When then-President-elect Trump appointed former neurosurgeon and presidential candidate Dr. Ben Carson to be Secretary of the Department of Housing and Urban Development, I had to turn to my friend and colleague Catherine Austin Fitts, and exchange the "knowing wink." Seriously, folks, we weren't even in the same room when the announcement came. We were, in fact, hundreds of miles away, but nonetheless, I strongly suspect we both turned in that "metaphorical higher-dimensional imaged-space" that we all create when such things happen, and winked at each other. Indeed, later, during a phone call as we were discussing the various cabinet appointments that were rolling out, we both had to speculate on just how long it would take Dr. Carson to find major financial problems. I forget who said what, but one of use gave it about "six months."
Well, it's been about six months, and here we are, with the following story shared by Ms. S.H.:
And here's the actual PDF put out by HUD:
Much of the latter is, of course, the usual government boiler-plate. So I direct your attention to page 3 of the PDF file, where we read this:
What We Audited and WhyIn accordance with the Chief Financial Officers Act of 1990, as amended, we are required to annually audit the consolidated financial statements of the U.S. Department of Housing andUrban Development (HUD). HUD reissued its fiscal year s 2016 and 2015 (restated) consolidated financial statements due to pervasive material errors that we identified. Our objective was to express an opinion on the fairness of HUD’s consolidated financial statements in accordance with U.S. generally accepted accounting principles (GAAP) applicable to the Federal Government. This report presents our reissued independent auditor’s report on HUD’s fiscal year s 2016 and 2015 (restated) consolidated financial statements, including an update to our report on HUD’s internal controls.What We FoundThe total amounts of errors corrected in HUD’s notes and consolidated financial statements were $516.4 billion and $3.4 billion, respectively. There were several other unresolved audit matters, which restricted our ability to obtain sufficient, appropriate evidence to express an opinion.These unresolved audit matters relate to (1) the Office of General Counsel’s refusal to sign the management representation letter , (2) HUD’s improper use of cumulative and first-in, first-out budgetary accounting methods of disbursing community planning and development program funds, (3) the $4.2 billion in nonpooled loan assets from Ginnie Mae’s stand-alone financial statements that we could not audit due to inadequate support, (4) the improper accounting for certain HUD assets and liabilities, and (5) material differences between HUD’s subledger and general ledger accounts. This audit report contains 11 material weaknesses, 7 significant deficiencies, and 5 instances of noncompliance with applicable laws and regulations.(Emphases added).
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