FEDERAL

FHLBanks, using analytically rigorous methods;
and (3) analyze staffing levels needed to perform
additional cross-cutting analyses and oversee housing
project site visits by the FHLBanks, and take
appropriate actions to meet those staffing targets.
FHFA agreed with our recommendations and noted
specific steps it will undertake to address them.
Recommendations
A complete list of OIG’s audit and evaluation
recommendations is provided in Appendix B.
Other Reports
In addition to its audits and evaluations, OIG issued
two management alerts.
Management Alert: Delay Implementing Advisory
Bulletin No. 2012-02 (August 5, 2013)
In a memo to the FHFA Acting Director, OIG raised
concerns about the delay, authorized by FHFA, in
the enterprises’ compliance with Advisory Bulletin
No. 2012-02. The bulletin directed the enterprises to
change their current practices and classify any singlefamily
loan that is delinquent for 180 or more days
as a loss. The bulletin initially called for compliance
in April 2012, although FHFA agreed to extensions
until January 1, 2015.
Given this lengthy delay and because the advisory
bulletin involves matters central to sound risk
management and accounting practices at the
enterprises, OIG recommended that FHFA require
the enterprises to report the estimated impact on
their financial statements as if the bulletin were in
effect. The agency agreed with the recommendation.
Public Company Accounting Oversight Board
Criticisms of Public Accounting Firms that Do
Business with the GSEs (May 3, 2013)
The Public Company Accounting Oversight Board
inspects selected audit work of public accounting
firms to assess compliance with requirements
established by the Sarbanes-Oxley Act of 2002, the
Securities and Exchange Commission (SEC), and
professional standards. The board found that two
firms, which conduct annual financial statement
audits for the GSEs, had failed to satisfy concerns it
had identified in previous inspections. While those
concerns were unrelated to the firms’ work for the
GSEs, we recommended that FHFA request that
the GSEs confirm that their audit committees and
management provide elevated attention to the work
conducted by the two firms.
Civil Fraud Initiative
OA launched its Civil Fraud Initiative in June 2013.
OA, with support from OI and the Office of Counsel
(OC), conducts civil fraud reviews (also known
as nonaudit services) to identify fraud and make
referrals for civil actions and administrative sanctions
against entities and individuals who commit fraud
against FHFA, Fannie Mae, Freddie Mac, or the
FHLBanks.
Currently, OA is working with various assistant U.S.
Attorneys on reviews of lenders’ loan origination
practices to determine their compliance with
enterprise requirements. Lenders are considered for
review through the use of data-mining techniques
and requests from government agencies.
Audit and Evaluation Plan
OIG maintains an Audit and Evaluation Plan
that focuses strategically on the areas of FHFA’s
18 Federal Housing Finance Agency Office of Inspector General