Federal Reports

We contracted with the independent public accounting firm of CliftonLarsonAllen LLP (CLA) to audit the financial statements of HUD as of and for the fiscal years ended September 30, 2022 and 2021, and to provide reports on HUD’s 1) internal control over financial reporting; and 2) compliance with laws, regulations, contracts, and grant agreements and other matters, including whether financial management systems complied substantially with the requirements of the Federal Financial ManagementImprovement Act of 1996 (FFMIA). Our contract with CLA required that the audit be performed in accordance with U.S. generally accepted government auditing standards, Office of Management and Budget audit requirements, and the Financial Audit Manual of the U.S. Government Accountability Office and the Council of the Inspectors General on Integrity and Efficiency.In its audit of HUD, CLA reported:The financial statements as of and for the fiscal years ended September 30, 2022 and 2021, are presented fairly, in all material respects, in accordance with U.S. generally accepted accounting principles.One material weakness for fiscal year 2022 in internal control over financial reporting, based on the limited procedures performed. The material weakness was related to (a) Federal Housing Administration’s (FHA) financial accounting and reporting controls over borrowing authority and loan receivables and (b) HUD’s financial reporting controls over grant accruals and Public and Indian Housing’s cash management process.Two reportable matters for fiscal year 2022 of noncompliance with provisions of applicable laws, regulations, contracts, and grant agreements or other matters.Noncompliance with federal financial management system requirements, federal accounting standards, and the U.S. Standard General Ledger at the transaction level.Noncompliance with the Single Audit Act.In connection with the contract, we reviewed CLA’s reports and related documentation and inquired of its representatives. Our review, as differentiated from an audit of the financial statements in accordance with U.S. generally accepted government auditing standards, was not intended to enable us to express, and we do not express, opinions on HUD’s financial statements or conclusions about 1) the effectiveness of HUD’s internal control over financial reporting; 2) HUD’s compliance with laws, regulations, contracts, grant agreements, or other matters; or 3) whether HUD’s financial management systems complied substantially with the three FFMIA requirements. CLA is responsible for the attached Independent Auditors’ Report, dated November 17, 2022, and the conclusions expressed therein. Our review disclosed no instances in which CLA did not comply, in all material respects, with U.S. generally accepted government auditing standards.HUD’s Agency Financial Report, which includes HUD’s audited financial statements, can be found at afr2022.pdf (hud.gov).

In keeping with its responsibilities under the Inspector General Act of 1978, as amended, the OIG monitored the audit of TVA's fiscal year 2022 financial statements performed by Ernst and Young LLP (EY) to assure their work complied with Government Auditing Standards. Our review of EY's work disclosed no instance in which the firm did not comply in all material respects with Government Auditing Standards.

The Tennessee Valley Authority’s (TVA) Economic Development (ED) organization is primarily responsible for helping to maintain TVA’s industrial and manufacturing base, locate desirable companies to the Valley, and improve the competitiveness of Valley communities. TVA ED offers incentive programs and services to new and existing customers in the valley. TVA included information on jobs created and retained in the Tennessee Valley for which TVA has played a role in the recruitment or retention of the economic development project in their fiscal years 2019 through 2021 Securities and Exchange Commission reports and fiscal year 2020 Sustainability Report. Additionally, jobs created and/or retained are used as a metric in the corporate multiplier for the Winning Performance Team Incentive Plan and the Executive Annual Incentive Plan. Based on the reputational risk of disseminating inaccurate information to the public, we included an audit of TVA ED jobs reporting in our annual audit plan. Our audit objective was to determine if the job numbers reported externally by TVA ED are validated prior to being disseminated to the public in accordance with any best practices.We found TVA ED has a monthly process in place to review job number forecasts prior to reporting the numbers externally and that the number of jobs reported generally agreed with supporting documentation. However, we found the information presented to the public by TVA related to job creation and retention is not always clear, complete, or presented in the proper context as required by the TVA Information Quality Guidelines.