital Investments: The table on the next page presents the results
(number of people trained) of human capital investments made by HUD’s CPD, PIH, and
OLHCHH programs for fiscal years 2012 through 2016.
102
Results of Investments in Human Capital
Number of People Trained
Fiscal Year 2012 – 2016
Program 2012 2013 2014 2015 2016
CPD
CDBG 65,741 68,236 54,350 51,808 47,805
1
SHP/CoC - Homeless 27.4% 16.5% 11.9% N/A N/A
HOPWA 1,426 1,595 1,415 1,064 502
NSP TA 2 1,414 6,995 1,397 811 27
RIF 3 0 1,048 279 397 0
4
Community Compass N/A 9,791 13,722 31,631 32,823
PIH
NHHBG 5 0 0 0 0 113
6
IHBG 770 1,077 1,167 1,756 1,752
HOPE VI (see table on page 7 )
Choice Neighborhoods (see table on page 8 )
OLHCHH
Lead Technical Assistance 600 590 1,069 512 2,120
TOTAL 69,951 89,332 73,399 87,979 85,142
Notes:
1. SHP/CoC- Homeless results are expressed in terms of percentage of persons exiting the
programs having employment income. Goals are changing, and the data is not available to
compare FY 2015 or FY 2016 to the prior year based on the old goal.
2. As of FY 2012, NSP TA outcomes data were under development in the Disaster Recovery
Grant Reporting System. Performance measures were developed that will allow for more
accurate and comprehensive tracking of outcomes. The number of people trained was further
updated in FY 2013, FY 2014 and FY 2015 because of more reliable data. The program is
nearing closeout, hence the reduced numbers of people trained in FY 2014 through FY 2016.
3. FY 2012 was the first year of reporting Rural Innovation Fund’s results of investments in
human capital in the RSSI, however the amount was not material to be included in the FY
2012 AFR. Expenditures under investments for human capital, in FY 2012 through FY 2015,
were also not material to be included in the AFRs. More than 15 grantees have completed
their projects before FY 2015 as the grant period draws to a close. The number of people
trained in FY2015 was corrected based on the last approved QPR. The final reporting period
for the RIF program was 09/30/2015.
4. FY 2013 was the first year of reporting Community Compass’, formerly OneCPD’s, results of
investments in human capital in the RSSI. The FY 2015 reported number has been revised, in
order to make the FY 2015 and FY 2016 data comparable, with the same data elements, e.g.,
live in-person and remote; self-paced on line, and recorded trainings.
5. A lack of S&E funding prevented ONAP from offering training in FY 2012-2015. Grantee
received training from HUD staff and, in FY 2016, from two contracted training providers.
Amount invested in FY 2016 was not material to be included in the AFR.
6. New training funds were offered through a Notice of Funding Availability (NOFA)
competition for contractors to provide training in FY 2015-2017.
HOPE VI/Choice Neighborhoods Results of Investments in Human Capital: Since the
inception of the HOPE VI program in FY 1993, the program has made significant investments in
Human Capital related initiatives (i.e., education and training). The following table presents
103
HOPE VI’s key cumulative performance information for fiscal years 2012, 2013, 2014, 2015 and
2016, since the program’s inception.
Key Results of HOPE VI Program Activities
Fiscal Years 2012 – 2016
2012 2012 % 2013 2013 %
HOPE VI Service Enrolled Completed Completed Enrolled Completed Completed
Employment Preparation,
Placement, & Retention 1 82,630 N/A N/A 84,792 N/A N/A
Job Skills Training
Programs 33,566 17,753 53% 34,664 18,322 53%
High School Equivalent
Education 17,684 5,164 29% 18,206 5,263 29%
Entrepreneurship Training 3,672 1,613 44% 3,730 1,635 44%
Homeownership
Counseling 16,163 6,964 43% 16,504 7,046 43%
2014 2014 % 2015 2015 %
HOPE VI Service Enrolled Completed Completed Enrolled Completed Completed
Employment Preparation,
Placement, & Retention 1 85,997 N/A N/A 87,005 N/A N/A
Job Skills Training
Programs 35,001 18,536 53% 35,364 18,685 53%
High School Equivalent
Education 18,389 5,315 29% 18,533 5,334 29%
Entrepreneurship Training 3,746 1,649 44% 3,755 1,654 44%
Homeownership
Counseling 16,650 7,160 43% 16,837 7,350 44%
2016 2016 %
HOPE VI Service Enrolled Completed Completed
Employment Preparation,
Placement, & Retention 1 87,564 N/A N/A
Job Skills Training
Programs 35,675 18,877 53%
High School Equivalent
Education 18,705 5,381 29%
Entrepreneurship Training 3,795 1,682 44%
Homeownership
Counseling 17,399 7,804 45%
Notes:
1. Completion data for this service is not provided, as all who enroll are considered recipients of the
training.
The table on the next page presents Choice Neighborhoods cumulative performance information
for fiscal years 2014, 2015 and 2016.
104
Key Results of Choice Neighborhoods Program Activities
Fiscal Years 2014 – 2016
Choice Neighborhoods Service 2014 1 2015 2016
Current Total Original Assisted Residents 5,813 7,017 10,089
Current Total Original Assisted Residents in Case
Management 2,900 3,063 4,882
High School Graduation Rate 2 N/A N/A N/A
Number of Residents (in Case Management) Who
Completed Job Training or Other Workforce
Development Programs 411 867 343
Notes:
1. 2014 was the first year of reporting results for Choice Neighborhoods Human Capital Investments.
2. Program level High School Graduation Rate date is currently not available for 2014, 2015 and 2016
due to metric only requiring individual grantees to enter rates and not numerator and denominator.
Research and Development
Investments in Research and Development: Research and development investments support
(a) the search for new knowledge and/or (b) the refinement and application of knowledge or
ideas, pertaining to development of new or improved products or processes. Research and
development investments are intended to increase economic productive capacity or yield other
future benefits.
As such, these investments support HUD’s strategic goals, which are to increase the availability
of decent, safe, and affordable housing in America’s communities; and ensure public trust in
HUD.
The following table summarizes HUD’s research and development investments, for fiscal years
2012 through 2016.
Investments in Research and Development
Fiscal Year 2012 – 2016
(Dollars in millions)
Program 2012 2013 2014 2015 2016
OLHCHH
Lead Hazard Control $1 $2 $3 $4 $5
TOTAL $1 $2 $3 $4 $5
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Results of Investments in Research and Development: In support of HUD’s lead hazard
control initiatives, the OLHCHH program has conducted various studies. Such studies have
contributed to an overall reduction in the per-housing unit cost of lead hazard evaluation and
control efforts over the last decade. More recently, as indicated in the following table, increased
supply and labor costs have contributed to increases in the per-housing unit cost. The per-
housing unit cost varies by geographic location and the grantees’ level of participation in control
activities. These studies have also led to the identification of the prevalence of related hazards.
Results of Research and Development Investments
Fiscal Year 2012 – 2016
(Dollars)
Program 2012 2013 2014 2015 2016
OLHCHH
Lead Hazard Control
Per-Housing Unit Cost $5,763 $6,321 $7,755 $8,909 $9,048
TOTAL $5,763 $6,321 $7,755 $8,909 $9,048
106
Required Supplementary Information
Presented on the following pages are the additional disaggregated financial statements broken
out by HUD’s major lines of business (i.e. responsibility segments) to supplement the financial
statements shown earlier in the section.
107
U.S. Department of Housing and Urban Development
Consolidating Balance Sheet
For the Period Ending September 2016
Dollars in Millions
Government
Federal Housing National Mortgage Public and Indian Housing for the Community
Administration Association Section 8 Rental Housing Loans and Homeless Elderly and Development Block Financial Statement
1 (FHA) (GNMA) Assistance Grants (PIH) Assistance Grants Disabled Grants (CDBG) HOME All Other Eliminations Consolidating
Intragovernmental:
Fund balance with Treasury (Note 4) $ 20,820 $ 1,379 $ 9,831 $ 4,519 $ 5,363 $ 2,279 $ 19,358 $ 3,230 $ 6,419 $ - $ 73,198
Short-term Overnight Investments (Note 6) - 15,954 - - - - - - - - 15,954
Long-term Investments held to maturity (Note 6) 36,398 - - - - - - - - - 36,398
Accounts Receivable, Net (Note 7) 0 7 - - - 0 - - 1 (7) 1
Other Assets (Note 12) - - 5 0 1 0 - 1 39 (3) 43
Total Intragovernmental Assets 57,218 17,340 9,836 4,520 5,364 2,279 19,358 3,231 6,459 (10) 125,594
Cash (Note 5) - 60 - - - - - - - - 60
Investments (Note 6) 31 - - - - - - - - - 31
Accounts Receivable, Net (Note 7) 243 106 68 42 2 14 10 0 125 - 611
Direct Loan and Loan Guarantees, Net (Note 8) 17,742 - - - - 1,171 - - 563 - 19,476
Other Non-Credit Reform Loans (Note 9) - 4,235 - - - - - - - (1,555) 2,680
General Property, Plant, and Equipment (Note 10) - 83 - - - - - - 298 - 381
PIH Prepayments (Note 11) - - 380 - - - - - - - 380
Other Assets (Note 12) 53 0 - 0 - - - - 0 - 53
Total Assets 75,287 21,824 10,285 4,561 5,366 3,464 19,368 3,231 7,445 (1,565) 149,266
108
Liabilities:
Intragovernmental:
Accounts Payable (Note 13) $ 7 $ - $ - $ - $ - $ - $ - $ - $ 24 $ (7) $ 24
Debt (Note 14) 30,873 - - - - - - - 128 - 31,001
Other Intragovernmental Liabilities (Note 17) 2,765 0 9 2 10 - - - 241 (3) 3,025
Total Intragovernmental Liabilities 33,645 0 9 2 10 - - - 393 (10) 34,050
Accounts Payable (Note 13) 495 113 4 13 8 6 42 7 318 - 1,006
Accrued Grant Liabilities (Note 13) - - - 353 168 14 1,707 312 109 - 2,663
Loan Guarantees (Note 8) (806) - - - - - - - 303 (1,555) (2,057)
Debt Held by the Public (Note 14) 0 - - 8 - - - - - - 8
Federal Employee and Veterans Benefits (Note 15) - - - - - - - - 64 - 64
Loss Reserves (Note 16) - 3 - - - - - - - - 3
Other Governmental Liabilities (Note 17) 854 322 0 - - 0 - - 191 - 1,367
Total Liabilities 34,189 438 14 376 186 20 1,749 319 1,378 (1,565) 37,104
Commitments and Contingencies (Note 19) - - - - - - - - 55 - 55
Net Position:
Unexpended Appropriations - Funds From Dedicated Collections (Note 20) - - 30 - - - - - (373) - (342)
Unexpended Appropriations - All Other Funds 414 - 10,182 4,158 5,178 1,904 17,608 2,912 4,900 - 47,257
Cumulative Results of Operations - Funds From Dedicated Collections (Note 20) - 21,386 - - - - - - 1,256 13 22,655
Cumulative Results of Operations - All Other Funds 40,683 - 59 27 2 1,540 11 0 283 (13) 42,592
Total Net Position - Funds From Dedicated Collections - 21,386 30 - - - - - 883 13 22,313
Total Net Position - All Other Funds $ 41,098 $ - $ 10,240 $ 4,185 $ 5,180 $ 3,444 $ 17,619 $ 2,912 $ 5,184 $ (13) $ 89,849
Total Net Position $ 41,098 $ 21,386 $ 10,271 $ 4,185 $ 5,180 $ 3,444 $ 17,619 $ 2,912 $ 6,067 $ - $ 112,162
Total Liabilities and Net Position $ 75,287 $ 21,824 $ 10,285 $ 4,561 $ 5,366 $ 3,464 $ 19,368 $ 3,231 $ 7,445 $ (1,565) $ 149,266
The accompanying notes are an integral part of these statements
Figures may not add to totals because of rounding.
U.S. Department of Housing and Urban Development
Consolidating Balance Sheet
For the Period Ending September 2015 (Restated)
(Dollars in Millions)
Government
Federal Housing National Mortgage Public and Indian Housing for the Community Financial
Administration Association Section 8 Rental Housing Loans and Homeless Elderly and Development Block Statement
(FHA) (GNMA) Assistance Grants (PIH) Assistance Grants Disabled Grants (CBDG) HOME All Other Eliminations Consolidating
ASSETS
Intragovernmental
Fund balance with Treasury (Note 4) 39,057 2,142 9,692 4,866 5,161 2,405 21,524 3,448 6,396 94,691
Short-Term Investments ( Note 6) 12,923 12,923
Long-Term Investments held to maturity ( Note 6) 14,754 14,754
Other Assets (Note 12) 1 4 1 3 9
Total Intragovernmental Assets 53,811 15,065 9,696 4,866 5,161 2,405 21,524 3,449 6,399 122,377
Cash (Note 5) 45 45
Investments (Note 6) 31 31
Accounts Receivable, Net (Note 7) 408 131 33 55 8 14 12 1 119 780
Direct Loan and Loan Guarantees, Net (Note 8) 12,923 1,417 625 14,965
Other Non-Credit Reform Loans (Note 9) 5,325 (2,098) 3,227
General Property, Plant, and Equipment (Note 10) 58 271 329
PIH Prepayments (Note 11) 672 672
Other Assets (Note 12) 45 45
TOTAL ASSETS 67,218 20,624 10,401 4,921 5,169 3,836 21,536 3,450 7,414 (2,098) 142,471
LIABILITIES
109
Intragovernmental Liabilities
Accounts payable (Note 13) 1 - - - - - - - 15 - 16
Debt (Note 14) 27,023 - - - - - - - 127 - 27,150
Other Intragovernmental Liabilities (Note 17) 2,889 - 13 2 5 - - - 239 - 3,148
Total Intragovernmental Liabilities 29,913 - 13 2 5 - - - 381 - 30,314
Accounts payable (Note 13) 545 135 7 17 15 1 30 6 210 - 966
Accrued Grant Liabilities (Note 13) - - - 330 132 24 1,514 324 64 - 2,388
Loan Guarantees (Note 8) 15,283 - - - - - - - 289 (2,098) 13,473
Debt Held by the Public (Note 14) 0 - - 8 - - - - - - 8
Federal Employee and Veterans Benefits (Note 15) - - - - - - - - 69 - 69
Other Governmental Liabilities (Note 17) 726 314 1 - - - - - 198 - 1,239
TOTAL LIABILITIES 46,466 449 21 357 152 25 1,544 330 1,211 (2,098) 48,457
Commitments and Contingencies (Note 19) - - - - - - - - 55 - 55
NET POSITION
Unexpended Appropriations - Funds From Dedicated Coll. (Note 20) - 1 17 18 17 - - 5 (363) - (305)
Unexpended Appropriations - Other Funds 871 - 10,363 4,549 4,996 2,273 19,991 3,115 5,262 - 51,420
Cumulative Results of Operations - Funds From Dedicated Coll. (Note 20) - 20,174 - - - - - - 1,243 - 21,417
Cumulative Results of Operations - Other Funds 19,881 - - (3) 4 1,538 1 - 61 - 21,482
TOTAL NET POSITION - Funds From Dedicated Collections - 20,175 17 18 17 - - 5 880 - 21,112
TOTAL NET POSITION - All Other Funds 20,752 - 10,363 4,546 5,000 3,811 19,992 3,115 5,323 - 72,902
TOTAL NET POSITION 20,752 20,175 10,380 4,564 5,017 3,811 19,992 3,120 6,203 - 94,014
TOTAL LIABILITIES AND NET POSITION 67,218 20,624 10,401 4,921 5,169 3,836 21,536 3,450 7,414 (2,098) 142,471
The accompanying notes are an integral part of these statements.
Figures may not add to totals because of rounding.
U.S. Department of Housing and Urban Development
Consolidating Statement of Net Cost
For the Periods Ending September 2016 and 2015 (Restated)
(Dollars in Millions)
Government
Federal Housing National Mortgage Public and Indian Housing for the Community
Administration Association Section 8 Rental Housing Loans and Homeless Elderly and Development Block Financial Statement
2016 (FHA) (GNMA) Assistance Grants (PIH) Assistance Grants Disabled Grants (CDBG) HOME All Other Eliminations Consolidating
Intragovernmental Gross Costs (Note 21) 1,239 4 49 29 6 17 18 4 513 - 1,879
Less: Intragovernmental Earned Revenue (1,151) (84) - (0) - (0) - - (20) 0 (1,255)
Intragovernmental Net Costs 87 (80) 49 29 6 17 18 4 494 0 624
Gross Costs With the Public (18,997) 427 30,604 2,965 1,951 957 6,269 1,163 5,838 - 31,177
Less: Earned Revenues From the Public (67) (1,562) - 0 5 (108) - - (17) - (1,749)
Net Costs With the Public (19,064) (1,135) 30,604 2,966 1,956 849 6,269 1,163 5,821 - 29,428
Total Net Cost (18,976) (1,215) 30,653 2,995 1,962 865 6,286 1,167 6,314 0 30,052
Net program costs including Assumption Changes (18,976) (1,215) 30,653 2,995 1,962 865 6,286 1,167 6,314 0 30,052
Costs Not Assigned to Programs - - - - - - - - 263 (1) 262
Less: Earned Revenues Not Attributed to Programs - - - - - - - - - 0 0
110
Net Cost of Operations (18,976) (1,215) 30,653 2,995 1,962 865 6,286 1,167 6,577 (1) 30,313
Government
Federal Housing National Mortgage Public and Indian Housing for the Community
2015 Administration Association Section 8 Rental Housing Loans and Homeless Elderly and Development Block Financial Statement
(Restated) (FHA) (GNMA) Assistance Grants (PIH) Assistance Grants Disabled Grants (CDBG) HOME All Other Eliminations Consolidating
PROGRAM COSTS
Gross Costs (Note 21) (16,203) (234) 29,482 2,835 1,894 1,037 7,567 1,241 6,071 - 33,690
Less: Earned Revenues (1,849) (1,555) - - (4) (136) - - (29) - (3,573)
Net Program Costs (18,051) (1,789) 29,482 2,835 1,890 901 7,567 1,241 6,042 - 30,117
Net Program Costs including Assumption Changes (18,051) (1,789) 29,482 2,835 1,890 901 7,567 1,241 6,042 - 30,117
Costs Not Assigned to Programs - - - - - - - - 218 - 218
Net Cost of Operations (18,051) (1,789) 29,482 2,835 1,890 901 7,567 1,241 6,260 - 30,335
The accompanying notes are an integral part of these statements
Figures may not add to totals because of rounding.
U.S. Department of Housing and Urban Development
Consolidating Statement of Changes in Net Position
For the Period Ending September 2016
(Dollars in Millions)
Government Public and
Federal National Indian Community
Housing Mortgage Section 8 Housing Homeless Housing for Development Financial
Administration Association Rental Loans and Assistance the Elderly Block Grants Statement
(FHA) (GNMA) Assistance Grants (PIH) Grants and Disabled (CDBG) HOME All Other Eliminations Total
Net Position - Beginning of Period
Funds From Dedicated Collections: - 20,174 - - - - - - 1,243 - 21,417
All Other Funds: 19,046 - - (3) 5 1,538 (0) - 61 - 20,647
Beginning Balances 19,046 20,174 - (3) 5 1,538 (0) - 1,304 - 42,064
Adjustments
Changes in Accounting Principles
Funds From Dedicated Collections: - - - - - - - - - - -
All Other Funds: - - - - - - - - - - -
Corrections of Errors
Funds From Dedicated Collections: - (5) - - - - - - - - (5)
All Other Funds: 835 - - - - - - - - - 835
Beginning Balances, As Adjusted
Funds From Dedicated Collections: - 20,169 - - - - - - 1,243 - 21,412
All Other Funds: 19,882 - - (3) 5 1,538 (0) - 61 - 21,482
Total Beginning Balances, as Adjusted 19,882 20,169 - (3) 5 1,538 (0) - 1,304 - 42,894
Other Adjustments (+/-)
Funds From Dedicated Collections: - (1) - - - - - - - - (1)
All Other Funds: - - - - - - - - - - -
Appropriations Used
Funds From Dedicated Collections: - - 68 8 6 - - 0 7 - 89
All Other Funds: 3,393 - 30,471 2,913 1,916 904 6,230 1,143 7,401 - 54,372
Nonexchange Revenue
Funds From Dedicated Collections: - 2 - - - - - - 3 - 4
All Other Funds: - - - - - 15 - - 186 - 201
Donations and Forfeitures of Cash and Cash
Equivalents
Funds From Dedicated Collections: - - - - - - - - - - -
All Other Funds: - - - - - - - - - - -
Transfers-In/Out Without Reimbursement
Funds From Dedicated Collections: - - - - - - - - - - -
All Other Funds: - - - - - (122) - - - 122 -
Other
Funds From Dedicated Collections: - - - - - - - - - - -
All Other Funds: - - 173 104 37 71 66 24 (475) - -
Donations and Forfeitures of Property
Funds From Dedicated Collections: - - - - - - - - - - -
All Other Funds: - - - - - - - - - - -
Transfers-In/Out Without Reimbursement
Funds From Dedicated Collections: - - - - - - - - (13) 13 -
All Other Funds: 480 - - - - - - - (345) (136) -
Imputed Financing
Funds From Dedicated Collections: - 1 - - - - - - - - 1
All Other Funds: 15 - - - - - - - 142 - 158
Other
Funds From Dedicated Collections: - - - - - - - - 13 - 13
All Other Funds: (2,063) - - - - - - - (107) - (2,170)
Total Financing Sources
Funds From Dedicated Collections: - 2 68 8 6 - - 0 9 13 107
All Other Funds: 1,825 - 30,644 3,017 1,953 867 6,296 1,167 6,803 (13) 52,560
Total Financing Sources 1,825 2 30,712 3,025 1,959 867 6,296 1,168 6,812 - 52,667
Net Cost of Operations
Funds From Dedicated Collections: - 1,216 (68) (8) (6) - - (0) 3 - 1,137
All Other Funds: 18,976 - (30,585) (2,987) (1,956) (865) (6,286) (1,167) (6,580) - (31,451)
Net Change
Funds From Dedicated Collections: - 1,218 - - - - - - 13 13 1,244
All Other Funds: 20,802 - 59 30 (3) 2 10 0 223 (13) 21,109
Cumulative Results of Operations
Funds From Dedicated Collections: - 21,387 - - - - - - 1,256 13 22,655
All Other Funds: 40,683 - 59 27 2 1,540 10 0 283 (13) 42,592
Cumulative Results of Operations 40,683 21,387 59 27 2 1,540 10 0 1,539 - 65,247
Figures may not add to totals because of rounding.
111
U.S. Department of Housing and Urban Development
Consolidating Statement of Changes in Net Position
For the Period Ending September 2016 (continued)
(Dollars in Millions)
Government Public and
Federal National Indian Community
Housing Mortgage Section 8 Housing Homeless Housing for Development Financial
Administration Association Rental Loans and Assistance the Elderly Block Grants Statement
(FHA) (GNMA) Assistance Grants (PIH) Grants and Disabled (CDBG) HOME All Other Eliminations Total
Net Position - Beginning of Period
Funds From Dedicated Collections: - 1 3 18 17 - - 5 (363) - (320)
All Other Funds: 871 - 10,378 4,550 4,996 2,272 19,991 3,115 5,262 - 51,434
Beginning Balances 871 1 10,381 4,568 5,013 2,272 19,991 3,120 4,898 - 51,114
Adjustments
Changes in Accounting Principles
Funds From Dedicated Collections: - - - - - - - - - - -
All Other Funds: - - - - - - - - - - -
Corrections of Errors -
Funds From Dedicated Collections: - (1) 15 - - - - - - - 13
All Other Funds: - - (15) - - - - - - - (15)
Beginning Balances, as Adjusted -
Funds From Dedicated Collections: - - 18 18 17 - - 5 (363) - (306)
All Other Funds: 871 - 10,363 4,550 4,996 2,272 19,991 3,115 5,262 - 51,419
Total Beginning Balances, as Adjusted 871 - 10,381 4,568 5,013 2,272 19,991 3,120 4,898 - 51,113
Appropriations Received
Funds From Dedicated Collections: - - - - - - - - - - -
All Other Funds: 3,437 - 30,249 2,548 2,250 583 3,860 950 7,212 - 51,089
Appropriations Transferred-In/Out
Funds From Dedicated Collections: - - 80 - - - - - - - 80
All Other Funds: - - 41 (22) - - (1) - (98) - (80)
Other Adjustments (+/-)
Funds From Dedicated Collections: - - - (10) (11) - - (5) (2) - (27)
All Other Funds: (501) - - (5) (151) (47) (11) (9) (74) - (799)
Appropriations Used
Funds From Dedicated Collections: - - (68) (8) (6) - - (0) (7) - (89)
All Other Funds: (3,393) - (30,471) (2,913) (1,916) (904) (6,230) (1,143) (7,401) - (54,372)
Total Budgetary Financing Sources
Funds From Dedicated Collections: - - 13 (18) (17) - - (5) (9) - (36)
All Other Funds: (456) - (182) (391) 182 (368) (2,382) (202) (362) - (4,161)
Total Budgetary Financing Sources (456) - (169) (409) 166 (368) (2,382) (208) (371) - (4,197)
Total Unexpended Appropriations
Funds From Dedicated Collections: - - 30 0 - - - - (373) - (342)
All Other Funds: 415 - 10,182 4,158 5,178 1,905 17,608 2,912 4,900 - 47,257
Total Unexpended Appropriations 415 - 10,212 4,158 5,178 1,905 17,608 2,912 4,528 - 46,915
Net Position
Funds From Dedicated Collections: - 21,386 30 0 - - - - 884 13 22,313
All Other Funds: 41,098 - 10,240 4,185 5,180 3,444 17,619 2,912 5,184 (13) 89,849
Net Position 41,098 21,386 10,271 4,185 5,180 3,444 17,619 2,912 6,069 - 112,162
Figures may not add to totals because of rounding.
112
U.S. Department of Housing and Urban Development
Consolidating Statement of Changes in Net Position
For the Period Ending September 2015 (Restated)
(Dollars in Millions)
Cumulative Results of Operations
Government Public and
Federal National Indian Community
Housing Mortgage Section 8 Housing Homeless Housing for Development Financial
Administration Association Rental Loans and Assistance the Elderly Block Grants Statement
(FHA) (GNMA) Assistance Grants (PIH) Grants and Disabled (CDBG) HOME All Other Eliminations Consolidating
Net Position - Beginning of Period
Funds From Dedicated Collections $ - $ 18,385 $ - $ - $ - $ - $ - $ - $ 1,237 $ - $ 19,621
All Other Funds 3,384 - - (4) - 1,951 1 - 102 - 5,434
Beginning Balances 3,384 18,385 - (4) - 1,951 1 - 1,339 - 25,055
Adjustments
Changes in Accounting Principles
Funds From Dedicated Collections - - - - - - - - - - -
All Other Funds - - - - - - - - - - -
Corrections of Errors
Funds From Dedicated Collections - - - - - - - - (3) - (3)
All Other Funds - - - - - - - - - - -
Beginning Balances, As Adjusted
Funds From Dedicated Collections - 18,385 - - - - - - 1,234 - 19,619
All Other Funds 3,384 - - (4) - 1,951 1 - 102 - 5,434
Total Beginning Balances, As Adjusted 3,384 18,385 - (4) - 1,951 1 - 1,336 - 25,053
Budgetary Financing Sources
Other Adjustments (Rescissions, etc)
Funds From Dedicated Collections - - - - - - - - - - -
All Other Funds - - - - - - - - - - -
Appropriations Used
Funds From Dedicated Collections - - 39 (1) - - 75 2 - - 115
All Other Funds 2,206 - 29,245 2,720 1,850 946 7,423 1,210 7,278 - 52,878
Non-exchange Revenue
Funds From Dedicated Collections - - - - - - - - 3 - 3
All Other Funds - - - - - - - - - - -
Donations/Forfeitures-Cash and Cash
Equivalents
Funds From Dedicated Collections - - - - - - - - - - -
All Other Funds - - - - - - - - - - -
Transfers In/Out Without Reimbursement
Funds From Dedicated Collections - - - - - - - - - - -
All Other Funds - - - - - (544) - - 544 - -
Other Budgetary Financing Sources
Funds From Dedicated Collections - - - - - - - - - - -
All Other Funds - - 198 116 44 86 69 29 (542) - (0)
Other Financing Sources:
Donations and Forfeitures of Property
Funds From Dedicated Collections - - - - - - - - - - -
All Other Funds - - - - - - - - - - -
Transfers In/Out Without Reimbursement
Funds From Dedicated Collections - - - - - - - - - - -
All Other Funds 442 - - - - - - - (442) - 0
Imputed Financing From Costs Absorbed
From Others
Funds From Dedicated Collections - - - - - - - - - - -
All Other Funds 15 - - - - - - - 50 - 65
Other
Funds From Dedicated Collections - - - - - - - - - - -
All Other Funds (4,216) - - - - - - - (663) - (4,879)
Total Financing Sources
Funds From Dedicated Collections - 1 5 (1) - - 75 2 3 - 86
All Other Funds (1,554) - 29,477 2,836 1,894 488 7,492 1,239 6,225 - 48,096
Total Financing Sources (1,554) 1 29,482 2,835 1,894 488 7,567 1,241 6,228 - 48,182
Net Cost of Operations
Funds From Dedicated Collections - 1,788 (39) 1 - - (75) (2) 6 - 1,680
All Other Funds 18,051 - (29,444) (2,835) (1,890) (901) (7,492) (1,239) (6,266) - (32,015)
Net Change
Funds From Dedicated Collections - 1,789 - - - - - - 9 - 1,797
All Other Funds 16,497 - - 1 4 (413) - - (41) - 16,048
Total All Funds
Funds From Dedicated Collections - 20,174 - - - - - - 1,243 - 21,417
All Other Funds 19,881 - - (3) 5 1,538 - - 61 - 21,482
Total All Funds 19,881 20,174 - (3) 5 1,538 - - 1,304 - 42,899
Figures may not add to totals because of rounding.
113
U.S. Department of Housing and Urban Development
Consolidating Statement of Changes in Net Position
For the Period Ending September 2015 (Restated) (continued)
(Dollars in Millions)
Unexpended Appropriations
Government Public and
Federal National Indian Community
Housing Mortgage Section 8 Housing Homeless Housing for Development Financial
Administration Association Rental Loans and Assistance the Elderly Block Grants Statement
(FHA) (GNMA) Assistance Grants (PIH) Grants and Disabled (CDBG) HOME All Other Eliminations Consolidating
Net Position - Beginning of Period
Funds From Dedicated Collections $ - $ 2 $ 1 $ 17 $ 16 $ - $ 90 $ 7 $ (355) $ - $ (221)
All Other Funds 872 - 10,001 4,767 4,853 2,683 24,366 3,432 5,468 - 56,442
Beginning Balances 872 2 10,002 4,784 4,869 2,683 24,456 3,439 5,113 - 56,220
Adjustments
Changes in Accounting Principles
Funds From Dedicated Collections - - - - - - - - - - -
All Other Funds - - - - - - - - - - -
Corrections of Errors
Funds From Dedicated Collections - - - - - - - - - - -
All Other Funds - - 574 - - - - - - - 574
Beginning Balances, As Adjusted -
Funds From Dedicated Collections - 2 - 17 17 - 90 7 (355) - (222)
All Other Funds 872 - 10,575 4,767 4,853 2,683 24,366 3,432 5,468 - 57,016
Total Beginning Balances, As Adjusted 872 2 10,575 4,784 4,870 2,683 24,456 3,439 5,113 - 56,794
Budgetary Financing Sources
Appropriations Received
Funds From Dedicated Collections - - - - - - - - - - -
All Other Funds 2,235 - 29,034 2,523 2,135 555 3,066 900 7,191 - 47,639
Appropriations Transfers In/Out
Funds From Dedicated Collections - - 56 - - - - - - - 56
All Other Funds - - - (16) - - - - (40) - (56)
Other Adjustments (Rescissions, etc)
Funds From Dedicated Collections - (1) - - - - (16) - (7) - (24)
All Other Funds (30) - - (4) (142) (20) (18) (7) (80) - (301)
Appropriations Used
Funds From Dedicated Collections - - (39) 1 - - (75) (2) - - (115)
All Other Funds (2,206) - (29,245) (2,720) (1,850) (946) (7,423) (1,210) (7,278) - (52,878)
Other Financing Sources:
Total Financing Sources
Funds From Dedicated Collections - (1) 17 1 - - (90) (2) (7) - (83)
All Other Funds (1) - (211) (217) 143 (411) (4,375) (317) (207) - (5,596)
Total Financing Sources (1) (1) (194) (217) 143 (411) (4,466) (319) (214) - (5,679)
Net Change
Funds From Dedicated Collections - 1 18 18 17 - - 5 (363) - (305)
All Other Funds 871 - 10,363 4,550 4,996 2,272 19,991 3,115 5,262 - 51,420
Total Unexpended Appropriations 871 1 10,381 4,568 5,013 2,272 19,991 3,120 4,898 - 51,115
Total All Funds
Funds From Dedicated Collections - 20,175 18 18 17 - - 5 880 - 21,112
All Other Funds 20,752 - 10,363 4,547 5,000 3,811 19,991 3,115 5,323 - 72,902
Net Position 20,752 20,175 10,381 4,564 5,017 3,811 19,991 3,120 6,202 - 94,014
Figures may not add to totals because of rounding.
114
U.S. Department of Housing and Urban Development
Combining Statement of Bundgetary Resources
For the Period Ending September 2016
(Dollars in Millions)
Total Non
Government Public and Government Other Non Budgetary
National Indian Community National Budgetary Credit
Federal Housing Mortgage Section 8 Housing Homeless Housing for Development Federal Housing Mortgage Credit Program
Administration Association Rental Loans and Assistance the Elderly Block Grants Budgetary Administration Administration Program Financing
1 (FHA) (GNMA) Assistance Grants (PIH) Grants and Disabled (CDBG) HOME All Other Total Non Budgetary Non-Budgetary Accounts Accounts Total
Budgetary Resources:
Unobligated Balance Brought Forward, October 1 16,733 12,873 790 156 2,626 441 9,029 264 1,349 44,260 33,986 1,158 472 35,616 79,876
Adjustments to Unobligated Balance Brought Forward, October 1 - - - - 5 - - - 2 7 (3) - - (3) 4
Unobligated Balance Brought Forward, Oct 1, As Adjusted 16,733 12,873 790 156 2,631 441 9,029 264 1,350 44,267 33,983 1,158 472 35,613 79,880
Recoveries of Prior Year Unpaid Obligations 241 17 126 14 389 40 9 29 175 1,039 463 - - 463 1,502
Other Changes in Unobligated Balance (681) (1) 0 (17) (161) (169) (10) (14) (37) (1,089) - - (0) (0) (1,089)
Unobligated Balance From Prior Year Budget Authority, Net 16,293 12,889 916 153 2,859 312 9,027 279 1,489 44,217 34,446 1,158 472 36,076 80,293
Appropriations 3,431 - 30,370 2,529 2,250 583 3,859 950 7,283 51,256 - - - - 51,256
Borrowing Authority - - - - - - - - - - 13,076 - 2 13,078 13,078
Contract Authority - - - - - - - - - - - - - - -
Spending Authority From Offsetting Collections 25,010 3,267 - 0 - 369 - - 59 28,705 19,800 2,765 92 22,657 51,362
Total Budgetary Resources 44,734 16,156 31,285 2,682 5,109 1,265 12,886 1,229 8,831 124,178 67,322 3,924 565 71,811 195,989
Status of Budgetary Resources
New obligations and upward adjustments (total)
Direct 6,976 24 30,357 2,572 2,128 626 4,866 964 6,815 55,328 50,911 - 109 51,020 106,348
Reimbursable - 196 - 2 9 1 - - 8 214 - 3,613 - 3,613 3,827
Subtotal 6,976 219 30,357 2,574 2,137 627 4,866 964 6,823 55,542 50,911 3,613 109 54,633 110,175
Unobligated Balances, End of Year
Apportioned, unexpired account 70 81 763 89 2,216 226 7,441 231 1,030 12,147 5,574 114 88 5,776 17,923
Exempt From Apportionment, unexpired accounts - - - - - - - - - - - - - - -
Unapportioned, unexpired accounts 37,648 15,851 166 2 195 356 574 2 844 55,639 10,837 197 368 11,402 67,041
Unexpired unobligated balance, end of year 37,718 15,932 928 91 2,412 582 8,015 233 1,874 67,786 16,411 311 456 17,178 84,964
Expired unobligated balance, end of year 40 4 0 18 560 55 6 32 134 850 - - - - 850
Total unobligated balance, end of year (total) 37,758 15,937 928 109 2,972 637 8,021 265 2,008 68,636 16,411 311 456 17,178 85,814
Total Status of Budgetary Resources 44,734 16,156 31,285 2,683 5,109 1,265 12,886 1,229 8,831 124,178 67,322 3,924 565 71,811 195,989
Change in Obligated Balance
Unpaid Obligations:
Unpaid Obligations, Brought Forward, October 1 565 330 8,902 4,710 2,536 1,964 12,495 3,184 4,617 39,303 2,485 294 2 2,781 42,084
Adjustment to Unpaid Obligations, Start of Year - - - - (5) - - - (3) (8) 3 - - 3 (5)
New Obligations and Upward Adjustments 6,976 219 30,357 2,574 2,137 627 4,866 964 6,823 55,543 50,911 3,613 109 54,633 110,176
Outlays (gross) (6,953) (221) (30,231) (2,860) (1,887) (910) (6,015) (1,154) (7,290) (57,520) (50,286) (3,656) (106) (54,048) (111,568)
Actual Transfers, Unpaid Obligations - - - - - - - - - - - - - - -
Recoveries of Prior Year Unpaid Obligations (241) (17) (126) (14) (389) (40) (9) (29) (175) (1,039) (463) - - (463) (1,502)
Unpaid Obligations, End of Year (gross) 346 311 8,902 4,410 2,391 1,642 11,337 2,965 3,973 36,278 2,650 251 5 2,906 39,184
Uncollected Payments:
Uncollected Payments, Fed Sources, Brought Forward, Oct 1 (15) - - - - - - - (3) (18) (0) (0) (56) (56) (74)
Adjustment to Uncollected Payments, Fed Sources, Start of Year - - - - - - - - - - - - - - -
Change in Uncollected Customer Payments, Fed Sources (20) - - - - (1) - - (2) (23) - 0 5 5 (18)
Actual Transfers, Uncollected Payments, Fed sources - - - - - - - - - - - - - - -
Uncollected Payments, Fed sources, End of Year (35) - - - - (1) - - (5) (41) (0) - (52) (51) (92)
Memorandum (non-add) Entries:
Obligated Balance, Start of Year 550 330 8,902 4,710 2,531 1,964 12,495 3,184 4,611 39,277 2,488 294 (54) 2,728 42,005
Obligated Balance, End of Year 311 311 8,902 4,410 2,391 1,641 11,337 2,965 3,967 36,237 2,650 251 (47) 2,855 39,092
Budget Authority and Outlays, Net:
Budget Authority, Gross (discretionary and mandatory) 28,441 3,267 30,370 2,529 2,250 953 3,859 950 7,342 79,961 32,876 2,765 94 35,735 115,696
Actual Offsetting Collections (discretionary and mandatory) (24,991) (3,381) (0) (1) (1) (369) (1) (0) (81) (28,825) (29,027) (2,766) (97) (31,889) (60,714)
Change in Uncollected Customer Payments from Fed sources
(discretionary and mandatory) (20) - - - - (1) - - (2) (23) - 0 5 5 (18)
Recoveries of prior year paid obligations (discretionary and mandatory) 1 0 0 1 1 0 1 0 24 28 - - - - 28
Anticipated Offsetting Collections (discretionary and mandatory) - - - - - - - - - - - - - - -
Budget Authority, Net (discretionary and mandatory) 3,431 (114) 30,370 2,529 2,250 583 3,859 950 7,283 51,141 3,849 0 1 3,851 54,992
Outlays, Gross (discretionary and mandatory) 6,953 221 30,231 2,860 1,887 910 6,015 1,154 7,290 57,520 50,286 3,656 106 54,048 111,568
Actual Offsetting Collections (discretionary and mandatory) (24,991) (3,381) (0) (1) (1) (369) (1) (0) (81) (28,825) (29,027) (2,766) (97) (31,889) (60,714)
Outlays, Net (discretionary and mandatory) (18,038) (3,160) 30,231 2,859 1,886 541 6,014 1,154 7,209 28,695 21,259 891 9 22,159 50,854
Distributed Offsetting Receipts (2,000) - (5) - - - - - (297) (2,302) - - - - (2,302)
Agency Outlays, Net (discretionary and mandatory) (20,038) (3,160) 30,226 2,859 1,886 541 6,014 1,154 6,912 26,393 21,259 891 9 22,159 48,552
Figures may not add to totals because of rounding.
115
U.S. Department of Housing and Urban Development
Combining Statement of Bundgetary Resources
For the Period Ending September 2015 (Restated)
(Dollars in Millions)
Government
Government Public and National Total
National Indian Community Mortgage Other NonBudgetary
Federal Housing Mortgage Section 8 Housing Homeless Housing for Development Federal Housing Association NonBudgetary Credit Program Financial
Administration Association Rental Loans and Assistance the Elderly Block Grants Budgetary Administration Non Credit Program Financing Statement
(FHA) (GNMA) Assistance Grants (PIH) Grants and Disabled (CDBG) HOME All Other Total Non Budgetary Budgetary Accounts Accounts Eliminations Total
Budgetary Resources:
Unobligated Balance Brought Foward, October $ 8,152 $ 9,029 $ 736 $ 150 $ 2,460 $ 570 $ 12,177 $ 200 $ 1,255 $ 34,729 $ 45,569 $ 3,751 $ 440 $ 49,760 $ - $ 84,489
Adjustments to Unobligated Balance, Brought Forward, October 1 - (13) - - - - - - - (13) - - - - - (13)
Unobligated balance brought forward, October 1, adjusted 8,152 9,016 736 150 2,460 570 12,177 200 1,255 34,716 45,569 3,751 440 49,760 - 84,477
Recoveries of prior year unpaid obligations 50 7 107 26 274 44 24 19 166 716 382 1 14 397 - 1,113
Other changes in unobligated balance (241) (1) - (4) (142) (188) (34) (7) (92) (708) - - - - - (708)
Unobligated balance from prior year budget authority, net 7,961 9,022 843 172 2,592 426 12,167 212 1,329 34,724 45,951 3,752 454 50,157 - 84,881
Appropriations (discretionary and mandatory) 2,225 - 29,090 2,507 2,135 555 3,066 900 6,980 47,458 - - - - - 47,458
Borrowing Authority (discretionary and mandatory) - - - - - - - - - - 12,146 - - 12,146 - 12,146
Contract Authority (discretionary and mandatory) - - - - - - - - - - - - - - - -
Spending Authority from offsetting collections 21,716 4,247 - - 7 127 - - 62 26,158 25,563 2,817 72 28,452 - 54,610
Total Budgetary Resources $ 31,902 $ 13,269 $ 29,933 $ 2,679 $ 4,735 $ 1,108 $ 15,233 $ 1,112 $ 8,371 $ 108,340 $ 83,660 $ 6,569 $ 526 $ 90,755 $ - $ 199,096
Status of Budgetary Resources:
Obligations Incurred
Direct 15,170 22 29,143 2,522 2,109 666 6,204 848 7,016 63,700 49,673 - 59 49,732 - 113,433
Reimbursable - 246 - - - - - - 3 249 - 5,538 - 5,538 - 5,787
Subtotal 15,170 268 29,143 2,522 2,109 666 6,204 848 7,019 63,949 49,673 5,538 59 55,271 - 119,220
Unobligated Balances
Apportioned 56 128 698 113 2,086 254 9,021 237 523 13,116 3,509 867 102 4,478 - 17,594
Exempt from Apportionment - - - - - - - - - - - - - - - -
Unapportioned 16,676 12,873 92 44 540 188 8 27 829 31,275 30,478 164 365 31,007 - 62,282
Subtotal 16,732 13,001 790 157 2,626 442 9,029 264 1,352 44,391 33,987 1,031 467 35,485 - 79,876
Total Status of Budgetary Resources $ 31,902 $ 13,269 $ 29,933 $ 2,679 $ 4,735 $ 1,108 $ 15,233 $ 1,112 $ 8,371 $ 108,340 $ 83,660 $ 6,569 $ 526 $ 90,756 $ - $ 199,096
Change in Obligated Balance
Unpaid Obligations:
Unpaid obligations, brought forward, Oct 1 587 281 8,865 4,871 2,605 2,303 12,861 3,568 5,147 41,087 2,229 265 17 2,511 - 43,598
Adjustments to unpaid obligations, start of year (+ or -) (Note 28) - 13 - - - - - - - 13 - - - - - 13
Obligations Incurred 15,170 268 29,143 2,522 2,109 666 6,204 848 7,019 63,950 49,673 5,538 59 55,271 - 119,221
Outlays, (gross) (-) (15,142) (202) (28,999) (2,657) (1,904) (962) (6,547) (1,213) (7,383) (65,009) (49,035) (5,532) (59) (54,627) - (119,635)
Actual Transfers, unpaid obligations (net) (+ or -) - - - - - - - - - - - - - - - -
Recoveries of prior year unpaid obligations (-) (50) (7) (107) (26) (274) (44) (24) (19) (166) (716) (382) (1) (14) (397) - (1,113)
Unpaid obligations, end of year (gross) 565 353 8,902 4,710 2,536 1,963 12,494 3,184 4,617 39,324 2,485 271 3 2,758 - 42,082
Uncollected Payments:
Uncollected payments, Fed sources, brought forward, Oct 1 (-) (8) - - - - - - - (3) (12) - (2) (51) (53) - (65)
Adjustments to uncollected payments, Fed sources, start of year (Note 28) - - - - - - - - - - - - - - - -
Change in uncollected customer payments, Fed sources (+ or -) (6) - - - - - - - - (6) - 2 (1) 1 - (5)
Actual Transfers, uncollected payments, Fed sources (net) (+ or -) - - - - - - - - - - - - - - - -
Uncollected payments, Fed sources, end of year (-) (14) - - - - - - - (3) (18) - (0) (52) (52) - (70)
Obligated balance, start of year (+ or -) 577 294 8,865 4,871 2,605 2,303 12,861 3,568 5,144 41,087 2,230 264 (36) 2,458 - 43,544
Obligated balance, end of year (net) $ 550 $ 353 $ 8,902 $ 4,710 $ 2,536 $ 1,964 $ 12,495 $ 3,184 $ 4,612 $ 39,305 $ 2,485 $ 270 $ (50) $ 2,705 $ - $ 42,010
Budget Authority and Outlays, Net:
Budget authority, gross (discretionary and mandatory) 23,941 4,247 29,090 2,508 2,141 682 3,066 900 7,039 73,615 37,708 2,817 73 40,598 - 114,213
Actual offsetting collections (discretionary and mandatory) (-) (21,710) (4,361) - - (6) (506) - - (60) (26,642) (38,213) (2,819) (77) (41,108) - (67,751)
Change in Uncollected Customer Payments From Fed Sources (Dis and Man)
(+ or -) (6) - - - - - - - - (6) - 2 (1) 1 - (5)
Anticipated offsetting collections (discretionary and mandatory) (+ or -) - - - - - - - - - - - - - - - -
Budget Authority, net (discretionary and mandatory) 2,225 (114) 29,090 2,507 2,135 176 3,066 900 6,980 46,965 (505) - (5) (510) - 46,455
Outlays, gross (discretionary and mandatory) 15,142 202 28,999 2,657 1,904 962 6,547 1,213 7,383 65,009 49,035 5,532 59 54,627 - 119,635
Actual offsetting collections (discretionary and mandatory) (-) (21,710) (4,358) - - (6) (506) - - (60) (26,639) (38,213) (2,819) (77) (41,108) - (67,748)
Outlays, net (discretionary and mandatory) (6,568) (4,156) 28,999 2,657 1,898 456 6,547 1,213 7,323 38,368 10,822 2,714 (18) 13,518 - 51,887
Distributed offsetting receipts (2,797) - - - - - - - (47) (2,844) - - - - - (2,844)
Agency Outlays, net (discretionary and mandatory) $ (9,365) $ (4,156) $ 28,999 $ 2,657 $ 1,898 $ 456 $ 6,547 $ 1,213 $ 7,276 $ 35,525 $ 10,822 $ 2,714 $ (18) $ 13,518 $ - $ 49,043
Figures may not add to totals because of rounding.
116
Fiscal Years 2016 and 2015 (Restated) U.S. Department of Housing and Urban Development Consolidated Financial Statements Audit
Published by the Department of Housing and Urban Development, Office of Inspector General on 2016-11-18.
Below is a raw (and likely hideous) rendition of the original report. (PDF)