HUD OIG Finds VIHFA Lacks Effective Fraud Risk Management Over Nearly $2 Billion in Grants

The title of a March 24 report of the Housing and Urban Development Office of the Inspector General lays out the document’s premise in stark terms: “The U.S. Virgin Islands Housing Finance Authority's Fraud Risk Management Practices Are At or Below The Lowest Desired Level.”  The findings come from an audit of the agency’s framework for preventing, detecting, and responding to fraud as it administers almost $2 billion in block grant funding. The high level conclusion? “VIHFA does not have fraud risk management processes to prevent and detect fraud risks,” the report states, referring to fraud prevention practices at the agency as “ad hoc” or worse. The audit, conducted between April and June 2025, covered the agency’s operations from September 2018 through March 2025. According to the HUD OIG report, while anti-fraud efforts at VIHFA do exist, they are “unstructured and reactive.” On a holistic level, the agency “has not effectively established a program to combat fraud,” the report ...