Transforming a Federal Agency

Chapter 10Coordination with Critical Service Providers

In the private sector, good financial controls and the financial statement close process can rely on outside service providers, including the independent auditor. The same is true for government. In HUD's case, we had several third-party providers involved in our financial processes. The Federal Housing Administration utilized a third party to assist in recording its credit subsidy liability. GNMA used third-party providers for multiple aspects of its accounting processes and loan-serving obligations. These third-party providers were doing a good job and were important to our control environment.

Our financial transformation efforts focused on two critical third-parties—our shared services center provider and our auditors. Our shared services center provider was the Treasury's Bureau of Fiscal Affairs' Administrative Resource Center (ARC), and our financial statements were audited by the Office of Inspector General. The ARC was directly involved in HUD's accounting and the preparation of our financial statements—coordinating our transformation efforts with the ARC was essential. The OIG was not involved in our accounting or reporting processes but was responsible for the independent audit of HUD's financial statements. Similar to the private sector, government entity auditors have a responsibility to perform an audit in accordance with applicable auditing standards. The independent audit process is one of the most important ...