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Highlights

What GAO Found

The Department of Housing and Urban Development‘s (HUD) oversight of the Moving to Work (MTW) demonstration has been limited. Improving oversight—particularly for information collection and analysis—would help HUD assess what MTW agencies have done, including funding use. HUD took steps to improve oversight and reporting, but GAO found limitations in the following areas:

  • Workforce planning. While HUD has taken steps to address staffing to oversee the current 39 MTW agencies, HUD has not finalized its workforce planning for 100 agencies to be added to the demonstration. According to a 2015 HUD analysis, a large number of additional staff would be needed for the expansion. HUD officials said field office staff might assume greater oversight responsibilities to fill this gap, but a joint (headquarters-field) oversight structure is not final and HUD's workforce analysis has not been updated to reflect this proposed oversight structure.
  • Data collection. Due to limited data, HUD cannot fully determine the extent to which demonstration flexibilities affected the performance of MTW agencies, especially in relation to outcomes that affect the number of tenants served—occupancy and voucher utilization rates and program expenses. GAO found that MTW agencies had lower yearly median rates for public housing occupancy and Housing Choice Voucher (voucher) unit utilization and higher yearly median program expenses than comparable non-MTW agencies. The differences may be partly the result of demonstration funding flexibilities, such as the ability to use public housing and voucher funding for purposes such as gap financing for affordable housing (a nontraditional activity). But limitations in HUD data (such as not differentiating expenses for nontraditional activities) make it difficult to fully explain differences in outcomes GAO analyzed.
  • Oversight of reserves. HUD has not implemented a process to monitor MTW reserves or agencies' plans for such reserves, which led to agencies accruing relatively large amounts of unused funds that could be used for vouchers. According to HUD data as of June 30, 2017, the 39 MTW agencies had more voucher reserves than the 2,166 non-MTW agencies that administer the voucher program combined ($808 million compared to $737 million). Without a monitoring process, HUD cannot provide reasonable assurance that MTW agencies have sound plans for expending reserves.
  • Monitoring the effect of rent reform, work requirements, and time limits on tenants. HUD is limited in its ability to evaluate the effect of MTW policies on tenants. HUD does not have a framework—including clear guidance on reporting requirements and analysis plans—for monitoring the effect of rent-reform, work-requirement, and time-limit policies. HUD guidance instructs agencies to analyze the impact of their rent reform activities, describe how they will reevaluate them, and develop a tenant hardship policy for such policies (but not for time limits or work requirements). But the guidance does not describe what must be included in the analyses or policies, leading to wide variation in how agencies develop them. Also, HUD does not assess the results of agencies' analyses.

Why GAO Did This Study

The MTW demonstration gives 39 participating public housing agencies the flexibility to use funding for HUD-approved purposes other than housing assistance, such as developing affordable housing; change HUD's tenant rent calculation; and impose work requirements and time limits on tenants. In 2015, Congress authorized the expansion of MTW by adding 100 new agencies. GAO was asked to evaluate the MTW demonstration. GAO examined HUD oversight of MTW agencies, including its monitoring of demonstration effects on tenants.

For this report, GAO reviewed HUD and MTW agency policies and documentation; interviewed officials at HUD and seven MTW agencies (selected based on type of policy changes, size, and geographic diversity); and interviewed tenants served by selected agencies. GAO also conducted a statistical analysis comparing data for MTW and non-MTW agencies on public housing occupancy rates, voucher utilization rates, and program expenses.

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Recommendations

GAO makes 11 recommendations to HUD, which include completing workforce planning, developing processes to track use of funds and monitor agencies' reserves, and developing a framework—including clear guidance on reporting requirements and analysis plans—to monitor effects on tenants. HUD generally agreed with eight of the recommendations and disagreed with three, citing the need for flexibility. GAO maintains the recommendations, as discussed further in the report.

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Housing and Urban Development
Priority Rec.
This is a priority recommendation.
1. The Assistant Secretary for the Office of Public and Indian Housing (PIH) should complete workforce planning for the MTW demonstration to help ensure that PIH has sufficient staff with appropriate skills and competencies to manage an expanded demonstration, including reviewing reports and carrying out compliance reviews in a timely manner. (Recommendation 1)
Closed - Implemented
In response to this recommendation, HUD stated that the agency would continue its workforce planning efforts to ensure that the agency had sufficient staff with appropriate skills and competencies to appropriately implement the MTW expansion. Specifically, it conducted a workload analysis in January 2020, assessing organizational functions, work products, and resources to determine the staffing gaps within the MTW Office. Since then, HUD has hired nine staff to fill gaps identified. HUD's identification of the skills and competencies needed and hiring of staff to address gaps should help it to oversee the expanded MTW demonstration.
Department of Housing and Urban Development 2. The Assistant Secretary for PIH should more fully document the process for annually assessing compliance with the five demonstration requirements. (Recommendation 2)
Closed - Implemented
In response to this recommendation, HUD stated that it would finalize internal written procedures. In April 2019, HUD developed guidance detailing how it will annually assess compliance with the five requirements for existing MTW agencies. In addition, on August 28, 2020, HUD issued a Federal Register operations notice for the expansion of the MTW demonstration, which also detailed how HUD will annually assess compliance with the five requirements for the expansion agencies. Both of these documents generally describe the data, data source, and methodology HUD will use to assess compliance with each of the five requirements. Taking these steps should help HUD ensure that it more consistently monitors MTW agencies' compliance with the five requirements.
Department of Housing and Urban Development
Priority Rec.
This is a priority recommendation.
3. The Assistant Secretary for PIH should develop and implement a process to track how MTW demonstration funds are being used for other allowable activities, including local, nontraditional activities. (Recommendation 3)
Open
In March 2021, HUD officials stated that they planned to revise reporting requirements and guidance for MTW agencies' Housing Choice Voucher funds to better track how these funds are being used for local, nontraditional activities. HUD plans to finalize these revisions by late 2021.
Department of Housing and Urban Development 4. The Assistant Secretary for PIH should identify and implement changes to PIC to capture household data for households served through local, nontraditional activities. (Recommendation 4)
Open
In January 2021, HUD officials stated that HUD planned to add fields for capturing data on households served through local, nontraditional activities to the next generation of PIC for expansion MTW agencies, which would be implemented in fiscal year 2021. Officials said HUD is currently in the process of determining when the next generation of PIC will be rolled out for existing MTW agencies.
Department of Housing and Urban Development
Priority Rec.
This is a priority recommendation.
5. The Assistant Secretary for PIH should develop and implement a process to monitor MTW agencies' reserves. (Recommendation 5)
Open
In January 2021, HUD officials stated that they planned to monitor existing MTW agencies' Housing Choice Voucher reserves by revising their annual reporting requirements to require them to report their plans for and use of reserves. HUD plans to issue the revised guidance by the summer of 2021.
Department of Housing and Urban Development 6. The Assistant Secretary for PIH should clarify HUD's rent-reform definition for the MTW demonstration as part of a framework for monitoring the effect of rent-reform, work-requirement, and time-limit policies on tenants. (Recommendation 6)
Open
On August 28, 2020, HUD published the MTW expansion operations notice, which better clarified the definition of rent reform for expansion agencies. In January 2021, HUD officials stated that PIH would clarify the definition of rent reform for existing MTW agencies in a document responding to frequently asked questions on the annual reporting requirements.
Department of Housing and Urban Development 7. The Assistant Secretary for PIH should set parameters for HUD's definition of self-sufficiency for the demonstration, either by providing one definition or a range of options from which agencies could choose, as part of a framework for monitoring the effect of rent-reform, work-requirement, and time-limit policies on tenants. (Recommendation 7)
Open
In January 2021, HUD officials said that the agency plans to provide a range of suggested options for defining self-sufficiency in a document responding to frequently asked questions about the annual reporting requirements for MTW agencies.
Department of Housing and Urban Development 8. The Assistant Secretary for PIH should revise HUD's guidance to MTW agencies to make it clear which elements are required in impact analyses, annual reevaluations, and hardship policies and the information required for each element as part of a framework for monitoring the effect of rent-reform, work-requirement, and time-limit policies on tenants. (Recommendation 8)
Open
On August 28, 2020, HUD published the MTW expansion operations notice that clarified which elements are required in impact analyses, annual reevaluations, and hardship policies the expansion MTW agencies develop. In January 2021, HUD officials stated that the 2016 Appropriations Act that extended the standard agreement for the existing 39 MTW agencies limits HUD's ability to revise its guidance for these agencies to make it clear which elements are required in impact analyses, annual reevaluations, and hardship policies and the information required for each element. However, they stated they plan to encourage these agencies to review the MTW operations notice for suggestions on how to structure their impact analyses, annual reevaluations, and hardship policies. As we stated in our report, the guidance for the existing MTW agencies is set forth outside the standard agreement, and HUD already has revised this guidance without changes to the standard agreement. Therefore, we continue to believe that HUD could revise its guidance for the existing agencies to clarify which elements are required for these documents and the information each element should include.
Department of Housing and Urban Development 9. The Assistant Secretary for PIH should develop written guidance for existing MTW agencies that requires a hardship policy for public housing time limits and encourages an impact analysis, annual reevaluation, and hardship policy for work-requirement and time-limit policies for public housing and voucher programs as part of a framework for monitoring the effect of these policies on tenants. (Recommendation 9)
Open
In January 2018, HUD updated its guidance to require existing MTW agencies to develop a hardship policy for public housing time limits. In January 2021, HUD provided GAO a draft of frequently asked questions to accompany its guidance to existing MTW agencies, one of which encourages an impact analysis, annual reevaluation, and hardship policy for work-requirement and time-limit policies for public housing and voucher programs.
Department of Housing and Urban Development 10. The Assistant Secretary for PIH should require an impact analysis, annual reevaluation, and hardship policy for work-requirement and time-limit policies new MTW agencies adopt for their public housing and voucher programs as part of a framework for monitoring the effect of these policies on tenants. (Recommendation 10)
Closed - Implemented
In response to this recommendation, HUD stated that new agencies would be required to take these steps once it finalized the MTW operations notice. On August 28, 2020, HUD finalized the notice, which required agencies that adopt work-requirement and time-limit policies to develop impact analyses and hardship policies for these activities. By requiring new MTW agencies to develop impact analyses and hardship policies for work-requirement and time-limit policies, HUD has taken steps to help ensure it collects information needed to evaluate the effect of these policies on tenants.
Department of Housing and Urban Development
Priority Rec.
This is a priority recommendation.
11. The Assistant Secretary for PIH should develop and implement a plan for analyzing the information that agencies report on the effect of rent-reform, work-requirement, and time-limit policies on tenants as part of a framework for monitoring the effect of these policies on tenants. (Recommendation 11)
Open
In January 2021, HUD officials stated that they planned to develop separate analysis plans for existing and expansion MTW agencies due to differences in the types of performance information HUD can require them to report under their MTW agreements. For the expansion agencies, HUD stated that it will analyze the effect of rent-reform, work-requirement, and time-limit policies as part of cohort-specific evaluations.

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