Real Estate

HUD: We need more funding from Congress for much-needed bureau updates

Technology dates back to 70s

The U.S. Department of Housing and Urban Development announced it needs serious updates to the agency, and it’s going to need more funding to get there.

HUD’s newly appointed Chief Financial Officer Irving Dennis announced Thursday that the agency is seriously lacking in three key areas which he uses to evaluate a company.

“When I evaluate a company, I evaluate based on people, process and technology,” Dennis said. “When it comes to HUD, they’re going to need some help on that.”

Dennis explained that before he stepped into the CFO position back in January, it had been vacant for several years. HUD’s people were looking for leadership, he explained, saying they need tools, training and mentorship.

“From a process standpoint, there is a general lack of focus on process here at the agency,” Dennis said. “That’s a culture we need to change.”

He explained that the agency’s technology is also in dire need of an update, saying some of the programing goes back to the late 1970s.

“We simply need to do better,” HUD Secretary Ben Carson said in a statement. “An updated system of internal controls will provide our agency with greater certainty that the dollars we spend are spent in a manner that satisfies all laws and regulations, and most importantly, the American people.”

“We will approach this as any business would by increasing transparency and accountability,” Carson said. “In the end, we will also support a culture that respects the fact that HUD funds belong to the public.”

HUD announced that in order to increase oversight, transparency and accountability, it will implement an agency-wide governance taskforce. This taskforce will provide oversight over all the agency’s finances.

“This is going to be a different way of working here,” Dennis said. “It’s going to be a change of culture.”

The department estimates the changes will happen over the next two to four years.

However, there is one small catch. When asked by HousingWire if the department would have the funds to be able to implement its new task force under the current budget cuts HUD is facing, the answer, in short, was no.

Finance transformation is a longer-term project that will require more funds from Congress and more time, Dennis said.

When President Donald Trump first announced the budget, HUD pointed out that it would be a slight increase in funding from the president’s 2018 budget proposal. However, it also received significant criticism as it still cut the budget by about $6 billion from the pre-Trump era and cut several of HUD’s programs.

But in order to implement what HUD describes as “much-needed” changes to modernize the department, Congress will need to approve more funding. HUD said it is still in the planning phase, and cannot yet estimate a dollar amount that it will need to complete its plan.

HUD’s new plan will consist of:

Agency-wide Governance: Implementing an agency-wide governance structure that allows for more oversight, transparency, monitoring and accountability

Finance Transformation: Developing a plan to restore discipline and accountability in the financial and reporting systems across the agency

Grant Modernization: Developing a holistic grant modernization plan to improve grant processes and reporting, including improved IT systems

Process Improvement: Promoting a HUD culture focused on documented and repeatable processes with a focus on transparency and cost reasonableness

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