The federal government entity responsible for ensuring Americans have access to fair and affordable housing, popularly known as HUD (Housing and Urban Development), has found itself under scrutiny. Over the past decade plus one year, the department has consistently experienced difficulties in pinpointing and preventing improper payments, leading to concerns surrounding accountability and fiscal responsibility.
The Study of Mismanagement
This news about the ongoing struggle of HUD emerged from an in-depth assessment carried out by the GAO (Government Accountability Office). The GAO, an independent advisory institution which provides audits, evaluations, and analyses to the United States Congress, embarked on this task following HUD’s inability to meet improper payment identification standards set by the Office of Management and Budget (OMB) for eleven consecutive years.
The improper payments that are in question refer to any payments made by the government that should not have been made or were made in an incorrect amount under statutory, contractual, administrative or other legally applicable requirements. These can also be payments made to ineligible recipients, duplications, payments for goods or services not received, and payments that have not been appropriately documented. In fact, these types of mishaps can lead to a significant drain of public funds if they are not identified and rectified immediately.
The redundant nature of these shortcomings has led to the GAO expressing great concern about HUD’s continuing difficulties in identifying and preventing improper payments made through its various programs. Though the OMB requires federal agencies to annually review programs that are susceptible to substantial improper payments, HUD was unable to meet these targets consistently.
HUD’s Battle with Mispayments
HUD’s main difficulty lies with two of its most prominent programs: the FHA (Federal Housing Administration) and the Housing Choice Voucher Program. While the FHA provides mortgage insurance on loans made by approved lenders, the Housing Choice Voucher Program allows individuals to find their own housing, including single-family homes, townhouses, and apartments.
The HUD did not meet the annual OMB requirement for estimating improper payments in its FHA program for the fiscal year 2020. Besides, the department also failed to provide the improper payment estimate for the Housing Choice Voucher Program in 2020, contributing to its streak of undershooting targets.
But the issue does not just lie with failing to estimate improper payments. HUD has also consistently struggled to implement corrective actions for these identified improper payments. The OMB necessitates that federal agencies take immediate remedial actions for any mispayments. Unfortunately, HUD was unable to meet this requirement over several years.
Plugging the Leak: Solutions and Obstacles
Addressing this recurring issue set by improper payments, the GAO suggests intensifying the oversight and monitoring of the FHA and Housing Choice Voucher Program. Specifically, the watchdog urges HUD to align itself more closely with the OMB’s guidelines on identifying, estimating, and taking remedial action for improper payments.
While this might seem straightforward, deeper systemic issues within HUD make achieving these objectives challenging. HUD lacks a centralized approach when it comes to tracking and analyzing the data on improper payments. This absence of a unified system makes it difficult to paint a clear, holistic picture of the issue across all programs and divisions within the department.
Additionally, HUD suffers from an insufficient budget and personnel to ensure that all programs correctly identify and accurately estimate improper payments. A lack of resources isn’t the only problem. The department also faces a shortage of adequately trained employees, impeding it from accurately tracking improper payments and implementing immediate corrective actions.
Missteps and the Way Forward
In the grand scheme of things, the issues faced by HUD are not entirely unfamiliar to other government departments experiencing similar tribulations. However, given the essential services the HUD offers to the public, mishandling of taxes could endanger its ability to assist those who depend on it.
The HUD needs to focus on building an integrated, comprehensive system that can track, identify, and take remedial action against improper payments across the entirety of its programs. Such a system would not only aid in identifying and controlling mispayments but even allow the identification of fraudulent activities. Moreover, the implementation of advanced data analytics could further enhance their capacity for identifying and mitigating potential instances of fraud.
Reforming the HUD from within is also pivotal for the future. Investing in human resources through adequate training can lead to meaningful change. HUD employees need to understand and be kept up-to-date around state-of-the-art technology and best practices for identifying and preventing improper payments.
Initiating these systemic reforms within the HUD will be the key for the entity that plays such a crucial role in ensuring housing security for many Americans. HUD must ensure that every cent dedicated to these programs is spent appropriately to continue catering to those in need. After all, guaranteeing fair and affordable housing lies at the heart of HUD’s mission—a mission that should not be compromised by avoidable financial mistakes.
