HUD Issues

Having 20+ years’ experience dealing with both governmental and not-for-profit agencies, I can honestly say that management letter comments (material weakness and significant deficiencies) constitute one of the most difficult parts of my job.  My clients have always been ultrasensitive towards these comments for fear of the perceptions the comments might cause funders and oversight agencies to have about the organization.

The U.S. Office of Inspector General issued its report on the United States Department of Housing and Urban Development’s (HUD) consolidated financial statements.  Click here for a copy of the report.  HUD was required to restate its previous year’s financial statements because of “pervasive material errors” identified.  The current year was not opined upon as a result of the inability to resolve several audit matters.  The audit report listed 11 material weakness, 7 significant deficiencies and five instances of noncompliance with applicable laws and regulations.

Given all of the issues identified above, I have two thoughts:  First, oversight organizations should hold themselves to a higher standard.  They sometimes are the judge and jury in many cases of findings.  You lose credibility when you, yourself, can’t get it right.  Secondly, organizations need to realize that having a finding isn’t the end of the world.  Embrace it, to learn and get better.  Of course, the finding has to be factual and correct.  But they do occur.  You are not the only organization to ever have a finding.

It will be interesting how HUD responds, and if there will ever be some type of acceptance of findings.

For more articles, please visit the Our Thoughts On blog.  

You’ve heard our thoughts… We’d like to hear yours

The Schneider Downs Our Thoughts On blog exists to create a dialogue on issues that are important to organizations and individuals. While we enjoy sharing our ideas and insights, we’re especially interested in what you may have to say. If you have a question or a comment about this article – or any article from the Our Thoughts On blog – we hope you’ll share it with us. After all, a dialogue is an exchange of ideas, and we’d like to hear from you. Email us at

Material discussed is meant for informational purposes only, and it is not to be construed as investment, tax, or legal advice. Please note that individual situations can vary. Therefore, this information should be relied upon when coordinated with individual professional advice.

© 2020 Schneider Downs. All rights-reserved. All content on this site is property of Schneider Downs unless otherwise noted and should not be used without written permission.

our thoughts on

IRS Requires E-filing of Form 1023, Application for Tax Exemption Under Section 501(c)(3)
Internal Controls for Not-For-Profits
Exempt Organizations: Do We File Schedule B or Not?
Audit, Tax BY Joe Bruce
Are You Ready for Your Big Game?
Guidance Provided for Organizations Claiming Credit for UBIT Paid on Repealed Tax
Simplification of Accounting for Income Taxes – ASU 2019-12

Register to receive our weekly newsletter with our most recent columns and insights.

Have a question? Ask us!

We’d love to hear from you. Drop us a note, and we’ll respond to you as quickly as possible.

Ask us

contact us

Map of Pittsburgh Office

One PPG Place, Suite 1700
Pittsburgh, PA 15222
p:412.261.3644     f:412.261.4876

Map of Columbus Office

65 East State Street, Suite 2000
Columbus, OH 43215
p:614.621.4060     f:614.621.4062

Map of Washington Office
Washington, D.C.

1660 International Drive, Suite 600
McLean, VA 22102