Top Management Challenges Facing HUD in 2021

Each year, HUD’s Office of Inspector General (OIG) issues a report summarizing what it considers the most serious management challenges facing the department. In turn, HUD is required to include this report in its annual agency financial report.

The recent report represents OIG’s view of HUD’s greatest vulnerabilities to waste, fraud, abuse, and mismanagement, and the most significant barriers to HUD’s success in accomplishing its mission. This report adds two challenges to ones identified in prior years: HUD’s response to the COVID-19 pandemic and its ability to procure necessary goods and services efficiently.

HUD’s Top Management and Performance Challenges for Fiscal Year 2021 include:

• Responding to the COVID-19 pandemic
• Financial management
• Management and oversight of information technology
• Monitoring and mitigating risk
• Ensuring the availability of affordable housing that’s decent, safe, sanitary, and in good repair
• Protecting the FHA insurance fund
• Administering disaster recovery assistance
• Human resource management challenges
• Increasing efficiency in procurement processes
• Ensuring ethical conduct

Overseeing CARES Act Grant Funds

In its report, OIG identified several ongoing challenges for HUD related to the pandemic. When the Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed into law on March 27, 2020, Congress provided more than $12 billion in funding to HUD to assist renters, landlords, vulnerable populations, and impacted communities in preventing, preparing for, and responding to the COVID-19 pandemic through its grant programs. The CARES Act also created protections for renters, homeowners, and landlords participating in HUD programs through temporary moratoriums on evictions and certain foreclosure actions and forbearance on payments of federally backed mortgaged loans.

One of the challenges OIG identified for HUD is ensuring timely and appropriate use of CARES Act grant funding. According to the report, HUD faces challenges in overseeing the substantial increase in grant funding that the CARES Act provided to: (a) supplement rental assistance subsidies and assist PHAs ($2.6 billion); (b) prevent homelessness and assist the elderly and people with HIV-AIDS ($4.1 billion); and (c) support local communities’ pandemic response ($5 billion).

According to the report, HUD has taken actions necessary to make CARES Act funding available to grantees through its existing formulas and also developed new methodology to allocate funds to jurisdictions based on pandemic-related needs. HUD also made substantial changes to its grant programs in order to provide guidance and flexibility for grantees.

However, OIG remains concerned about the grantees’ capacity to manage and spend these funds, considering that some grantees have previously been designated as slow spenders by HUD. Additionally, OIG has highlighted in recent years that HUD’s Office of Community Planning and Development (CPD) faces substantial challenges in monitoring its grantees, which may be amplified by the increase in funding to these grantees coupled with the constraints on CPD operations resulting from the pandemic.

OIG says it’s closely following grantee spending rates and trends, surveying the grantees to understand the challenges they’re facing during the pandemic, as well as conducting a review to identify the causes of slow spending in CPD programs.

Is Telework Working?

OIG has also identified performing HUD’s mission operations through the pandemic as a challenge. As OIG has outlined in prior Top Management and Performance Challenges reports, HUD already experiences significant challenges in the areas of human capital and procurement, financial management, information systems technology, and monitoring and oversight. OIG is concerned that the new work required by HUD under the CARES Act could amplify these challenges.

Early in the pandemic, OIG conducted a limited-scope survey of HUD staff members to assess the challenges they faced in a full-time telework environment, and most reported that they were able to perform their job functions. But OIG also found that HUD’s paper-reliant processes were severely slowed and HUD’s network bandwidth was strained and limited some work functions. OIG says it is conducting a follow-up assessment of HUD’s information technology (IT) infrastructure and whether it has the capability to support long-term telework.

HUD is working to protect the health and safety of staff members as they continue to perform HUD’s mission operations and begin to return to the workplace. OIG says it’s currently reviewing how HUD has implemented its plan for Resuming Normal Operations Guide when it has reopened federal office space.

OIG is also concerned about the operational challenges that the pandemic places on HUD’s ability to perform its mission work that requires contact with the public. Many HUD program offices suspended their onsite monitoring of program participants during the pandemic, creating uncertainty about the true state of its program activities. OIG says it’s currently reviewing the Office of Public and Indian Housing’s plans for resuming health and safety inspections in HUD-assisted housing.