GAO discussed the Department of Housing and Urban Development's (HUD) reorganization and its programs, priorities, and business operations. GAO noted that: (1) HUD reorganization could overshadow the redirection of its programs and priorities; (2) HUD may not have the resources to complete its overly ambitious reinvention agenda; (3) the Government National Mortgage Corporation needs more staffing flexibility to improve its focus on areas of risk and exposure and its response to future management challenges; (4) HUD information systems have not been planned and managed to meet its strategic objectives and it will take years of sustained management attention to correct these problems; (5) large budget carryovers have raised questions about HUD ability to allocate funds efficiently and its need for new budget authority; (6) HUD has a backlog of obligated and unobligated funds because of difficulties in planning modernization projects; (7) HUD does not accurately estimate the future costs of incentives for property owners to preserve their properties as low-income housing; (8) HUD could have the ultimate responsibility to settle claims resulting from lead-based paint poisoning, but HUD could minimize lead-based hazards by acting on previous recommendations; and (9) HUD cannot realistically resolve its problems in a single year.