Summary: For years, GAO and others, including the Department of Housing and Urban Development's (HUD) Inspector General and external auditors, have cited significant management problems at HUD. These problems have arisen because of serious, long-standing deficiencies in four areas: internal controls, information and financial management systems, organizational structure, and staffing. Since 1994, GAO has included HUD's programs on its list of government operations at high risk for waste, fraud, abuse, and mismanagement. GAO testified that HUD is making significant changes and has made progress in overhauling its operations to correct management deficiencies. Among other things, HUD has improved its financial reporting and developed risk assessments for its programs, developed and deployed components for its information and financial management systems, consolidated and centralized many of its operations, and reassigned and retrained many of its staff. At the same time, internal control weaknesses and problems with information and financial management systems persist. For example, material internal control weaknesses continue to plague the Section 8 subsidy payment process, which provides $18 billion in rental assistance, and HUD has not adequately monitored programs and functions, such as contractors' management of the agency's real estate assets. HUD is likely to continue to spend millions of dollars, miss milestones, and still not meet its goal of developing and fully deploying an integrated financial management system because it has not yet finalized detailed project plans or cost and schedule estimates for this effort. Recent reforms to deal with HUD's organizational and staffing problems are in the early stages, and it is too soon to tell whether they will solve the agency's problems. HUD needs to ensure that the steps being taken eliminate the remaining major internal control weaknesses, strengthen its management and oversight of efforts to integrate its information and financial management systems and correct their weaknesses, ensure that the field offices have enough staff to carry out the work assigned, and ensure that all staff have the skills needed to do their jobs.
