Good morning, Mr. Chairman and Members of the Senate Governmental Affairs Committee. I am Dwight P. Robinson, Deputy Secretary of the Department of Housing and Urban Development.

On behalf of Secretary Cuomo and the Department, I appreciate this opportunity to come before you and the Committee to report on HUD's management reform efforts and plans for the future. I look forward to helping Secretary Cuomo build a productive, bipartisan working relationship with you and the members of this Committee.

Let me begin by saluting former Secretary Cisneros for beginning the reform process that we are discussing today. Because of his vision and commitment, today's HUD is much improved from the HUD of 1993. And while we all recognize that many challenges remain ahead, I can unequivocally tell you that HUD today is stronger, more able, and more cohesive than it has ever been. We are now in the best position possible to continue our progress.

In Secretary Cuomo, we have a leader who demonstrated exemplary management reform and program results when he served as Assistant Secretary for Community Planning and Development. I am confident that he will provide the same aggressive leadership needed to complete the reform of this agency. Our goal is clear -- to restore the public's trust in the Department. To reach this goal, we will work tirelessly to eliminate management deficiencies and we will seek your assistance in obtaining necessary legislative reforms to carry us forward.

Secretary Cuomo has made it clear to me and to the rest of HUD's senior management team that he considers restoring the public's trust in HUD a critical goal of the Department, on a par with solving the Section 8 contract expiration crisis discussed in the 1998 budget proposal. He has said repeatedly that we must do everything we can to avoid making the choice between fiscal prudence and our mission of helping people in need. Clearly, we can -- and we must -- do both. HUD must do its part by intensifying and completing a comprehensive management and program reform effort. To that end, we are developing a comprehensive management plan, which will enable our auditors -- both OIG and GAO -- to recognize real progress and achievement by the end of the next fiscal year.

Since Secretary Cuomo assumed leadership of the Department, he has set forth his vision and specific directions to strengthen the Department's overall management operations. Following are three major goals and objectives:

• Our Financial Systems Integration Plan will be overhauled so that we can be certain that our accounting and financial information systems are accurate, reliable and timely when fully operational. A private sector contractor with proven experience and background in financial systems integration will design, develop, and implement the integration of our financial management systems.

• The Secretary has looked at the immense challenges facing the Department in the year 2000 and beyond -- challenges such as meeting the needs of the community, budgetary restraints, welfare reform, etc. - - and decided that the only way to effectively address these issues is for HUD to become a much smarter, leaner, more focused agency. The ultimate question is: "What should we look like down the road to meet the increasing demands of the future?" The most logical answer for us is to allow our planned program reforms to determine how we reshape the agency and align its resources. As a result, our future policy and program reforms are in clear alignment with our staffing reduction targets -- 7500 FTE's in the year 2000. What we are ultimately talking about is a new and different way of doing business.

• Our finance and budget systems will be realigned and consolidated in the Office of the Chief Financial Officer, so that we can improve the management and coordination requirements of these interrelated functions.

It is important to note that while identifying long-standing management deficiencies that HUD must address, GAO also has taken notice of the significant progress the Department has made in addressing these problem areas. In fact, GAO has acknowledged our "substantial efforts over the past two years." Yet we know full well that serious inadequacies remain and we are tackling them head-on.

Specifically, the lingering problem areas include: 1) internal controls, 2) information and financial management systems, 3) organization and 4) staffing skill mix.

INTERNAL CONTROLS

For the first time ever, HUD will enforce requirements for front-end risk assessment for all new programs. Also we are going to increase regular reviews of current programs. This increased frequency of internal control reviews will improve our capacity to detect and eliminate instances of fraud, waste and mismanagement. I expect the CFO to complete these changes to our internal controls within 120 days.

INFORMATION AND FINANCIAL MANAGEMENT SYSTEMS

As I stated earlier, a private contractor will be brought in to design, develop and implement the HUD Financial Systems Integration (FSI) Plan. Our objective is to install an integrated financial information system that is timely, accurate and reliable. FSI will enable us to more accurately report how we spend the taxpayers' dollars and will pinpoint those programs that best benefit intended recipients. In short, we will save time, money and be able to validate the success of our programs.

Further, we are changing our employee performance evaluation and incentives system to insure accountability up and down the line. By making these much needed changes, we can demand and expect much higher quality data from our program offices.

To begin this accelerated systems integration process we are reviewing 93 existing systems to get rid of those which are either obsolete or redundant.

ORGANIZATION

In GAO's original high risk report, the Department was cited for having ill-defined and overlapping management and authority structures between Headquarters and the field. To address this issue, HUD has completed its Field Reorganization. We eliminated regional offices as a management layer and gave Assistant Secretaries the authority to manage their programs and people at the field office level. GAO was also concerned that our resources be aligned clearly with our mission, and we are taking steps to correct remaining imbalances.

STAFFING

Finally, the GAO has identified a need for a better skills mix of staff in order to improve the monitoring and oversight of HUD's programs. We have already undertaken two major actions to address this problem. First, our training budget has increased four-fold and the number of training hours our employees receive has increased by 100 percent from FY 1993 to 1996. And we established the HUD training academy to help our employees become better trained to meet the changing demands of the 21st century.

Second, in January of this year we completed a Department-wide employees skills assessment survey. The survey will help us to identify specific areas of training need and will help us better focus our training dollars. In addition, we are contracting out to private universities those training programs that they can do best.

CONCLUSION:

In closing, let me emphasize that HUD is committed to an accelerated work plan to ensure that the progress on our reform efforts moves as swiftly as possible. We will continue to hold meetings with key staff in GAO as well as OMB to monitor our progress on the Management Action Strategy which I have outlined today. We are proud of the progress we have made to date. It is clear that we are on the right track to becoming a better agency so that we can better serve the needs of the American people. Rest assured that underlying everything we do is our commitment to restoring the public's trust in the Department.