BOOZ-ALLEN REPORT: HUD MAKES "SIGNIFICANT PROGRESS" IN IMPLEMENTING MANAGEMENT REFORMS

WASHINGTON - An independent review of the Department of Housing and Urban Development's efforts to implement its 2020 Management Reform Plan was issued today and said HUD has made "significant progress towards achieving the many management reforms that are critical to making the Department function effectively."

The review by Booz-Allen & Hamilton Inc. found that:

• The 2020 Management Reform Plan is both "sound" and "ambitious."

• The plan's reforms - when implemented - would dramatically change HUD and improve its performance.

• HUD is effectively implementing its 2020 Management Reform Plan.

"This independent evaluation is a vote of confidence in the work of HUD employees around the country, who have succeeded in creating a new HUD that is doing a better job of serving America's communities and the American taxpayer," Secretary Andrew Cuomo said. "It shows we have turned our hopes for management reform into reality."

"HUD 2020 adopts management reforms that have improved the performance of some of America's most successful corporations," Cuomo said. "The reforms are enabling all parts of HUD 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 issued in June. It was developed at Cuomo's direction by HUD staff with the help of Vice President Al 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").

The management reform plan 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."

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.

• Establishing new performance-based evaluation systems.

Here are excerpts from findings of the Booz-Allen review, which took place from Dec. 19 last year to Feb. 27 this year:

• "The change required, of people and of the HUD institution by this (HUD 2020) transformation is real, massive, and is, in Booz-Allen's experience, almost unparalleled in scale for a government agency transformation and certainly for HUD."

• "The HUD transformation initiative, emphasizing community-focused efforts balanced by public trust functions, is significant in scope and is fully responsive to both Congressional mandates and Administration reinventing government thrusts."

• "The HUD 2020 Plan lays out a solid framework for a sweeping reinvention of HUD and proposes a number of reforms that should help HUD restore the public trust in the Agency."

• "HUD's implementation of the Plan to date is sound and, upon substantial implementation of many of the planned reforms by the end of 1998, HUD will be significantly better aligned to meet its Congressionally mandated mission."

• "HUD 2020 Management Reforms were designed comprehensively to transform the Agency's management philosophies, institutional culture, structure, processes and systems."

• "... HUD has set out a plan to reform by administrative action its management structures and systems - reforms which when implemented should present a significant improvement of HUD's performance, lower the risk of fraud, waste and abuse of its programs, and position HUD to better serve America's communities."

• "As of February 1998, the HUD 2020 organization is in place and being staffed. Considerable progress has been made in implementing the revised organizations, structures, processes, new systems, and staffing shifts needed for HUD's transformation."

• "The implementation of the plan is setting the stage for a shift in institutional culture towards an anti-fraud, waste and abuse perspective."

• "... it appears that HUD is on track towards having fully implemented the major structural elements of HUD 2020 Reform Plan by the end of FY98. Achieving this level of implementation by the end of the year would be a significant accomplishment for a transformation of this scope."

• "Significant progress has been made in implementing the plan including: establishment of the critically important Enforcement and Assessment Centers, as well as defining roles and workload for these new centers; establishment of 12 other new centers with defined missions and processes; restructuring the Departmental management processes of FHA, CPD and PIH to integrate with the new center operations; retraining of thousands of staff in the new HUD; establishment of the Community Builder concept and initial training of the first cadre of Community Builders; development of information and management systems to leverage technology; (and) design and establishment of new internal controls."