Thompson Letter on GPRA - HUD
August 17, 1999
The Honorable Andrew M. Cuomo
Secretary
Department of Housing and Urban Development
451 Seventh Street, SW
Washington, DC 20410
Dear Secretary Cuomo:
As you know, the Congress is focused on ensuring that the federal government delivers better results to its citizens and taxpayers. The Congress has enacted a statutory framework to achieve these results. This statutory framework includes the Government Performance and Results Act (GPRA); financial management statutes, such as the Chief Financial Officers Act; and information resources management statutes, such as the Clinger-Cohen Act. Each of these reforms aims at achieving more efficient and effective performance throughout the federal government.
As part of our oversight agenda, the Committee has developed information on how effectively the Department of Housing and Urban Development (HUD) is using the above statutory tools to improve its performance in several key areas such as becoming more results-oriented and resolving long-standing problems of fraud, waste, and mismanagement. The purpose of this letter is to share with you the information we have developed and obtain your response to certain questions pertaining to it. With this dialog as a start, we hope to work with you on a continuing basis to ensure that HUD delivers the best possible results for the American people.
Performance plan assessment
The Congress continues to look closely at how well departments and agencies are implementing GPRA. At the request of this Committee and others, GAO recently completed an assessment of HUD’s annual performance plan for fiscal year (FY) 2000. According to GAO, HUD’s FY 2000 plan is an improvement over its FY 1999 plan and should be useful to decision makers. The major strengths of the plan are that it:
- contains results-oriented goals and quantifiable measures;
- discusses strategies for achieving intended performance;
- identifies crosscutting activities;
- identifies specific data sources, as well as their advantages or limitations; and
- discusses planned validation and verification of performance measures.
However, GAO also found that the plan has several key weaknesses. Specifically, the plan:
- does not show how budgetary resources relate to achieving performance goals;
- provides limited confidence that the performance data will be credible;
- does not link its human resources to its strategic goals and objectives; and
- does not describe planned coordination strategies.
I commend you for the improvements in HUD’s FY 2000 performance plan. I hope that you will address the remaining key weaknesses GAO has identified and otherwise continue to improve the plan in future iterations.
Need to implement audit recommendations on major management problems
One area where there have been too few results and too little progress is in solving major management challenges that seem to persist year after year at most agencies, including HUD.
As you know, HUD has been a GAO-designated "high-risk" area since 1994 because of four serious, long-standing department-wide problem areas:
- internal control weaknesses, such as lack of necessary data and management processes;
- poorly integrated, ineffective, and generally unreliable information and financial management systems that do not meet the needs of program managers and weaken their ability to provide management control over housing and community development programs;
- organizational deficiencies, such as overlapping and ill-defined responsibilities and authorities between HUD headquarters and field organizations and a fundamental lack of management accountability and responsibility; and
- an insufficient mix of staff with the proper skills, which hampers the effective monitoring and oversight of HUD’s programs.
I am concerned that HUD is not taking all actions it could to address these problems. For example, HUD has yet to fully implement 35 GAO recommendations dealing with these high-risk problem areas. Twelve particularly significant open recommendations are detailed in an enclosure to this letter. Four of these open recommendations date back to 1994.
As described in another enclosure, there are also a number of open recommendations by your Inspector General (IG) addressing major management problems at HUD. Many of these recommendations date back to 1992. In addition to the open audit recommendations, your IG points out that the annual audit of HUD’s financial statements has identified eight material control weaknesses, most of which have been reported consistently for six or more years. For example, the IG reported that HUD’s control structure does not provide reasonable assurance that funding for rent and operating subsidies to housing authorities and multi-family project owners is spent in compliance with applicable laws and regulations. Indeed, HUD itself estimates that excess rent subsidy payments totaled about $857 million for calendar year 1997.
Need for specific performance goals to address major management problems
It is essential that agency heads and other managers commit themselves to tangible steps that will lead to solutions and that agency heads accept accountability for following through on these commitments. One obvious way to do this is to establish specific and measurable goals in your annual GPRA performance plans. Indeed, Office of Management and Budget (OMB) guidance implementing GPRA states:
Performance goals for management problems should be included in the annual plan, particularly for problems whose resolution is mission-critical, or which could potentially impede achievement of program goals . . .
GAO recently evaluated the extent to which HUD’s FY 2000 performance plan contains specific performance goals to address the 11 high-risk and other most serious management problems confronting the Department that GAO and your IG have identified. According to the GAO evaluation, which is detailed in another enclosure, HUD’s plan contains such performance goals for only 3 of these 11 problem areas.
Many of the performance goals HUD has established to address its internal control weaknesses are sufficiently specific and measurable to permit the Department to be held accountable in a meaningful way. However, I am concerned that these are the exception rather than the rule. For instance, to address the problem of inadequate HUD staff with the proper skills, the plan sets goals of higher staff satisfaction and greater percentages of minorities and women. These goals are not responsive to the core problem of employee skill imbalances. Without specific and measurable performance goals, it is difficult if not impossible to assess progress in addressing major management problems and to hold agencies accountable.
Slow pace of HUD management reforms
I understand that HUD’s "2020 Management Reform Plan" and the further plans implementing it contain specific goals to address some of the management problems. This is commendable. However, reports by GAO and your IG indicate that the pace of implementing the 2020 reforms has been slow. For example, the IG observed in the introduction to her March 31, 1999 Semiannual Report to the Congress:
After almost 2 years, the HUD 2020 Management Reform is still a work in progress, with substantial slippage from milestones projected by Booz-Allen Hamilton in March 1998. Meanwhile, HUD continues to suffer from the management deficiencies that HUD 2020 was intended to correct.
It is important to recognize that there are consequences to this prolonged transition period. Major audits completed during this period . . . indicate that HUD needs to devote substantially more attention and resources to these programs before we can be reasonably sure they are having their intended results. And OIG disclosures of fraud, waste, and abuse continue unabated.
I hope you will do whatever is necessary to accelerate the pace of reform, using GPRA and other tools that are available. I look forward to assisting in any way that I can.
Congressional follow-up
With so many tax dollars being wasted, this Committee expects agencies to take every opportunity to use the many tools available to them, such as GPRA plans, to resolve major management problems. Furthermore, the GAO and your own IG exist to work in partnership with you to solve longstanding issues of waste, fraud, and abuse.
I hope that the information provided with this letter will stimulate you to make greater use of these tools and resources. In this regard, I ask that you review the enclosed information and respond to the following questions:
- Do you disagree with any of the GAO or IG recommendations described in the enclosures? If so, what is the basis for your disagreement?
- Where you agree with the recommendations, what specific actions are you taking to implement each one and how long will they take to complete?
- Do you disagree with any of the GAO or IG designations of management problems facing HUD? If so, which ones and why?
- Where you agree with the problem designations, are you prepared to establish specific and measurable commitments to address each one of them in your next performance plan?
- If so, could you outline what approach you plan to take for each problem?
- If you believe that any of these problems do not lend themselves to specific and measurable performance plan goals, please explain why. Please also explain what alternative steps you are taking to solve the problem.
I would appreciate your early attention to this letter. After receiving your response, I will ask Committee staff to arrange a meeting with your representatives to discuss it. My Governmental Affairs Committee staff contact is Robert Shea.
Sincerely,
Fred Thompson
Chairman
FT:rs
Enclosures
