GAO Gives HUD Update on Open Recommendations

The Government Accountability Office (GAO) recently reminded HUD of some ways it could improve its operations. In November 2021, GAO reported that 67 percent of its recommendations for HUD made four years prior were implemented. And HUD has implemented four of GAO’s 13 priority recommendations.

Specifically, HUD issued a Cybersecurity Risk Management Strategy and an Enterprise Risk Management Standard Operating Procedure. It also reviewed positions and assigned work role codes in the IT management occupational series. For the Moving to Work program, HUD upgraded an information system to track use of Housing Choice Voucher funds for certain activities. And finally, Ginnie Mae developed and recalibrated an economic model to estimate the guaranty fee needed to cover losses and found its capital reserves adequate to cover estimated losses.

As of June 2022, however, HUD had 121 open recommendations. The congressional watchdog recently sent an update to the HUD Secretary highlighting 11 priority open recommendations for HUD as of June 2022. With the recent update, GAO sought to direct Secretary Marcia Fudge’s continued personal attention to recommendations it views should be given high priority. The 11 priority recommendations fall into the following six major areas.

Disaster Recovery Barriers

Many disaster survivors face barriers in accessing disaster assistance programs and resources. GAO recommended HUD hash out an agreement with the Federal Emergency Management Agency and the Small Business Administration to identify barriers to disaster recovery access and disparate outcomes in disaster-affected areas.

REAC Physical Inspection Process

The Real Estate Assessment Center’s inspections continue to find properties in poor physical condition and with life-threatening health and safety issues. And Congress and the media raised concerns about properties that may have received inspection scores not consistent with their physical condition. In March 2019, GAO found several weaknesses in REAC’s physical inspection process and recommended a comprehensive review of the process.

Ginnie Mae’s Risk Management and Staffing Challenges

According to GAO, Ginnie Mae, a guarantor of federally backed loans, has faced challenges with its ability to oversee significant growth in its operations. GAO said that Ginnie Mae, a corporation inside of HUD, relies heavily on contractors for many functions, yet doesn’t analyze the cost of using contractors. GAO said that analysis would help it decide whether to use in-house staff instead of contractors for certain functions.

Processes to Address Lead Paint Hazards

GAO also recommended that HUD establish a plan to mitigate and address risks within HUD’s lead paint compliance monitoring process. This specific recommendation has been open since 2018.

Oversight of Moving to Work

The Moving to Work demonstration gives participating public housing agencies the flexibility to change rent calculations and other requirements for tenants. But organizations that advocate on behalf of residents and others raised questions about the lack of information about the demonstration’s effects on tenants. GAO recommended HUD develop and implement a plan to analyze the effects of program flexibility on tenants.

IT Management

Among the most acute of challenges, from the GAO’s perspective, is HUD’s IT systems. GAO said in its report that HUD has “long experienced shortcomings in its IT management capability.” GAO says HUD still hasn’t implemented an efficient way of tracking data on cost savings and efficiencies resulting from IT investments. Doing so would allow HUD to track whether IT investments are delivering expected benefits, the GAO argued.