Housing and Urban Development: Major Management and Budget Issues

GAO discussed the Department of Housing and Urban Development's (HUD) budget and management problems. GAO noted that: (1) HUD effectiveness is hampered by long-standing internal control weaknesses, an ineffective organizational structure, an insufficient mix of properly skilled staff, and inadequate information and financial management systems; (2) HUD has made slow progress in addressing its management problems; (3) departmentwide management problems have exacerbated problems in HUD public and assisted housing programs, including loan defaults, the poor physical condition of multifamily properties, backlogged housing rehabilitation needs, increased vacancy rates, declining tenant income, and increasing housing subsidies; (4) housing programs have created severe budget pressures because of an increasing client load and the high cost of subsidies; (5) HUD has adopted a new management approach to balance risks with results, implemented a substantial field reorganization, and initiated other actions to address its management problems; and (6) solving HUD management problems is complicated, will require a reexamination of housing policies and the HUD mission, and could have serious budget and social implications.