An Audit Report on the Single Family Mortgage Revenue Bond Program at the Department of Housing and Community Affairs
August 2008
Report Number 08-043
Overall Conclusion
The Department of Housing and Community Affairs (Department) is effectively managing the cash flows needed to fund the Single Family Mortgage Revenue Bond Program's (Program) debt service payments. However, it could improve its monitoring to ensure that all Program cash flows are adequately managed and accounted for by the Program trustee and master servicer.
The Department performs consistent monitoring activities, but it could strengthen its reviews, analysis, and reconciliations of Program financial information provided by its master servicer (Countrywide Home Loans, Inc.) and trustee (The Bank of New York Mellon Corporation). The Department also could improve its monitoring of the Program's master servicer to ensure Program funds are used for qualified borrowers' mortgages that meet all Program requirements.
Additionally, the Department could strengthen its policies and procedures related to its use of interest rate swaps (swaps). While the Department's use of swaps has been highly effective to date, the Department could further reduce the Program's exposure to risks associated with swaps and variable interest rates by further defining the parameters under which it uses swaps and ensuring that Program financial information is as complete and accurate as possible.
Program expenditures recorded by the Department are reasonable and generally necessary; however, the Department lacks a formalized methodology to distribute indirect administrative costs to the Program. Without a methodology to assign agency-wide costs, the Department cannot ensure that administrative costs are accurately allocated to the Program.
Contact the SAO about this report.
Download the Acrobat version of this report. (.pdf)
If you prefer an HTML version, follow this link to an Adobe site which converts PDF files to HTML.