[Federal Register Volume 77, Number 56 (Thursday, March 22, 2012)]
[Notices]
[Pages 16850-16852]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-6964]


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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-5627-N-02]


Notice of Reclassification of One Investigative Field Office to 
Regional Office: Denver, CO

AGENCY: Office of Inspector General, United States Department of 
Housing and Urban Development (HUD/OIG).

ACTION: Notice of reorganization: the reclassification of the Denver, 
Colorado field office of investigation as a regional office of 
investigation.

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SUMMARY: This notice advises the public that the HUD/OIG Office of 
Investigation plans to reclassify its Denver, Colorado field office as 
a regional office. The planned reorganization is intended to:
    1. Improve the alignment of limited investigative resources, to 
promote more efficient responses to HUD or Congressional requests 
involving critical program issues;
    2. Redeploy resources to prevent and detect fraud in new program 
delivery of CPD, FHA and other HUD programs; and
    3. Improve management control and effectiveness, and reduce travel 
costs of management by reducing region size.
    4. Return to the traditional Regional alignment of HUD OIG Regional 
offices and HUD Regional offices.

The HUD/OIG Office of Audit, to the extent that it maintains a field 
office in this location, has determined that based upon the different 
nature of its responsibilities it does not need to reorganize. This 
notice also includes a cost-benefit analysis supporting the 
reclassification of the office.

FOR FURTHER INFORMATION CONTACT: John McCarty, Assistant Inspector 
General for Investigations, Department of Housing and Urban 
Development, 451 Seventh Street SW., Room 8274, Washington, DC 20410-
4500, telephone 202-708-0390 (This is not a toll free number.) A 
telecommunication device for hearing and speech-impaired persons (TTY) 
is available at 800-877-8339 (Federal Relay Services). (This is a toll 
free number).

SUPPLEMENTARY INFORMATION: Section 7(p) of the Department of Housing 
and Urban Development Act (42 U.S.C. 3535(p)) provides that:
    A plan for reorganization, of any regional, area, insuring, or 
other field office of the Department of Housing and Urban Development 
may take effect only upon the expiration of 90 days after the 
publication in the Federal Register of a cost-benefit analysis of the 
effect of the plan on the office involved.
    The required cost-benefit analysis must include: (1) An estimate of 
cost savings anticipated; (2) an estimate of the additional cost which 
will result from the reorganization; (3) a discussion of the impact on 
the local economy; and (4) an estimate of the effect of the 
reorganization on the availability, accessibility, and quality of 
services provided for recipients of those services.
    Legislative history pertaining to section 7(p) indicates that not 
all reorganizations are subject to the requirements of section 7(p). 
Congress stated that ``[t]his amendment is not intended to [apply] to 
or restrict the internal operations or organization of the Department 
(such as the establishment of new or combination of existing 
organization units within a field office, the duty stationing of

[[Page 16851]]

employees in various locations to provide on-site service, or the 
establishment or closing, based on workload, of small, informal offices 
such as valuation stations).'' (See House Conference Report No. 95-
1792, October 14, 1978 at 58.) Although HUD/OIG believes that the 
legislative history of section 7(p) strongly suggests that the 
legislation is inapplicable to a reclassification of four field offices 
that will in no way reduce the level of services provided to areas 
served by such offices, HUD/OIG nonetheless voluntarily publishes the 
following cost-benefit analysis of its plan.

Cost-Benefit Analysis

A. Background

    HUD/OIG staffing is presently being reduced from a high average of 
around 730 full time equivalents (FTEs) to a target level of 
approximately 620 FTEs, currently now at 650. Simultaneous with this 
constriction of staff resources, HUD/OIG is contending with the 
onslaught of mortgage fraud issues and foreclosure issues associated 
with the collapse of the mortgage industry and the sub-prime market, 
the crippled economy and the impact that the economy has had on the 
foreclosure of HUD FHA insured loans. The ongoing staff reductions and 
other unforeseen additional responsibilities have conspired to cause 
the HUD/OIG Office of Investigation to struggle to continue to properly 
and timely address baseline fraud, waste and abuse in HUD programs. 
HUD's regional structure includes a Regional office in Denver, 
Colorado, and one of its four Housing Ownership Centers (HOCs) is 
located in Denver. HUD OIG works closely with the HOCs in indentifying 
trends and compiling data related to fraudulent practices against HUD 
programs. HUD OIG has traditionally had a Regional office in Denver, 
Colorado but closed it in the early 2000's due to various problems with 
the office. Collocating with HUD will allow HUD OIG investigations to 
more efficiently and effectively address HUD/OIG's core mission and at 
the same time become better prepared to respond to inevitable but 
unpredictable events. Additionally, the United States Attorney for 
Colorado as well as other western US Attorneys have expressed interest 
in expanding work relative to HUD Native American programs and having a 
Regional office in Denver, Colorado will facilitate that effort. 
Accordingly, HUD/OIG plans to reclassify its Denver, Colorado office to 
Regional office status, 90 days following the publication of this 
notice.

B. Description of Proposed Changes

    90 days following the publication of this notice, the HUD/OIG 
Office of Investigation will reclassify its Denver, Colorado field 
office as a regional office, headquarters for HUD OIG Region 8. Region 
8 will have geographic responsibility for the states of Colorado, 
Wyoming, Montana, Utah, North Dakota, South Dakota, Idaho, Oregon and 
Washington. As part of this reorganization Region 10, currently 
headquartered in Seattle, Washington, will become a field office of 
Region 8, and its former field offices in Washington and Oregon will 
become Region 8 field offices. The HUD/OIG Office of Audit will not 
participate in this reorganization and will remain as part of HUD OIG 
Region 7 with its Regional office located in Kansas City, Missouri. 
Additionally, the Office of Investigation's headquarters organization 
will not be affected by this realignment.
    Like all HUD/OIG Office of Investigation regional offices, Region 8 
will be managed by a GS-15 1811 Special Agent-in-Charge (SAC). The 
office currently has a GS-14 ASAC and 5 GS-13 agents, all of whom will 
remain. The current GS15 SAC position in Seattle will be eliminated and 
will ultimately result in a reduction of one FTE.

C. Costs Versus Benefits

1. One-Time Costs
    (a) Personnel relocation costs It is not anticipated that there 
will be any personnel relocation costs associated with this 
reorganization. It is prudent to plan for potential relocations that 
may become necessary to fill vacancies and/or back filling of 
positions.
    (b) Severance or unemployment compensation costs ($0). No severance 
costs are associated with this initiative as it does not contemplate 
the termination of any staff.
    (c) Purchase/movement of furniture and equipment ($0). The only 
costs here will be for equipping the new SAC office. All other offices 
already exist and are fully equipped. Additionally, the proposal does 
not contemplate the creation of new field offices or an increase in 
overall FTEs at this time. Thus, no purchase or movement of furniture 
or equipment is involved.
    (d) Space alteration costs (de minimus). Some offices may require 
slight space alterations and telephone changes to accommodate assigned 
staff and the new SAC. However, HUD/OIG estimates that any space 
alteration costs that result will be minimal.
    No additional or supplemental funding is expected to the current 
appropriated budget. All costs will be maintained within the current 
budget.
2. Permanent Increases in Operating Costs
    Cost to realign current FTEs: The reclassification of the Denver 
field office to a regional office will require the creation of one SAC 
position at the GS-15 level. However, the elimination of a SAC position 
in Seattle by merging Region 10 into Region 8 will ultimately offset 
the addition of the GS 15 position in Denver. It is likely that the 
position will be filled with someone from the local commuting area so 
any additional cost involved will be limited to the pay differential 
between GS-14 and GS-15 pay levels. Moreover, in light of Law 
Enforcement Availability Pay (LEAP) differentials payable to ASACs and 
SACs, combined with the curtailing effect that the overall GS15 step 10 
salary cap has on LEAP differentials payable to GS-15 SACs, it is 
believed that costs associated with the creation of the SAC positions 
will be negligible, if anything. No additional or supplemental funding 
is expected. All additional costs will be funded within the ordinary 
budgets.
3. Dollar Savings Resulting From Elevation of Office
    Management travel costs: A necessary incident to having remote 
field offices is travel costs for supervisors to travel to the office 
to supervise/review staff and liaise with stake-holders. HUD/OIG 
believes that contracting the geographic footprint of Region 7--as is 
contemplated by this plan--will correspondingly reduce management 
travel for the SAC of Region 7 located Kansas City. Travel for the 
eventual SAC in Region 8 will be shorter and less expensive than the 
corresponding travel from Kansas City. The merger of Region 10, with 
its regional office currently in Seattle, Washington, into Region 8, as 
noticed in a separate Federal Register notice, will further reduce 
travel for the Region 7 SAC. In light of the current volatile nature of 
energy and transportation costs, HUD/OIG is unable to accurately 
quantify such savings.

D. Impact on Local Economies

    The planned reclassification of the Denver, Colorado office is not 
expected to have any impact on the local economy of Denver. The plan 
does not involve terminating existing real estate leases prior to their 
expiration date, nor does it involve leasing addition real estate. 
Moreover, the plan does not contemplate appreciable relocation of

[[Page 16852]]

staff to these large metropolitan areas. Thus, any impact on the local 
economies in terms of housing, schools, public services, taxes, 
employment, and traffic congestion will be insignificant.

E. Effect of the Reclassifications on the Availability, Accessibility, 
and Quality of Services Provided for Recipients of Those Services

    The plan was designed to improve the quality and level of service 
provided to stakeholders and affected clients nationwide. The new 
region will receive greater management emphasis than prior to the 
reclassification. Management in the new region--because it will be less 
dispersed and remote--will be enabled to interact with HUD management 
and clients, the Office of the United States Attorney, and other law 
enforcement partners more frequently and in greater scope than is now 
possible. More interaction and attention translates into more 
availability and accessibility of higher quality services. Similarly, 
the footprint of HUD/OIG's Region 7 will shrink, and the incumbent SAC 
will be empowered to redirect attention that he currently devotes to 
the new Region 8 to the city within Region 7 as redefined. Again, more 
attention translates into more availability and accessibility of higher 
quality services.

    Dated: March 13, 2012.
David A. Montoya,
Inspector General.
[FR Doc. 2012-6964 Filed 3-21-12; 8:45 am]
BILLING CODE 4210-67-P