August 31, 1999

Thompson letter on GPRA - HUD Attachment 2

SPECIFIC PERFORMANCE GOALS IN HUD FY 2000 PERFORMANCE PLAN

ADDRESSING

GAO- AND IG-DESIGNATED MAJOR MANAGEMENT CHALLENGES

Major Management Challenge	Specific Performance Goal(s)
Y2K readiness (GAO govt-wide high-risk)	None.
Information security (GAO govt-wide high-risk)	None.
Internal control weaknesses persist. These include: lack of staff and resources to manage and monitor real estate inventory; an inadequate early warning system to prevent losses from defaults in insurance programs; inadequate controls over the rental assistance program; inadequate automated systems to provide reliable data; and an inadequate management control system (Based on this and the following 3 challenges, HUD programs as a whole are high-risk) (IG also)	Examples of relevant performance goals: Increase by 5% the share of tenant-based Section 8 assistance managed by housing authorities that score highly for income verification. Increase by 3% by 2001 the share of households for which rent determinations are correct for public housing and for project-based Section 8 housing. All households living in HOME rental developments will be income eligible, pay appropriate rent, and live in physically adequate units. The share of public housing and assisted multifamily developments that comply with the standards of the Fire Safety Act increases by 3 %. Among households living in subsidized multifamily properties, the share living in developments that have substandard financial management decreases by 5 %. The share of public housing units and assisted multifamily units that contain life-threatening health and safety deficiencies decreases by 10 %. The share of households for which rent determinations are correct increases by 3 % for public housing and for project-based Section 8 by 2001. Increase by 2% the share of FHA mortgage defaults resolved by loss mitigation alternatives to foreclosure. Decrease by 5% the share of public housing units managed by troubled housing authorities. Increase by 1% the share of public housing units and assisted multifamily units that meet HUD-established standards: [ Standards for what? – Housing Quality Standards (HQS) ] HUD has 6 sets of HQS established in 24 CFR for its various housing programs. These standards specify performance and acceptability requirements for sanitation, food preparation, water supply, air quality and other aspects of housing. On September 1, 1998 HUD published its final rule for "Uniform physical condition standards and physical inspection requirements for certain HUD housing" to be effective 10/1/98 that consolidated the HQS requirements, but it included a paragraph (5.705 ) that stated that inspections were not be required using these standards until 30 days after HUD publishes a notice that new inspection software and a guidebook are available. Until that time, the prior requirements remain in effect. The HQS can be found at: 24 CFR 880.207 – Section 8 housing assistance payments for new construction 24 CFR 881.207 – Section 8 housing assistance payments for substantial rehabilitation 24 CFR 882.109 – Section 8 housing assistance payments for existing housing 24 CFR 883.310 – Section 8 housing assistance payments for state housing agencies 24 CFR 884.515 – Section 8 housing assistance payments for farmers home administration 24 CFR 886.113 – additional assistance for projects with HUD insured and HUD held mortgages (FHA) Office of Housing field staff to review a statistically valid sample of transactions of 7 categories for compliance with data quality standards [Matrix refers to a 25% increase in obligations for performance-based contracts. Is this a FY 2000 performance goal or measure, or does it relate to one? On page 135 of the plan, HUD lists this as one outcome indicator in support of its objective "HUD’s workforce and partners are empowered, capable, and accountable for results" under the goal to restore public trust.]
HUD has had poorly integrated, ineffective, and generally unreliable information and financial management systems (GAO & IG)	HUD’s automated data systems are rated highly by users for usefulness, ease of use, and reliability. (Plan does not specify rating criteria.)
HUD has had organizational problems, such as overlapping and ill-defined responsibilities and authorities between its headquarters and field organization and a fundamental lack of management accountability and responsibility (GAO)	None. However, HUD’s 2020 Management Reform Plan and implementation plans describe goals for correcting management deficiencies identified by GAO and others.
An insufficient mix of staff with the proper skills has hampered the effective monitoring and oversight of HUD’s programs and the timely updating of procedures (GAO & IG)	HUD employees are more satisfied, consider themselves more capable, and perceive the organization to be more effective. ( HUD is developing a new survey to measure employee satisfaction.) Increase the share of Hispanics by 0.5 % to 7.1% of employees. Increase representation of women and minority employees at and above GS-13 by 1% to 33%.
Bringing on line the operation of the Real Estate Assessment Center (IG)	None. (The Center is supposed to be operational now.)
Little progress in restructuring project mortgages to bring them to market levels (IG)	None.
Defining the relationship between community builders and public trust officers (IG)	None.
Section 8 program problems: As more and more Section 8 contract renewals move to an annual cycle, HUD will have greater difficulty responding quickly to customer needs. Also, HUD continues to experience problems with data systems in identifying excess Section 8 reserves at the Public Housing Authority level (IG)	None.
HUD is particularly vulnerable in the management of Real Estate Owned (REO) properties (IG)	None.