Prepared in the spring of 1997, these reports identify a number of potential efficiencies from consolidating and centralizing processes. Beyond allowing the agency to operate with a reduced workforce, other efficiencies include reducing the processing time for single-family housing insurance endorsements and multifamily housing development applications and reducing paperwork requirements for grant programs. The potential efficiencies are generally not based on detailed empirical analyses or studies, but rather on a variety of factors, including some workload data, limited results of a pilot project, identified best practices in HUD field offices, benchmarks from other organizations, and managers’ and staff’s experiences and judgment. HUD’s Ability to Operate With 7,500 Staff Is Not Based Upon Systematic Analyses of Needs

According to the Deputy Secretary, the process changes proposed by the 2020 plan, along with partnerships with states and local entities and the use of contractors, will allow the agency to operate with 7,500 staff—a staffing target level established prior to the plan. Proposed staffing levels for each program area, as outlined in the management reform team and change agent team reports, are generally not based upon systematic workload analyses to determine needs. While the teams were instructed by the Deputy Secretary to determine staffing requirements on the basis of workload, they were also instructed to work within targeted staffing levels and HUD’s staffing constraints. The teams relied on a variety of factors, including workload data, to show whether they could carry out their responsibilities within assigned targeted staffing levels. Union Agreement Established Framework for Managing Personnel Changes

On August 10, 1997, HUD and the American Federation of Government Employees National Council of HUD Locals 222 signed an implementation agreement to carry out the 2020 plan. The letter stated that HUD would not implement a reduction in force until 2002 if one was necessary. Because the reforms are not yet complete and some of the plan’s approaches are untested, the extent to which its proposed reforms will result in the plan’s intended benefits is unknown. In addition, because the downsizing target of 7,500 staff is not based upon a systematic workload analysis to determine needs, it is uncertain whether HUD will have the capacity to carry out its responsibilities once the reforms are in place. Concerning HUD’s comment that the draft report did not acknowledge potential benefits from the 2020 reform plan, the report noted that the plan is directed in part towards correcting management deficiencies that we and others have identified. Scope and Methodology

To identify HUD’s analyses supporting the (1) prospective efficiencies from centralizing and consolidating major programs and activities and (2) agency’s ability to carry out its responsibilities with 7,500 employees, we reviewed the management reform and change agent reports for each of HUD’s major program areas. To identify how HUD plans to manage the personnel changes that will result from the reforms and downsizing, we interviewed officials responsible for the changes and obtained copies of union agreements and other relevant documents. High-Risk Series: Department of Housing and Urban Development (GAO/HR-97-12, Feb. 1997).
Why GAO Did This Study

Pursuant to a congressional request, GAO reviewed aspects of the management reform proposals outlined in the Department of Housing and Urban Development's (HUD) 2020 Management Reform Plan, focusing on: (1) studies and analyses that HUD performed to determine the efficiencies derived from the centralization and consolidation of the Federal Housing Administration (FHA) and other major programs and activities; (2) studies and workload analyses that were conducted to show that HUD would be able to carry out its responsibilities with 7,500 employees; and (3) HUD's plan to manage the personnel changes that will result from its reforms and downsizing.

What GAO Found

GAO noted that: (1) reports covering each of HUD's major program areas and functions, prepared by teams of HUD employees in the spring of 1997, are the principal documents supporting the 2020 plan; (2) the reports identify a number of prospective efficiencies from consolidating and centralizing certain processes; (3) in addition to allowing the agency to operate with a reduced workforce, HUD intends the changes to reduce the time or paperwork required for various processes; (4) the efficiencies cited are generally not based upon detailed empirical analyses or studies, but rather on a variety of information, including some workload data, limited results from a pilot project, identified best practices in HUD field offices, benchmarks from other organizations, and managers' and staff's experiences and judgment; (5) the plan is directed in part towards correcting the management deficiencies that have been identified; (6) because the reforms are not yet complete and some of the plan's approaches are untested, the extent to which they will result in the intended benefits is unknown; (7) according to HUD's Deputy Secretary, the process changes proposed by the 2020 plan, along with states and local entities and the use of contractors, will allow the agency to operate with 7,500 staff--a staffing target level established prior to the plan; (8) however, proposed staffing levels for each program area are generally not based upon systematic workload analyses to determine needs; (9) while the reform teams were instructed by the Deputy Secretary to determine staffing requirements based upon workload, they were also instructed to work within targeted staffing levels and the Department's staffing constraints; (10) the reform teams relied on a variety of factors, including some workload data, to show whether responsibilities could be carried out within targeted staffing levels; (11) because the downsizing target of 7,500 staff is not based upon a systematic assessment of needs and because proposed legislation could affect those needs, it is uncertain that HUD will have the capacity to carry out its responsibilities once the reforms are in place; (12) an August 1997 agreement between HUD and the American Federation of Government Employees National Council of HUD Locals 222 established the framework for managing personnel changes to implement the 2020 plan; (13) this agreement includes buyouts, reassignments, and an outplacement program for HUD employees and provides that a reduction in force may be used if necessary, but not before 2002; and (14) this agreement also provides for hiring new employees for some positions.