Government Idiocy in HUD Exposed By IG Audits

Recently I read an article in an off mainstream site about the shock Dr. Carson probably received once he became HUD Secretary. The article was ” Audit on HUD reveals billions in bookkeeping errors” by Tracey Matheson on March 7. 2017. The lead paragraph said:

“Despite officials from the Department of Housing and Urban Development (HUD) correcting $520 billion in bookkeeping errors, the department’s financial records have been so poorly kept that HUD’s inspector general (IG) cannot complete an audit of them.”

As Julián Castro left the secretary position after having held the post since 2014, he told Dr. Carson,

“My number one piece of advice would be to work hard every day in the interest of people who need a champion for them – to believe in them, to see the brighter side, the possibility for their lives.”

“Through all of these efforts, I’ve tried to layer the bricks and mortar with greater opportunity for people who live in HUD-assisted housing,” Castro said.

More than one posted article castigated Carson as a good choice for heading up HUD and ran statements on how Castro had bucked the system and raised HUD up.  They cited Carson’s total lack of political understanding, law, and property management as being reasons why he was totally wrong for the position.

Some Liberal media went to great effort to highlight how Castro enjoyed successes at HUD while dealing with constrained spending and other obstacles. They stressed how he was at one time considered as VP running mate for Clinton and speculated that he may run in 2020 for President.

The reality of the program is far different than liberal big government proponents want to admit or have the public know.

As many citizens have known over the forty plus years since HUD began – HUD is a bottomless pit where taxpayer dollars never see the light of day again.  The problem is from Reagan until today few of us have known the facts. Trump’s bid for presidency and subsequent election have done a great deal to open the eyes of the country to what has been happening over the years from liberalist efforts to “transform” our country into a begging and beggardly state of morass ruled by big federal government and by elitest who believe in globalization and socialism. Both of which do nothing to help and definitely do a lot of harm.

HUD was the brain child of Lyndon Johnson and all his crowd in 1965. It had a purpose that was like all other movements a great idea. However, over the years the program has been corrupted and run by those with little interest or ability to keep it solvent, follow the law, and through poor accounting been able to cover up all the money flowing out and into pockets of those who were taking advantage of its everflowing well of funds. Billions have flowed into the coffers and like a sieve flowed out just a quickly.

Scandals became prevalent in the 1990’s (under you guessed it – Bill Clinton) though honestly many scandals simply came to public eye from many years of mismanagement and neglect before then. Yet congress continued to double and triple down on its grants, programs, and renewal schemes.

What many who lived around the apartments and housing areas observed was not pride in ownership or care in living by those who were helped but rather within only a few years the total destruction and rise of criminal elements living within the walls and neighborhoods. Fear as well as gangs and drugs rose as the places declined.

At least some of the housing meltdown of 2007-2008 can be laid squarely on HUD along with its two partners in crime Fannie Mae and Freddie Mac along with Democrat liberalists as they applied tremendous pressure on the bank market to find “creative” ways to help low income afford to acquire their own homes.

Needless to say, the banking, stock market, and real estate industries not only found ways but created a bubble that burst spewing problems around the world not just in the US. Many of those involved in government and upper management certainly benefited from these activities . Then billions more money was injected in attempts to stabilize the industry and help those harmed. Again though the pie was sliced but only the greedy feasted while investors and less fortunate including those it was meant to help were bankrupt and thrown out into the cruel jobless world with some never recovering.

In 2009, HUD got $38.5 billion handed to it which was an increase of $3.2 billion over 2008 thanks to Obama. By 2012, citing “successes” Obama requested $47.8 billion and proposed to offset some of that by $6 billion in projected FHA and Ginnie Mae receipts. By 2016, the sinkhole budget had risen to $49.6 billion.

For most of the IG audit years, reference has been made to basically the same problems every year-poor management oversight, not following the laws, and poor accounting practices. During the 2014 overall audit, a great deal of improvement was noted and that generally accepted accounting principles were evident under Shaun Donovan. Although, when reading these “independent” audits, I get the feeling HUD was being treated with kid gloves.

IG pretty much slapped HUD down for their noncompliance and lack of following through on recommended changes from prior years. In their 2016-FO-0002_0 report, IG noted that there again many accounting practices not acceptable to government standards so much so they were reluctant to issue a finding. Included in that report, was the notification that they had found examples of people living in the residences who made salaries far above the maximum allowed. They also found lack of notations, billing and receiving errors.

It wasn’t until after another restated report that IG apparently felt confident enough to make the following observations but they were still unable to provide a final finding because accounting methods were so sloppy and disjointed. In other words, the total extent of loss in HUD has not been determined because there is has been no way to accurately investigate and draw a complete conclusion.

Beginning sometime in 2010 the agency started selling assets but in 2013 HUD went on a vigorous agenda of asset sales of non-performing loans. Bloomberg noted $3.7 billion but another said up to $6 billion was sold off. These sales were protested in 2014 and 2015.

I have to wonder just how IG was able to audit these sales funds and follow through if as one article speculated the money was moved to FHA. That is a huge amount of funds dropped from one federal agency into the pocket of another if the money was moved there, especially given IG’s comment that it could not complete an audit.

2017-FO-0005, March 1, 2017 – HUD’s Fiscal Years 2016 and 2015 (Restated) Consolidated Financial Statements Audit (Reissued) DC

  • $519.8 billion  – The total amount of errors corrected in HUD’s notes and consolidated financial statements were $516.4 billion and $3.4 billion, respectively.
  • $4.2 billion  – Nonpooled loan assets from Ginnie Mae’s stand-alone financial statements that we could not audit due to inadequate support
  • Audit report contains 11 material weaknesses, 7 significant deficiencies, and 5 instances of noncompliance with applicable laws and regulations due to an inability to establish a compliant control environment, implement adequate financial accounting systems, retain key financial staff, and identify appropriate accounting principles and policies.

Doing a general audit of the program is not all IG is responsible for though. IG has many grants, programs, and state audit responsibilities of oversight as well. It falls to them to investigate allegations and review problems from all states and offices for discrepancies and criminal activities. Several of these are criminal investigations currently under investigation and involving millions of dollars.


So basically Castro’s term as secretary wasn’t nearly as successful as media would have us believe; but then, we already knew that MSM has a real problem sorting facts from the liberal Democrat “scripted spin.”

Dr. Carson is going to have a difficult time trying to sort out all the problems that have built up over the years. The greatest challenge will be to have a highly recommended CPA coordinate with an excellent data programming group to produce a better internal progam. One hopefully that satisfies IG, provides stricter ability for criminal detection, and essentially a better coordinated and trained input community.

In Trump’s “2018 Budget Blueprint”, under his proposed HUD section the proposed request is for $40.7 billion in gross discretionary funding for HUD, a $6.2 billion or 13.2 percent decrease from the 2017 annualized CR level.

This is certainly down from the 2017 budget request submitted in February 2016 of $48.9 billion in gross discretionary funding and $11.3 billion in new mandatory spending over ten years. No wonder so many agencies are squealing like rotund alcoholic swine cut off from their supply.


About Uriel

Retired educator and constitutionalist
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4 Responses to Government Idiocy in HUD Exposed By IG Audits

  1. Sun Tzu says:

    Well what would you expect from an incompetent you know what hire…..typical government BS. Hire/promote the incompetent and let everything go to hell.

  2. Wingman says:

    More importantly how about an audit of Castro and other muckity mucks inside of HUD. Any chance their own personal bank accounts increased exponentially during their time there? Sounds like way too much money unaccounted for there.

    • Uriel says:

      I have NO problem with that. Make it a surprise audit of EVERYONE in congress remotely involved with HUD. Especially Obama! Matter of fact it should be yearly for all of congress anyway. They don’t have to submit one ever I don’t think.