What We’ve Learned from Years of HUD Audits: Expert CPA Reflections
After years of conducting and supporting HUD audits for housing providers across the country, we’ve seen just about everything—strong systems that pass with flying colors and preventable mistakes that turn into costly findings. Through it all, one thing has become clear: success in a HUD audit doesn’t come from luck. It comes from preparation, awareness, and a deep understanding of compliance.
At Wilson & Associates CPA, we’ve built our reputation on guiding HUD-funded organizations through the audit process with confidence and clarity. In this post, we’re sharing key lessons we’ve learned over the years—insights that can help you reduce risk, improve operations, and stay fully aligned with HUD expectations.
HUD Audits Are Predictable—If You Know Where to Look
The HUD audit process is rigorous, but it follows a clear structure. The HUD Consolidated Audit Guide outlines exactly what auditors are required to test, from financial reporting and tenant eligibility to internal controls and procurement procedures.
Lesson:
Organizations that take the time to understand the guide—or partner with CPAs who do—are always better prepared. Knowing what’s coming removes guesswork and gives you time to address issues before they appear in a report.
Documentation Is Everything
We’ve seen otherwise well-run organizations struggle during audits simply because they couldn’t produce the right documentation. HUD auditors don’t just want to know that you’re compliant—they want proof.
Lesson:
Create a strong paper trail for every policy, transaction, and tenant file. Establish clear filing systems and retain documents according to HUD’s retention guidelines. If it’s not documented, HUD considers it didn’t happen.
Internal Controls Can Make or Break an Audit
Many findings stem not from outright violations, but from weak internal controls—things like lack of segregation of duties, poor approval processes, or informal cash handling practices.
Lesson:
Build internal controls that are realistic for your organization’s size and complexity. Small teams may need creative workarounds, like board-level oversight or rotating financial responsibilities, to stay compliant and secure.
Your Team Matters More Than You Think
HUD compliance isn’t just about policies—it’s about the people putting them into practice. When staff don’t fully understand HUD rules, even routine tasks like rent calculations or recertifications can result in costly errors.
Lesson:
Invest in training. Ensure your property managers, finance staff, and program directors are well-versed in HUD regulations. A knowledgeable team is your first line of defense against audit findings.
Timely Reporting Is Non-Negotiable
We’ve seen organizations face avoidable penalties simply because they missed a reporting deadline. HUD has strict timelines, especially for year-end financial statements and program reports.
Lesson:
Create a compliance calendar with all HUD reporting deadlines and assign responsibility. Your CPA can help build a reporting workflow to keep things on track.
Audit Prep Is a Year-Round Activity
Many providers scramble to prepare for an audit only once they receive a notification. In our experience, the most successful audits happen when compliance is integrated into everyday operations.
Lesson:
Don’t wait for the audit letter. Conduct internal reviews, test files, and reconcile accounts regularly throughout the year. Pre-audit checkups with your CPA can catch issues early and give you peace of mind.
A Knowledgeable CPA Makes a Big Difference
HUD audits aren’t like standard financial audits. They require a specialized understanding of government regulations, compliance testing, and the unique structure of HUD-funded organizations.
Lesson:
Choose a CPA firm that lives and breathes HUD. A generalist accountant might get the basics right, but a HUD-experienced CPA can help you identify risks, improve your systems, and navigate the audit process with confidence.
Moving Forward with Confidence
Every audit we’ve conducted has taught us something new—but the biggest takeaway is this: preparation and knowledge are the keys to success. At Wilson & Associates CPA, we’re proud to bring both to the table for every client we serve.
If you’re ready to take a proactive approach to HUD compliance and audit readiness, we’re here to help.
📞 Let’s talk. Contact us to schedule a consultation or HUD compliance checkup today.