Staffing, expenses challenged FHFA, but it met most fiscal year goals

The Federal Housing Finance Agency kept up with the majority of its strategic targets in fiscal year 2022, but fell short in a few areas.

Overall, Director Sandra Thompson said the just-released annual performance and accountability report shows that "FHFA performed well under the existing strategic goals and finds that the agency has no material internal control weaknesses."

However, the report did acknowledge three goals the FHFA failed to meet during the fiscal year, which ended Sept. 30.

One was a report related to "human capital," or staffing, something the FHFA's inspector general flagged in a recent missive as impeding the agency's oversight of executive compensation at a large, government-related mortgage investor.

The agency drafted a plan aimed at improving staffing ahead of a targeted July 2022 completion date, but failed to finalize that report.

The FHFA also hasn't kept up with its goal to meet 95% of its inspector general's recommendations within one year of their resolution dates, the report noted. It completed 84% of the recommendations within this timeframe.

"Some of the corrective actions were tied to exam cycles and could not be resolved within one year due to the timing of exams," the agency said in the report.

Additionally, the FHFA failed to approve diversity and inclusion reports for government-sponsored enterprises it oversees and their Common Securitization Solutions affiliate by a March target date, noting that "the ratings for Fannie Mae, Freddie Mac and CSS are non-public and under review."

Another challenge for the agency in the past fiscal year was an increase in expenditures related to modernizing technology, climate risk and expanded research capabilities, according to the report.

Gross costs allocated to strategic goals rose to $338.4 million from $317.6 million. At the same time, revenue derived from assessments fell 5% to $320.3 million. That resulted in a net cost of more than $18 million for operations in fiscal year 2022.