Under the act, agencies are to develop strategic plans, annual performance plans, and annual performance reports. Specifically, we reported that HUD: had made limited progress in addressing internal control weaknesses by implementing a new management planning and control program intended to identify and rank the major risks in each program and devise strategies to abate those risks, and had reduced its material weaknesses identified under the FMFIA assessment from 51 in the early 1990s to 9. continued to make progress in improving its information and financial management systems but much work remained: Some of the projects would not be completed until the year 2000. had completed a field reorganization that eliminated its regional office structure and transferred direct authority for staff and resources to the Assistant Secretaries, and was planning additional reorganization efforts. had made some progress in addressing the problems with staff members’ skills and with resource management. In addition, we and HUD’s Inspector General continued to identify staff resource problems in HUD’s major program areas, specifically in public housing and the Federal Housing Administration (FHA). 2020 Reforms Are Directed Towards Correcting Management Weaknesses

Under the HUD 2020 Management Reform Plan and related efforts, HUD is in the process of making significant changes that will affect most aspects of its operations, including the long-standing management problems and issues facing the agency. The plan calls for reducing the number of programs, reducing staffing levels, retraining the majority of the staff, reorganizing the 81 field offices, consolidating processes and functions within and across program areas into specialized centers, and modernizing and integrating the financial and management information systems. Key Implementation Issues

Several interrelated issues are particularly important for achieving the intended benefits of HUD’s management reform efforts: (1) HUD’s ability to meet planned timetables for implementing key reforms, (2) the adequacy of staffing during and after the transition to the “new HUD,” (3) the Department’s ability to reduce the numbers of troubled public housing authorities and troubled multifamily projects, and (4) HUD’s ability to effectively improve its procurement and contracting practices, including its oversight of contractors. HUD Has Linked Results Act Plans to Management Reform Efforts

The HUD 2020 Management Reform Plan appears to be the driving force behind agency operations. HUD has clearly linked its management reform efforts to the agency’s Results Act plans, so that its success in meeting annual performance goals and achieving strategic objectives depends on the success of the management reform efforts. In reviewing HUD’s strategic plan, we observed that it contained a number of legislative proposals that appeared to affect the strategic objectives but did not make clear the impact on meeting the objectives if the legislative proposals were not enacted.
Why GAO Did This Study

GAO discussed management issues concerning the Department of Housing and Urban Development (HUD), focusing on: (1) the progress HUD has made in addressing management deficiencies and the need for additional improvement; (2) the activities under HUD's 2020 management reform and other efforts to address its deficiencies; (3) issues that GAO believes are key as HUD implements its management reforms; and (4) the relationship between HUD's reform efforts and its Government Performance and Results Act plans.

What GAO Found

GAO noted that: (1) HUD has made progress in addressing problems that led to GAO's high-risk designation, but much remains to be done; (2) prior to announcing the 2020 management plan, HUD had among other things: (a) addressed internal control weaknesses by implementing a new management planning and control program and reduced the material weaknesses identified under the Federal Managers' Financial Integrity Act (FMFIA) assessment; (b) continued to make progress in improving its information and financial management systems; (c) completed a field reorganization that transferred direct authority for staff and resources to the Assistant Secretaries; and (d) made some progress in addressing problems with staff members' skills and with resource management; (3) however, GAO's recent work and that of the Inspector General indicate the need for continued progress in these areas; (4) under HUD 2020 Management Reform Plan and related efforts, HUD is in the process of making significant changes that will affect most aspects of its operations; (5) the plan calls for reducing the number of programs, reducing staffing, retraining the majority of the staff, reorganizing the 81 field offices, consolidating processes and functions within and across program areas into specialized centers, and modernizing and integrating the financial and management information systems; (6) several interrelated issues are particularly important for achieving the intended benefits of HUD's management reform efforts: (a) HUD's ability to meet planned timetables for implementing key reforms; (b) the adequacy of staffing during and after the transition to the new HUD; (c) the Department's ability to reduce the number of troubled public housing authorities and troubled multi-family projects; and (d) HUD's ability to effectively improve its procurement and contracting practices, including its oversight of contractors; (7) the HUD 2020 Management Reform Plan appears to be the driving force behind agency operations, and it is clearly linked to the agency's strategic and annual performance plans required by the Results Act; (8) the degree to which HUD is successful in implementing its reform efforts will influence its success in meeting its goals and objectives outlined in the strategic and annual performance plans; (9) both appear to rely in part on many of the same legislative proposals that could affect HUD's staffing needs and the attainment of strategic objectives; and (10) HUD's strategic plan could be improved by clarifying the impact on meeting objectives if the legislative proposals are not enacted.