GAO RECOGNIZES HUD'S MANAGEMENT REFORMS
First time in 13 years no HUD programs on GAO's "High-Risk" list

WASHINGTON - Citing significant financial and management reforms put in place by Housing and Urban Development Secretary Alphonso Jackson, the U.S. Government Accountability Office (GAO) today announced that two of HUD's critical housing programs have been removed from its "high-risk" list. GAO's report recognized HUD's progress in implementing management controls that have led to significant improvements to the Department's Single-Family Mortgage Insurance Programs and Rental Housing Assistance Programs.

This action marks the first time since 1994 that no HUD programs have been on GAO's "high-risk" list.

"HUD serves the nation best when all its programs are working effectively and efficiently," said Jackson. "GAO's removal of a high-risk designation for these two programs shines a bright light on HUD's efforts over the past six years to ensure taxpayer dollars are spent wisely and well."

In 2001, then-Deputy Secretary Jackson implemented the President's Management Agenda at HUD, putting in motion a reform plan to make sure the Single-Family Mortgage Insurance and Rental Housing Assistance Programs function more effectively. Under his leadership, the GAO in January 2005 recognized significant improvement in Single-Family Mortgage Insurance Programs and Rental Housing Assistance Programs. Since then, HUD's auditors from the Office of the Inspector General have also recognized the Department's progress by eliminating all material weakness issues in both program areas.

Single Family Housing Mortgage Insurance Program Reforms

Since 2001, the Department has made significant strides to reform The Federal Housing Administration's (FHA) single-family mortgage insurance programs. FHA made great progress in improving its lending, appraisal and property disposition controls, and enhancements to the timeliness, sophistication and predictive accuracy of its actuarial modeling. These improvements are ensuring a sound footing for FHA as it modernizes its programs in order to serve the 21st century homebuyer.

Rental Housing Assistance Program Reforms

In 2001, HUD issued the Quality Control for Rental Assistance Subsidies Determinations Study, which estimated that the Department's public housing and various tenant-based and project-based rental assistance programs issued $3.2 billion in gross annual improper payments attributable to program administrator errors and tenant underreporting of income.

To reduce improper rental assistance payments, HUD's Office of Public and Indian Housing and Office of Housing worked with their housing industry partners and tenant advocacy groups to improve program guidance, training and automated systems support. HUD developed and implemented the Enterprise Income Verification System (EIV) - a web-based, state of the art system - to share income data in other federal databases with public housing authorities to improve their income verification process. These collective actions led to a 60 percent decline in gross improper payments between 2001 and 2005. With full implementation of the use of EIV by all HUD program administrators in 2007, HUD will further reduce the remaining improper payment level. The money that had been paid in error is now being used to house more low-income families.

The EIV system has received significant recognition for its innovation in government, including helping HUD gain a "green" score under the President's Management Agenda scorecard in 2005 and winning the Government Computer News Gala Award in 2006.

To read the full GAO report visit: http://www.gao.gov/new.items/d07310.pdf

###

HUD is the nation's housing agency committed to increasing homeownership, particularly among minorities; creating affordable housing opportunities for low-income Americans; and supporting the homeless, elderly, people with disabilities and people living with AIDS. The Department also promotes economic and community development, and enforces the nation's fair housing laws. More information about HUD and its programs is available on the Internet espanol.hud.gov. For more information about FHA products, please visit www.fha.gov.