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  • 2017-04-07 (xsd:date)
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  • Did Ben Carson Discover $500 Billion in Accounting Errors at HUD? (en)
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  • On 6 April 2017, the Daily Wire posted a story reporting that retired neurosurgeon and current U.S. Department of Housing and Urban Development (HUD) director Ben Carson found $520 billion in accounting errors after ordering an audit of the agency: The referenced audit was actually initiated by HUD's Office of the Inspector General (OIG), who originally issued an independent auditor’s report on 15 November 2016 (over two months before Dr. Carson was confirmed as the new HUD secretary), along with a disclaimer noting that many discrepancies and information gaps existed within HUD's financial statements and notes. That report was subsequently replaced with a reissued version dated 1 March 2017. The OIG is the enforcement arm of HUD and has been led by Inspector General David Montoya since 2011. Their revised audit report issued on 1 March 2017 deals with pervasive material errors found in HUD's 2015 and 2016 consolidated financial statements: The process of auditing HUD and identifying errors in their financial reports began in 2016, according to the report: The total dollar figure noted in the report — roughly $520 billion — is undeniably a very large amount of money (equivalent to approximately 13% of the entire 2015 federal budget). But the OIG report explains that figure was the absolute value of all numeric corrections made to HUD financial records, meaning all numeric adjustments (whether positive or negative) were added to create that aggregate figure. A simple analogy would be to consider a bookkeeper who mistakenly entered the same $1,000 payment into a ledger six times: the aggregate value of those mistakes would be $5,000, but that would not mean the hapless bookkeeper actually found and/or lost $5,000 in real funds, or that that amount of money ever actually passed through his hands. Likewise, the OIG report on HUD does not mean that $520 billion was lost and then recovered as of 1 March 2017: Although significant problems with HUD's bookkeeping turned up, claims that Dr. Carson, barely two months into his tenure as HUD secretary, found billions of dollars lost through accounting errors are misleading. The audit originated prior to Dr. Carson's arrival at HUD, and the astoundingly large-sounding dollar figure is an aggregate of many different discrepancies in different directions. According to the OIG report, HUD maintains that the errors represented a net adjustment of only $3 million and resulted in no changes in HUD’s financial position or impact to [HUD] programs: We reached out to the Department of Housing and Urban Development's Office of the Inspector General but they declined to comment, saying only, We believe the audit speaks for itself. (en)
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