By: Richa Goel, Policy and Legislative Affairs Data Analyst <\/p>\n\n\n\n
On October 17th<\/sup>, the HUD Office of Inspector General (OIG) released its fiscal year (FY) 2025 Top Management Challenges, an annual report which highlights \u201cthe most serious management and performance challenges facing the Department and progress made since last year.\u201d HUD OIG has identified eight top management challenges for FY 2025.<\/p>\n\n\n\n 1. Promoting Health and Safety in HUD-Assisted Housing<\/strong> <\/p>\n\n\n\n HUD is responsible for overseeing its assisted housing to ensure that properties are \u201cdecent, safe, sanitary, and in good repair and that its programs and projects comply with environmental regulations.\u201d <\/p>\n\n\n\n OIG has identified two areas in which HUD faces difficulties: the risk of lead hazard in HUD-assisted housing and identification and remediation of health and safety deficiencies through its inspection processes. HUD OIG audits of large PHAs found that PHA\u2019s lacked proper procedures to manage lead-based paint and in some instances, misinterpreted HUD\u2019s requirements. With respect to inspection processes, two OIG audits found that PHAs lacked adequate oversight of Housing Choice Voucher (HCV) unit inspections and faced difficulties addressing unit deficiencies. Furthermore, a HUD OIG audit found inadequacies in HUD\u2019s Real Estate Assessment Center (REAC)\u2019s inspection process. <\/p>\n\n\n\n 2. Increasing Access to Affordable Housing<\/strong> <\/p>\n\n\n\n Amid an ongoing shortage of affordable housing, HUD must continue to work with PHAs to expand access to affordable housing. HUD has faced challenges in maximizing and overseeing the HCV program. The national success rate for new voucher recipients has decreased from 65 percent in 2018 to 55 percent in 2022, underscoring the need to find new ways to increase landlord participation and leasing potential. Furthermore, the report finds that HUD needs to enhance its oversight of PHA voucher programs and ensure that funds are being used to help the maximum number of families. <\/p>\n\n\n\n 3. Mitigating Counterparty Risks<\/strong> <\/p>\n\n\n\n HUD OIG has identified multiple counterparty risks that HUD must mitigate including liquidity risks posed by Ginnie Mae\u2019s nonbank counterparties, risks presented by reverse mortgages, and Ginnie Mae\u2019s limited capacity. HUD must also work to improve FHA oversight of servicers that provide loss mitigation and address risks posed by lengthy foreclosure and conveyance processes. <\/p>\n\n\n\n 4. Grants Management<\/strong> <\/p>\n\n\n\n Each year, through a diverse range of grant programs, HUD provides billions of dollars to States, cities, and other entities to advance HUD\u2019s mission. However, HUD continues to face difficulties in \u201cdeveloping and implementing adequate policies, procedures, and other controls to oversee grantees\u2019 and subrecipients\u2019 compliance, performance, and effectiveness.\u201d The report contends that HUD needs more reliable and complete financial and performance information and systems, enhanced subrecipients monitoring, and timeliness in grant fund spending and grant program execution. <\/p>\n\n\n\n 5. Enhancing Oversight of Disaster Recovery <\/strong> <\/p>\n\n\n\n Each year, HUD administers and oversees billions of dollars in disaster recovery and mitigation grants. HUD OIG has recommended that HUD continue to seek permanent authorization of CDBG-DR programs, address data limitations, and improve oversight of grantees and grantee oversight of subrecipients. <\/p>\n\n\n\n 6. Managing Fraud Risk and Improper Payments<\/strong> <\/p>\n\n\n\n Fraud against HUD diminishes HUD\u2019s ability to meet the critical housing needs of its communities. HUD OIG has determined that HUD is \u201cmissing opportunities to mitigate fraud risks and detect improper and unknown payments\u201d. HUD\u2019s Chief Risk Officer must work to mature HUD\u2019s fraud risk management program. Furthermore, HUD must address challenges in guaranteeing that whistleblowers are protected from retaliation. <\/p>\n\n\n\n