HUD reform plan fixes some problems, makes others worse, GAO says

The Department of Housing and Urban Development's management reform effort has streamlined some agency operations, but exacerbated workforce problems, according to a new report from the General Accounting Office. HUD's 2020 Management Reform Plan has eliminated bureaucratic layers at the agency by consolidating some oversight and processing functions associated with single-family housing and real estate assessment, according to the report, "Progress Made on Management Reforms, but Challenges Remain" (GAO-02-45). But the agency's failure to reduce the number of programs it manages, coupled with downsizing, has resulted in a smaller staff, more work and poor morale, the report said. In 1997, then-Secretary Andrew Cuomo launched the HUD 2020 Management Reform Plan to reorganize the department and repair HUD's reputation as a scandal-ridden and mismanaged agency. To streamline bureaucratic layers, HUD created specialized centers to oversee processing and oversight functions, including the single-family mortgage insurance program, physical and financial assessments of housing stock, and enforcement activity. At the same time, the agency planned to cut its staff from 10,500 at the end of fiscal 1996 to 7,500 by fiscal 2002 through buyouts, attrition and reassignments. The agency stopped its downsizing efforts in 1998, with about 9,000 full-time positions in place. Streamlining HUD's processing and oversight functions has reduced the time it takes the agency to process single-family insurance papers from about five weeks to three days, and has enabled HUD to complete its first real estate assessment of its assisted housing stock, according to GAO. But now the agency has fewer employees taking on more work, the report said. "Our recent survey of HUD managers indicated that they believe they do not have enough staff and their workload has increased, rather than decreased as envisioned under the 2020 plan," said GAO. While HUD has made efforts to retrain its workforce and establish an employee appraisal system for senior managers, the agency still needs to make better use of its staff and improve morale, the report said. Workforce management is the "primary challenge" facing HUD, GAO said, while criticizing the agency for failing to maintain a balance between staff numbers and workload. For example, under the reform plan, HUD pledged to consolidate its single-family operations and about 70 percent of its field staff into specialized home ownership centers. However, as of January 2001, about 44 percent of the staff working on the single-family program remained in various field offices because the agency abandoned its plan, causing an imbalance between staff levels and workload. "Some of the home ownership centers are understaffed while single-family staff located in some field offices are not utilized in an effective and productive manner," the report said. The imbalance has affected employee morale because some employees are taking on many more responsibilities than they had before, while others have little to do, GAO said. GAO also expressed concern that impending retirements at HUD could exacerbate its staffing problems. According to the report, about 39 percent of HUD staff is eligible to retire within the next five years-one of the highest percentages of retirement-eligible workforces among federal agencies. GAO encouraged HUD to develop a comprehensive succession plan to handle impending retirements and to conduct a workforce analysis that matches staff levels with skills and workload. HUD's top political and career leaders must continue their commitment to reform in order to sustain those efforts and must work harder to involve employees in reform initiatives, the report said. HUD generally agreed with the report's findings.
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