On April 8, the House Financial Services Subcommittee on Oversight and Investigations held a hearing titled “Decades of Dysfunction: Restoring Accountability at HUD.” The session focused on long-standing concerns at HUD, including improper payments, outdated systems, and challenges in program oversight. The sole witness was Stephen M. Begg, Acting Inspector General of HUD, who outlined current risks and testified to ongoing efforts to strengthen the agency’s operations and accountability.

Open recommendations: As of March 31, HUD’s Office of Inspector General (OIG) was tracking 699 open recommendations for agency action. Of these, 246 are estimated to have a monetary impact of more than $11.4 billion if implemented. An additional $35.3 million could be recovered through active repayment agreements with grantees.

HUD’s outdated tech: Also, a recurring theme in the hearing was HUD’s outdated information technology systems. The systems hinder efforts to manage programs efficiently and reduce improper payments. According to Begg’s testimony, HUD hasn’t been able to produce compliant estimates for its largest rental assistance programs, the Tenant-Based and Project-Based Rental Assistance programs, since 2016. The lack of reliable data collection systems has contributed to delays in identifying and addressing payment errors.

Fraud risks: The Inspector General also noted that many HUD grantees have limited capacity to manage fraud risks. Recent audits revealed gaps in fraud detection and response among high-profile partners, including the New York City Housing Authority. OIG is encouraging HUD to require grantees to adopt more structured fraud prevention plans and conduct risk assessments across programs.

Pending legislation: Members of the subcommittee discussed pending legislation, including the “HUD Transparency Act of 2025” (H.R. 225), which would require annual testimony from the Inspector General.

DOGE access to HUD databases: The hearing also raised questions about the role and authority of the Department of Government Efficiency (DOGE), particularly regarding access to sensitive HUD data and oversight responsibilities. During the hearing, Rep. Nikema Williams (D-GA) expressed concerns about DOGE’s access to HUD databases containing sensitive personal information, including medical records and addresses of domestic violence survivors. Acting Inspector General Begg confirmed that the Chief Information Officer oversees data privacy and security, and that his office is conducting an ongoing review of potential improper disclosures.

Fair housing contracts: Additionally, the abrupt termination of 78 fair housing contracts on Feb. 27 was discussed, with Begg noting that the terminations are under litigation but confirmed that his office is monitoring the situation.