Housing and Urban Development:

HUD's Management Deficiencies, Progress on Reforms, and Issues for Its Future

T-RCED-97-89: Published: Mar 6, 1997. Publicly Released: Mar 6, 1997.

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GAO discussed progress that the Department of Housing and Urban Development (HUD) has made in addressing serious management and budgetary problems, focusing on: (1) the long-standing management deficiencies that hamper HUD's effectiveness, progress made in addressing these problems, and the work remaining in the coming years; (2) the problems in HUD's assisted and public housing programs, which account for the largest portion of its outlays and a vast share of the budget authority HUD expects to need in the future; and (3) the need to achieve consensus on federal housing policy, HUD's mission, and the resources devoted to achieving that mission.

GAO noted that: (1) four long-standing departmentwide management deficiencies continue to make HUD vulnerable to waste, fraud, abuse, and mismanagement: (a) weak internal controls; (b) inadequate information and financial management systems; (c) an ineffective organizational structure; and (d) an insufficient mix of staff with the proper skills; (2) while HUD has made progress in addressing these weaknesses, GAO has determined that much remains to be done and HUD continues to warrant the focused attention that comes with being designated by GAO as a "high-risk area"; (3) HUD faces a variety of problems in its largest assisted and public housing programs, including how to: (a) continue providing Section 8 housing assistance to 3 million families while not undermining funding for other important housing and community development programs; (b) reduce excess rental subsidies to some insured multifamily properties while minimizing insurance losses to the Federal Housing Administration fund and ensuring that those properties meet basic housing quality standards; and (c) help public housing authorities deal with increasingly tight funding levels while ensuring a minimum level of oversight and assistance from HUD for the authorities with management problems; (4) the Congress and the administration need to agree on the future direction of federal housing policy and put in place the organizational and program delivery structures that are best suited to carrying out that policy; and (5) doing so will require revisiting fundamental issues about that policy, including whom the federal government will serve, how much will be spent on those being served, and how those policies will be implemented.

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