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HUD Archives: News Releases

HUD No. 97-109
Further Information:For Release
In the Washington, DC area: 202/708-1420Thursday
Or contact your local HUD officeJune 26, 1997


WASHINGTON -- Secretary Andrew Cuomo today announced historic management reforms to enable the Department of Housing and Urban Development to stamp out waste, fraud and abuse with a new Enforcement Division, and to help HUD better serve America's people and communities with improved business practices.

The management reform plan -- called HUD 2020 -- says it aims to transform HUD from "the poster child for inept government" that "has been plagued for years by scandal and mismanagement" into "a new HUD, a HUD that works."

HUD has been criticized by Congress and its Inspector General since 1980 for failing to modernize operations and fight waste, fraud and abuse. The General Accounting Office designates HUD as the only "high risk" agency in the federal government.

Vice President Al Gore, who has spearheaded government reinvention under President Clinton, said HUD 2020 "goes farther and does more than any other management reform plan not only in the history of HUD but in the recent history of the federal government."

"Our plan adopts major reforms that have improved the performance of some of America's most successful corporations," Cuomo said. "The reforms knock down bureaucratic walls within HUD to enable all parts of the Department to work together in a productive partnership with our nation's people and communities. Our key objectives are outstanding performance, efficiency, and accountability to the American people. We will not allow a single dollar to be wasted."

HUD 2020 was developed at Cuomo's direction by HUD staff with the help of Vice President Gore's office, the Office of Management and Budget, the HUD Inspector General's Office, and outside experts including Ernst & Young, David Osborne (co-author of "Reinventing Government") and James Champy (co-author of "Re- engineering the Corporation").

Key reforms in HUD 2020 include:

  • Creating a new Enforcement Division to fight waste, fraud and abuse.

  • Retraining some HUD employees as Community Builders to serve as HUD's service representatives for the public and retraining other employees as Public Trust Officers to monitor recipients of HUD funding.

  • Consolidating over 300 HUD programs and activities into 71.

  • Consolidating routine paperwork by HUD offices around the country in more efficient "back office" processing centers.

  • Conducting the first comprehensive evaluation involving physical inspections and financial audits of HUD's housing portfolio.

  • Establishing a new financial information management system.

  • Reducing the size of HUD's staff from the current 10,500 to 7,500 by the end of the year 2000.

  • Establishing new performance-based evaluation systems.

HUD will implement most of the reforms on its own authority, but portions of some require Congressional approval.

White House Chief of Staff Erskine Bowles said: "I salute Secretary Cuomo and the employees of the Department of Housing and Urban Development for innovative steps they are taking to deliver better services to more Americans at lower costs. The Department's emphasis on improving customer service, reducing waste, rewarding performance and leveraging information systems furthers this Administration's efforts to create smaller, more effective government."

Office of Management and Budget Director Franklin Raines said: "When implemented, these reforms will transform HUD into a more fiscally responsible and accountable agency that will better serve the American people. The reforms will play a vital role in helping the Department achieve its mission."

Cuomo said the reforms will enable HUD to become an empowerment agency that will strengthen communities to meet challenges detailed in the State of the Cities report released by President Clinton this week.

Here are details of the reforms the Department will launch under HUD 2020:

  • ENFORCEMENT DIVISION: HUD will restore public trust by eliminating waste, fraud and abuse by those receiving HUD funds (public housing authorities, private landlords, local governments, businesses and individuals) and by HUD itself. Improper activities will be monitored, documented and prosecuted. HUD will create an Enforcement Division, which will carry out this effort. The Department-wide Enforcement Division will be headed by an FBI agent on detail to HUD. It will replace independent enforcement functions with different standards and procedures in HUD's program offices. The division's duties will include: 1) Taking legal action against housing authorities that get a failing grade on their annual assessments. 2) Acting against HUD-assisted housing on the private market that fails physical and financial audit inspections. 3) Cracking down on the improper use of grants from the Community Planning Division and the Office of Fair Housing and Equal Opportunity. HUD will also seek Congressional approval for new types of enforcement action.

  • COMMUNITY BUILDERS AND PUBLIC TRUST OFFICERS: HUD will empower America's people and local governments to take the leading role in improving lives and strengthening communities. A new group of several hundred retrained HUD employees, called Community Builders, will spearhead this effort. These generalists will serve as one-stop customer service representatives in HUD's 81 field offices around the nation -- providing assistance and information on economic development, homeownership, public housing, homeless assistance, and HUD's other programs. HUD 2020 says this new structure will be more effective in helping people living in HUD-assisted housing to get jobs and become self- sufficient, and will help localities develop their own community development strategies. Another group of several hundred retrained HUD employees called Public Trust Officers will monitor recipients of HUD assistance to guard against waste, fraud and abuse. Public Trust Officers will refer significant problem cases to the new Enforcement Division.

  • CONSOLIDATING PROGRAMS: Eliminate duplication by consolidating over 300 HUD programs and activities into 71 programs and activities, if Congressional approval is obtained. This will increase efficiency and allow HUD to focus on its most important functions.

  • "BACK OFFICES": Instead of performing routine paperwork at field offices around the country, HUD will consolidate the work and perform it in more efficient "back office" processing centers, following the example of many banks. All of HUD's 81 field offices will remain open and will be better focused on serving the public.

  • PROPERTY EVALUATION: HUD will conduct physical inspections and financial audits of all public housing authority properties and all privately owned properties receiving HUD financial assistance or Federal Housing Administration insurance. Assessments will determine which properties are most troubled. These properties will receive additional HUD oversight, while public housing and assisted housing operating without problems will be given more freedom. Under legislation proposed by HUD, the Department would be required to designate a housing authority as troubled if the authority fails to provide acceptable housing for residents. The legislation provides for mandatory appointment of a judicial receiver to take control of any large housing authority that fails to come off the troubled list within one year. HUD could appoint an administrative receiver for smaller authorities.

  • INFORMATION MANAGEMENT: HUD will replace its 89 outdated computerized financial information management systems -- many of which are unable to communicate with each other -- with a new integrated system. HUD's deficient financial management systems are poorly organized, generally unreliable, and are the main reason HUD is on the General Accounting Office's "high risk" list. HUD's new financial management information management system will be fully implemented by mid 1999 and will include award-winning mapping software that provides a graphic display of local HUD funding.

  • STAFF SIZE: HUD will use attrition and targeted buyouts to reduce the size of its staff from the current 10,500 to 7,500 by the end of the year 2000 to carry out a commitment made by former Secretary Henry Cisneros. HUD had 13,500 employees when Cisneros began the staff reductions.

  • PERFORMANCE-BASED SYSTEMS: Establish performance-based systems to evaluate HUD programs, operations and employees. These will allow HUD to implement effective performance measures under the Government Performance and Results Act (GPRA). HUD will establish performance as the guideline to determine effectiveness of its programs.


    Content Archived: January 20, 2009

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