|HUD No. 013|
|Further Information:||For Release|
|In the Washington, DC area: 202/708-0685||Wednesday|
|Or contact your local HUD office||January 17, 2001|
SUCCESS OF HUD MANAGEMENT REFORMS CONFIRMED BY GAO DEPARTMENT REMOVED FROM HIGH RISK LIST
WASHINGTON - The General Accounting Office (GAO) has taken the Department of Housing and Urban Development off its "high risk" list as a result of significant management reforms set in place under Secretary Andrew Cuomos leadership.
"Over the past four years, the staff at HUD has worked tirelessly to ensure that our programs serve the nations most vulnerable people more effectively and more efficiently," Cuomo said. "HUDs department-wide high risk designation is now a thing of the past. Weve transformed a monolithic government agency into a model of government reinvention."
GAO placed the entire department on its "high risk" list in 1994 citing HUDs vulnerability to waste, fraud, and abuse. Upon becoming Secretary, Cuomo responded to criticism of the agency by dramatically overhauling HUD's management, governing philosophy and programs.
Now, HUD is clearly back in the housing business. Under Cuomos leadership, HUD has won prestigious prizes for government innovation, received bipartisan praise, and won increased budgets in the past three years: $25.2 billion in 1999, $26.2 billion in 2000, and $32.4 billion in 2001 (the best budget for HUD in 20 years).
"When I became Secretary in January 1997, HUD was fighting for its life," Cuomo explained. "HUD's budget was repeatedly cut despite a record-high number of Americans in need of affordable housing. For five straight years, Congress refused to increase the supply of new housing-assistance vouchers. Some members of Congress were even calling for HUD's elimination. But we fought to restore trust in HUD and its vital mission and now we have succeeded in giving the Department and more importantly, the people and communities we serve, a better and brighter future."
Todays GAO report further validates the success of HUDs reforms. According to the report:
- "[HUDs] top management has given
high priority to implementing the Departments 2020 Management Reform
Plan. The Departments reorganization plan is substantially complete,
and the Departments reform efforts have resulted in some improvements."
- "During the past two years, HUD has
continued to make progress in addressing these [management] problems.
. . HUD has since January 1999 implemented new early warning tools, including
the first physical inspections and financial assessments of the entire
multifamily housing inventory."
- "The Homeownership Centers reduced the average time for processing single-family mortgage loans from 4 to 6 weeks to 2 to 3 days, and the Enforcement Center relocated 427 families from substandard housing and recovered $12.6 million from property owners for ineligible costs."
Tom Cochran, Executive Director, U.S. Conference of Mayors praised the agency saying, "Secretary Cuomo probably faced the toughest challenge of any of the Cabinet Secretaries -- taking charge of an agency that was widely regarded as dysfunctional and threatened with elimination. His management reforms are working, and HUD is now a partner with Americas communities, not a roadblock."
"The GAO report is confirmation of the major progress that Andrew Cuomo has made in reforming HUD's administration," said Cushing Dolbeare, Chair, Meeting America's Housing Needs. "He deserves credit for making HUD a true partner with local neighborhoods and residents and a forceful advocate for affordable rental housing and homeownership."
In his four years as HUD Secretary, Cuomo
was responsible for a number of innovative measures which helped turn the
- Cuomo cracked down on waste, fraud and
abuse. He brought in the FBI to manage and staff HUDs new Enforcement
Center, which is responsible for eliminating fraud and abuse in HUDs
programs. A new Real Estate Assessment Center (REAC) was created, which
monitors and assesses the physical and financial condition of HUD properties.
For the first time ever, REAC inspected HUDs entire housing portfolio
-- some 31,000 properties using handheld computers.
- Under Cuomos leadership, HUD doubled
the number of anti-discrimination actions taken under the Fair Housing
Act with 2,700 actions since 1997. Cuomo successfully brought the
first Fair Housing case against the Ku Klux Klan, and won the largest fair
housing settlement ever on behalf of migrant farm workers. He also took
on 21st century forms of discrimination by setting up a task force to crack
down on cyberhate on the Internet, while at the same time preserve free
- Harnessed the power of new technologies.
Under Cuomos leadership, HUD adopted the latest computer technologies
to better serve the public. HUD developed cutting-edge Community 2020 mapping
software to help citizens see where and how HUD dollars were being spent
in their community. The next generation of this software -- E-Maps -- allows
people to locate environmentally sensitive areas in their communities in
relation to HUD investments. HUD also set up state-of-the art, touch screen
kiosks in 81 locations in 47 states which provide information 24 hours
a day about all of HUD programs.
- Launched the Administrations successful Empowerment Zone Initiative. Cuomo was responsible for implementing President Clintons and Vice President Gores Empowerment Zone and Enterprise Communities (EZ/EC) initiative in 89 underserved urban communities. Using a combination of direct federal assistance and tax incentives, these communities reported placing 120,000 persons in jobs, leveraging more than $10 billion in private sector investment, and assisting 30,000 businesses.
Attached are comments made by individuals concerning the HUD reforms.
EXCERPTS FROM INDEPENDENT REVIEWS OF HUDS MANAGEMENT REFORMS
- Management Expert David Osborne, author
of Reinventing Government, wrote in November 2000 "The pace and breadth
of the HUD reform effort has been astonishing. Essentially every part
of the organization has been significantly and positively impacted in some
way." In reaction, Vice President Al Gore, the leader of government
reinvention, said in a letter to Secretary Cuomo, "I commend you
and all of the hard working people at HUD as you continue down this road
of reform and strive to create a Department that will be a model of reinvention
in this new century."
- A report in early 1999 by the General Accounting
Office of Congress said: "HUD continues to make credible progress
in overhauling its operations to correct its management deficiencies"
and called Cuomos management reform plan "a major contributor
to this progress."
- The HUD Office of Inspector General issued
the first clean audit of HUDs financial statements in the Departments
history in March 1999. This means that for the first time, the Departments
financial statements are in complete compliance with all applicable federal
requirements. While the audit also summarized many of the past criticisms
that the Office of Inspector General has made of the Department, the Inspector
General wrote that the audit "represents a considerable achievement
for HUD, and it further reflects continuing improvements in HUDs
commitment and ability to properly account for the funds entrusted to the
- A review by management consultants Booz-Allen
& Hamilton concluded in 1998 that HUD has made "significant progress
towards achieving the many management reforms that are critical to making
the Department function effectively."
- Another outside review of HUDs reinvention
performed by Price Waterhouse Coopers LLP concluded in December 1998 that
HUDs management reform plan is successfully moving forward on schedule.
The review said that "implementation of the Community Builders, Enforcement
Center, Procurement Reform, Real Estate Assessment Center, Storefronts,
and Troubled Agency Recovery Center is well under way. Each project met
all or substantially all of the critical milestones that HUD established
for completion as of September 1."
- A survey found in December 1998 that 70
percent of HUD employees believed the Department has made reinvention an
important priority the highest percentage of any of 22 federal agencies
surveyed. The employee survey was performed by the National Partnership
for Reinventing Government, which is headed by Vice President Al Gore.
The Vice President said: "Through REGO (the reinventing government
initiative) and thanks to the extraordinary leadership of Secretary
Andrew Cuomo we turned HUD around."
ENDORSEMENTS FROM CAPITOL HILL AND OUTSIDE EXPERTS
"You and the many dedicated public servants
that keep HUD working for the country truly deserve our thanks. I am pleased
that our nations citizens are reaping the benefits of the hard work
and dedication you and your staff consistently demonstrate. I commend you
on your leadership and wish you and your colleagues at HUD even greater
success in the future."
--Senate Democratic Leader Tom Daschle (SD)
"As a result of concentrated efforts
by Secretary Cuomo and his top staff, I understand that GAO will announce
this afternoon that HUD is now off the high risk list. They achieved this
result by working tirelessly to correct the problems in financial, oversight,
procurement systems, and the like. It is widely known that Secretary Cuomo
has devoted significant time and effort to address these managerial issues."
--Senator Paul Sarbanes (MD), Chairman, Senate Banking Committee
"You have breathed new life into a once-threatened
department. You showed extraordinary willingness to work with Congress on
this budget. As a result, HUD is more ready than ever to lead American communities
into the new millennium."
--House Democratic Leader Richard Gephardt (MO)
"Some years ago there was a movement
among some to abolish the Department of Housing and Urban Development. Led
by Secretary Cuomo and supporters in Congress, that initiative was turned
back. Most importantly, HUD now is considered an agency thats on
its feet, doing well, and doing wonderful public service for people in the
housing and urban development arena."
--Representative Jim Leach (IA) Former Chair, House Banking Committee
"The pace and breadth of the HUD reform effort has been astonishing. Essentially every part of the organization has been significantly and positively impacted in some way."
--David Osborne, author of Reinventing Government