Page 1 GAO-25-107981 FHFA Internal Control
April 30, 2025
The Honorable William J. Pulte
Director, Federal Housing Finance Agency
Federal Housing Finance Agency: Improvements Needed in Certain Internal Controls
over Financial Reporting
Dear Director Pulte:
On November 15, 2024, we issued our auditor’s report on the results of our audits of the fiscal
year 2024 consolidated financial statements of the Federal Housing Finance Agency (FHFA)
and of FHFA’s internal control over financial reporting relevant to its financial statements as of
September 30, 2024.
1
As we reported in connection with our audits, although certain controls
could be improved, FHFA maintained, in all material respects, effective internal control over
financial reporting as of September 30, 2024. Those controls provided reasonable assurance
that FHFA would prevent, or detect and correct, material misstatements of the agency’s
consolidated financial statements on a timely basis.
However, we identified a deficiency in FHFA’s controls over accounts payable accruals that
represents a new significant deficiency in FHFA’s internal control over financial reporting.
2
We
also identified other deficiencies in FHFA’s internal controls that we do not consider to be
material weaknesses or significant deficiencies but warrant the attention of FHFA management.
We are making four new recommendations to address these deficiencies.
This report also presents the results of our follow-up on the status of FHFA’s corrective actions
to address nine recommendations related to internal control over financial reporting deficiencies
identified in our prior reports that remained open as of September 30, 2023.
3
FHFA completed
corrective actions to address four of the nine recommendations and was in the process of taking
corrective actions for the remaining five recommendations. This report is intended for FHFA
management’s use.
1
GAO, Financial Audit: Federal Housing Finance Agency’s FY 2024 and 2023 Financial Statements, GAO-25-107454
(Washington, D.C.: Nov. 15, 2024).
2
A deficiency in internal control exists when the design or operation of a control does not allow management or
employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable possibility that a material misstatement of the entity’s
financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a
deficiency, or a combination of deficiencies, in internal control over financial reporting, that is less severe than a
material weakness yet important enough to merit attention by those charged with governance.
3
GAO, Management Report: Federal Housing Finance Agency Should Improve Controls over Personnel and Payroll
Information, GAO-23-106487
(Washington, D.C.: Apr. 19, 2023); Federal Housing Finance Agency: Improvements
Needed in Controls over Management Reviews and Information Systems Access, GAO-24-107219 (Washington,
D.C.: May 9, 2024); and Federal Housing Finance Agency Office of Inspector General: Improvements Needed in
Review of Procedures for Payroll Accounting, GAO-24-107430 (Washington, D.C.: May 9, 2024).
