Impact of the Department of Housing and Urban Development's Proposed Consolidation Plan on Tennessee

RCED-83-100: Published: Feb 25, 1983. Publicly Released: Feb 25, 1983.

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In response to a congressional request, GAO evaluated the Department of Housing and Urban Development's (HUD) proposal to move its Nashville multifamily housing function to Knoxville, Tennessee.

HUD contends that inefficient and ineffective program delivery and client service are inherent in splitting the responsibilities for multifamily housing between its offices in Knoxville and Nashville, Tennessee. Further, HUD asserts that the only viable option to correct program delivery and client service problems is to reorganize. GAO does not see support that past reports of program delivery or client service problems were the result of the organizational structure in Tennessee. GAO found no evidence that serious program delivery or client service problems currently exist. In support of its reorganization proposal, HUD developed a cost analysis indicating that a savings would be realized if multifamily housing functions were consolidated in Knoxville as proposed. However, GAO found that the HUD cost analysis contained assumptions and estimates that were neither adequately supported nor based on sound planning or detailed study. The HUD analysis also understates the cost of consolidation and overstates the potential savings. Finally, GAO found no evidence that HUD considered the impact of changing initiatives in its proposal to reorganize in Tennessee, and some of those changes will affect the organization and staffing levels of its field multifamily housing operations.

Recommendation for Executive Action

  1. Status: Closed - Not Implemented

    Comments: Although HUD officially discounts the recommendation, it has decided to cancel the proposed consolidation of multifamily housing operations in Tennessee. GAO that the recommendation is no longer applicable.

    Recommendation: The Secretary of HUD should reevaluate the proposal to consolidate Tennessee multifamily housing operations. In this reevaluation, the Secretary should: (1) justify that the reorganization is necessary and desirable and demonstrate how it will improve program delivery and client service; (2) develop a complete and detailed cost and benefit analysis based on sound plans; and (3) consider the effects of new initiatives in making his final decision regarding the most appropriate organizational structure in Tennessee.

    Agency Affected: Department of Housing and Urban Development


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