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HUD's Fiscal Year 2000 Budget Request: Additional Analysis and Justification Needed for Some Programs

RCED-99-251 Published: Sep 03, 1999. Publicly Released: Oct 20, 1999.
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Highlights

Pursuant to a congressional request, GAO reviewed the Department of Housing and Urban Development's (HUD) fiscal year (FY) 2000 budget request, focusing on: (1) whether HUD has the capacity to implement, and adequate justification to support, the new or significantly expanded programs and initiatives included in its budget request; (2) the potential for HUD to use available unexpended balances in some programs to reduce its need for new funding in other programs; and (3) whether HUD adequately justified its use of or requests for funds in the following five areas: (a) disaster assistance; (b) salaries and expenses; (c) Schedule C and non-career Senior Executive Service positions; (d) rural housing and economic development; and (e) international housing initiatives.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Housing and Urban Development To improve HUD's management of unexpended balances, the Secretary of Housing and Urban Development should direct the Department's Chief Financial Officer and its Office of Budget to work with HUD's program offices to independently verify unexpended balances that are certified by program offices.
Closed – Implemented
In response to the recommendation, HUD appointed a Departmental Task Force chaired by the Deputy Chief of Staff for Policy and Programs, to examine the unexpended balances in HUD program offices. The task force has initiated the following steps to get behind these balances: (1) contracted with three different contractors to review programs carrying large balances, including the Section 202 and Public Housing Capital fund programs, Community Development Block Grant program, and Section 8 project and tenant based programs; and (2) held meetings with all departmental heads to inform them that getting behind these balances is a top priority of the department, and that they need to investigate balances in their programs and determine whether they can be rescinded or recaptured. To date, contracted studies have been completed on all programs mentioned above, except the Section 8 project and tenant based program. Furthermore, according to HUD, all other program offices carrying unexpended balances are swept in August to determine the amount of unexpended balances that can be recaptured or rescinded.
Department of Housing and Urban Development The Secretary of Housing and Urban Development should provide, prior to letting new contracts for administering multifamily housing assistance contracts, written assurances to the Senate and House Committees on Appropriations that HUD has: (1) established firm monitoring procedures for overseeing the performance of contract administrators and the condition of the properties they administer through the Contract Administration Program; and (2) amended its budget request to reflect the reduction in the scope of the Contract Administration Program resulting from the exclusion of certain properties from the program.
Closed – Implemented
In response to the recommendation, HUD indicated that draft policies and procedures had been developed for monitoring and oversight of the Contract Administration program, and that these procedures would be finalized in January 2000. However, to date, HUD has not finalized these procedures, and they are still in draft form. HUD also indicated in response to the recommendation that it would reevaluate the need for the number of units included in its budget estimate before starting the effort. According to HUD officials, the number of units factored into the original budget request should be $934,184 not $1.1 million, resulting in an estimated reduction from HUD's original request of about $12 million. HUD agreed to reduce the amount appropriated to the program, and plans to make these excess funds available for other priority needs under the Housing Certificate Fund Account.
Department of Housing and Urban Development The Secretary of Housing and Urban Development should adopt, where practicable, the practices used by the Federal Emergency Management Agency for obligating emergency funding for disaster relief, provided HUD's authority to fund its disaster assistance program does not change.
Closed – Implemented
In response to the recommendation, HUD agreed to review the procedures used by the Federal Emergency Management Agency (FEMA) for obligating its unmet needs funding. HUD has also developed a streamlined approach that incorporates FEMA's procedures for allocating and awarding funds for disaster recovery.
Department of Housing and Urban Development The Secretary of Housing and Urban Development should direct the Office of Budget to work with HUD's program offices to identify programs with a history of unobligated and undisbursed obligated balances, as well as grantees holding excessive balances, so that action can be taken to ensure the expeditious obligation and expenditure of these funds.
Closed – Implemented
In response to the recommendation, HUD appointed a Departmental Task Force chaired by the Deputy Chief of Staff for Policy and Programs, to examine the unexpended balances in HUD program offices. The task force has initiated the following steps to get behind these balances: (1) contracted with three different contractors to review programs carrying large balances, including the Section 202 and Public Housing Capital fund programs, Community Development Block Grant program, and Section 8 project and tenant based programs; and (2) held meetings with all departmental heads to inform them that getting behind these balances is a top priority of the department, and that they need to investigate balances in their programs and determine whether they can be rescinded or recaptured. To date, contracted studies have been completed on all programs mentioned above, except the Section 8 project and tenant based program. Furthermore, according to HUD, all other program offices carrying unexpended balances are swept in August to determine the amount of unexpended balances that can be recaptured or rescinded.
Department of Housing and Urban Development The Secretary of Housing and Urban Development should direct the Office of Budget to work with HUD's program offices to identify and alleviate barriers to the timely obligation of funds in HUD's programs.
Closed – Implemented
In response to the recommendation, HUD established new distribution formulas for the major Section 8 programs, Public Operating Subsidies, Public Housing Capital/Modernization Funds, and Section 8 renewal of annual contracts, which are intended to alleviate many of the distribution problems that were noted in the report.

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Topics

Budget administrationCommunity development programsContract administrationFederal agency reorganizationFederal grantsGrant administrationHousing programsPresidential budgetsUnexpended budget balancesBudget requests