Good morning Mr. Chairman and members of the Committee. I am Saul Ramirez, Deputy Secretary of the Department of Housing and Urban Development. I appreciate this opportunity to share with you the management reforms and operations of the Department, and more specifically, to discuss the Community Builder program. I request the inclusion of my oral and written testimony in their entirety in the record. Mr. Chairman, I want to share with you four major points that I believe are important for everyone on this Committee to fully understand.

1. The Community Builder Program has been a remarkable success. This is not only our opinion but also the opinion of every independent group that has reviewed the program, including the Public Strategies Group, Booz-Allen and Andersen Consulting. Today I am pleased to announce that the respected independent accounting firm, Ernst and Young, LLP has issued a report demonstrating the clear success of Community Builders around the nation. E & Y concludes that "the Community Builder program can prove to be a model of government management innovation and reinvention success."

2. The Office of the Inspector General (OIG) is the first - and only - entity to give the program a negative review, and the criticisms in the OIG's report are baseless and factually incorrect. I intend to set the record straight.

3. The Department has grave concerns about the audit process which the OIG conducted in a manner that was fundamentally unfair to the agency and to many members of Congress who have an interest in the Community Builder program.

4. I am announcing continued steps to improve the Community Builder program and build on its many successes. We are not going to remain complacent in the face of positive independent reviews that underscore the program's success. We're going to build on it. We plan to perform a series of management and operations workshops for our senior field managers. We are instituting a new on-line Community Builders project management system. And we are enhancing the role of Community Builders in HUD's Business and Operating Plan.

When I joined the Department in July 1997 as the Assistant Secretary for Community Planning and Development (CPD), Secretary Cuomo had already begun to change HUD's internal management structure and program operations in order to improve the functioning of the Department. In fact, two of his major reforms - the Consolidated Plan and the Continuum of Care -- have been honored with the prestigious Harvard University's Innovations in Government Award.

The Department's 2020 Management Reform Plan made even more bold, sweeping and innovative changes. HUD 2020 was designed and developed to address the Department's long-standing material weaknesses identified by many in Congress as well as the GAO and OIG. These improvements covered financial management and program operations, as well as program delivery and customer service. Since the announcement of these management reforms in June 1997, I am proud to say that the Department has made credible and substantial progress in correcting management deficiencies, as well as improving program operations.

The Community Builder program is but one part of the comprehensive plan that is making HUD more responsive to community needs and more protective of the public trust.

Mr. Chairman, I would like to take a moment to go over each of the four points I mentioned in greater detail.

First, the Community Builder program is working. Many independent experts have recommended that HUD make a change like the Community Builder program. At the direction of Congress, the National Academy of Public Administration (NAPA) in 1994 studied HUD and issued a report called Renewing HUD: A Long-Term Agenda for Effective Performance that recognized the need for clarifying job roles and for emphasizing HUD's role as a catalyst and viable community partner - not just regulator and enforcer.

The NAPA report recommended that HUD revise its employee incentive system to emphasize that working with communities and other agencies is as important as enforcing regulations. It said HUD program areas should change the way they do business to provide holistic services to communities rather than solely program-focused assistance.

Another independent group of management experts, the Public Strategies Group, examined HUD's reform efforts and warned about the pitfalls of some federal agency structures, noting that "a common source of dysfunction in government agencies stems from the commingling of both service and compliance functions within programmatic cylinders, requiring agency employees to assume dual roles - at times seeking to offer assistance, facilitate and problem solve, and at other times to perform oversight and enforce compliance." HUD took these recommendations and other past criticisms seriously when creating the Community Builder program as part of our overall Management Reform strategy. Since our Management Reform plan was unveiled, the Department has hired, trained, and deployed 800 Community Builders in HUD offices nationwide. The introduction of the Community Builder role into the HUD workforce was a major, and critically important reform initiative. We expeditiously, and with great precision, addressed the issue that I referred to at the opening of my statement - we streamlined our customer service function - by designating certain staff to function as a single point of contact for all HUD programs. That's what Community Builders do.

At the same time, we also addressed another major issue that has plagued this Department for many years - role ambiguity - which was caused by HUD employees being forced to wear two hats. As Public Strategies Group noted, our staff were previously charged with serving both as HUD's customer service representatives - helping communities access resources - and program monitors - ensuring that the same communities used HUD's funds properly. The introduction of Community Builders to HUD has clarified and separated these two, very distinct, functions. Now we have Community Builders (9% of agency) who function as our community resource representatives, and Public Trust Officers (91% of agency) who ensure that HUD meets its obligations and responsibilities to the American people.

Clearly defined roles and responsibilities also means we are better meeting our program goals and commitments for furthering the Department's strategic objectives. For the first time, HUD has freed up some 90% of the agency's staff to monitor and run its programs. We are setting national performance goals that are quantifiable and measurable. For example, this year, we have exceeded our goals in three critical areas: fair housing enforcement; increasing homeownership among underserved populations; and providing comprehensive solutions to fighting homelessness.

These achievements demonstrate that HUD is on the right track. And our customers are looking at us differently. Andersen Consulting surveyed our customers this year and found: "In striking contrast to the image of a federal bureaucracy, HUD's staff is perceived by its customers as providing exemplary service and accurate information, and HUD staff also received high marks for timeliness of the information provided. The fact that HUD customers indicated high positive levels of customer service is even more impressive because of the high disposition of government customers to negative bias (since, unlike private companies, HUD must regulate its customers.)"

Similarly, Ernst & Young's review of the Community Builders program applauded HUD's efforts in leading the way for real change. E & Y asserts "that the Community Builder program may serve as an innovative government model of improved customer service for government institutions at all levels." As an aside, we know that others are indeed using this strategy - the Peace Corps' new customer service storefront office is modeled after ours; The Justice Department is considering implementing our Fellowship model with Assistant U.S. Attorneys nationwide; and Mayor Kirk Watson of Austin not only praised the program, but recently used it to reorganize his own housing office.

Ernst and Young also found that:

• Community Builders are providing increased customer service and responsiveness to community needs and requests

• Community Builders are expanding outreach to new and in some cases previously under served partners

• Community Builders are facilitating working partnerships furthering the Department's mission

• Community Builders are utilizing valuable private sector experience and skills to benefit the public sector

• Community Builders are furthering the Department's strategic objectives

If you're still skeptical, don't take my word for it, and don't take the word of the many management experts that I have already quoted. Members of Congress and Mayors from across the country have applauded the work of our Community Builders. Let me highlight a few samples.

Here's what Mayor John Norquist of Milwaukee said -

"HUD had been virtually invisible in the community. However, that has changed since the appointment of the four fellows in the local HUD office. They have worked hard to create a HUD presence in the community and have been wildly successful. Their efforts to 'go where no HUD has gone before' have resulted in HUD representation at venues specifically targeted toward under-served areas�. The Community Builder program is the model for empowering communities to achieve self-sufficiency."

"They have helped guide me and the committee I have formed to begin to transform a neighborhood that has been neglected for many, many years - the Old Central/Central Park Neighborhood. We are about to launch a neighborhood effort that we hope will transform the neighborhood aesthetics, encourage self esteem, provide home ownership and encourage entrepreneurship opportunities�. I hope other cities are the recipients of the same personal attention we are receiving from the HUD Community Builder Program, and I encourage you to consider expansion of this program in the future because it works."

I can assure the committee and Mayor Quiroga that many cities across the nation are enjoying similar assistance from our Community Builders.

And finally, Mayor Dominic Pileggi of the City of Chester, Pennsylvania writes:

I am a believer in a limited federal government. Nevertheless, the Community Builder program has been the single most effective innovation in a federal government program in my 6 years in City Government.

Clearly, the Mayors are pleased with the work of our Community Builders. We at HUD are proud of this program. We are proud of our record of achievement and the outside evaluations over the past two years which have consistently shown that we're moving in the right direction.

Now, you may ask, why then did HUD's Inspector General so severely criticize this program?

The second point that I would like to make to you today is that the OIG audit ignored all of the positive information on the program and based its findings on factually inaccurate and unsubstantiated claims.

Their report is so full of inaccuracies that it's hard to believe that it is about the same program which we call the Community Builders - and therefore, it's important for me to set the record straight.

Please allow me to provide you with a brief sample of the erroneous information in the Audit for I am confident that it will provide you with a much clearer understanding of the program:

• The Draft Report mistakenly claims that Community Builders do not fit the criteria for hiring under Schedule A. Schedule A hiring authority is designed, in part, for Fellowship programs like the CB fellowship. I would like to emphasize that HUD's Office of General Counsel fully analyzed the applicability of Schedule A hiring authority to the Community Builders and concluded that "the Department may hire individuals from outside the Department to fill positions in the Community Builders program under the Schedule A authority of 5 CFR 213.3102 (r)." I would like to submit a copy of that memo for inclusion in the record. Oddly enough, one of the HUD attorneys who drafted the memorandum currently serves as the IG's associate counsel. I cannot understand why the OIG would contradict the legal opinion of its own lawyer.

• The IG report stated that there were irregularities in the hiring process for Community Builders and that the process was not well planned or implemented - This claim is absolutely false. The hiring process complied with all relevant rules, laws, and regulations provided by the Office of Personnel Management (OPM). In fact, we consulted with OPM regarding the process and they did not object to any part of our plan. Our response to the IG report addresses this issue in detail. I am also providing you with a memorandum from our general counsel and DAS for Administration demonstrating that HUD acted appropriately in hiring Community Builder Fellows.

• The IG report alleged that Community Builders merely do - and I quote - "public relations" and that their work is of "minimal value." Again, the IG is wrong and plainly distorts the record. As confirmed by E&Y, Community Builders are helping the Department meet each of its strategic objectives. Some of the clear examples of valuable work performed by Community Builders that E & Y found includes:

forming a partnership between a Community Development Corporation, HUD and a local high school to assist with a crime mapping initiative;

providing information so that a local government entity could access a new source of HUD funding for the first time;

facilitating the participation of a local chapter of the United Way in the Department of Justice's weed and seed program;

bringing together a group of tenants and their landlord to help resolve maintenance and safety issues;

identifying alternative financing options for the Cherokee Nation Housing Authority;

leading a collaborative effort that included the Federal Emergency Management Agency to respond to freezing weather that destroyed crops that were an important part of the local economy;

helping a non-profit organization in Galveston, TX find funding for a training program for young inner city entrepreneurs;

locating a disabled-accessible apartment for a woman with multiple sclerosis and providing her information regarding fair housing complaint procedures;

providing technical assistance to a local non-profit housing development organization to help it become a designated Community Housing Development Organization;

providing information and technical assistance to help preserve Washington State's Section 8 contracts;

organizing first-time home buyer training for local lenders who were interested in targeting the community's under served minority first-time home buyer population;

presenting information on HUD's housing programs, including eligibility requirements and rent calculations to an AIDS Task Force to help them educate their clients;

and working with the Philadelphia Housing Authority to inform public and assisted housing residents about new "Welfare-to-work" reform rules and regulations.

Now, if you believe that's public relations, that's fine. I think its the relations the public expects us to have - to be responsive and reliable. This work is exactly what the public should expect from HUD - comprehensive services that are responsive to local needs.

• The IG report alleges that Community Builders disseminate primarily political information. Once again, the IG is wrong. Community Builders provide information to customers on HUD and its programs. The OIG report provides absolutely no valid, reliable evidence for this unfounded charge.

• The IG report inaccurately alleges that Community Builders are paid more than they should be and implies that salaries were determined in a more favorable fashion than for other HUD employees. The OIG fails to get the facts straight. HUD career human resources officials followed OPM guidelines in assigning salary levels. This is the same process used to assign salary levels for all government employees. Nearly all Community Builder Fellows are mid-career professionals with 10 or more years of experience in their chosen profession and their average age is 45. Many also have advanced degrees in fields such as law, public administration, and public policy. The implication that Community Builders are paid too much is false. Their pay is commensurate with their experience and ability. Salaries for Community Builder range from GS 7 through GS 15, approximately $27,000 to $105,000, including locality pay.

These are but a sampling of the errors and inaccuracies contained in the IG report. That is why I urge this Committee to examine the facts carefully and draw your own conclusions. I know that if you look at the facts objectively, you will conclude that the program has been unfairly attacked and that the basis for these attacks is unsubstantiated, anecdotal stories that clearly demonstrate a misunderstanding of this program.

This brings me to my third point. I have grave concerns about the way in which this audit was handled. The OIG deprived Congress of the opportunity to weigh the facts in an even-handed manner.

There are standards and guidelines that dictate the way audits are to be performed. There is also an issue of plain fairness. The IG's audit fails on both accounts. It is the blatant disregard for the unspoken rules of fairness about which I am most deeply disturbed. We were not informed that the draft report was being released to Senators Bond and Allard, the Chairmen of the two Senate Subcommittees which we work with - without informing the ranking minority members of those committees as well. OIG staff were directed not to inform others of this early release of the report, yet they would not tell us who gave that order. The OIG's covert actions disadvantaged many in Congress because they did not have equal access to the draft report during the debate on HUD's budget. I would hope that the OIG would not engage in partisan politics to undermine this innovative program.

The final point I would like to make today is that HUD will not let positive reviews lull us into complacency nor negative attacks weaken our resolve to continue to improve this program. Today, I would like to share with you our comprehensive, five-part strategy to continue to improve the Community Builder program. We intend to build on what has worked, and carry forth the recommendations set out by Ernst and Young. Here are the five prongs of the plan:

Deploy HUD's first-ever on-line, real time project and management tracking system

• We are deploying a new on-line system to track and manage Community Builders' projects. Although HUD has systems currently in place to track all of the department's field activities, we have developed a new tool to help Community Builders with the management of their projects. This system enhances the Department's ability to monitor individual Community Builder activities and continually assess their performance and the program as a whole.

Enhance the role of Community Builders in making HUD run more efficiently and effectively

• We are enhancing the role of Community Builders in HUD's Business and Operating Plan. HUD has improved the Department's operations plan for fiscal year 2000 by further integrating Community Builder activities in the local, retail level business and operating plans and improving the accounting process at the national level. Using a new system enhancement, HUD is tying its field operations to goals and results achieved in measurable ways. Community Builders' contribution to the Department's goals will be clearly measured and more easily identified.

Give Community Builders more effective management tools

• We are continuing to enhance management training for our Senior Community Builders as part of our overall employee training. The Department will execute an aggressive plan to provide all Senior Community Builders with the necessary, comprehensive management training needed to successfully lead their offices to full attainment of their goals and objectives. HUD's Senior Community Builders are a critical component of our organization, and we intend to provide them the tools and support they need to be effective.

Hold Community Builders to the highest standard

• Community Builders will be thoroughly evaluated on their performance. The Department currently has a performance appraisal system in place. In addition to utilizing this existing system, the Department has developed additional standards and requirements for Community Builders Fellows, specifically designed to assess their performance in key areas. For example, Fellows will be rated on their performance as relationship managers for the Department - they are expected to enhance HUD's relationships with customers in America's many communities. We will ensure that Fellows will be held to high performance standards.

Fully utilize the full range of technology tools

• We will fully leverage HUD's information technology systems. The Department has made extensive use of information and communications technology systems for training staff. We will be executing a plan to more fully exploit the Department's past investment in these systems for providing high quality training for Community Builders so that they may best carry out their duties in the field. We will also continue to enhance the technology available to CBs in performing their jobs. CBs already are equipped with laptops that serve as virtual offices and offer real-time information. That means we must continue to enhance our state of the art web-site, expand our Community 2020 software, offer on-line assistance, web-casting and other new avenues to reach underserved communities and support their local efforts.

Mr. Chairman, as you can see, we have a plan. It is a sound and positive plan with one goal in mind - to better serve American communities by working with them and responding to their needs. Community Builders help us to do that, and we are proud to have them as part of our workforce.

I thank you for the opportunity you have given me to share with you the successes of the Community Builders program. I look forward to answering any questions you may have for me.

Content Archived: January 20, 2009