In 2001, you may remember the scandal of the bankruptcy of Enron Corporation, an energy company based in Texas. Investors lost about $63 billion when they found that Enron officials and auditors at the Arthur Anderson accounting firm had used loopholes in the law and several different accounting tricks to hide billions of dollars that were lost in bad deals and debt from the shareholders. This was intentional and many people were jailed for this.
Now lets talk about March 2017. Fast forward to March 2017, a report from the Office of Inspector General was released in regards to the U.S. Department of Housing and Urban Development, yet not much has been discussed by media concerning this HUGE issue.
The report indicated, an audit of HUD‘s 2015 and 2016 consolidated financial statements had an astounding amount of “pervasive material errors” as to be unacceptable. These errors totaled close to $520 billion, as well as many other problems within the department itself.
The OIG reported that, “This audit report contains 11 material weaknesses, 7 significant deficiencies, and 5 instances of noncompliance with applicable laws and regulations.”
Conservative Tribune reported:
The report noted that an initial audit of HUD’s 2015 and 2016 numbers were so error-ridden that they needed to be sent back and re-released as “restated consolidated reports,” but even those were filled with “material errors” of enormous magnitude.
A big part of the problem was what was described as “weak internal controls” over the complex financial reporting system, which was reportedly in the process of transitioning from a standard ledger format to new “undefined and untested processes” that increased the workload on the financial reporting division and caused them to outsource some of their work to others with even less familiarity or training to handle the processes.
Altogether, the errors in the initial reports amounted to $278.5 billion in misstatements in financial notes, a half billion dollar error in the statement on budgetary resources, and $19.5 billion in discrepancies of line items of the report that differed from what was submitted for audit.
The corrected and restated consolidated financial reports made over $516 billion in corrections to the notes and another $3.4 billion to the financial statement, but even though the Inspector General appreciated HUD’s corrections, the scathing report still called for substantial change to the department’s internal accounting practices.
All of this has occurred under former President Obama and yet we focus on fake stories around President Trump instead of this. That’s right. Liberal media focus on any story to attack President Trump as he is attempting to establish order and clean up the White House.
What are your thoughts? How has this been swept under the rug?