HUD’s fiscal year 1997 budget proposal requests about $22 billion in discretionary budget authority and plans about $33 billion in discretionary outlays. Updated Data May Assist in Evaluating HUD’s Multifamily Reengineering Cost Estimates

HUD’s fiscal year 1997 budget request discusses how a planned, major restructuring of the multifamily housing program is likely to affect its budget over the next 6 years and beyond. However, HUD’s assumptions about its ability to quickly restructure properties with high subsidy costs appear overly optimistic and could be responsible for HUD underestimating its request for rental assistance for low-income families. HUD Needs More Time to Establish a Program of Performance Bonuses

In its fiscal year 1997 budget, HUD requested $845 million in bonus funding for high-performing grantees in four of its six new block grants. III summarizes the details of the proposed bonus pools.) Implementing Performance Funds Will Be Complicated and Time-Consuming

Some features inherent to block grants will complicate the implementation of a performance measurement system in fiscal year 1997. High-Risk Series: Department of Housing and Urban Development (GAO/HR-95-11, Feb. 1995).
Why GAO Did This Study

GAO discussed the Department of Housing and Urban Development's (HUD) fiscal year 1997 budget request, focusing on: (1) HUD multifamily reengineering cost estimates; (2) proposed bonus pools for high-performing grantees who exceed established performance measures; and (3) HUD progress in addressing management deficiencies.

What GAO Found

GAO noted that: (1) HUD has requested about $22 billion in discretionary budget authority and plans about $33 billion in discretionary outlays; (2) overly optimistic cost control assumptions about the major restructuring of the multifamily housing program could affect the HUD budget request for rental assistance for low-income families; (3) HUD has requested $845 million in bonus funding for high-performing grantees in some of its new block grants; (4) implementing HUD performance funds will be complicated and time-consuming; and (5) HUD has proposed various internal controls to address management deficiencies.