HUD’s FY25 Agency Financial Report and related HUD materials available as of now do not describe the exact data‑analytic techniques (for example, specific statistical models, algorithms, or software tools) that the Office of the Chief Financial Officer used to identify the $5+ billion in potential improper payments. They only state that “advanced data analytics” were used to review all 2024 Tenant‑Based Rental Assistance (TBRA) and Project‑Based Rental Assistance (PBRA) payments through internal management reviews. Without the full AFR text or a technical appendix, the specific methods remain undisclosed to the public.
According to HUD’s press release, the more than $5 billion in potential improper payments come from the OCFO’s review of “all Tenant‑Based Rental Assistance (TBRA) and Project‑Based Rental Assistance (PBRA) payments made in 2024,” so they are limited to payments made in that year. HUD characterizes them as “potential improper payments” identified through data analytics and management reviews, not as fully confirmed improper payments; confirmation would require case‑by‑case follow‑up, audits, and investigations under the Payment Integrity Information Act framework.
In federal financial reporting, a “material weakness” is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement of the financial statements or other significant reporting (like improper payments) will not be prevented, or detected and corrected, on a timely basis (per GAO’s Green Book and OMB guidance). HUD’s press release states that, after identifying process gaps and weaknesses related to TBRA and PBRA payments, HUD “disclosed a material weakness” to reflect the risks that existed under the Biden administration. However, the publicly accessible press release does not specify which exact internal controls (for example, eligibility verification, death‑file matching, or payment authorization controls) were missing or ineffective; that level of detail would typically appear in the full AFR and related audit or OIG reports, which are not yet available for FY25. Earlier OIG work has broadly criticized HUD’s controls over estimating and managing improper payments in TBRA and PBRA, but does not enumerate the new FY25 weaknesses described in this press release.
The HUD press release and other currently available HUD documents do not state how many Public Housing Authorities (PHAs) or HUD‑funded grantees were flagged in the FY25 AFR, nor do they list or quantify which specific entities were implicated. The release also does not indicate that HUD plans to publish the identities of particular PHAs or grantees in connection with the $5+ billion of potential improper payments; such details are typically treated as sensitive and handled through audits, monitoring, and possible enforcement actions rather than public naming in summary reports.
The press release announcing the FY25 AFR does not state that HUD has, at this stage, formally referred these particular potential improper‑payment findings to the Office of Inspector General (OIG), the Department of Justice, or Congress for investigation or recovery. It says only that HUD “will continue investigating” and “will take appropriate action to hold bad actors accountable.” HUD OIG already has ongoing oversight of HUD’s payment‑integrity problems generally, but there is no public record yet tying this new $5+ billion figure to a specific, newly announced referral or enforcement action.
HUD’s press release says that, in response to the findings, the Department “will continue to implement new processes to track how Public Housing Authorities (PHAs) and HUD‑funded grantees spend the funds they receive, ensuring efficiency, transparency, and accountability at every level,” but it does not spell out concrete near‑term compliance steps (such as new reporting forms, frequency of submissions, or mandated data‑matching). Based on standard HUD practice and prior OIG recommendations, those steps are likely to include strengthened eligibility verification, better data‑matching against external databases (such as death records and income data), and enhanced monitoring and reporting requirements, but the specific FY25 requirements for PHAs and grantees have not yet been detailed publicly.