Housing and Urban Development: Reinvention and Budget Issues

GAO discussed the Department of Housing and Urban Development's (HUD) reinvention plans and fiscal year (FY) 1996 budget. GAO noted that: (1) HUD will take longer than the originally projected 3 years to implement its reinvention plans; (2) the reinvention strategy would make public housing authorities compete with the private market, consolidate 6O categorical programs into 3 flexible, performance-based funds, and establish an entrepreneurial, government-owned Federal Housing Administration; (3) the strategy requires major legislative actions, regulatory revisions, new funding allocation formulas, and more state responsibility; (4) HUD internal control, organization structure, staff mix, and information and financial management system weaknesses jeopardize the reinvention strategy's success; (5) HUD top management has given high priority to correcting these deficiencies; (6) projected FY 1996 HUD budget savings would result from shortening Section 8 contracts, which would defer costs to later years, freezing or reducing program spending levels, and other unspecified and technical changes; and (7) the HUD FY 1996 budget projects savings of $51 billion in budget authority and $13 billion in outlays over the next 5 years.