Report to the Ranking Minority

Member, Subcommittee on Housing and

Community Opportunity, House

Committee on Banking and Financial

Services

United States General Accounting Office

GAO

June 2001 HUD INSPECTOR

GENERAL

Actions Needed to

Strengthen

Management and

Oversight of

Operation Safe Home

GAO-01-794
Page i GAO-01-794 HUD Inspector General

Letter 1

Results in Brief 1

Background 5

Operation Safe Home Funding Not Effectively Managed 5

Operation Safe Home Arrest and Conviction Data Are Unreliable 13

OIG Officials Identified Few Complaints Against Its Agents 14

Operation Safe Home Raises Questions About OIG’s Independence 16

Conclusions 17

Matter for Congressional Consideration 18

Recommendations for Executive Action 18

Agency Comments and Our Evaluation 18

Scope and Methodology 22

Appendix I Comments From the Office of Inspector General,

Department of Housing and Urban Development 24

GAO Comments 31

Appendix II GAO Contacts and Staff Acknowledgments 40

Figures

Figure 1: HUD OIG Allotments of Operation Safe Home Funding,

Fiscal Years 1996 - 2001 6

Figure 2: HUD’s Public Housing Drug Elimination Program

Appropriation, Fiscal Year 2000 (Total $310 Million) 7

Figure 3: Appropriations Available to HUD OIG, Fiscal Year 2000

(Total $93 Million) 8

 Source: Public Law 106-74 p. 113, Stat. 1058 and 1068. 8

Figure 4: Operation Safe Home: Status of Task Force Funds, Fiscal

Years 1996 - 2000 (by year) 9

Figure 5: Operation Safe Home: Estimated Funds Expended on

Salaries and Expenses, Fiscal Years 1997-2000 (by year) 11

Figure 6: Operation Safe Home: Expenditure of Task Force Activity

Funds, Fiscal Year 2000 (Total $2.7 Million) 12

Contents
Page ii GAO-01-794 HUD Inspector General

Abbreviations

HUD U.S. Department of Housing and Urban Development

FBI Federal Bureau of Investigation

DEA Drug Enforcement Agency

OIG Office of Inspector General

OMB Office of Management and Budget
Page 1 GAO-01-794 HUD Inspector General

June 29, 2001

The Honorable Barney Frank

Ranking Minority Member

Subcommittee on Housing and Community Opportunity

Committee on Banking and Financial Services

House of Representatives

Dear Mr. Frank:

Since 1994, the Department of Housing and Urban Development’s (HUD)

Office of Inspector General (OIG) has devoted substantial funding and

personnel to combat violent crime and drug trafficking through Operation

Safe Home. The HUD OIG administers Operation Safe Home by

establishing, funding, and participating in law enforcement task forces that

operate in public and assisted housing where OIG special agents—in

partnership with federal and local law enforcement agencies—investigate

criminal activity, make arrests, and refer individuals for criminal

prosecution. In fiscal year 1996, the Congress began earmarking funds for

the HUD OIG to administer Operation Safe Home.

Concerned about the effectiveness of the HUD OIG’s management of

Operation Safe Home and whether the HUD OIG’s role in this initiative is

appropriate, you asked us to report on (1) the amount and source of

Operation Safe Home funding and how it was spent, (2) the number of

arrests and convictions resulting from Operation Safe Home

investigations, (3) complaints lodged against OIG special agents engaged

in Operation Safe Home activities, and (4) the impact Operation Safe

Home activities could have on the OIG’s independence to conduct audits

and investigations of HUD’s programs to reduce violent and drug-related

crime in public and assisted housing. To address these questions, we

reviewed program documents, reports, and databases, and spoke with OIG

officials.

Since fiscal year 1996, the Congress has appropriated $92.5 million to the

HUD OIG to fund Operation Safe Home and these funds are available until

expended. The OIG has allotted annual appropriations to pay for (1) the

costs of supporting Operation Safe Home law enforcement task forces and

(2) the salaries and expenses of OIG special agents working on Operation

Safe Home activities. Of the amounts appropriated, the OIG did not spend

a substantial amount of funding allotted for task force activities from fiscal

United States General Accounting Office

Washington, DC 20548

Results in Brief
Page 2 GAO-01-794 HUD Inspector General

year 1996 through 2000—about $10 million remains unobligated—

however, the OIG estimates that, during this same period, it used about

$3.9 million of other OIG funds to supplement the Operation Safe Home

salaries and expenses allotment. Furthermore, while the OIG provided

overall information on the level of obligations and expenditures for task

force activities, it could not readily identify how much money was allotted

to and obligated and expended by individual task forces or readily provide

detailed information on how the money was specifically spent. Thus, the

OIG did not have a reliable mechanism for estimating its funding needs,

allocating program resources, and determining how funds were spent. OIG

officials stated that HUD’s proposed fiscal year 2002 budget request for

Operation Safe Home was reduced from $20 million to $10 million and that

Operation Safe Home’s unobligated balances would finance task force

activities through fiscal year 2002. In addition, the OIG is taking action to

improve accountability, including developing an improved and more

detailed method of tracking Operation Safe Home funds.

The HUD OIG cannot accurately determine the number of arrests and

convictions that have resulted from Operation Safe Home activities

because the data it maintains are unreliable. According to the OIG

database, investigations stemming from Operation Safe Home have

resulted in about 25,000 arrests and 500 convictions since 1994; however,

these data are unreliable because they are not consistent, complete, or

accurate. For example, the OIG did not have a single information system in

place and has instead relied upon multiple data collection mechanisms of

questionable reliability. Further, OIG managers had differing

interpretations of the types of arrests and convictions to report. In

addition, we found 57 apparent double entries of arrest data that

potentially resulted in the OIG overreporting 600 arrests. Moreover, the

OIG could not provide documentation supporting summary data, including

the number of arrests, contained in 12 semiannual reports to the Congress.

Due to the problems with these data collection mechanisms and the lack

of documentation, the arrest statistics that the OIG has reported to the

Congress since 1994 are neither reliable nor supportable. The OIG has

recognized the poor quality of its data systems and in March 2001

implemented a new management information system designed—among

other things—to improve the reliability of its data. In response to our

review, OIG officials told us they are also developing guidance for OIG

special agents to use in reporting arrest and conviction data.

We were not able to precisely determine the number and disposition of

complaints filed against HUD OIG special agents engaged in Operation

Safe Home activities. During our review, the Assistant Inspector General
Page 3 GAO-01-794 HUD Inspector General

for Investigations told us that the OIG did not have a centralized system

for reporting, documenting, and addressing allegations and that the OIG’s

11 district offices adjudicated complaints filed against OIG special agents.

The Assistant Inspector General for Investigations and these Special

Agents in Charge told us that they were aware of seven complaints lodged

against HUD OIG special agents engaged in Operation Safe Home activities

from January 1997 through May of 2001, including allegations such as

sexual harassment, improper use of authority, and misuse of funds. OIG

officials said that of these seven complaints, three were still under

investigation and four were closed; in two of the four closed cases, the

OIG had removed special agents from federal employment. In

commenting on a draft of this report, the Acting Deputy HUD Inspector

General stated that the OIG uses a contractor to provide it centralized

information concerning allegations of misconduct filed against OIG

employees, and that all complaint files were also maintained at OIG

headquarters. This information was not consistent with information

provided earlier by OIG officials and confirmed by the Inspector General

and other OIG officials in February 2001. The Acting Deputy Inspector

General also provided us a listing of disciplinary actions taken against OIG

employees from January 2000 through January 2001. However, we

reviewed the additional information and it was not sufficient to determine

whether it included any additional allegations against special agents

engaged in Operation Safe Home activities.

The HUD OIG’s role in Operation Safe Home raises certain questions

about its independence in connection with any related audit and

investigation of HUD’s programs that aim to reduce violent and drugrelated crime in public and assisted housing. While the Congress has

authorized the OIG to administer Operation Safe Home and has

appropriated funds to the OIG for this purpose, in August 2000, we raised

concerns about the impact the OIG’s role in Operation Safe Home could

have on its ability to independently assess law enforcement activities

undertaken by HUD, its grantees, and contractors at public and assisted

housing.1

 In a May 2001 letter to the Inspector General, we further

explained our concerns.2

 First, since the OIG directly administers and

participates in Operation Safe Home activities, it cannot independently

and impartially audit or investigate those activities. Second, because HUD

 1

GAO letter to James Walsh, Chairman of Subcommittee on VA, HUD, and Independent

Agencies, Senate Committee on Appropriations; August 9, 2000. B-285066.2.

2

GAO letter to the Honorable Susan Gaffney, May 24, 2001. B-285066.3.
Page 4 GAO-01-794 HUD Inspector General

has other similar programs to reduce violent and drug-related crime in

public and assisted housing, the OIG may not be impartial or may not be

perceived as impartial when auditing these HUD programs.

Because of our concerns about the HUD OIG’s independence, this report

makes a matter for consideration to the Congress to assess whether the

long-term involvement of the HUD OIG in Operation Safe Home is worth

the actual or perceived impairment of the OIG's independence in

performing audits and investigations of HUD's programs to reduce violent

and drug-related crime in public and assisted housing. In addition, the

report also contains recommendations to either the HUD Inspector

General or the Secretary of HUD--depending on the Congress’ decision

regarding the involvement of the HUD OIG in Operation Safe Home.

These recommendations include: (1) improving the accountability over

task force activity funds and (2) enhancing the reliability of Operation Safe

Home investigative data for such actions as arrest and convictions.

On June 8, 2001, the Acting Deputy Inspector General of HUD provided the

HUD OIG’s written comments to a draft of this report (see app. I). The

OIG agreed with our proposed recommendations and reported that it had

completed actions to implement them. The OIG did not dispute our

conclusions regarding its independence to conduct audits and

investigations of HUD’s programs, but disagreed with a number of other

facts and conclusions presented in our report. We believe that the HUD

OIG has not yet fully implemented two of the three proposed

recommendations contained in the draft report because further action is

needed to improve the accountability over task force activity funds and to

enhance the reliability of Operation Safe Home investigative data. We

therefore retained those recommendations in the final report. However,

we agree that on June 4, 2001, the HUD OIG fully implemented its policies

and procedures pertaining to employee misconduct, and we deleted the

proposed recommendation and revised the report to reflect this action.

The Acting Deputy Inspector General disagreed with a number of facts and

conclusions presented in our report. We carefully considered the Acting

Deputy Inspector General’s comments and, where appropriate, made

modifications to the report to clarify issues and add additional

information. However, we made no changes to the facts and conclusions

in the report. For example, while the OIG disagreed that it cannot

accurately determine the number of arrests and convictions that have

resulted from Operation Safe Home activities, it did not dispute the

reliability problems we identified in its arrest and conviction data or

address the fact that it could not provide documentation supporting the
Page 5 GAO-01-794 HUD Inspector General

summary investigative data reported to the Congress. Our evaluation of

the OIG’s comments are noted in app. I.

Operation Safe Home is administered by HUD’s OIG to combat violent

crime and drug trafficking in public and assisted housing.3

 It began as an

anticrime initiative in February 1994 and was announced as a joint effort

among HUD, the Department of Justice the Department of the Treasury,

and the Office of National Drug Control Policy. To implement Operation

Safe Home, the OIG—through its 11 district offices—establishes and

participates in law enforcement task forces. Its partners include federal

law enforcement agencies—such as the Federal Bureau of Investigation

(FBI) and the Drug Enforcement Agency (DEA)—as well as state and local

law enforcement agencies. The task forces investigate criminal activity in

public and assisted housing, and OIG special agents conduct undercover

operations, make arrests, and refer cases for criminal prosecution. As of

December 2000, 280 task forces were active in numerous U.S. cities. In

addition, under Operation Safe Home, the OIG facilitates the relocation of

witnesses and their families who assist law enforcement efforts. According

to the Inspector General’s September 1999 Semiannual Report to the

Congress, the OIG had facilitated the relocation of 637 families since the

beginning of Operation Safe Home. The OIG supports this activity by using

HUD Section 8 vouchers set aside for this purpose.4

The HUD OIG has not effectively managed the Operation Safe Home

funding earmarked by the Congress since fiscal year 1996. Whereas the

OIG did not spend a substantial amount of the funds it allotted for

Operation Safe Home law enforcement task forces between fiscal years

1996 and 2000, the OIG also estimates that--during that same period--it

used other OIG funds to supplement the Operation Safe Home salaries and

expenses allotment. In addition, the OIG did not have information on the

amount of money allotted to and spent by each of its 280 task forces, and

had only limited information on how this money was specifically spent.

 3

Our review of Operation Safe Home focused on the OIG’s violent and drug-related crime

investigations; however, the OIG also uses the term Operation Safe Home to encompass

selected high priority white collar fraud investigations.

4

The Section 8 program is administered by HUD and public housing authorities to assist

very low-income families, the elderly, and the disabled obtain affordable housing—

including subsidized housing as well as single-family homes, townhouses, and apartments

in the private market.

Background

Operation Safe Home

Funding Not

Effectively Managed
Page 6 GAO-01-794 HUD Inspector General

From fiscal year 1996 through 2001, the Congress earmarked $92.5 million

to the HUD OIG to fund Operation Safe Home, and these funds are

available until expended. The Congress began funding Operation Safe

Home in fiscal year 1996 with $2.5 million and raised this to $10 million in

fiscal year 1997. From fiscal year 1998 through 2001, the Congress annually

earmarked $20 million to the OIG to administer Operation Safe Home. The

OIG has allotted Operation Safe Home funds for two purposes: (1)

expenses associated with law enforcement task forces such as overtime

pay for local law enforcement, vehicle leasing, and training, and (2)

salaries and expenses of OIG special agents working on Operation Safe

Home drug and violent crime investigations and witness relocation

activities. As figure 1 shows, in fiscal year 1996, the OIG allotted all of the

appropriation—$2.5 million—for task force activities, and since fiscal year

1997, the OIG has split the appropriation evenly—50 percent for task force

activities and 50 percent for salaries and expenses.

Figure 1: HUD OIG Allotments of Operation Safe Home Funding, Fiscal Years 1996 -

2001

Note: Data not independently verified by GAO.

Source: HUD OIG.

Amount and Source of

Operation Safe Home

Funding
Page 7 GAO-01-794 HUD Inspector General

The source of congressional funding for Operation Safe Home is the Public

Housing Drug Elimination Program. The Congress established the Drug

Elimination Program to provide grants to public housing authorities to

reduce or eliminate drug-related crime in public housing developments.

Eligible uses of this grant money include—but are not limited to—

employing security personnel and making physical improvements to

housing structures to increase security. As figure 2 illustrates, in fiscal

year 2000, about 6 percent of the Drug Elimination Program’s

appropriation was earmarked for the HUD OIG to fund Operation Safe

Home. As figure 3 shows, the $20 million the OIG received in fiscal year

2000 for Operation Safe Home represented about 22 percent of the OIG’s

budget for that fiscal year.

Figure 2: HUD’s Public Housing Drug Elimination Program Appropriation, Fiscal

Year 2000 (Total $310 Million)

Source: Public Law 106-74, p. 113, Stat. 1057-1058.
Page 8 GAO-01-794 HUD Inspector General

Figure 3: Appropriations Available to HUD OIG, Fiscal Year 2000 (Total $93 Million)

Source: Public Law 106-74, p. 113, Stat. 1058 and 1068.

The HUD OIG has not spent a substantial amount of the funds it allotted

for Operation Safe Home task forces; conversely, it has expended all the

funds it allotted to pay for the salaries and expenses of OIG special agents

engaged in Operation Safe Home activities and has also used other OIG

funds for this purpose. In particular, from fiscal year 1996 through 2000

(the last full fiscal year for which data are available) the OIG had not

obligated about $10 million of the $37.5 million it allotted to fund

Operation Safe Home law enforcement task forces.5

 In addition, of the

$27.5 million that had been obligated, about $8 million had not been

expended by the end of fiscal year 2000. While these funds remain

available to the OIG until expended, more than half of the unexpended

funds were obligated in fiscal year 1999 or earlier, as shown in figure 4. We

plan to review these unexpended balances as part of our budget

justification review of HUD’s proposed fiscal year 2002 budget.

 5

From fiscal year 1996 through 2001, the HUD OIG allotted $47.5 million to pay for

Operation Safe Home task force activities. However, complete expenditure data for fiscal

year 2001 are not available; therefore, our analysis of these funds covers fiscal years 1996

through 2000.

Substantial Amount of

Operation Safe Home

Funding Not Spent
Page 9 GAO-01-794 HUD Inspector General

Figure 4: Operation Safe Home: Status of Task Force Funds, Fiscal Years 1996 -

2000 (by Year)

Note: Data as of January 2001. Data not independently verified by GAO.

Source: HUD OIG.

The Inspector General told us that Operation Safe Home task force money

is unobligated because the HUD OIG has received more funding than was

needed. OIG officials stated that as a result, HUD’s proposed fiscal year

2002 budget request for Operation Safe Home was reduced from $20

million to $10 million, and that Operation Safe Home’s unobligated

balances would finance task force activities through fiscal year 2002.

In contrast to the HUD OIG not expending the task force allotment, the

OIG estimates that it has used other OIG monies to pay for the salaries and

expenses of special agents working on Operation Safe Home activities.

Specifically, from fiscal year 1997 through fiscal year 2000 (the last full

fiscal year for which data are available) the OIG allotted $35 million of
Page 10 GAO-01-794 HUD Inspector General

Operation Safe Home earmarks for salaries and expenses.6 However, the

OIG estimates that during this period it expended $38.9 million on salaries

and expenses of special agents working on Operation Safe Home

activities.7

 Therefore, the OIG estimates that it used $3.9 million of other

OIG funds—about 10 percent more than initially allotted—to pay for the

salaries and expenses of special agents working on Operation Safe Home

activities. The use of other OIG funds to pay for Operation Safe Home

activities was permitted by law. Figure 5 illustrates the OIG's estimates of

funds expended annually to pay for the salaries and expenses of OIG

special agents engaged in Operation Safe Home activities.

 6

From fiscal year 1997 though 2001, the HUD Inspector General allotted $45 million to pay

for the salaries and expenses of special agents involved in Operation Safe Home activities.

However, complete expenditure data for fiscal year 2001 are not available; therefore, our

analysis of these funds covers fiscal years 1997 through 2000.

7

The HUD OIG estimated these expenditures because funds allotted for Operation Safe

Home salaries and expenses are directly transferred into the OIG's Salaries and Expenses

account and the OIG does not and is not required to separately account for how the

allotted funds are spent.
Page 11 GAO-01-794 HUD Inspector General

Figure 5: Operation Safe Home: Estimated Funds Expended on Salaries and

Expenses, Fiscal Years 1997-2000 (by Year)

Note: Data as of December 2000. Data not independently verified by GAO.

Source: HUD OIG.

HUD OIG officials were able to provide only limited information on how

the task force funds were spent. Specifically, while the OIG was able to

supply overall obligation and expenditure data, it could not readily identify

how much money was allotted to and obligated and expended by

individual task forces. Furthermore, it could not readily provide

information on what specific activities were funded. For example, HUD's

accounting system could not accurately provide information on how much

was expended for training and payment of overtime costs. OIG officials

stated that while HUD's accounting system has specific expenditure

levels—such as training and payment of overtime costs--that OIG staff

rarely use and have not been required to use the more detailed levels. As

figure 6 illustrates, in fiscal year 2000, 63 percent of the expenditures for

task force activities were categorized as “Other.”

Limited Information on

Task Force Expenditures
Page 12 GAO-01-794 HUD Inspector General

Figure 6: Operation Safe Home: Expenditure of Task Force Funds, Fiscal Year 2000

(Total $2.7 Million)

Note: Data as of September 2000. Data not independently verified by GAO.

Source: HUD OIG.

The OIG is acting to improve accountability over funds allotted for task

force activities. As a result of our review, the HUD OIG is instituting

additional mechanisms to identify the funding allotted to and obligated

and expended by each of its 280 task forces. The OIG has further advised

its district offices to provide more detailed information on specific task

force obligations and expenditures. In addition, in November 2000, the

Inspector General placed some restrictions on the use of Operation Safe

Home funds allotted for task force activities. These restrictions precluded

the formation of additional task forces, although existing task forces

continue to be funded and may request additional funding. OIG officials

stated that the restrictions were necessary because of delays in

contracting for the required audits of Operation Safe Home and due to

allegations of misuse of funding at the OIG’s Denver office. When we

completed our review, the required audit of Operation Safe Home was

under way and was scheduled to be completed in July 2001, and the FBI

and OIG were investigating the allegations in the Denver office (as

discussed later in the report).
Page 13 GAO-01-794 HUD Inspector General

The HUD OIG cannot accurately determine the number of arrests and

convictions that have resulted from Operation Safe Home activities

because the data it has maintained are unreliable. According to the OIG

database, investigations stemming from Operation Safe Home have

resulted in about 25,000 arrests and 500 convictions since 1994; however,

these data are unreliable because they are not consistent, complete, or

accurate. We found that the OIG lacked a single and reliable information

system and instead used multiple data collection methods of questionable

reliability. For example, the OIG:

• used narrative reports composed by OIG special agents to compile arrest

and conviction statistics. However, the OIG had not developed guidance

detailing the type of information that should be included in the narrative

reports. As a result, OIG special agents could and did have differing

interpretations on what to include. For example, while some OIG special

agents told us they only counted arrests for which they were physically

present, others counted all Operation Safe Home arrests executed by any

task force participant. Also, some OIG special agents told us they only

tracked federal convictions, while others tracked federal, state, and local

convictions.

• compiled the narrative reports by highlighting discussions of arrests and

convictions and then entered the data into a database. This method is

highly prone to error because it relied on the interpretation of the

individuals reading the narrative reports and manually identifying and

transferring information. For example, we found at least 57 instances of

apparent double entries of arrest data, potentially resulting in the OIG

overreporting 600 arrests.

• maintained arrest and conviction data in its Investigator Case Management

System database. This database was originally developed in 1980 to track

the time and attendance of OIG special agents but was expanded in 1994

to track Operation Safe Home investigative data. OIG special agents told

us the system was antiquated, cumbersome, unreliable, and highly prone

to error and technical difficulties. For example, OIG staff said they

frequently lost data they had entered or were “booted out” of the case

management system for no apparent reason. As a result, according to one

OIG official, tracking and inputting investigative data was a “huge clerical

effort” and was thus often a low priority for special agents.

To supplement the data collected from the systems named above, the HUD

OIG also manually compiled investigative information through periodic

“data calls” to district offices. These calls were meant to collect

Operation Safe Home

Arrest and Conviction

Data Are Unreliable
Page 14 GAO-01-794 HUD Inspector General

information on selected items such as indictments, prosecutions, and

search warrants that have resulted from OIG investigative activities.

The HUD OIG used these data collection mechanisms to compile summary

data—including the number of arrests resulting from Operation Safe Home

investigations—and reported to the Congress every 6 months on Operation

Safe Home and its other activities. However, the OIG could not provide

workpapers or documentation supporting the number of arrests reported

in 12 semiannual reports to the Congress. Therefore, the arrest statistics

that the OIG reported to the Congress since 1994 are neither reliable nor

supportable.8

The HUD OIG has recognized major weaknesses in its information systems

and has taken actions to improve the reliability of Operation Safe Home

arrest and conviction data. For example, the OIG began working with a

consultant in 1995 to develop a new information system to better manage

its investigative data collection activities. The new system was

implemented in March 2001. A OIG official stated that it allows OIG

special agents in the field to directly input data into a single information

system, and thus automates and centralizes the OIG’s investigative data

collection efforts. OIG officials believe that this system will ultimately

resolve reliability problems and concerns. Further, as a result of our

review, the OIG is developing guidance for OIG special agents so that they

consistently report arrests and convictions.

We could not precisely determine the number of complaints lodged

against HUD OIG special agents working on Operation Safe Home

investigations because OIG officials told us that they had no central

system for reporting, documenting, and addressing allegations. Instead, a

Special Agent in Charge—at the OIG’s 11 district offices—adjudicated

complaints filed against OIG special agents. The Assistant Inspector

General for Investigations and Special Agents in Charge told us that they

were aware of seven complaints lodged against OIG special agents

engaged in Operation Safe Home activities from January 1997 through May

of 2001.9

 8

The two most recent HUD OIG semiannual reports to the Congress (March and September

2000) did not include summary data.

9

As of December 2000, 113 HUD OIG special agents were engaged in Operation Safe Home

activities.

OIG Officials

Identified Few

Complaints Against

Its Agents
Page 15 GAO-01-794 HUD Inspector General

• An OIG special agent executing a search warrant with local police

officers was accused of excessive use of force when handcuffing

residents—who were minors—during a search. The OIG investigated

the complaint, found that the allegation of excessive use of force had

no merit, and the OIG closed the allegation.

• An OIG special agent was accused of sexual harassment by a local

police officer. The complaint was investigated by the OIG. The

investigation disclosed that although no sexual harassment, per se,

occurred, the special agent acted inappropriately and unprofessionally

to the police officer and others. During the investigation, the OIG

identified additional misconduct. The special agent chose to leave the

OIG and therefore, the OIG closed the allegation.

• An OIG special agent was accused of having an improper intimate

relationship with an informant. The OIG investigated the allegation

and, as a result, subsequently removed the special agent from federal

employment.

• An OIG special agent was accused of improper use of authority and

other infractions. The OIG investigated the allegation and, as a result,

removed the special agent from federal employment.

• An OIG special agent was accused of multiple offenses including

mishandling evidence, insubordination, and conducting unauthorized

activities. The OIG was investigating the allegation.

• An OIG special agent was accused of violating the guidelines of the

HUD OIG Firearms Manual. The OIG was investigating the allegation.

• OIG special agents in the Denver district office were accused of misuse

of funds, abuse of authority, and personal misconduct. The FBI and

OIG were investigating these allegations.

In commenting on a draft of this report, the Acting Deputy HUD Inspector

General stated that the HUD OIG employs a contractor that provides it

centralized information concerning allegations of misconduct filed against

OIG employees, and that all complaint files were also maintained at OIG

headquarters. This was not consistent with the information provided

earlier by the former Assistant Inspector General for Investigations who

stated that no such system existed and that all records were kept in the 11

district offices. Furthermore, during a meeting in February 2001 conducted

to confirm facts ascertained during our review, OIG managers—including
Page 16 GAO-01-794 HUD Inspector General

the Inspector General—agreed to the former Assistant Inspector General's

characterization. The Acting Deputy HUD Inspector General also

provided additional information concerning disciplinary actions taken

against a number of OIG employees from January 2000 through January

2001. However, this information was insufficient to determine whether it

included any additional allegations against OIG special agents engaged in

Operation Safe Home activities.

In August 2000, the HUD OIG established policies and procedures

pertaining to employee misconduct that includes a centralized internal

affairs investigations unit and a unified process to (1) receive and

investigate allegations of employee misconduct, (2) evaluate the

misconduct, and (3) where appropriate, propose disciplinary action. These

new policies and procedures took effect on June 4, 2001.

The HUD OIG's independence to conduct audits and investigations of

HUD’s programs to reduce violent and drug-related crime in public and

assisted housing is subject to question given its role in Operation Safe

Home. Although the Congress has authorized the OIG to administer

Operation Safe Home to combat violent and drug-related crime and has

earmarked funds to the OIG for this purpose, in August 2000, we raised

concerns about the impact the OIG’s role in Operation Safe Home could

have on its ability to assess law enforcement activities at public and

assisted housing by HUD, its grantees, and contractors.10 In a May 2001

letter to the Inspector General, we further explained our concerns.11

First, under applicable Government Auditing Standards, the OIG cannot

independently and impartially audit and investigate activities it is directly

involved in.12 Since the HUD OIG directly administers and carries out

Operation Safe Home activities, the OIG cannot independently and

impartially audit and investigate those activities it carries out itself. For

example, OIG special agents investigate individuals committing violent or

drug-related crime in public and assisted housing, and the OIG administers

a funding program to compensate participating local law enforcement

agencies for overtime and investigative expenses.

 10See B-285066.2.

11See B-285066.3.

12Government Auditing Standards, 1994 Revision, June 1994, section 3.11, p. 22.

Operation Safe Home

Raises Questions

About OIG’s

Independence
Page 17 GAO-01-794 HUD Inspector General

Second, since both HUD and the HUD OIG are involved in combating

violent and drug-related crime in public and assisted housing, the OIG may

not be perceived as impartial when auditing HUD’s efforts to combat drugs

and crime in public and assisted housing. HUD’s mission includes

fostering safe and decent public housing, and HUD’s programs include

various activities to reduce violent and drug-related crime in public and

assisted housing in support of that mission. For example, under the Public

Housing Drug Elimination program and other programs, public housing

agencies receive grants to reimburse local law enforcement agencies for

additional security, to reimburse local agencies to investigate and

prosecute drug-related crime, and other purposes. Given that Operation

Safe Home is also designed to reduce violent and drug-related crime in

public and assisted housing, the OIG may not be perceived as impartial

when auditing or investigating HUD programs that are also designed to

accomplish the same objective.

Operation Safe Home does not have the necessary information systems

and management controls to ensure that HUD’s OIG managers can readily

monitor the obligation and expenditure of funds and track the numbers of

arrests and convictions. As a result, the OIG does not have a reliable

mechanism for effectively allocating program resources or for accurately

estimating its funding needs. Furthermore, in the absence of complete,

consistent, or accurate information, the OIG has not had the means to

accurately report the results of its investigations and thus to provide the

Congress with reliable and supportable information on what Operation

Safe Home has accomplished. The OIG has recognized the need for more

effective management controls within Operation Safe Home and has begun

to address the problems. These actions, once implemented, should

improve the ability of the OIG to allocate resources more effectively,

better estimate future funding needs, and more accurately measure and

report the program’s accomplishments. Nevertheless, while management

improvements are under way, we remain concerned about the

consequences of a long-term involvement of the OIG in Operation Safe

Home. The OIG cannot independently and impartially audit or investigate

Operation Safe Home, and may not be perceived as impartial when

auditing other similar HUD programs. For these reasons, as we stated in

August 2000, Operation Safe Home raises questions about the OIG’s ability

to independently audit and investigate HUD programs designed to reduce

violent and drug-related crime in public and assisted housing.

Conclusions
Page 18 GAO-01-794 HUD Inspector General

We believe that the Congress should consider whether the long-term

involvement of the HUD OIG in Operation Safe Home is worth the actual

or perceived impairment of the OIG’s independence in performing audits

and investigations of HUD’s programs to reduce violent and drug-related

crime in public and assisted housing.

We recommend that the HUD Inspector General or the Secretary of

HUD—depending on Congress’ decision regarding the involvement of the

HUD OIG in Operation Safe Home—should ensure that actions begun by

the Inspector General to improve the management and oversight of

Operation Safe Home are fully and effectively implemented in a timely

manner. Specifically,

• improve the accountability over Operation Safe Home task force activity

funds by developing and implementing a system to track funding allotted

to and obligated and expended by individual task forces, and

• improve the reliability of Operation Safe Home investigative data by (a)

promulgating additional guidance to be used by HUD staff when inputting

investigative information into the recently developed information system

and (b) properly maintaining documentation supporting investigative data

reported to the Congress.

On June 8, 2001, the Acting Deputy Inspector General of HUD provided the

HUD OIG’s written comments to a draft of this report (see app. I). The

OIG agreed with our proposed recommendations and reported that it had

completed actions to implement them. The OIG did not dispute our

conclusions regarding its independence to conduct audits and

investigations of HUD’s programs, but disagreed with other information

presented in the report. Specifically, the OIG suggested that the draft

report's findings lacked supporting criteria, that a number of facts

presented were inaccurate, and that the conclusions were overstated given

the facts presented.

We believe that the HUD OIG has not yet fully implemented two of the

three proposed recommendations contained in the draft report. On June

5, 2001, the OIG issued new procedures to track funding allotted to and

obligated and expended by individual task forces; however, further action

is needed to ensure that the OIG fully and effectively implements this

system. Action also is still needed to promulgate guidance for OIG staff in

reporting arrests and convictions and to establish procedures to properly

Matter for

Congressional

Consideration

Recommendations for

Executive Action

Agency Comments

and Our Evaluation
Page 19 GAO-01-794 HUD Inspector General

maintain documentation supporting investigative data reported to the

Congress. We therefore retained these recommendations in the final

report. However, we agree that on June 4, 2001, the HUD OIG fully

implemented its policies and procedures pertaining to employee

misconduct, and we have deleted the proposed recommendation and

revised the report to reflect this action.

Although the HUD OIG did not dispute our conclusions regarding its

independence to conduct audits and investigations of HUD’s programs to

reduce violent and drug-related crime in public and assisted housing, the

Acting Deputy Inspector General questioned our matter for congressional

consideration that the Congress should assess whether the long-term

involvement of the OIG in Operation Safe Home is worth the actual or

perceived impairment of the OIG’s independence. According to the Acting

Deputy Inspector General, the Congress has already considered our

concerns and “apparently determined them to be without merit." We do

not believe that the Congress has made any definitive statement in law or

legislative history regarding the concern discussed in this report about

Operation Safe Home and the OIG’s audit and investigative independence.

The OIG is relying upon the absence of such a provision in a bill or

proposed amendment to infer approval; however, unless there is an

explanation in the legislative history or the reason is indisputably clear

from the context, the effect of such an omission or deletion is

inconclusive.13 Therefore, we made no change to our proposed matter for

congressional consideration.

The Acting Deputy Inspector General disagreed that the HUD OIG could

not identify how much funding was allotted to and obligated and expended

by Operation Safe Home task forces and that the OIG had limited

information on how task force funds were spent. The Acting Deputy

Inspector General stated that reliable financial information exists within

the OIG but was decentralized and under the control of Operation Safe

Home case agents in the field to protect sensitive and confidential

investigative information. While we acknowledge that a review of field

office financial records was outside the scope of our review, we disagree

that it was incumbent upon us to examine, review, summarize, and

aggregate records in 11 locations to reconstruct how the OIG spent its

Operation Safe Home funds. Instead, we believe that the OIG is

responsible for maintaining useful aggregate financial information and that

confidentiality concerns do not obviate the responsibility of program

 13Fox v. Standard Oil Co., 294 U.S. 87, 967 (1935); See, 1 Principles of Federal

Appropriations law (PFAL), 2-71 – 2-72 (2nd ed. 1991) and other cases cited therein.
Page 20 GAO-01-794 HUD Inspector General

managers to exercise basic oversight. OMB Circular A-127 requires that

federal agency financial management systems provide “for tracking of

specific program expenditures,” that they “ensure that consistent

information is readily available and provided to internal managers at all

levels within the organization,” and that they “be able to provide financial

information in a timely and useful fashion to . . . support fiscal

management of program delivery and program decisionmaking.”

14 Without

basic financial information, such as the amount of funding allotted to

individual task forces and how it was spent, OIG managers did not have

sufficient information to effectively allocate resources or estimate funding

needs. As such, we disagree with the OIG that our conclusion that the OIG

did not effectively manage Operation Safe Home funds is overly broad and

made no changes to the report.

The Acting Deputy Inspector General also disagreed that the HUD OIG

cannot determine the number of arrests and convictions that have resulted

from Operation Safe Home activities. The OIG stated that although it is

developing a centralized management information system for arrest and

conviction data, it is not required to have one, and that we could have

accurately determined the number of arrests and convictions by reviewing

or sampling the nearly 300 case files in each of the OIG’s 11 district offices.

We disagree with the OIG that it is not responsible for centrally and

accurately accounting for investigative information. The Inspector General

Act of 1978, as amended, requires the OIG to report to the Congress on its

activities semiannually, including convictions resulting from cases it refers

for prosecution. While the OIG has provided investigative data to the

Congress, the OIG has not fulfilled the requirement effectively because the

data it has provided were unreliable and unsupportable. The OIG

provided no evidence during our review concerning the accuracy of its

case files, nor could it demonstrate or document whether or how such

information was used to compile and report arrest and conviction data. As

OMB Circular 123 stipulates, agencies “should design management

structures that help ensure accountability for results.” Agencies’

“management controls” must “reasonably ensure that reliable and timely

information is obtained, maintained, reported and used for decision

making.” Additionally, “documentation . . . must be clear and readily

available for examination.”

15 Furthermore, the Acting Deputy Inspector

 14OMB Circular A-127, Financial Management Systems, July 23, 1993,

www.whitehouse.gov/omb/circulars/a127/a127.html.

15OMB Circular A-123, Management Accountability and Control, June 21, 1995,

www.whitehouse.gov/omb/circulars/a123/a123.html.
Page 21 GAO-01-794 HUD Inspector General

General did not dispute the facts presented in our draft report supporting

the conclusion that the OIG’s arrest and conviction data were unreliable

and unsupportable. We therefore made no changes to the report.

As discussed in the report, the Acting Deputy Inspector General disputed

the statement in our draft report that the HUD OIG had no centralized

system for reporting, documenting, and addressing allegations against OIG

special agents. He stated that the OIG uses a contractor to maintain

information concerning allegations of misconduct filed against OIG

employees, and that all complaint files were also maintained at OIG

headquarters. We modified the report to reflect the fact that this

information was not consistent with the information provided earlier by

OIG officials during our review. The Acting Deputy Inspector General also

provided us additional information concerning disciplinary actions taken

against a number of OIG employees from January 2000 through January

2001. As discussed in the report, we reviewed the additional information

and it was not sufficient to determine whether it included any additional

allegations against OIG special agents engaged in Operation Safe Home

activities.

In February 2001, we presented a written statement of facts concerning

Operation Safe Home financial information, arrest and conviction data,

and complaints filed against HUD OIG special agents to the HUD OIG. We

discussed this statement of facts with the Inspector General, the Deputy

Inspector General, the Assistant Inspector General of Audits, the Acting

Assistant Inspector General for Management and Policy, the Assistant

Inspector General for Investigations, the General Counsel, and others.16 At

that time, all OIG officials agreed with the facts we subsequently presented

in this report. For these reasons, as well as the reasons discussed above,

we made no changes to the facts and conclusions presented. We have,

however, made modifications where appropriate to clarify the issues

presented in the report.

 16The Assistant Inspector General for Audits is currently the Acting Deputy Inspector

General.
Page 22 GAO-01-794 HUD Inspector General

To review Operation Safe Home issues, we reviewed HUD OIG reports,

funding data, regulations, databases, and other documents, and discussed

these with OIG staff in Washington, D.C., including the Assistant Inspector

General for Investigations and his staff, and the Acting Assistant Inspector

General for Management and Policy and his staff. We also conducted

telephone interviews with the Special Agents in Charge at each of the

OIG’s 11 district offices. Our review of Operation Safe Home focused on

the HUD OIG’s violent and drug-related crime initiatives; however, the OIG

also uses the term Operation Safe Home to encompass selected high

priority white collar fraud investigations. We did not independently verify

the HUD OIG’s budget and financial data. In addition, we reviewed funding

data at OIG headquarters in Washington, D.C.; we did not review funding

data maintained by the 11 OIG district offices. Further, our review of

federal funding for Operation Safe Home was limited to the funding

provided to the HUD OIG; we did not determine what funds have been

expended by other federal law enforcement agencies, such as the FBI and

DEA, participating in Operation Safe Home activities.

To assess the reliability of arrest and conviction data, we (1) performed

checks of the data for accuracy, completeness, and reasonableness and (2)

interviewed OIG headquarters and field officials to learn how the

information system was structured, controlled, and used. We conducted

our review from November 2000 through May 2001 in accordance with

generally accepted government auditing standards.

We are sending copies of this report to the Senate Committee on Banking,

Housing & Urban Affairs; the Senate Appropriations Committee; the

Senate Budget Committee; the Senate Finance Committee; the Senate

Governmental Affairs Committee; the House Committee on the Budget;

the House Committee on Appropriations; the House Committee on

Financial Services; the House Committee on Government Reform; the

Office of Inspector General, Department of Housing and Urban

Development; the Secretary of the Department of Housing and Urban

Development; the Attorney General of the Department of Justice; the

Acting Director of the Federal Bureau of Investigations; and the

Administrator of the Drug Enforcement Agency. We will also make copies

available to others upon request.

Scope and

Methodology
Page 23 GAO-01-794 HUD Inspector General

If you have any questions regarding this report, please call me or Steve

Cohen at (202) 512-7631. Key contributors to this report are listed in app.

II.

Sincerely yours,

Stanley J. Czerwinski

Director, Physical Infrastructure Issues
Appendix I: Comments From the Office of

Inspector General, Department of Housing

and Urban Development

Page 24 GAO-01-794 HUD Inspector General

Appendix I: Comments From the Office of

Inspector General, Department of Housing

and Urban Development

Note: GAO comments

supplementing those in

the report text appear at

the end of this appendix.

See comment 3.

See comment 2.

See comment 1.
Appendix I: Comments From the Office of

Inspector General, Department of Housing

and Urban Development

Page 25 GAO-01-794 HUD Inspector General

See comment 7.

See comment 6.

See comment 5.

See comment 4.
Appendix I: Comments From the Office of

Inspector General, Department of Housing

and Urban Development

Page 26 GAO-01-794 HUD Inspector General

See comment 12.

See comment 11.

See comment 10.

See comment 9.

See comment 8.
Appendix I: Comments From the Office of

Inspector General, Department of Housing

and Urban Development

Page 27 GAO-01-794 HUD Inspector General

See comment 15.

See comment 14.

See comment 13.
Appendix I: Comments From the Office of

Inspector General, Department of Housing

and Urban Development

Page 28 GAO-01-794 HUD Inspector General

See comment 19.

See comment 18.

See comment 17.

See comment 16.
Appendix I: Comments From the Office of

Inspector General, Department of Housing

and Urban Development

Page 29 GAO-01-794 HUD Inspector General

See comment 21

See comment 20.
Appendix I: Comments From the Office of

Inspector General, Department of Housing

and Urban Development

Page 30 GAO-01-794 HUD Inspector General

See comment 22.
Appendix I: Comments From the Office of

Inspector General, Department of Housing

and Urban Development

Page 31 GAO-01-794 HUD Inspector General

The following are GAO’s comments on the HUD Office of Inspector

General’s (OIG) letter dated June 8, 2001.

1. We agree that, on June 4, 2001, the HUD OIG fully implemented its

policies and procedures pertaining to employee misconduct, and we

have deleted the proposed recommendation and revised the report to

reflect this action. However, the OIG has not yet completed action on

two other recommendations. While on June 5, 2001, the OIG issued

new procedures to track funding obligated and expended by individual

task forces, further action is needed to ensure that the OIG fully and

effectively implements this system. Action is also still needed to

promulgate guidance to be used by OIG staff in reporting arrests and

convictions and to establish procedures to properly maintain

documentation supporting investigative data reported to the Congress.

2. The HUD OIG stated that although it agreed with the

recommendations it did not agree with many of the facts and

conclusions supporting those recommendations. However, the OIG

did not provide evidence or additional information to support its

position. For example, although the OIG disagreed that it cannot

accurately determine the number of arrests and convictions that have

resulted from Operation Safe Home activities, it also did not dispute

any of the facts we presented to support our finding that Operation

Safe Home arrest and conviction data were unreliable. A more

detailed analysis of the statements in the OIG's letter is presented in

the comments that follow. While we made no changes to the facts and

conclusions in our draft report, we made modifications where

appropriate to clarify the issues presented in the report.

3. We agree that the HUD OIG does not maintain its own accounting

system, and have made modifications to the report where appropriate

to reflect that the OIG uses HUD’s accounting system. While we

recognize there are limitations in HUD’s accounting and financial

management systems and have reported on these limitations in the

past, we do not believe that these limitations inherently prevent the

OIG from identifying funding by individual task forces or preclude it

from centrally maintaining more detailed information spending data.

For example, the OIG is currently working with HUD to use HUD’s

accounting system to enable it to track the use of funds by individual

task forces and provide greater detail on how funds are spent.

GAO Comments
Appendix I: Comments From the Office of

Inspector General, Department of Housing

and Urban Development

Page 32 GAO-01-794 HUD Inspector General

4. We disagree that our finding that the OIG has not effectively managed

Operation Safe Home funding is “overly broad.” We based this

conclusion on several factors, including the OIG’s inability to readily

identify how much funding was allotted to and obligated and expended

by individual task forces and the limited information the OIG had

centrally on how task force funds were spent. As a result, it did not

have a reliable mechanism for estimating its funding needs, allocating

program resources, and determining how funds were spent—and thus

effectively manage its Operation Safe Home funding. We agree with the

HUD OIG’s statement that administration and management

responsibilities for Operation Safe Home have been largely delegated

to the OIG’s 11 district offices and that decentralized financial

information exists in each of those offices. We acknowledged that we

did not review data maintained by the field offices; however, we do not

believe that it was incumbent upon us to examine, review, summarize,

and aggregate records in 11 locations to reconstruct how the OIG

spent its Operation Safe Home funds. Instead, we believe that the OIG

is responsible for maintaining useful aggregate financial information

and that decentralization of program administration does not obviate

the responsibility of headquarters program managers to exercise basic

oversight. For example, Office of Management and Budget (OMB)

Circular A-127 states that financial management systems should

"ensure that consistent information is readily available and provided to

internal managers at all levels within the organization" and that they

“be able to provide financial information in a timely and useful fashion

to...support fiscal management of program delivery and program

decision making” (OMB Circular A-127, Financial Management

Systems, July 23, 1993,

www.whitehouse.gov/omb/circulars/a127/a127.html) (see also

comment 13).

5. Where appropriate, we modified our discussion on the use of

Operation Safe Home funds to avoid any possible inference that the

HUD OIG’s allocation of funds was improper. See comments 7

through 12.

6. We disagree that this statement is inaccurate. As comment 13

discusses, our finding that information on task force expenditures was

limited was based on the fact that the OIG could not readily identify

the funding allotted to and obligated and expended by its individual

task forces and could only account for Operation Safe Home

obligations and expenditures in four broad categories.
Appendix I: Comments From the Office of

Inspector General, Department of Housing

and Urban Development

Page 33 GAO-01-794 HUD Inspector General

7. While we have no objection to the OIG’s allotment of its Operation

Safe Home appropriations, we disagree that the Congress “mandated”

specific Operation Safe Home allotments for task force operations and

salaries and expenses from fiscal year 1996 through fiscal year 2001.

First, the OIG has more flexibility in allotting the funds than is stated

in its letter. The Congress appropriates monies for Operation Safe

Home through two set-asides in the Public Housing Drug Elimination

Grant Program account contained in HUD’s annual appropriation. One

of the set-asides is to “be used in connection with efforts to combat

violent crime in public and assisted housing under the Operation Safe

Home Program administered by the Inspector General of the

Department of Housing and Urban Development.” The other set aside

is “provided to the Office of Inspector General for Operation Safe

Home.” See, for example, Pub. L. 106-377, 114 Stat. 1441, 1441A-24

(2000). The language of each set-aside is broad enough to permit the

payment of expenses incurred by the Inspector General in carrying out

Operation Safe Home. For example, the salary of an OIG agent

working undercover in connection with an Operation Safe Home

investigation could be funded out of either set-aside. Neither

appropriation is limited as the OIG has stated. Both appropriations are

available for carrying out Operation Safe Home.

Second, as a technical matter, the Congress does not allot funds. It

appropriates funds. Once the Congress appropriates funds, the OMB

apportions the funds to assure an effective and orderly use of the

appropriated funds. Upon receipt of an apportionment, the

responsible agency official, consistent with the apportionment, will

allot the funds among the various programs and activities for which

the Congress had appropriated the funds. Thus, the “Congress

appropriates, OMB apportions, and the receiving agency allots (or

allocates) within the apportionment.” 1 Principles of Federal

Appropriations Law Ch.1, Part D, Sec. 3.a (emphasis in original).

8. Our report does not suggest (as the HUD OIG stated on page 2 of its

letter) that there is "anything wrong" with the purpose and timing of

the OIG’s obligation and expenditure of Operation Safe Home funds.

We made modifications to the report to more clearly outline how the

OIG obligated and expended Operation Safe Home funds.

9. We do not believe, and the draft report did not state, that the existence

of unexpended or unobligated balances, by itself, means that the HUD

OIG has not effectively managed Operation Safe Home funds. Instead,
Appendix I: Comments From the Office of

Inspector General, Department of Housing

and Urban Development

Page 34 GAO-01-794 HUD Inspector General

the report’s finding that the OIG has not effectively managed Operation

Safe Home funds is based on a combination of information gathered,

including the OIG’s inability to readily identify how much funding was

allotted to and obligated and expended by individual task forces, and

the limited information it had on hand on how task force funds were

spent.

10. We believe we have given the HUD OIG’s fiscal year 2002 budget

request the proper emphasis. As stated in the report, we discussed our

findings on unobligated and unexpended Operation Safe Home funds

with HUD and HUD OIG officials in February 2001. Subsequent to this

discussion, in April 2001, HUD submitted its proposed fiscal year 2002

budget requesting that the annual earmark for Operation Safe Home be

reduced from $20 million to $10 million over fiscal year 2001 levels.

OIG officials told us they plan to use Operation Safe Home’s

unobligated balances to finance task force activities through fiscal year

2002. We made no modifications to the report.

11. As discussed in comment 7, the Congress has, in recent years,

earmarked a portion of the Drug Elimination Grant Program

appropriation for Operation Safe Home and the funds are transferred

to the OIG Salaries and Expense account (See, e.g., Pub. L. 106-377,

114 Stat. at 1441A-24 and 1441A-48.) Our discussion in the draft

report—that the OIG does not separately account for the expenditure

of earmarked funds it allots for OIG salaries and expenses—was

descriptive in nature and included, in the same sentence quoted in the

OIG’s letter, the statement that this practice was permissible.

Nevertheless, we amended our discussion to allay any concerns that

we were criticizing the OIG’s practices.

12. We agree with the OIG that the balance of its Salaries and Expenses

account, not solely the earmarked funds, is available to pay for salaries

earned and expenses incurred in connection with Operation Safe

Home. Although the draft report did not suggest otherwise, we have

modified the report to make clear that the use of funds from the OIG

Salaries and Expense account to pay for Operation Safe Home salaries

and expenses was permitted by law.

13. We disagree that the statements in the report cited by the OIG were

inaccurate. These statements were based on the fact that cognizant

OIG officials could not centrally and readily identify the funding it

provided to its individual task forces and could only account for

Operation Safe Home obligations and expenditures in four broad
Appendix I: Comments From the Office of

Inspector General, Department of Housing

and Urban Development

Page 35 GAO-01-794 HUD Inspector General

categories. The OIG stated that more detailed financial records are

available in OIG’s 11 field offices, suggesting that an examination of

these records would have provided detailed information on Operation

Safe Home task force obligations and expenditures. We acknowledge

that a review of field office financial records was outside the scope of

our review. However, we disagree that it was incumbent upon us to

examine, review, summarize, and aggregate records in 11 locations to

reconstruct how the OIG spent its Operation Safe Home funds.

Instead, we believe that the OIG is responsible for maintaining useful

aggregate financial information and that a decentralized program

management arrangement does not obviate the responsibility of

program managers to exercise basic oversight. OMB Circular A-127

requires that federal agency financial management systems provide

“for tracking of specific program expenditures,” that they “ensure that

consistent information is readily available and provided to internal

managers at all levels within the organization,” and that they “be able

to provide financial information in a timely and useful fashion

to...support fiscal management of program delivery and program

decision making" ” (OMB Circular A-127, Financial Management

Systems, July 23, 1993,

www.whitehouse.gov/omb/circulars/a127/a127.html). We also disagree

that the HUD OIG cannot have useful aggregate financial information

about Operation Safe Home without compromising sensitive and

confidential information, or that confidentiality concerns obviate the

responsibility of program managers to exercise basic oversight. It is

not necessary to centrally record “every confidential informant

payment, contraband purchase, or hour of police overtime” as the OIG

suggests. Without basic financial information such as the amount of

funding allotted to individual task forces and how it was spent, OIG

managers did not have sufficient information to effectively allocate

resources or estimate funding needs.

In addition, the HUD OIG’s statement that entries in HUD’s accounting

system “reflect the funding of task force cases and reference the

corresponding case numbers” is incorrect. The OIG headquarters did

not maintain financial data on Operation Safe Home by individual task

forces until it issued new procedures on June 5, 2001 to track the use

of Operation Safe Home task force funds by task force case number.

14. Although the HUD OIG states that its financial information must be

decentralized to protect sensitive and confidential information, we

noted that it has also initiated actions to centralize accounting for
Appendix I: Comments From the Office of

Inspector General, Department of Housing

and Urban Development

Page 36 GAO-01-794 HUD Inspector General

Operation Safe Home task force funds. We welcome this development

and urge the OIG to fully and effectively implement these actions.

15. While the HUD OIG stated it disagrees that it cannot accurately

determine the number of arrests and convictions that have resulted

from Operation Safe Home activities, it also did not dispute any of the

facts we presented to support our finding that Operation Safe Home

arrest and conviction data were unreliable. For example, the OIG’s

letter does not address the problems we identified in the OIG’s

mechanisms to aggregate arrest and conviction data or the fact that the

OIG could not provide documentation supporting the summary

investigative data reported to the Congress. We therefore made no

changes to the report.

Further, while the OIG stated that there is no requirement for it to have

a “management information system for arrest and conviction data,” it

is responsible for accurately and centrally accounting for investigative

information. The Inspector General Act of 1978, as amended, requires

the OIG to report to the Congress on its activities semiannually,

including convictions resulting from cases it refers for prosecution.

While the OIG has provided investigative data to the Congress, the OIG

has not fulfilled the requirement effectively because—as our report

outlines—the data it has provided are unreliable and unsupportable.

The OIG provided no evidence during our review concerning the

accuracy of its case files, nor could it demonstrate or document

whether or how such information was used to compile and report

arrest and conviction data. As OMB Circular A-123 stipulates, agencies

“should design management structures that help ensure accountability

for results” and that “management controls are...used to reasonably

ensure that reliable and timely information is obtained, maintained,

reported and used for decision making” and that

“documentation...must be clear and readily available for examination”

(OMB Circular A-123, Management Accountability and Control,

June 21, 1995, www.whitehouse.gov/omb/circulars/a123/a123.html).

We welcome the implementation of a new management information

system for arrest and conviction data. While we believe that it is too

soon to determine if the information maintained by the new system

will in fact generate reliable arrest and conviction data, we urge the

OIG to fully implement the new system, including promulgating

additional guidance to be used by HUD staff when inputting

investigative information into the recently developed information
Appendix I: Comments From the Office of

Inspector General, Department of Housing

and Urban Development

Page 37 GAO-01-794 HUD Inspector General

system and to also properly maintain documentation supporting

investigative data reported to the Congress.

16. The OIG states that we could have accurately determined the number

of arrests and convictions by reviewing or sampling records in each of

the OIG’s 11 district offices. First, as discussed in comment 15, the

OIG is responsible for accurately and centrally accounting for

investigative information and thus we disagree that it was incumbent

upon us to collect, interpret, and summarize nearly 300 case files in 11

locations to reconstruct the number of arrests and convictions

resulting from Operation Safe Home investigations. Second, the OIG

offered no evidence that case file records located in its district offices

were accurate. For example, although the OIG said that internal

reviews of case files demonstrated that summary case data reported to

OIG headquarters by the districts was accurate, the OIG did not

provide these assessments, nor was it able to provide any

documentation of any summary case file data reported to OIG

headquarters, or to demonstrate how that information was used to

generate summary data reported to the Congress. Further, given these

reliability and supportability concerns, there is no evidence to suggest

that arrests have been underreported.

17. The statement in the draft report—that we could not precisely

determine the number and disposition of complaints filed against HUD

OIG special agents engaged in Operation Safe Home activities—was

based on statements from the Assistant Inspector General for

Investigations and other OIG officials who told us that (a) the OIG did

not have a centralized system for reporting, documenting, and

addressing allegations and (b) the OIG’s 11 district offices adjudicated

complaints filed against OIG special agents. Therefore, we—in

coordination with OIG officials—constructed a record of allegations

filed against OIG special agents engaged in Operation Safe Home

activities since 1997 based on the OIG's collective institutional

memory.

The OIG’s letter stated that (a) the OIG has a contractor that provides

it centralized information concerning allegations of misconduct filed

against OIG employees and (b) all complaint files are maintained at

OIG headquarters. This information was not consistent with the

information provided earlier by the former Assistant Inspector General

for Investigations and other OIG officials who stated that no such

system existed and that all records were kept in the 11 district offices.

Furthermore, during a meeting in February 2001 conducted to confirm
Appendix I: Comments From the Office of

Inspector General, Department of Housing

and Urban Development

Page 38 GAO-01-794 HUD Inspector General

facts ascertained during our review, OIG managers—including the

Inspector General—agreed to the former Assistant Inspector General's

characterization. We revised the report to explain these events and to

reflect the new information provided by the HUD OIG.

Along with its letter the OIG provided information obtained from its

contractor concerning disciplinary actions taken against a number of

OIG employees from January 2000 through January 2001. We

examined this information; however, it reflected only a portion of the

time frame we were examining (January 1997-May 2001) and was

insufficiently detailed to determine whether it included any additional

allegations against HUD special agents engaged in Operation Safe

Home activities. We therefore made no changes to our statement that

we could not precisely determine the number and disposition of

complaints filed against HUD OIG special agents engaged in Operation

Safe Home activities.

18. We agree that on June 4, 2001, the HUD OIG fully implemented a

system for reporting, documenting, and addressing allegations against

OIG special agents by completing the implementation of recently

established policies and procedures pertaining to employee

misconduct. We therefore deleted our proposed recommendation in

our draft report and have revised the report to reflect this action.

19. The draft report did not suggest that the HUD OIG was required to

centralize and segregate disciplinary files concerning complaints filed

against OIG special agents engaged in Operation Safe Home activities.

As stated in comment 17, based on information that no centralized

system existed, we worked with OIG officials to construct a record of

allegations filed against OIG special agents engaged in Operation Safe

Home activities since 1997. However, we disagree that the OIG erred

on the side of inclusion when providing us with information we

requested. In fact, during the course of our review, the OIG did not

provide us any of the files maintained by the Bureau of Public Debt

and the OIG’s Legal Counsel’s office regarding the misconduct of OIG

special agents.

20. We disagree that the reason we were not able to precisely determine

the number of complaints lodged against OIG special agents engaged

in Operation Safe activities was the difficulty of attributing allegations

of misconduct to special agents engaged in Operation Safe Home

activities versus other OIG activities. Rather, we were not able to

precisely determine the number of complaints lodged against OIG
Appendix I: Comments From the Office of

Inspector General, Department of Housing

and Urban Development

Page 39 GAO-01-794 HUD Inspector General

special agents engaged in Operation Safe Home activities because—

according to the Assistant Inspector General for Investigations and

other OIG officials—the OIG did not have a centralized system for

reporting, documenting, and addressing allegations. Further, as

discussed in comment 17, the new information provided by the OIG

was insufficient to determine whether it included any additional

allegations against special agents engaged in Operation Safe Home

activities.

21. We agree that the information concerning these cases would be

enhanced by discussing the number of HUD OIG special agents

involved in Operation Safe Home activities, and we modified the report

to include this information. However, we did not compare the number

of complaints lodged against OIG special agents with complaints

lodged against employees of other law enforcement entities because

we were not requested to do so; therefore, such a comparison was

outside the scope of our review. In addition, the OIG’s statement that

the draft report did not provide the period of time the complaints were

received is not correct. Both the draft report and final report stated

that the complaints were received from January 1997 through May

2001.

22. We do not believe that the Congress has made any definitive statement

in law or legislative history regarding Operation Safe Home and the

HUD OIG’s audit and investigative independence. The OIG is relying

on the fact that the Congress has not enacted a provision addressing

its involvement in Operation Safe Home as evidence that the Congress

found these concerns to be without merit. However, it is inappropriate

for the OIG to rely upon the absence of such a provision in a bill or

proposed amendment to infer approval. Unless there is an explanation

in the legislative history or the reason is indisputably clear from the

context, the effect of such an omission or deletion is simply

inconclusive. Fox v. Standard Oil Co., 294 U.S. 87, 967 (1935); See, 1

Principles of Federal Appropriations law (PFAL), 2-71 – 2-72 (2nd ed.

1991) and other cases cited therein. Therefore, we made no change to

our proposed matter for congressional consideration.
Appendix II: GAO Contacts and Staff Acknowledgments

Page 40 GAO-01-794 HUD Inspector General

Stanley J. Czerwinski, (202) 512-7631

Steve Cohen, (202) 512-7631

In addition to those named above, Anne A. Cangi, Thomas Armstrong,

Edda Emmanuelli-Perez, John McGrail, Barbara Johnson, and John

Shumann made key contributions to this report.

Appendix II: GAO Contacts and Staff

Acknowledgments

GAO Contacts

Acknowledgments

(391018)
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