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, 2021 and 2020,1 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 Management Improvement 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 consolidated financial statements as of and for the fiscal year ended September 30,2021, are presented fairly, in all material respects, in accordance with U.S. generally accepted accounting principles.One material weakness2 and one significant deficiency3 in internal control over financial reporting, based on the limited procedures that it performed.A material weakness existed related to HUD and Federal Housing Administration(FHA) controls over financial accounting and reporting.A significant deficiency existed related to FHA econometric modeling activities used to estimate the agency’s loan guarantee liability.Two reportable matters 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.We will provide a replacement report for posting, once HUD publishes its Agency Financial Report, which will include this report and the audited financial statements.

This Office of Inspector General (OIG) Comprehensive Healthcare Inspection Program report provides a focused evaluation of the quality of care delivered in the inpatient and outpatient settings of the Fayetteville VA Coastal Health Care System. The inspection covers key clinical and administrative processes that are associated with promoting quality care. This inspection focused on Leadership and Organizational Risks; COVID-19 Pandemic Readiness and Response; Quality, Safety, and Value; Registered Nurse Credentialing; Medication Management: Remdesivir Use in VHA; Mental Health: Emergency Department and Urgent Care Center Suicide Risk Screening and Evaluation; Care Coordination: Inter-facility Transfers; and High-Risk Processes: Management of Disruptive and Violent Behavior.The system’s executive leadership team appeared stable, with all positions permanently assigned. The leaders had worked together for over one year. Employee satisfaction survey results indicated that the Chief of Staff had opportunities to improve staff attitudes toward the workplace. Scores related to leaders’ listening, respect, trust, favoritism, and response to concerns were lower than the VHA averages, except for the Associate Director, whose score was significantly higher. Patients generally appeared less satisfied with their care than VHA national averages. The OIG’s review of the system’s accreditation findings, sentinel events, and disclosures did not identify any substantial organizational risk factors. The Director and Chief of Staff were knowledgeable within their scope of responsibilities about VHA data and system-level factors contributing to specific poorly performing Strategic Analytics for Improvement and Learning measures. However, the Associate Director of Patient Care Services and Associate Director had opportunities to increase their knowledge of these factors. The OIG issued seven recommendations for improvement in three areas: (1) Quality, Safety, and Value • Surgical work group meetings and attendance (2) Care Coordination • Transfer documentation • Active medication list transmission • Nurse-to-nurse communication (3) High-Risk Processes • Disruptive behavior committee attendance • Staff training

The VA Office of Inspector General (OIG) conducted a healthcare inspection in response to an allegation that a urologist perforated two patients’ organs during procedures. Patients’ organs were perforated by the urologist. The OIG found the facility conducted management reviews and facility leaders took reasonable actions based on the results.The inspection identified deficiencies in disclosures, quality reviews, timeliness of management reviews, and the process for delineating urologists’ privileges.The urologist reported disclosing a bladder and possible colon perforation to the first patient; however, documentation did not reference the possible colon perforation. Moreover, documentation of a disclosure for a confirmed colon perforation was not found. Regarding the second patient, the urologist completed the clinical disclosure four days after the patient’s surgery, inconsistent with Veterans Health Administration policy.Institutional disclosures were not considered for either patient. The OIG concluded that disclosure failures may result in patients not being fully informed.The first patient’s bladder perforation and possible colon perforation were reported to the Patient Safety Manager; however, facility staff failed to report other adverse events. A planned peer review was not completed, and management reviews were delayed.The two patients’ care was presented at Surgical Service Morbidity and Mortality Conferences, but the Surgical Workgroup did not provide required oversight of the conferences. Oversight deficiencies could lead to delayed or missed opportunities to improve quality care.The form delineating privileges for urologists was not reviewed as required. A privileging form statement suggested that urologists may perform procedures beyond those listed, without the safeguards afforded through the required delineation of privileges process.The OIG made seven recommendations to the Facility Director related to disclosures, patient safety reporting, quality review processes, oversight of Surgical Service Morbidity and Mortality Conferences, and the privileging process.

The Office of the Inspector General is required by the Federal Information Security Modernization Act of 2014 (FISMA) to conduct an annual independent evaluation that determines the effectiveness of the information security program (ISP) and practices of its respective agency. To that end, the Office of Inspector General engaged the independent public accounting firm McConnell & Jones LLP (M&J) to conduct the annual evaluation and complete the FY 2021 IG FISMA Reporting Metrics. The objective of the evaluation was to assess the effectiveness of the Commission’s security program and practices across key functional areas, as of September 30, 2021. The evaluators determined that although the Commission took positive steps to implement policies, procedures and strategies, there are existing improvement opportunities. Specifically, the Commission remediated seven of the nine prior year recommendations leading to their closure at the end of FY 2021. Furthermore, the overall assessment of the Commission’s FY 2021 information security program was deemed effective because the tested, calculated, and assessed maturity levels across the functional and domain areas received an overall rating of effective. However, the evaluators identified two new findings with two corresponding recommendations.

We contracted with the independent public accounting firm of CliftonLarsonAllen LLP (CLA) to audit the financial statements of FHA as of and for the fiscal years ended September 30, 2021 and 2020, and to provide reports on FHA’s 1) internal control over financial reporting; and 2) compliance with laws, regulations, contracts, and grant agreements in its financial reporting.  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 FHA, CLA reported:

• The consolidated financial statements as of and for the fiscal year ended September 30, 2021, are presented fairly, in all material respects, in accordance with U.S. generally accepted accounting principles.
• One material weakness and one significant deficiency in internal control over financial reporting, based on the limited procedures that it performed.
• A material weakness existed related to FHA controls over financial accounting and reporting.
• A significant deficiency existed related to FHA econometric modeling activities used to estimate the agency’s loan guarantee liability.
• No reportable noncompliance issues for fiscal year 2021 with provisions of applicable laws, regulations, contracts, and grant agreements tested and no other matters.

This report, along with the audited financial statements, is included in FHA’s Annual Management Report, which is available at https://www.hud.gov/program_offices/housing/hsgrroom/fhaamr