SCOPE OF ACTIVITY

The Departmental Enforcement Center (DEC) was established in fiscal year 1998 as part of HUD's 2020 Management Reform Plan. Its strategic objective is to restore the public trust in HUD's ability to provide decent, safe and sanitary housing by effectively consolidating an administering timely enforcement actions. DEC strives to further restore public trust and confidence in HUD's abilities to ensure that taxpayer dollars, appropriated by Congress, are properly and efficiently used as intended. The Enforcement Center is responsible for providing aid in reducing the Department's troubled Multifamily housing inventory to a level comparable to or lower than the private sector by taking aggressive actions on violations referred to the Center. It is also charged to resolve outstanding cases of recipient non-compliance of HUD program resources in Housing, Public and Indian Housing, and Community Planning and Development, as well as eliminating long-standing, and often unaddressed breaches, including waste, fraud, and abuse of HUD program requirements by recipients and other beneficiaries. Another important aspect of Enforcement Center activities includes initiation of debarment actions and suspensions referred by field offices and the handling of Limited Denials of Participation (LDPs) appeals and Multifamily previous participation (2530) appeals.

In fiscal year 1999, the Center began assisting Housing in implementing its Credit Watch program. Under this program, mortgagees can have their authority to originate HUD insured single family mortgages terminated if their default rate is excessively high. Any mortgagee who receives a notice of proposed termination is entitled to a hearing with a Housing official to present mitigating information. The Center is responsible for docketing hearing requests, arranging the hearing date, and providing legal assistance to the Housing official hearing the appeal.

WORKLOAD

1. HEADQUARTERS

The principal workload of the Enforcement Center consists of providing advice and recommendations to Program Offices to revise current policies and procedures which will help reduce enforcement actions; initiate, as necessary, appropriate civil referrals to the Department of Justice (DOJ) and/or criminal referrals to the Office of the Inspector General (OIG); and, assist HUD in ensuring that parties under contract with the Department comply with the terms of their contracts.

Headquarters staff have the responsibility for performing the following functions:

• directing and coordinating the administration of enforcement activities and providing technical assistance and procedural guidance to the satellite offices;
• monitoring, reviewing and evaluating satellite operations;
• providing administrative, budgetary and contract administration support for Enforcement Center activities; and
• providing budget formulation and execution support for Salaries and Expenses and to ensure proper management of Program resources and fiscal control and coordination where Housing and the Enforcement Center co-manage a referral.
1. OPERATIONS DIVISION

The work of the Operations Division addresses distressed multifamily properties referred by the Real Estate Assessment Center (REAC) and other Program offices. This Division is responsible for judicial or administrative receivership for those public housing authorities which Public and Indian Housing (PIH) refer to the Enforcement Center. The Enforcement Center is be available to PIH for take-over of receivership cases referred by the Office of Native American Programs (ONAP). Additionally, the DEC will work with the Assistant Secretaries for Community Planning and Development (CPD) and Fair Housing and Equal Opportunity FHEO) on matters which require enforcement actions to resolve program non-compliance issues with their grantees. In the case of FHEO, the Enforcement Center will only be involved in non-civil rights issues. This Division uses general contractors who perform due diligence, workouts, inspections and other actions to effect enforcement against property owners or Contract Administrators and/or effect recovery of distressed multifamily properties. Division staff work with the Center attorneys in processing legal documents and will be the principal point of contact for field staff communications regarding any enforcement actions taken against troubled projects. The Center will be fully responsible for 700-1,000 properties referred by REAC and will conduct due diligence on the properties and develop an enforcement plan covering appropriate sanctions (if any) and corrective actions by HUD and the owners including a timetable for completion of all activities. In phase two, REAC will produce annual scores and assessments of properties in HUD's inventory. REAC will score the physical and financial conditions of projects and flag conditions that indicate possibility of compliance breaches, performance deficiencies or risk. The scores and flags will determine which projects will be assigned to the Enforcement Center and which to the Multifamily Hub based upon risk management criteria.



1/ Fiscal year 2001 estimate based on an increase in FTE.

2. COMPLIANCE DIVISION

   The Compliance Division staff is responsible for making determinations related to suspensions, debarments, Limited Denials of Participation (LDPs) and 2530 appeals for the Department. Requests from program field offices are submitted directly to the Compliance Division which reviews the documentation to determine if the requests support the action requested. A notice of suspension or debarment is prepared and submitted to the Enforcement Center Legal Division to review for Legal Sufficiency. Once the legal review is completed, that notice is forwarded to the debarring official. Division staff will also pursue civil money penalties against property owners who fail to submit required financial statements.

3. TRACKING DIVISION

   The Enforcement Center has the responsibility for tracking all enforcement actions Departmentwide, except for actions authorized under the Federal civil rights laws. The DEC's Tracking Division will develop and implement a centralized tracking system to carryout this responsibility. The staff will work with the Office of Inspector General (OIG) and program offices to discuss the details of the data that needs to be collected and how to facilitate tracking of their enforcement actions. Liaison Officers will implement this Enforcement tracking system, training Headquarters and satellite staff on the system, maintain and manage the system and prepare enforcement performance reports to the Secretary, the Center Director, and other entities upon request. The staff will work closely with the Information and Technology Division and the Operations Division on quality control responsibilities, timeliness of actions and performing other activities to verify the quality and reliability of the Center's enforcement efforts and those undertaken by the Program offices.

4. LEGAL DIVISION

   The Legal Division is responsible for all legal enforcement actions for the Center. This includes initiating administrative actions, referring cases to the Department of Justice (DOJ) for civil action, and referring potential criminal matters to the Office of the Inspector General (OIG). This Division will provide a variety of support services to the Center Director, the Center's Compliance and Operations Divisions and the five satellite offices in the field. The Legal Division will also provide legal advice and guidance to Program field staff (CPD, FHEO, PIH and Housing) on an as needed basis, and will monitor contracts that provide legal services to help the Center carry out its mission.

   In connection with a new initiative for the Enforcement Center, the Legal Division will work closely with Single Family Housing to hear appeals stemming from Credit Watch. Mortgagees will make a request to the Enforcement Center for a hearing and hearings/meetings will be scheduled with the Center. Following the hearing and in conjunction with Single Family Housing, the Center will assist in the writing of a legal opinion in each referral.

5. INFORMATION AND TECHNOLOGY DIVISION

   The Information and Technology Division is responsible for: (1) developing and maintaining internal information systems for the Center; (2) interfacing with the Department's financial information and program systems to ensure data required by the Center is accurate, current, accessible and reliable; (3) preparing reports for internal use and for other Departmental purposes; (4) developing and maintaining a Department wide enforcement tracking system and, (5) coordinating with users from other parts of the Department. This Division will also maintain the established file protocol as materials are retrieved by contractors.

6. ADMINISTRATIVE AND MANAGEMENT SERVICES DIVISION

   The Administrative and Management Services Division will be responsible for a wide range of functions which support the overall operations of the Center, including: (1) the provision of staff training and orientation courses; (2) budget and finance management; (3) administrative and personnel support services; (4) field coordination (Secretary's Representatives and Senior Community Builders); (5) the provision of public information; and (6) management planning requirements. The Division will also be responsible for the preparation of performance measures, management plans and strategic planning, meeting GPRA requirements, internal controls, FOIA requests, enforcement policies and procedures, and enforcement action updates for the field.

   Contract oversight is also a key component of this Division. Specially trained staff are dedicated to managing and overseeing the Center's legal services and operational contracts, including quality control, evaluation, cost containment and implementation. The staff provides technical advice and guidance related to the work of the contract and makes a determination on the contractor's performance in terms of quality and timeliness. Contract oversight staff plans and ensures the placement of contracts to carry out the mission of the Center and coordinates these efforts with REAC and other Program Offices.

2. SATELLITE OFFICES

   The primary role of satellite offices is to manage the day-to-day recovery and enforcement strategies for Multifamily properties. Five Satellite Offices are responsible for a total of ten enforcement teams, each with an assigned geographic area. Each Satellite Office receives direct inquiries. During phase two of implementation, the Office of Multifamily Housing will refer approximately 700-1,200 properties to the Enforcement Center. In the final phase of implementation, REAC and Property Disposition Centers (relocation, foreclosure and mortgagee in-possession) will be the primary sources of referral while the Center continues to receive referrals from the Office of Multifamily Housing. The Satellite Office carries out enforcement actions using general contractors who perform due diligence, workouts, and other actions necessary to effect enforcement activities. Satellite offices are located in Atlanta, Georgia; Los Angeles, California; New York, New York; Ft. Worth, Texas; and Chicago, Illinois.

   TRAVEL

   The table below identifies travel requirements unique to this activity.

   

   The proposed travel budget of $500 thousand in fiscal year 2001 for the Enforcement Center will support both the headquarters and satellite offices and will be used for travel supporting the Secretary's priorities associated with establishing the Enforcement Center as the enforcement arm of the Department. The Director plans to travel locally and nationally to communicate to HUD's constituency and other interested parties the mission, role and responsibilities as the Center works to regain and maintain the public trust.

   The DEC anticipates receiving approximately 700-1,200 referrals. During fiscal year 1999 referrals lagged behind schedule. However, with the physical and financial inspections completed by REAC, referrals involving multifamily properties are already increasing dramatically and are expected to continue upward in fiscal years 2000 and 2001. Travel will be required for multiple site visits; detailed evaluations; to meet with owners; management agents; Assistant U.S. Attorneys; and Department of Justice attorneys. The increase of $135 thousand will provide for witness travel. Witnesses may be called to appear in enforcement proceedings in U. S. Courts throughout the Country.

   CONTRACTS

   The table below identifies contract requirements unique to this activity.

   

   Technical Services

   • Legal Services contracts provide legal support services that will assist Enforcement Center attorneys in pursuing affirmative litigation against project owners receiving the benefit of FHA insured financing and/or Section 8 assistance.
   • Technical assistance contracts for Assessment and Analysis Services will also be used to provide the Center with histories of the ownership of the project; descriptions of the project's physical condition; analysis of current financial status; and recommendations for resolving the problems identified by the contractor. One contract will be awarded for each of the five satellite offices.
   • Contracts for court reporting services and transcripts are essential in deposing witnesses and taking affidavits in preparation for evidentiary proceedings. Contract requirements are expected to dramatically increase as referrals accelerate.
   • The increase of approximately $2 million will enable DEC to adequately perform the maximum number of analyses and assessments of project referrals.

   Public Information Services. The Public Affairs Officer is responsible for preparing and promulgating information about the activities of the Enforcement Center through the use of broadcasts, videos, exhibits and conferences. The Enforcement Center has numerous objectives which it is committed to fulfilling to inform and educate general and specialized publics, Congress, State and local governments, law enforcement, and many other interested parties. We propose to participate in the White House Summit on Enforcement, make videos, and prepare national broadcasts to update and orient internal and external audiences throughout the housing industry.

   General Support. This funding principally provides for contract temporary services for clerical, administrative and legal support in areas where a critical need is identified.