GAO Report Faults CFPB on Internal Control Deficiencies – NMP Skip to main content

GAO Report Faults CFPB on Internal Control Deficiencies

Jun 15, 2016
The Consumer Financial Protection Bureau (CFPB) has levied a $1.75 million civil penalty against Coppell, Texas-based Nationstar Mortgage LLC

While the Consumer Financial Protection Bureau (CFPB) keeps a suspicious eye on how financial institutions operate, the agency’s internal controls and accounting procedures continue to draw criticism from the Government Accountability Office (GAO).

In a new GAO report, the CFPB was faulted for “deficiencies” in its internal control over accounting for property, equipment and software that collectively constituted a significant deficiency in CFPB’s internal control over financial reporting.

“Specifically, GAO found that CFPB did not effectively design or implement controls to (1) reasonably assure accurate and timely classification and recording of software costs and (2) maintain ongoing accuracy and completeness of property and equipment inventory records,” the report stated. “In addition, GAO identified deficiencies that it did not consider to be material weaknesses or significant deficiencies, either individually or collectively, but nonetheless warrant CFPB management’s attention. These control deficiencies are related to reviewing and approving financial statements.”

The GAO offered five recommendations for the CFPB to correct its problems: a new requirement for vendors to provide detailed invoices with costs broken out by project; an updating of records by the agency’s chief financial officer (CFO) on the costs by project; the development of new training materials on how to conduct inventory of electronic equipment and how to update and maintain accurate inventory records; improved coordination between the agency’s CFO and Office of Technology and Innovation; and a new directive for the CFO design and implement more effective procedures over the preparation of CFPB financial statements and note disclosures.

While the CFPB did not acknowledge the GAO report on its Web site, the GAO stated that the agency had “agreed with the recommendations GAO made in the report and has implemented or is in the process of implementing actions to address the issues GAO identified.”

About the author
Published
Jun 15, 2016
MISMO Updates Business Glossary To Support AI, eMortgages

New definitions covering eHELOCs, remote online notarization, valuation modernization, and compliance initiatives aim to improve consistency

Underwriters Don’t Slow Down Loans. They Eliminate Uncertainty.

ndustry’s biggest bottleneck is not underwriting itself — it is the uncertainty that reaches underwriting too late in the process. When validation happens upstream, speed follows naturally.

MISMO Launches AI Governance Framework For Mortgage Lenders

New FRAME toolkit gives lenders, servicers, and technology providers a roadmap for managing AI risk while supporting innovation

CFPB Tells Lenders Immigration Status Can Factor Into ATR Analysis

CFPB frames immigration status as a potential ability-to-repay factor when future U.S.-based income is at risk

UAD 3.6 Deadline Nears; First American Earns Verification

First American's ACI Sky Workbench gains verification ahead of the Nov. 2 implementation date for the GSEs' updated appraisal reporting requirements

MISMO Introduces New Loan Boarding Standard

Wrapper Files support standardized data transfers between origination and servicing systems, with potential savings of $60 to $160 per loan