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HUD   >   Program Offices   >   Chief Financial Officer   >   Agency Financial Report FY 2012   >   Section I   >   Management and Performance Challenges Summary

OFFICE OF INSPECTOR GENERAL'S MANAGEMENT AND PERFORMANCE CHALLENGES FOR FISCAL YEAR 2013 AND BEYOND SUMMARY

In accordance with the Reports Consolidation Act of 2000, HUD’s Office of Inspector General (OIG) annually identifies the most significant management and performance challenges facing the Department. Below are seven challenges identified by the OIG for FY 2012 along with a summary of Departmental progress in addressing each of the noted issues. [The complete OIG memorandum and management’s comments are located in Section 3.]
 

Single Family Programs – Effective management of the Federal Housing Administration’s single family mortgage insurance programs represents a continuing challenge.

Progress

  • To address sustained losses in this program due to taking on additional risk, FHA increased mortgage insurance premiums, established minimum Fair Isaac Company (FICO) score standards, increasing the minimum down payment, reducing the amount of equity withdrawn on reverse mortgages, and modifying the role of former loan correspondents so they are responsible to direct lenders. Additionally, FHA established polices that require lenders to review borrowers credit, collateral, capacity and cash assets to determine borrower eligibility for FHA insurance.  Read more...


Oversight of American Recovery and Reinvestment Act funds – Is a significant challenge while dealing with increased mortgage activity and conducting normal operations.

Progress

  • Increased on-site monitoring and technical assistance while continuing to review quarterly progress reports and to audit files.  Read more...

 
Human Capital Management – One of the Department’s major challenges has been to effectively manage its limited staff to accomplish its primary mission.

Progress

  • HUD included a Strategic Goal in its FY 2012- 2015 Strategic Plan to transform the way HUD does business to address this issue including sub-goals to (1) build capacity, (2) focus on results, (3) reduce bureaucracy, and (4) change its culture.  Read more...

 
Financial management systems – The Department lacks an integrated financial management system, including the need to enhance FHA’s management controls over its portfolio of integrated insurance and financial systems.

Progress

  • Partially implemented a new core financial system at FHA, and addressed most of the previous weaknesses that OIG identified causing OIG to reclassify a material weakness to a significant deficiency.  Read more...

 

HOME Program – HUD faces challenges over the controls, monitoring, and information systems related to the HOME program.

Progress

  • HUD proposed new rules which should strengthen HUD’s future enforcement authority, providing significant reforms to Community Housing Development Organizations performance and underwriting standards for rental housing and homeownership, developer selection, property standards, deadlines for completing projects, and ongoing monitoring of financial conditions of HOME-assisted projects. Read more...

 
Public and Assisted Housing Program Administration – HUD has a challenge in (1) monitoring the Housing Choice Voucher (HCV) program and (2) monitoring and oversight of PHAs participating in the Moving to Work (MTW) demonstration program.

Progress

  • Developing a Next Generation Management System and Portfolio Management Tool to assist in oversight of the HCV program.  Read more...

 
Administering Programs Directed Toward Victims of Natural Disasters – The Department has a significant management challenge in monitoring disaster program funds provided to various states, cities, and local governments under its purview. This challenge is particularly pressing because of limited resources to perform the oversight, the broad nature of HUD projects, the length of time needed to complete some of these projects, the ability to waive certain HUD program requirements, and the lack of understanding of the Community Development Block Grant-Disaster Recovery (CDBG-DR) grants by the recipients.

Progress

  • Revised the risk CDBG-DR analysis to include the entire CDBG-DR portfolio.  Read more...