Housing and Urban Development:

Reforms at HUD and Issues for Its Future

T-RCED-95-108: Published: Feb 22, 1995. Publicly Released: Feb 22, 1995.

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GAO discussed the budget and management problems facing the Department of Housing and Urban Development (HUD). GAO noted that: (1) the four high risk problems that hamper HUD ability to effectively carry out its mission are weak internal controls, an ineffective organizational structure, an insufficient number of properly skilled staff, and inadequate information and financial management systems; (2) HUD needs to address its management deficiencies so that it can minimize mortgage loan defaults, address the physical inadequacies of its insured multifamily properties, control housing subsidy costs, and address its public housing rehabilitation backlog, increased vacancy levels, and declining tenant incomes; (3) over the next 6 years, HUD expects that multifamily loan defaults will total about $10 billion; (4) although HUD has developed a new management approach that balances risks with results and begun to consolidate its field offices, these efforts are in the early stages of implementation; (5) the HUD reinvention blueprint may require major legislative overhauls and revisions and may be difficult to implement because of HUD long-standing systemic management deficiencies; and (6) HUD management reforms will require a long-term commitment and could have serious budget and social implications.

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