Reimbursements Received Through Rent Credits From the General Services Administration

We audited rent credits that the U.S. Department of Housing and Urban Development (HUD) received from the U.S. General Services Administration (GSA) during fiscal years 2015 through 2018 in exchange for financial contributions for building improvements. We initiated this audit due to concerns we identified while completing a review of HUD’s use of funds approved by Congress for building improvements.[1] Our objective was to determine whether HUD accounted for and managed rent credits, issued by GSA in exchange for HUD’s financial contributions for building improvements, in accordance with applicable requirements. [1] HUD Used Funds for Building Improvements in Accordance With Its Plans and the Approval of the House and Senate Committees on Appropriations, Memorandum 2019-PH-0801, issued November 7, 2018 HUD did not properly account for and manage reimbursements totaling nearly $7.8 million that it obtained through rent credits issued to it by GSA in 2017 in exchange for improvements that it made to its headquarters building in 2016. HUD’s Office of Administration used these funds for expenses it incurred in 2017 instead of depositing the funds in the U.S. Treasury general account. This condition occurred because Office of Administration staff improperly considered all rent credits received, regardless of type, as a refund to its current appropriation. The Office of Administration also lacked controls to ensure that its staff complied with HUD’s funds control policy. As a result, HUD exceeded its fiscal year 2017 appropriated funding level by nearly $7.8 million and potentially violated the Antideficiency Act.[2] 2 HUD’s Chief Financial Officer has the sole authority to investigate this potential violation and determine whether HUD was required to deposit the value of rent credits into the U.S. Treasury General Funds. HUD OIG can make a referral to the Chief Financial Officer to investigate the potential violation. We recommend that HUD’s Chief Financial Officer investigate the facts surrounding the potential Antideficiency Act violation involving nearly $7.8 million in rent credits. If it is determined that a violation occurred, HUD should develop corrective action plans or internal process improvements, take appropriate disciplinary actions, and report violations to the appropriate oversight authorities, as required.