Housing and Urban Development: Major Management and Budget Issues

GAO discussed the budget and management problems facing the Department of Housing and Urban Development (HUD), focusing on: (1) long-standing management deficiencies at HUD that hamper its effectiveness; (2) problems that HUD and Congress face in assisted and public housing programs that account for the bulk of HUD outlays; (3) HUD progress in addressing these problems; and (4) the future of HUD. GAO noted that: (1) HUD ability to effectively carry out its mission is hampered by weak internal controls, an ineffective organizational structure, inexperienced staff, and inadequate information and financial management systems; (2) HUD has serious problems with loan defaults on insured multifamily properties and the billions of dollars of backlogged housing rehabilitation needs, increased vacancy levels, and declining tenant incomes that exist in public housing; (3) HUD needs to address the increasing costs of providing housing subsidies to lower-income families; (4) HUD has taken steps to address its departmentwide deficiencies, as well as the problems that exist in assisted and public housing programs; (5) solving the problems at HUD will require a full reexamination of federal housing policies and the HUD mission; (6) HUD budget needs are growing and will remain at high levels for the foreseeable future; and (7) HUD reforms could have serious budget and social implications because HUD currently serves millions of people by providing rental subsidies, addressing housing discrimination, and helping revitalize communities.