Impact of the Department of Housing and Urban Development's Proposed Consolidation Plan on Tennessee

In response to a congressional request, GAO evaluated the Department of Housing and Urban Development's (HUD) proposal to move its Nashville multifamily housing function to Knoxville, Tennessee.

HUD contends that inefficient and ineffective program delivery and client service are inherent in splitting the responsibilities for multifamily housing between its offices in Knoxville and Nashville, Tennessee. Further, HUD asserts that the only viable option to correct program delivery and client service problems is to reorganize. GAO does not see support that past reports of program delivery or client service problems were the result of the organizational structure in Tennessee. GAO found no evidence that serious program delivery or client service problems currently exist. In support of its reorganization proposal, HUD developed a cost analysis indicating that a savings would be realized if multifamily housing functions were consolidated in Knoxville as proposed. However, GAO found that the HUD cost analysis contained assumptions and estimates that were neither adequately supported nor based on sound planning or detailed study. The HUD analysis also understates the cost of consolidation and overstates the potential savings. Finally, GAO found no evidence that HUD considered the impact of changing initiatives in its proposal to reorganize in Tennessee, and some of those changes will affect the organization and staffing levels of its field multifamily housing operations.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: Steven J. Wozny Team: General Accounting Office: Resources, Community, and Economic Development Division Phone: (202) 426-1780