HUD Management:

Major Challenges and Program Risks

T-RCED/AIMD-99-126: Published: Mar 23, 1999. Publicly Released: Mar 23, 1999.

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Judy A. England Joseph
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Pursuant to a congressional request, GAO discussed its January 1999 report on the Department of Housing and Urban Development's (HUD) major management challenges and program risks, focusing on: (1) corrective actions that HUD has taken or initiated on its major management challenges; (2) major management challenges that remain and limit HUD's effectiveness in carrying out its mission; and (3) further actions that are needed to resolve these challenges.

GAO noted that: (1) HUD is making significant changes and has made credible progress in overhauling its operations to correct its management deficiencies; (2) among other things, it has improved its financial reporting and development risk assessments for its programs, developed and deployed components for its information and financial management systems, consolidated and centralized many of its operations, and reassigned and begun to retrain many of its staff; (3) a major contributor to this progress is HUD's June 1997 2020 Management Reform Plan, a set of proposals intended to, among other things, correct the management deficiencies that GAO and others identified; (4) however, it should be recognized that HUD's problems were years in the making and will take time and much effort to correct; (5) HUD management has placed high priority on removing HUD programs from the high-risk designation, but it will take continued and sustained efforts before meaningful and lasting results can be achieved; (6) while major reforms are under way, GAO's recent work indicates that internal control weaknesses and problems with information and financial management systems persist; (7) recently, GAO reported that HUD is likely to continue to spend millions of dollars, miss milestones, and still not meet its objective of developing and fully deploying an integrated financial management system because it has not yet finalized detailed project plans or cost and schedule estimates for this effort; (8) furthermore, recent reforms to address HUD's organizational and staffing problems are in the early stages of implementation, and it is too soon to tell whether the reforms will resolve the major deficiencies that GAO and others have identified; (9) therefore, pending the achievement of substantial results, the integrity and accountability of HUD's programs remain at high risk in GAO's opinion; and (10) GAO reached this conclusion using the same methodologies and criteria as it used for its 1995 and 1997 reports.

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