PHAS and PIC Establish Criteria for Identifying Performance Problems

HUD uses PHAS and PIC to assess public housing authorities’  performance. PHAS includes four performance indicators, which HUD  scores and plans to use for designating housing authorities as troubled. The physical condition indicator is used to determine whether the  housing authority is providing decent, safe, and sanitary housing to its  residents. The resident service and satisfaction indicator measures residents’  satisfaction with their living conditions. At Some Nontroubled Housing Authorities, Unsatisfactory Living Conditions Stemmed from Management Deficiencies

The five public housing authorities we visited, which have not been  designated as troubled under PHAS but have been classified as moderate to  high risk under PIC, exhibited a wide range of problems. However, many  developments at these authorities were well or adequately maintained. In some instances, HUD may enter into special  agreements with housing authorities, giving them the flexibility to address  unique problems. HUD May Provide Technical Assistance to Address Problems

HUD may provide technical assistance to address chronic problems at  housing authorities even when the authorities have not been designated as  troubled under PHAS. HUD May Apply Sanctions or Intervene in a Housing Authority’s Operations to Correct Problems

When HUD is unable to address the problems at a housing authority  cooperatively, it has the authority to intervene or apply several different  sanctions at varying levels of severity as follows:  HUD may review a housing authority’s expenditures and place  restrictions and conditions on them. In e- mails dated January 31, February 1, and February 4, 2002, incorporating  comments from the deputy assistant secretary for the Office of Troubled  Agency Recovery, the deputy assistant secretary for the Office of  Administration and Budget, and the acting director of field operations,  Office of Public and Indian Housing, and a REAC official, HUD provided  background information on the PIC risk assessment process and indicated  that it planned to revise the PIC rating scheme to ensure that all troubled  public housing authorities are designated as high risk. Under the approach HUD plans to use in fiscal year 2002, we  used the total PHAS score and the scores for all four indicators, classifying  housing authorities as troubled if they scored less than 60 percent overall  or less than 60 percent on more than one of the major indicators (physical  condition, financial condition, and management operations). These risk assessments use the total PHAS score and information about  funding and compliance issues to classify housing authorities as high,  moderate, or low risk. The database does not define what is  in the “other problems” category. Problems at Nontroubled High-Risk Public Housing Authorities

To identify the kinds of problems found at public housing authorities that  HUD has not designated as troubled but has classified as high risk, we  applied HUD’s criteria for determining housing authorities’ status (troubled  or nontroubled) and risk level (high, moderate, or low) to the nation’s 3,166  public housing authorities. According to  the recovery center’s team leader for SFHA, since the center began  servicing the authority, 50 to 70 positions have been terminated in an effort  to cut costs and alleviate the overstaffing.
What GAO Found

The Department of Housing and Urban Development (HUD) spends $7 billion annually to provide decent, safe, and sanitary housing for low-income households in about 14,000 rental properties nationwide. Yet, many public housing properties have been unsafe and unsanitary for several decades. To identify and correct these problems, HUD began a Public Housing Assessment System (PHAS) to evaluate the performance of public housing authorities. Although HUD is still testing and revising PHAS, it has begun to designate certain housing authorities as troubled and to assign them to recovery centers, where they receive technical and other assistance. HUD also created the Public and Indian Housing Information Center (PIC) database to collect information on funding, compliance, and other problems that fall outside the scope of PHAS. PHAS includes four performance indicators: (1) the physical condition of the properties, (2) the financial condition of the housing authority, (3) the authority's management operations, and (4) residents' satisfaction with their living conditions. HUD develops a score for each indicator and, starting in this fiscal year, plans to use the scores for all four indicators to determine whether housing authorities are troubled. So far, HUD has used only the management operations score to designate housing authorities as troubled. The PIC risk assessment uses the total PHAS score and information about funding and compliance issues to classify troubled and nontroubled housing authorities as high, moderate, or low risk. According to HUD, the field offices focus their monitoring resources on the nontroubled high-risk authorities in an effort to correct their problems before the authorities are designated as troubled. GAO found inconsistencies between the PHAS and PIC assessment. The five public housing authorities GAO visited, which had not been designated as troubled under PHAS but had been classified as moderate to high risk under PIC, had various problems. However, even under the same authority, some developments were well or adequately maintained, while others had cosmetic, structural, or health and safety problems. HUD may provide technical assistance at a housing authority through either a field office team or a troubled agency recovery center. HUD may also impose sanctions on a housing authority or intervene in its operations to compel the authority to correct problems. For more serious, long-standing problems, HUD may put a housing authority into receivership. In some instances, HUD may enter into special agreements with housing authorities, giving them the flexibility to address unique problems. Although these options have the potential for solving problems at public housing authorities, it is still to early to evaluate their effectiveness. Moreover, in the past, the options have not always fully addressed the problems or the housing authorities have not sustained the improvements. Refer to the accompanying video, Public Housing Today (GAO-02-1040SP).