The distinguished financial expert Catherine Austin Fitts was asked “how long will it take for the new HUD Secretary, Dr. Ben Carson, to uncover financial misdealings at HUD?”
She gave it “about six months.”
Well, it’s been about six months, and here we are, with the following news that Dr. Carson has uncovered some $516 BILLION in “errors” at HUD, merely from it’s fiscal years 2015 and 2016 alone.
Here’s the actual PDF report released by HUD:
Much of the report is the usual Governmentese
So please direct your attention to page 3 of the PDF file:
What We Audited and Why
In 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 and
Urban 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 Found
The 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.
Now, let’s translate that from Governmentese to English:
1) “…pervasive material errors we identified,” = “we identified pervasive material errors” = We couldn’t make much sense of the way HUD keeps its books, but…
2) …nonetheless we found “amounts of errors” totaling $516,400,000,000 = in spite of the deplorable state of HUD’s books, we were still able to identify half a trillion dollars of errors.
Now, you’re probably wondering whether or not this money is actually missing, or if these were simply “accounting errors.” Well in the very next sentence we read:
3) “There were several other unresolved audit matters, which restricted our ability to obtain sufficient, appropriate evidence to express and opinion” = “we did the best audit that we could, but in spite of the fact that we were able to identify half a trillion dollars of errors, we we’re able to get any further because there’s ‘something funny’ about the books.”
And lest you think we’re reading too much into that statement, we are then told that
4) “We ran into ‘improper accounting’ of ‘certain HUD assets and liabilities,'” = “we don’t even know what HUD owns or is liable for”…
…and yes, folks, I’d call that an accounting problem. It’s beginning to look an awful lot like we’re not just looking at poor addition and subtraction skills from Johnny and Susie Hudd, but an actual missing half a trillion dollars.
But wait. There’s more:
You might be asking yourself – “don’t they even know what they own or are liable for?”
And the answer is:
5) There were “material differences between HUD’s subledger and general ledger accounts,” which is a nice Clinton-Bush-Obama-esque way of saying “we don’t know what we own or are liable for because we’re keeping two sets of books!”
Ponder that statement for a moment: they acknowledge the existence of something called a “subledger”. Now, obviously, I’ve never served at any high level of the Federal Cesspool, nor would I want to. So perhaps “subledger” is a professional term of art for Federal Accounting.
But to my average joe ears, it sounds like “two sets of books”. And hey, if we can have subledgers, then why not sub-sub-subledgers, and so on, and several sets of books, all the way from the local to the state to the regional to the federal level.
Would such confusion allow the looting of HUD?
You bet. And why would one loot any federal agency, turning it into a piggy bank?
To keep their covert operations, drug running, and secret research going. All greased and funded, from somewhere, off official record or approval…
And that’s a fancy way of saying that, while there is a problem in HUD, the problem doesn’t originate nor end there.