HUD Management

The Department of Housing and Urban Development (HUD) has been repeatedly criticized for management and oversight weaknesses that have made the agency vulnerable to waste, fraud, abuse, and mismanagement. In 1994, GAO included HUD in its list of high-risk programs because of four long-standing deficiencies: weak internal controls, poor information and financial management systems, an ineffective organizational structure, and an insufficient mix of staff with the proper skills. In June 1997, HUD announced its "HUD 2020 Management Reform Plan," a sweeping set of proposals intended to, among other things, address management weaknesses and downsize the agency. This testimony discusses (1) HUD's progress in addressing management shortcomings and the need for additional improvement, (2) the activities under HUD's 2020 management reform and other efforts to address its deficiencies, (3) issues that GAO believes are key as HUD implements its management reforms, and (4) the relationship between HUD's reform efforts and its Results Act plans.

GAO noted that: (1) HUD has made progress in addressing problems that led to GAO's high-risk designation, but much remains to be done; (2) prior to announcing the 2020 management plan, HUD had among other things: (a) addressed internal control weaknesses by implementing a new management planning and control program and reduced the material weaknesses identified under the Federal Managers' Financial Integrity Act (FMFIA) assessment; (b) continued to make progress in improving its information and financial management systems; (c) completed a field reorganization that transferred direct authority for staff and resources to the Assistant Secretaries; and (d) made some progress in addressing problems with staff members' skills and with resource management; (3) however, GAO's recent work and that of the Inspector General indicate the need for continued progress in these areas; (4) under HUD 2020 Management Reform Plan and related efforts, HUD is in the process of making significant changes that will affect most aspects of its operations; (5) the plan calls for reducing the number of programs, reducing staffing, retraining the majority of the staff, reorganizing the 81 field offices, consolidating processes and functions within and across program areas into specialized centers, and modernizing and integrating the financial and management information systems; (6) several interrelated issues are particularly important for achieving the intended benefits of HUD's management reform efforts: (a) HUD's ability to meet planned timetables for implementing key reforms; (b) the adequacy of staffing during and after the transition to the new HUD; (c) the Department's ability to reduce the number of troubled public housing authorities and troubled multi-family projects; and (d) HUD's ability to effectively improve its procurement and contracting practices, including its oversight of contractors; (7) the HUD 2020 Management Reform Plan appears to be the driving force behind agency operations, and it is clearly linked to the agency's strategic and annual performance plans required by the Results Act; (8) the degree to which HUD is successful in implementing its reform efforts will influence its success in meeting its goals and objectives outlined in the strategic and annual performance plans; (9) both appear to rely in part on many of the same legislative proposals that could affect HUD's staffing needs and the attainment of strategic objectives; and (10) HUD's strategic plan could be improved by clarifying the impact on meeting objectives if the legislative proposals are not enacted.