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 Department of Housing and Urban Development [Docket No. FR-5261-N-01]
 AGENCY: Office of Inspector General, Department of Housing and Urban Development (HUD/OIG).
 ACTION: Notice of  reclassification of field offices of investigation as regional offices of investigation.
 SUMMARY: This notice advises the public that the HUD/OIG Office of Investigation plans to reclassify its Cleveland; Baltimore; Tampa; and Seattle field offices as regional offices.  The planned reclassification 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 and FHA; and (3) improve management control and effectiveness, and reduce travel costs of management by reducing region size. The HUD/OIG Office of Audit, to the extent that it maintains field offices in these locations, 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 four field offices.
 FOR FURTHER INFORMATION CONTACT: John McCarty, Assistant Inspector General for Investigations, Room 8274, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC, 20410-4500, 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 Information 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 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 the cost-benefit analysis of its plan. Cost-Benefit Analysis A. Background Since 2002, HUD/OIG staffing has declined from a high of 750 full time equivalents (FTEs) to a current level of 650 FTEs. Simultaneous with this constriction of staff resources, HUD/OIG has had to contend with additional, extraordinary responsibilities associated with the September 11, 2001, terrorist attacks and the 2005 natural disasters along the Gulf Coast. The staff reductions and unforeseen additional responsibilities have caused HUD/OIG Office of Investigation to struggle to address baseline fraud, waste, and abuse in HUD programs. 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, HUD/OIG plans to reclassify four field offices to regional office status at the close of the 90-day period following the publication of this notice. B. Description of Proposed Changes At the expiration of 90 days following the publication of this notice, the HUD/OIG Office of Investigation will reclassify its Cleveland, Ohio; Baltimore, Maryland; Tampa, Florida; and Seattle, Washington field offices as regional offices. The Cleveland Regional 
                    ( print page 53037)
                    Office will supervise the operations of the existing Cleveland, Columbus, and Detroit Field Offices. The Baltimore Regional Office will supervise the operations of the Washington, Baltimore, Richmond, Virginia, and Greensboro, North Carolina Field Offices. The Seattle Regional Office will supervise the operations of the Seattle, San Francisco, Billings, Montana, and Sacramento, California Field Offices. The Tampa Regional Office will supervise the operations of the Tampa, Miami, Jacksonville, Florida and San Juan, Puerto Rico Field Offices. Additionally, as part of this reclassification, the New York, New York Regional Office will no longer supervise the operations of the Newark, New Jersey Field Office; rather, henceforth the Philadelphia, Pennsylvania Regional Office will supervise the operations of the Newark Field Office. All other existing regional and field office jurisdictional boundaries will be unchanged, and the HUD/OIG Office of Audit will not participate in this reclassification. Additionally, the Office of Investigation's headquarters organization will not be affected by this realignment. Like all HUD/OIG Office of Investigation regional offices, each of the four new regional offices will be managed by a GS-15 1811 Special Agent-in-Charge (SAC). HUD/OIG additionally plans to supplement the management of each of the new regional offices with a GS-14 1811 Assistant Special Agent-in-Charge (ASAC); currently, at least one ASAC is stationed in the Baltimore, Tampa, and Cleveland Field Offices. C. Costs versus Benefits 1. One-Time Costs (a) 
                    *Personnel relocation costs ($500,000)*. It is prudent to plan for potential relocations that may become necessary to fill vacancies and/or back filling of positions. Accordingly, HUD/OIG's plan contemplates that up to four relocations may be necessary as a result of selections of SAC/ASACs to manage the new regions. (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)*. Each of the field offices that are being evaluated for reclassification to regional office status already exist and are fully equipped. Additionally, the proposal does not contemplate the creation of new field offices or an increase in overall FTEs. Thus, no purchase or movement of furniture or equipment is involved. (d) 
                    *Space alteration costs (de minimus)*. Some offices may require space alterations and telephone changes to accommodate any future changes of assigned staff. However, HUD/OIG estimates that any space alteration costs that result will be minimal because HUD/OIG has implemented and encourages teleworking, and hoteling is an option available to HUD/OIG. 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 ($30,000):*
                     The reclassification of the four field offices to regional offices will require the creation of four SAC positions at the GS-15 level. It is reasonable to presume that existing ASACs will compete for these positions, and, thus, the likelihood is that the 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 GS-15 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. Likewise, it is reasonable to presume that existing GS-13s will compete for ASAC, and, thus, the additional cost involved will be limited to the pay differential between GS-13 and GS-14 pay levels. HUD/OIG estimates that this differential to be approximately $30,000 annually. No additional or supplemental funding is expected. All additional costs will be funded within the ordinary budgets. 3. Dollar Savings Resulting From Elevation of Offices *Management travel costs:*
                     A necessary incident to the remote of field offices is travel costs for supervisors to travel to the office to supervise/review staff and to liaison with stakeholders. HUD/OIG believes that contracting the geographic footprint of his regions—as is contemplated by this plan—will correspondingly reduce management travel. However, in light of the current volatile nature of energy and transportation cost, HUD/OIG is unable accurately quantify such savings. D. Impact on Local Economies The planned reclassification of four field offices is not expected to have any impact on the local economies of Cleveland, Baltimore, Tampa, or Seattle. 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 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 regions will receive greater management emphasis than prior to the reclassification. Management in the new regions—because it will be less dispersed and remote—will be enabled to interact with HUD management and clients and 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 footprints of HUD/OIG's existing regions will shrink, and the incumbent SACs will be empowered to redirect attention that they currently devote to Cleveland, Detroit, Washington, Baltimore, Tampa, Miami, Seattle, San Francisco, Columbus, Sacramento, San Juan, Richmond, Greensboro, and Jacksonville to the remaining field offices under their supervision. Again, under the circumstances discussed in this notice, more attention translates into more availability and accessibility of higher quality services. For the reasons presented this notice, HUD/OIG intends to proceed to reclassify four investigative field offices as regional offices—Cleveland, Ohio; Baltimore, Maryland; Tampa, Florida; and Seattle, Washington—at the expiration of the 90-day period from the date of publication of this notice. The attachment to this notice presents the proposed staffing, and geographic coverage that will result from the reclassification of the four field offices of investigations. Dated: September 8, 2008. Kenneth M. Donohue, Inspector General.
 
 
 Attachment—Proposed Staffing and Coverage of Realignment of Office of Investigations
[BOLDED Cities are proposed new regional offices]
Projected FTEs by region
Offices
Current states
Proposed statesBoston (12)
Boston, Manchester, Hartford
Massachusetts, Rhode Island, Connecticut, New Hampshire, Maine, Vermont
Massachusetts, Rhode Island, Connecticut, New Hampshire, Maine, Vermont.New York City (19)
New York City, Buffalo
New York, New Jersey
New York only.Philadelphia (19)
Philadelphia, Newark, Pittsburgh

Pennsylvania, New Jersey, Delaware.Baltimore (19)
Baltimore, Richmond, Greensboro
Pennsylvania, Delaware, Maryland, DC, Virginia, West Virginia
Maryland, DC, Virginia, West Virginia, North Carolina.Atlanta (28)
Atlanta, Knoxville Birmingham,
Georgia, Alabama, South Carolina, North Carolina, Tennessee, Kentucky, Florida, Puerto Rico, Mississippi
Georgia, Alabama, South Carolina, Tennessee, Kentucky.Tampa (16)
Tampa, Miami, Jacksonville, Puerto Rico

Florida, Puerto Rico, Virgin Island.Chicago (26)
Chicago, Minneapolis, Indianapolis
Illinois, Indiana, Wisconsin, Minnesota, Ohio, Michigan
Illinois, Indiana, Wisconsin, Minnesota.Cleveland (23)
Cleveland, Detroit, Columbus

Ohio, Michigan.Arlington (29)
Arlington, Houston, San Antonio, Oklahoma City
Texas, Oklahoma, Arkansas, New Mexico
Texas, Oklahoma, Arkansas, New Mexico.Kansas City (19)
Kansas City, Denver, St. Louis, Salt Lake City
Kansas, Missouri, Colorado, Utah, Iowa, Nebraska, South Dakota, North Dakota, Wyoming
Kansas, Missouri, Colorado, Utah, Iowa, Nebraska, South Dakota, North Dakota, Wyoming.Los Angeles (13)
Los Angeles, Phoenix, Las Vegas
California, Nevada, Arizona, Washington, Oregon, Idaho, Montana, Alaska Hawaii, Guam
Southern California, Nevada, Arizona, Hawaii, Guam.San Francisco (14)
San Francisco, Sacramento, Seattle, Billings

Northern California, Washington, Oregon, Idaho, Montana, Alaska.New Orleans (15)
New Orleans, Jackson, Arlington, Hattiesburg
Louisiana, Mississippi
Louisiana, Mississippi.* New Orleans will remain staffed at 15 rather then projected needed of 24. Other 9 FTE will be used to adjust levels of other regions.** Projected FTE includes administrative staff.


[FR Doc. E8-21226 Filed 9-11-08; 8:45 am] BILLING CODE 4210-67-P