This testimony discusses the high-risk program areas and management challenges at the Department of Housing and Urban Development (HUD). For many years, management and oversight weaknesses have made its programs vulnerable to fraud, waste, abuse, and mismanagement. The current administration has placed improving HUD's management among its highest priorities and wants to remove the high-risk designation from all HUD programs by 2005. Human capital management is the most pressing management challenge facing HUD. HUD has begun the initial stages of workforce planning; it has completed its resource estimation and allocation process, which estimates the staff needed to handle the current workload in each office, and a detailed analysis of potential staff losses due to retirement. However, the Department does not have a comprehensive workforce plan. Effective acquisition management is of increasing importance because, as HUD downsized its staff, it relied more and more on outside contractors to accomplish its mission. HUD has made progress in the past few years improving its acquisition management practices, but it faces the challenge of ensuring that, where it relies on contractors to perform its mission, it will hold these contractors accountable for results. Responsive programmatic and financial management information systems are critical to HUD's ability to meet its mission, deliver key services, and establish sufficient management control over its programs and operations. GAO first reported some of HUD's current problems in 1984, and its recent work shows that these weaknesses continue to adversely impact the Department's ability to monitor and effectively ensure the integrity of its single-family mortgage insurance and rental assistance programs.