Some of the systems used by the Federal Housing Administration’s single-family insurance program are vulnerable to security breaches, an investigation by the agency’s watchdog uncovered recently.
Details on the nature of the “vulnerabilities” are limited at this point; the Office of the Inspector General for the Department of Housing and Urban Development chose not to share the full results of its investigation with the public.
The only mention is a short description of the investigation and its methods posted on the OIG website.
Specifically, the HUD-OIG stated in the brief recap of its investigation that it “reviewed the general and application controls over the FHA’s Single Family Insurance System and Single Family Insurance Claims Subsystem as part of the internal control assessments required for the fiscal year 2015 financial statement audit under the Chief Financial Officer’s Act of 1990.”
After auditing the city of Richmond, California’s Neighborhood Stabilization Program, the U.S. Department of Housing and Urban Development Office of the Inspector General determined that the city was not following the requirements related to procurement and cost eligibility of NSP1.
The problem revolves around the city awarding contracts to developers that lacked the capacity and financial resources to administer the program.
Then, it failed to monitor the rehabilitation progress or the quality of work performed by three developers.
As a direct result, HUD said, “The rehabilitation of some properties suffered significant delays, while the rehabilitation of other properties had not been completed after more than 3 years.”
Along with that, the city paid $691,005 for rehabilitation work that was not performed and other ineligible and unreasonable costs, and it did not ensure that NSP1 properties were sold to eligible homebuyers.