HUD's Fiscal Year 2000 Budget Request

The Department of Housing and Urban Development (HUD) faces a combination of limited funds and organizational changes in fiscal year 2000. In April, Congress approved a budget for the U.S. government for fiscal year 2000 and set forth budgetary levels for fiscal years 2001 through 2009. Industry groups representing housing and community development practitioners believe that these levels could limit the amount of new budget authority available for HUD's programs. This report answers questions about HUD's fiscal year 2000 budget request.

GAO noted that: (1) out of its total FY 2000 budget request of over $28 billion, HUD has requested $731 million for 19 programs and initiatives that were not funded in FY 1999; (2) however, in GAO's March 1999 testimony on HUD's FY 2000 budget request, GAO questioned HUD's capacity to manage this volume of additional work because of the time-consuming organizational reform occurring at this time and the substantial resources HUD would need to implement new programs; (3) in GAO's review of one of the largest of these new programs--Contract Administration, with $209 million requested for FY 2000--GAO found that HUD has not accomplished two tasks that are critical for effective implementation; (4) as proposed, the Contract Administration program would contract out for the administration of 20,000 multifamily properties in HUD's project-based section 8 housing assistance inventory; (5) although HUD has taken steps to identify qualified contractors, HUD has not established, to date, essential oversight procedures nor assigned key staff to monitor the contractors' performance; (6) furthermore, HUD recently decided to exclude certain properties from the program, which could reduce the need for fully funding the request; (7) therefore, HUD is not prepared to fully implement the program and likely will not need the full amount of its FY 2000 budget request for this program; (8) the potential exists for HUD to better manage unexpended balances in a number of programs and for some unobligated funding to be used to meet other needs; (9) however, determining the full extent to which unexpended balances are available for other purposes will require additional information and analysis by HUD; (10) GAO's limited review identified some programs--such as the Homeless Assistance, Rent Supplement, and Rental Assistance programs--in which the need for carrying unobligated balances is questionable; (11) it also showed that the unobligated, unexpended balances for three selected programs are caused by several factors, including HUD's lengthy process for making competitive awards and funding allocation policies that delay providing funds to grantees; (12) taking steps to scrutinize and make more productive use of its unobligated balances is important because these balances have grown over the past 3 years for some of HUD's existing programs; and (13) for 4 of the 5 areas GAO reviewed, GAO found that HUD had adequate support for its budget request.

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.

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