This report discusses the Department of Housing and Urban Development's (HUD) efforts to resolve serious internal control weaknesses. During the past several years, serious internal control weaknesses and other deficiencies have plagued HUD's activities. In 1997, HUD announced its 2020 Management Reform Plan to overcome the agency's problems. HUD has made reasonable progress toward resolving material internal control weaknesses, but more remains to be done. Major steps that remain include bringing core financial systems into compliance with federal financial systems requirements, ensuring that rental subsidies are based on correct tenant income, improving the Federal Housing Administration's (FHA) multifamily project monitoring, improving budgetary and financial accounting controls, and enhancing support in the FHA business processes.