COMPLIANCE FINDING DOCUMENTATION



9000.87 HUD Compliance Audit Program – Federal Financial and Activity Reports (Title II Lender)Client:Closing Date:Current Version: 11/2010 View Document SignoffsTitleNameDatePrepared by 1Prepared by 2Prepared by 3Reviewed by 1Reviewed by 2Reviewed by 3Reviewed by 4Preparer Comments: Note:The engagement team should use the FI HUD attribute sampling guidance to determine the appropriate sample size for each attribute being tested. For example, if the attribute being tested relates to required activity reports then the engagement team should use the number of reports prepared that related to that attribute as the population for sample selections. This form is also required to be signed-off by the manager and in-charge. Overall ObjectiveThe objective of this audit program is to document the auditor's tests of compliance related to HUD requirements related to financial and activity reporting activities for Title II lenders. GuidanceMortgagees participating in HUD-assisted activities are required to provide reasonable assurance that financial status, single-family default monitoring, and reports required under the Home Mortgage Disclosure Act contain reliable data and are presented in accordance with the terms of applicable agreements between the entity and HUD. The individual agreements, handbooks, and mortgagee letters contain the specific reporting requirements that the mortgagee is to follow (HUD Handbook 4330.1, chapter 7 and 4155.1, chapter 3; Mortgagee Letter 95-3).The audit program should be modified to address the audit requirements identified in the guidance referenced above for every applicable requirement identified. 1Identify the person primarily responsible for completion of this section:StepNo.SUGGESTED AUDIT PROCEDURESDATEW/PREFREMARKS1.Determine which financial and activity reports are required to be submitted by the mortgagee. Note: The reports required by HUD depend on the specific areas within the HUD program that the mortgagee participates in.2.Verify there are no changes to the auditee’s policies and procedures related to preparing and reviewing the required HUD reports from the understanding obtained during the risk assessment process.3.Select a sample of at least 2 financial reports, other than those that are included in the audited financial statements, and determine whether the reports selected are prepared in accordance with HUD instructions.4.Select a sample of at least 2 activity reports and determine whether the reports selected are prepared in accordance with HUD requirements.5.For the sample of financial and activity reports selected, trace significant data to supporting documentation (i.e., worksheets, ledgers, etc.) and investigate all discrepancies noted. 6.Review significant adjustments made to the general ledger accounts affecting HUD-assisted activity and evaluate the propriety of those adjustments.Conclusion:The objective set forth at the beginning of this audit program section has been achieved and all "findings" identified have been evaluated for appropriate reporting in accordance with the HUD Handbook 4060.1 and Handbook 2000.04, Consolidated Audit Guide for Audits of HUD Programs.Yes _____ No _____ Signature __________________________________________________________Explanation of "No" conclusion____________________1The principle compliance requirements related to HUD-assisted programs are provided in the HUD Handbook 4060.1 and Handbook 2000.04, Consolidated Audit Guide for Audits of HUD Programs. When there have been changes to the compliance requirements and the changes are not yet reflected in the guidance referred to above, the auditor should determine the current compliance requirements and modify the audit procedures accordingly. ................
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