HUD Public and Indian Housing Programs: Progress on Prior GAO Recommendations to Enhance Accountability and Efficiency
Published: 2015-07-10T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: HUD's Office of Public and Indian Housing (PIH) administers programs that help some of the nation's most vulnerable households—including low-income families and members of Native Americans tribes—obtain safe, decent, and affordable housing. PIH also operates complementary programs, such as FSS, that are designed to help assisted households become more self-sufficient. PIH programs accounted for about 60 percent of HUD's budget authority for fiscal year 2015, or about $26 billion.
GAO has issued four reports since March 2012 on PIH programs, including the MTW, FSS, voucher, and IHBG programs, that contained recommendations to HUD (see GAO-12-300 , GAO-12-490 , GAO-13-581 , and GAO-14-255 ). This testimony is based on these four reports. It discusses, among other things, HUD's progress in addressing prior GAO recommendations on the MTW and FSS programs, the voucher program, and the IHBG program.
To update the status of prior recommendations, GAO reviewed new or revised HUD policies, procedures, and reports and interviewed officials.
section_title: What GAO Found
paragraphs: As of June 2015, the Department of Housing and Urban Development (HUD) had addressed some of GAO's 16 prior recommendations for four programs: Moving to Work (MTW), Family Self-Sufficiency (FSS), Housing Choice Voucher (voucher), and Indian Housing Block Grant (IHBG). But other recommendations require further attention. Specifically:
HUD has addressed seven of eight recommendations GAO made in April 2012 to improve assessment of MTW, capture lessons learned, and enhance program oversight. The MTW program is intended, among other things, to give state and local housing agencies flexibility to design and test innovative strategies for providing housing assistance. HUD agreed or partially agreed with most of GAO's recommendations. However, it has yet to fully implement a process for systematically identifying lessons learned.
HUD has taken initial steps to address GAO's two recommendations from a July 2013 report to develop and implement (1) a process to better ensure that data on FSS grants were complete and (2) a strategy for regularly analyzing FSS participation and outcome data. The FSS program is designed to help families receiving HUD housing assistance become self-sufficient through case management and referrals to supportive services such as education and training. HUD agreed with the recommendations and has revised its data collection and analysis procedures. But it has not yet provided full documentation of these efforts so that GAO can assess its actions.
HUD has implemented one of three recommendations GAO made in a 2012 report on the voucher program. The voucher program subsidizes private market rents for about 2 million low-income households. HUD neither agreed nor disagreed with these recommendations. But HUD has addressed one that is aimed at streamlining the program's administration by, among other things, publishing a proposed rule that includes measures to simplify administrative processes. HUD has not yet provided GAO evidence that it has implemented the two other recommendations, one on informing Congress about excess state and local housing agency reserves and one on informing Congress about HUD's criteria for redistributing these reserves.
HUD has implemented two of three GAO recommendations from a March 2014 report on the IHBG program. IHBG annually provides more than $600 million in housing assistance to about 570 federally and state-recognized Indian tribes. Consistent with GAO's recommendations, HUD has broadened its solicitation of input from block grant recipients and developed a location on its website to collect and disseminate best practices on housing development. HUD has also taken steps to address a third recommendation to collaborate with other agencies that work with Indian tribes to improve interagency coordination on environmental reviews for tribal housing development. The agencies' efforts to develop a coordinated environmental review process are ongoing.

section_title: Letter
paragraphs: I am pleased to be here today to discuss our work on programs  administered by the Office of Public and Indian Housing (PIH) within the  Department of Housing and Urban Development (HUD). PIH programs  help some of the nation’s most vulnerable households—including low- income families and members of Native Americans tribes—obtain safe,  decent, and affordable housing. PIH also operates complementary  programs designed to help assisted households become more self- sufficient and economically independent. PIH programs accounted for  approximately 60 percent of HUD’s budget authority for fiscal year 2015,  or about $26 billion. The size of this investment, coupled with the nation’s  fiscal challenges and unmet affordable housing needs, underscores the  importance of managing these programs as efficiently and effectively as  possible.
My testimony today is based primarily on four reports we issued between  March 2012 and March 2014. Appendix I provides a list of  recommendations from these reports and their status. I will discuss (1)  HUD’s progress on our prior recommendations to improve assessment of  the Moving to Work (MTW) demonstration program and Family Self- Sufficiency (FSS) program; (2) our previously reported options and  recommendations to HUD to increase the efficiency of the Housing  Choice Voucher (voucher) program; (3) HUD’s actions to address our  prior recommendations on the implementation of the Indian Housing  Block Grant (IHBG) program; and (4) additional ongoing challenges  facing PIH.
To conduct the work for the four reports issued from 2012 to 2014, we  relied on several analytical methods, including reviewing legislation,  regulations, and studies; analyzing HUD and public housing agency  budget, financial, and program data; and reviewing HUD policies,  procedures, and program documentation and comparing them to federal  requirements. We also interviewed officials from HUD and public and  tribal housing agencies, as well as representatives from organizations  advocating for affordable housing, residents of federally subsidized  housing, and American Indians, Alaska Natives, and Native Hawaiians.  Our prior reports each include a detailed description of our scope and  methodology. To update the status of recommendations from these  reports, we reviewed new or revised HUD policies, procedures, and  reports and interviewed HUD officials. For this testimony, we also  reviewed information on HUD’s estimates of improper rental assistance  payments reported for fiscal years 2010 through 2013 (the most recent  estimate available). We performed the work on which this testimony is  based in accordance with generally accepted government auditing  standards. Those standards require that we plan and perform the audit to  obtain sufficient, appropriate evidence to provide a reasonable basis for  our findings and conclusions based on our audit objectives. We believe  that the evidence obtained provides a reasonable basis for our findings  and conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: The assistance PIH provides to low-income families encompasses three  broad program areas: public housing, which offers units for eligible tenants in properties  generally owned and administered by state and local public housing  agencies (PHA); tenant-based rental assistance, which provides vouchers that eligible  households can use to rent houses or apartments in the private  housing market; and
Native American programs, which provide block grants and loan  guarantees to tribal entities for housing development and assistance  and housing-related services.
Specific programs administered by PIH include, but are not limited to, the  following:
MTW Demonstration Program. HUD implemented the MTW  demonstration program, which was authorized by the Omnibus  Consolidated Rescissions and Appropriations Act of 1996, in 1999.
The program is intended to give participating PHAs the flexibility to  design and test innovative strategies for providing and administering  housing assistance. The program has three statutory purposes: to  reduce costs and achieve greater cost-effectiveness in federal  housing expenditures, give families with children incentives to obtain  employment and become self-sufficient, and increase housing choices  for low-income families. To put in place the innovations intended  under the program’s authorizing legislation, PHAs may request  waivers of certain provisions in the United States Housing Act of  1937, as amended. For example, PHAs may combine the funding  they are awarded annually from different programs—such as public  housing capital funds, public housing operating funds, and voucher  funds—into a single, authority-wide funding source. As of June 2015,  39 PHAs were participating through the end of their fiscal year 2018.
FSS Program. FSS was authorized in 1990 to help families receiving  vouchers or living in public housing become self-sufficient through  case management and referrals to education, training, and other  supportive services. HUD has historically received separate FSS  appropriations for public housing residents and Housing Choice  Voucher recipients, but Congress combined the appropriations in  fiscal year 2014. PHAs use grant funds to pay program coordinators who link residents to the supportive services they need to achieve  self-sufficiency. Families in the FSS program sign contracts with their  PHAs requiring that all family members become independent of cash  welfare assistance and that the head of the family seek and maintain  employment.
Voucher Program. The voucher program was authorized under  Section 8 of the United States Housing Act of 1937, as amended. In  recent years, the voucher program has helped provide affordable  rental housing to about 2 million very low- or extremely low-income  households annually. Approximately 2,400 PHAs administer the  voucher program on HUD’s behalf. Under the program, an assisted  household pays either 30 percent of its monthly adjusted income in  rent or the PHA-established minimum rent (up to $50). The remainder  of the rent—the difference between the lesser of the unit’s gross rent  (rent plus utilities) or a local “payment standard” and the household’s  payment—is paid through a HUD-subsidized “voucher.” The payment  standard is based on the HUD-determined fair market rent for the  locality, which HUD annually estimates for metropolitan and  nonmetropolitan areas. Participating PHAs can set payment  standards (that is, pay subsidies) of between 90 and 110 percent of  the fair market rent for their areas. The voucher program is not an  entitlement program. Therefore, the amount of budget authority  Congress provides through annual appropriations limits the number of  households that the program can assist. Historically, appropriations  for the voucher program (or for other housing programs) have not  been sufficient to assist all households that HUD identified as having  worst-case housing needs—households with very low incomes that  pay more than 50 percent of their incomes in rent, live in substandard  housing, or both.
IHBG Program. Native American tribes primarily receive assistance  for low-income housing through the IHBG program under the Native  American Housing Assistance and Self-Determination Act of 1996  (NAHASDA) program.  NAHASDA reorganized the system of  housing assistance that HUD provided to Native Americans by  eliminating or incorporating several separate programs into a single  block grant program—the IHBG program—and created the Title VI  Loan Guarantee (Title VI) program to assist grant recipients with  private market financing. HUD’s Office of Native American Programs  within PIH administers NAHASDA. IHBG is a formula grant program,  and participating tribes may choose to receive housing funds directly  or through a tribally designated housing entity (TDHE) that  administers the housing program on their behalf. As of January 2015,  566 federally recognized and 5 state-recognized Indian tribes with  membership levels ranging from a few hundred to a few hundred  thousand are eligible to receive IHBG funds annually to provide their  members with adequate and affordable housing. Families eligible for  NAHASDA-funded assistance must be low-income Indian families— those whose income does not exceed 80 percent of the area median  income—residing on a reservation or in an Indian area.
Pub. L. No. 104-330, 110 Stat. 4016 (1996) (codified, as amended, at 25 U.S.C. § 4101  et seq.).
section_title: HUD Has Taken Initial Actions to Better Assess the Moving to Work and Family Self- Sufficiency Programs
paragraphs: In our prior work on the MTW and FSS programs, we concluded that HUD  could take additional steps to understand program outcomes. We made  eight recommendations in our April 2012 report on the MTW program,  seven of which have been implemented. We made two  recommendations to HUD concerning FSS in a July 2013 report on self- sufficiency programs.recommendations. The following discussion addresses selected  recommendations from these reports that focus on improving program  assessment. (See app. I for a full list of the recommendations from these  reports and their status.)
subsections: section_title: HUD Has Taken Steps to Improve What is Known about the Moving to Work Program
paragraphs: In our April 2012 report on the MTW program, we identified a number of  weaknesses that limited HUD’s ability to determine program outcomes as  they related to statutory purposes. First, we found that guidance on  reporting performance information did not emphasize the importance of  accurate outcome-oriented information. We noted that PHAs participating  in MTW (MTW agencies) reported annually on their activities, including  efforts to reduce administrative costs and encourage residents to work.  But the usefulness of this information was limited because it was not  consistently outcome oriented. For example, for similar activities designed  to promote family self-sufficiency, one MTW agency reported only the  number of participants, which is generally considered an output, and  another agency did not provide any performance information. To be  consistent with the GPRA Modernization Act of 2010 (GPRAMA), we  noted that HUD’s guidance on reporting performance information should  indicate the importance of outcome-oriented information.
Second, we reported in 2012 that HUD had not identified the performance  data needed to assess the results of similar MTW activities across PHAs  or of the program as a whole. Obtaining performance information from  demonstration programs is critical, because the purpose of a  demonstration is to test approaches to identify those that provide positive  results. Since 2009 HUD had been requiring agencies to provide  information on the impact of MTW activities, including benchmarks and  metrics, in their annual MTW reports. We found that while these reports  were informative, they did not lend themselves to quantitative analysis  because the reporting requirements did not call for standardized data,  such as the number of residents who found employment.
Further, we found that HUD had not established performance indicators  for MTW. According to GPRAMA, federal agencies should establish  efficiency, output, and outcome indicators for each program activity as  appropriate. Federal internal control standards also require the  establishment of performance indicators. As we noted in 2012, specific performance indicators for the MTW program could be based on the three  statutory purposes of the program. For example, agencies could report on  the savings achieved (reducing costs).
In light of these shortcomings, we recommended that HUD (1) improve its  guidance to MTW agencies on providing performance information in their  annual reports by requiring that such information be quantifiable and  outcome oriented, (2) develop and implement a plan for quantitatively  assessing the effectiveness of similar activities and the program as a  whole, and (3) establish performance indicators for the program.
HUD subsequently implemented all three of these recommendations.  Specifically, in May 2013 HUD revised the reporting requirements for  MTW agencies and began requiring them to report quantifiable and  outcome-oriented information on MTW activities. Also, in 2015 HUD  developed a five-step plan to quantitatively assess both the effectiveness  of similar activities across agencies and the program as a whole.  According to this plan, HUD will assign standard metrics for all of the  implemented and proposed activities of each MTW agency and ensure  that agencies conducting similar activities report annually on the same set  of metrics. HUD has taken steps to implement this plan by, for example,  issuing guidance to MTW agencies on how to assign the metrics to  activities. Additionally, in 2013 HUD established standard measures that  correlate with each of the statutory objectives of the MTW program. For  each measure, HUD will be able to calculate quantitative results for the  program as a whole and determine whether they are positive, neutral, or  negative.
Finally, we indicated in our 2012 report that while HUD had identified  some lessons learned on an ad hoc basis, it did not have a systematic  process in place for identifying them. As previously noted, obtaining  impact information from demonstration programs is critical. Since 2000,  HUD had been identifying some activities that could be replicated by  other PHAs. For example, a HUD-sponsored contractor developed five  case studies to describe issues and challenges involved in implementing  MTW. However, these efforts had shortcomings. In most cases, the  lessons learned were chosen based on the opinions of HUD or contracted  staff and largely involved anecdotal (or qualitative) data rather than  quantitative data. We reported in 2012 that because HUD had not  developed criteria and a systematic process for identifying lessons  learned, HUD was limited in its ability to promote useful practices for  broader implementation. We recommended that HUD create a process to  systematically identify lessons learned. HUD agreed and in response  stated that once its revised reporting requirements were implemented, the  resulting data would inform an effort to establish lessons learned. As of  June 2015, HUD had provided information on the steps it will take to  systematically identify promising practices. We are in the process of  reviewing this information to determine if it fully satisfies our  recommendation.
section_title: HUD Has Begun Taking Steps to Improve Participation and Outcome Data on the Family Self- Sufficiency Program
paragraphs: In a July 2013 report, we found that the number of families participating in  HUD’s FSS program could not be reliably assessed. According to HUD  guidance, PHAs that received FSS grants were required to update  information about each participating family at least annually. As a part of  these updates, PHAs were expected to indicate whether the family was  actively participating in or had exited the program. For those families that  had exited the program, PHAs were required to indicate whether they had  completed the program or stopped participating for other reasons. In  general, PHAs were to report these data using HUD’s Public and Indian  Housing Information Center (PIC) system.
We found that many PIC records lacked information on when and why the  participating family exited the FSS program before completion. For  example, while HUD’s PIC data indicated that 14,690 families began  participating in the FSS program in fiscal year 2006, data on exits for the  5-year program were missing for nearly half of these families. According  to HUD officials with responsibility for implementing the FSS program, the  records could have been incomplete or incorrect for several reasons. For  example, if a participating family had left public housing or the voucher  program, the responsible PHA might not have updated the FSS portion of  PIC to reflect the departure. The officials also told us that no HUD staff  had been given specific responsibility for monitoring the completeness of  participants’ records in PIC. We determined that not analyzing the extent  to which PHAs had reported required data limited HUD’s ability to  effectively oversee the program.
During our work for the July 2013 report, we also noted that HUD required  PHAs to enter summary output and outcome data annually in a  spreadsheet-based reporting tool. These data were to include, among  other things, the number of households that had increased their incomes  or moved to nonsubsidized housing and the number of residents that had  obtained high school diplomas. However, we found that PHAs also had  not consistently reported such information, a condition that was  exacerbated by a lack of program-specific reporting guidance. Further, we  found that HUD lacked a strategy for using the data it collected on the  FSS program, whether through PIC or its spreadsheet-based reporting  tool. Internal control standards underline the importance not only of  collecting but also using information to achieve programmatic goals—in  this case, helping families increase self-sufficiency.
To address limitations in HUD’s oversight of the FSS program, we  recommended that HUD develop and implement a process to better  ensure that data on FSS participant grants were complete. We stated  that such a process should include steps to identify missing data and the  reasons for the omissions and to help ensure that the data were  complete. HUD agreed with this recommendation and in May 2014  implemented modifications to the PIC system. According to HUD, the  modifications established a system of checks within PIC that would alert  PHA users if the information they submitted was incomplete or appeared  to be incorrect. In June 2015, HUD reported that between June 2014 and  May 2015 the new system had generated 36,802 alerts notifying PHAs  that they needed to correct their information before resubmitting it to  HUD. According to HUD, the agency also has taken initial steps to  improve its spreadsheet-based tool and prevent PHA users from  submitting incomplete data. HUD officials told us that they would provide  documentation of PHAs’ use of the tool and HUD’s analysis of the data  collected by July 30, 2015. While HUD’s actions to date appear to be  broadly consistent with our recommendation, we will determine whether  HUD has satisfied our recommendation after we obtain and review this  documentation.
While acknowledging the difficulty of determining the outcomes of self- sufficiency activities, our July 2013 report concluded that HUD could have  done more to review participant accomplishments across programs. To  improve what is known about and better inform Congress on residents’  progress towards self-sufficiency, we recommended that HUD develop  and implement a strategy for regularly analyzing FSS participation and  outcome data. We noted that such a strategy could include identifying  PHAs from which lessons could be learned as well as PHAs that might  need assistance improving completion rates or outcomes. HUD agreed  with this recommendation, and in March 2014 the agency established  criteria for identifying high-performing and poorly performing FSS  grantees using data from PIC. According to HUD, the agency will annually  assess changes in earned income and FSS program graduation rates,  among other factors. In June 2015, HUD stated that it would provide  documentation of the use of the criteria to identify high-performing and  poorly performing FSS grantees. We will determine whether HUD has  fully implemented our recommendation when we receive this  documentation.
section_title: HUD Has Taken Steps to Streamline the Voucher Program, but Further Opportunities Exist to Increase Efficiencies
paragraphs: In our March 2012 report, we identified several options that, if  implemented effectively, could reduce voucher program costs or allow   First, improved information on the  PHAs to assist additional households.level of subsidy reserves that housing agencies should maintain could aid  budget decisions and reduce the need for new appropriations. Second,  agency officials have noted that the voucher program’s requirements are  complex and burdensome and that streamlining these requirements could  reduce costs. Finally, changing the method for calculating households’  payments toward rent—known as rent reform—and consolidating voucher  administration under fewer housing agencies could also reduce program  costs. These options involve difficult policy decisions that will affect some  of the most vulnerable members of the population and alter long-standing  program priorities and practices. Our 2012 report made recommendations  to HUD that pertain to the subsidy reserve and administrative streamlining  options we identified.
subsections: section_title: Improved Information on Public Housing Agencies’ Subsidy Reserves Could Aid Budget Decisions
paragraphs: As we reported in March 2012, improved information on the level of  subsidy reserves PHAs should maintain could aid budget decisions and  reduce the need for new appropriations. PHAs had accumulated subsidy  reserves—that is, unspent funds—that Congress could use to (1) reduce  program appropriations through a rescission and offset and potentially  meet other needs or (2) direct HUD to assist more households.may under-lease or receive more funding than they can spend in a year.  Unless rescinded and offset, PHAs can accumulate unused subsidy  funding in reserve accounts held by HUD and spend it for authorized   PHAs  expenses in future years. HUD has requested the authority to offset and,  in some cases, redistribute “excess” reserves—those beyond what is  needed to fund defined contingencies. But HUD has not developed  specific or consistent criteria defining what constitutes excess reserves or  how it would redistribute funding among PHAs.
In our March 2012 report, we concluded that providing Congress with  better information on subsidy reserves could help ensure that disbursed  funds would be used to assist households rather than remain unused.  This assessment was consistent with the results of previously issued  work, in which we concluded that agency reporting about key areas such  as financial management or program reforms should inform congressional  decision making. We recommended in our 2012 report that HUD  provide information to Congress on (1) the estimated amount of excess  subsidy reserves and (2) criteria for redistributing excess reserves among  PHAs, while also determining a level of subsidy reserves PHAs should  retain on an ongoing basis to effectively manage their voucher programs.  HUD neither agreed nor disagreed with our recommendations. HUD  officials subsequently told us that, upon request, they provide information  to congressional appropriators on subsidy reserve levels, including  balances above certain minimum reserve levels. However, HUD has not  yet determined what level of subsidy reserves PHAs should retain or  provided Congress with criteria for redistributing excess reserves. As a  result, we consider these recommendations to not be implemented.
section_title: Administrative Reforms Could Streamline Burdensome Requirements and Reduce Costs
paragraphs: As we indicated in our March 2012 report, in various budget requests for  2004 through 2012 HUD requested the authority to put in place reforms  that could decrease voucher program subsidy costs, administrative costs,  or both. These reforms include streamlining complex and burdensome  requirements and improving the delivery and oversight of rental  assistance.
We recommended in our March 2012 report that HUD consider proposing  to Congress options for streamlining and simplifying the administration of  the voucher program and making corresponding changes to the  administrative fee formula to reflect any new or revised administrative  requirements. We stated that such proposals should be informed by the  results of HUD’s administrative fee study and the experience of the MTW  program. HUD neither agreed nor disagreed with our recommendation.  However, consistent with our recommendation, in the President’s budgets  for fiscal years 2013-2016, HUD proposed a number of statutory changes  to streamline administrative requirements for the voucher program. In  addition, in January 2015 HUD published a proposed rule that included a  number of program and administrative simplification measures for the  voucher program. For example, the proposed rule includes a provision  that would permit PHAs to conduct streamlined annual reexaminations for  families with fixed incomes. According to HUD, the department will  publish a final rule no later than December 2015. Further, in April 2015  HUD released its voucher program administrative fee study. The study  found that the current administrative fee funding did not fully cover the  amount needed to effectively and efficiently administer the voucher  program. HUD has indicated that it plans to commence work on  developing a proposed rule for a new administrative fee formula based on  the findings of the study. On the basis of HUD’s actions, we consider our  recommendation to be implemented.
section_title: Rent Reform and Consolidation Could Reduce Costs or Increase Households Served, but Both Actions Involve Trade-offs
paragraphs: As we indicated in our March 2012 report, changes to the calculation of  households’ payment toward rent (rent reform) and the consolidation of  voucher administration under fewer PHAs could yield substantial cost  savings, allow PHAs to serve additional households if Congress were to  reinvest annual cost savings in the voucher program, or both.  Furthermore, these options are not mutually exclusive—that is, the cost  savings or additional households served could be greater if both options  were implemented.
We found that because about 90 percent of voucher program funds are  used to pay subsidies, decreasing the subsidy, which would increase the  household contribution toward rent, would yield the greatest cost savings.  Our March 2012 report estimated the effect of several options that  changed either the minimum rents households were required to pay or  used different formulas for calculating required household payments. In  identifying and assessing these options, we reviewed proposals included  in draft legislation and reports from HUD, the Congressional Budget  Office, and housing industry groups. We also considered changes certain  PHAs had implemented. We estimated the effect—both in terms of cost  savings and the additional households that could be served if Congress  chose to reinvest the savings in the program—of requiring assisted  households to pay higher minimum rents (ranging from $50 to $300),
35 percent of their adjusted income in rent,
30 percent of their gross income in rent (with no adjustments), or a percentage of the applicable fair market rent.
For example, increasing minimum rents to $75 would yield an estimated  $67 million in annual cost savings or allow PHAs to serve an estimated  8,600 additional households. Requiring assisted households to pay 30  percent of their gross income (rather than income adjusted for certain  deductions and exclusions) in rent would yield an estimated annual  savings of $513 million or allow PHAs to serve an estimated 76,000  additional households, based on household characteristic and rent data  as of December 2010. A rent structure based on gross income would  eliminate the deductions and exclusions that households currently may  claim. Simplification of the rent calculation could also reduce the potential  for improper payments resulting from program administrator rent  calculation errors.
While each of these options could reduce costs or create administrative  efficiencies, each also involves trade-offs that should be considered  before any changes are implemented. Under each option, some  households would have to pay more in rent than they currently pay.  Setting a minimum rent of $75 would increase the rent for 11 percent of  assisted households, and requiring households to pay 30 percent of gross  income would increase the rent for 86 percent of households. The  options also would have varying effects on different types of households,  such as families with children, persons with disabilities, and the elderly.  We also noted disparities by geographic area, such as high-cost versus  low-cost rental markets. For example, setting household rental payments  based on a percentage of the applicable fair market rent would place  greater burdens on households in high-cost areas.
Finally, our March 2012 report found that consolidating voucher program  administration under fewer PHAs could yield a more efficient oversight  and administrative structure and cost savings for HUD and PHAs. HUD  spends considerable resources in overseeing the more than 2,400 PHAs  that administer the voucher program. According to a 2008 HUD study, the  department dedicated from more than half to two-thirds of its oversight  resources to PHAs that administered 400 or fewer vouchers and 10  percent of all units. According to agency officials, consolidating voucher  administration under fewer agencies would decrease HUD’s oversight  responsibilities.
section_title: HUD Has Begun Collecting Additional Feedback and Disseminating Promising Approaches for Indian Housing Block Grant Activities
paragraphs: In our March 2014 report on tribal housing challenges, we found that  Indian tribes and TDHEs participating in the IHBG program faced both  external and internal challenges in carrying out affordable housing  activities.following:   Some of the challenges that tribes faced included the
Remoteness and lack of adequate infrastructure. Many of the  tribal housing officials we interviewed told us that tribes’ remote  locations or lack of adequate infrastructure to support housing led to  higher development costs. For example, one Arizona tribe saw its  costs double because materials had to be brought in by helicopter.  Officials from a Nevada tribe told us that the tribe’s land base was  undeveloped, requiring the tribe to invest resources to put  infrastructure in place before building homes for tribal members.
According to the officials, sewer pipes in one of the tribe’s  communities were failing and in need of upgrades. The officials added  that another community had significant bedrock that likely would  require blasting before infrastructure could be added to the area, and  the nearest main road was 5 miles away.
Differing federal environmental review requirements. NAHASDA  regulations state that the environmental effects of activities carried out  with assistance from the program must be evaluated in accordance  with the National Environmental Policy Act of 1969 (NEPA), as  amended (42 U.S.C. §§ 4321-4347), and related authorities. Under  NEPA, agencies evaluate the likely environmental effects of projects  they are proposing using an environmental assessment or, if the  project is more likely to significantly affect the environment, a more  detailed environmental impact statement. When tribes combine  IHBG and other federal funds on a project—something NAHASDA  allows—they must follow each agency’s particular NEPA  requirements. IHBG recipients identified mandatory environmental  reviews as an area in which differing federal agency requirements  contributed to project delays and increased costs when IHBG and  other funds were combined.
We concluded that a coordinated environmental review process for  tribal housing similar to one proposed for water and wastewater  projects by a federal infrastructure task force would address the issue  of costly multiple reviews. We recommended that to increase  consistency and reduce time and cost for IHBG recipients HUD, the  U.S. Department of Agriculture, the Department of the Interior, and  the Indian Health Service should initiate an interagency effort to  develop and implement a coordinated environmental review process  for all agencies overseeing tribal housing development. We suggested  that the agencies determine if designating a lead agency would be  appropriate. HUD agreed with the recommendation. In June 2015,  HUD told us it would continue collaborating with the other agencies to  develop a coordinated environmental review process that would  simplify efforts to develop tribal housing.collaborating agencies hoped to have some recommendations on the  process by September 2015.
Potential reduction in training opportunities and program  support. In fiscal year 2012, HUD instituted new training and  technical assistance procedures according to revised language in the  NAHASDA appropriation legislation. These procedures changed both  the way that HUD made funds available to provider organizations and  IHGB recipients’ options for requesting training and technical  assistance. Specifically, Congress stopped appropriating a set-aside  to the National American Indian Housing Council (NAIHC)—which had  previously served as the primary provider of external training and  technical assistance to IHBG recipients—and directed HUD to provide  grants on a competitive basis to national and regional organizations.
Until fiscal year 2012, Congress appropriated approximately $2 million to $3.5 million  annually as part of a set-aside in the NAHASDA appropriation to NAIHC. concluded that a more comprehensive approach would include input  from tribes that had not yet used HUD’s new procedures so that their  concerns could be addressed. Additionally, we found that HUD had  not shared promising housing practices across grant recipients in an  easily accessible manner. We recommended that HUD (1) expand its  training feedback mechanism to include input from recipients that had  not yet used the new procedures, and (2) collect and disseminate  promising approaches that recipients had used to address housing  challenges. HUD disagreed with the first recommendation, noting  that it already had a fully functioning feedback mechanism for training  and technical assistance. However, HUD subsequently outlined  actions it had taken to broaden its solicitation of input from IHBG  recipients through various outreach efforts, including events attended  by tribal housing officials. HUD has also developed a location on its  website that collects and disseminates best practices on housing  development to tribes, TDHEs, and the general public. As a result, we  consider both recommendations to be implemented.
section_title: HUD’s Office of Public and Indian Housing Faces Other Ongoing Challenges
paragraphs: As we and HUD’s Inspector General have found in previously issued  work, PIH faces a number of ongoing program management challenges.  Among these are reducing improper rental subsidy payments (over- and  underpayments), preserving and improving affordable federally assisted  rental properties, and overseeing the performance of PHAs.
Reducing improper rental subsidy payments. HUD’s rental  assistance programs, which include public housing and voucher  programs, are among the programs at risk of having significant  improper payments. As we found in a 2005 report, HUD initiated the  Rental Housing Integrity Improvement Project in 2001 to address this  problem, which stems in part from tenant underreporting of income.
GAO, Public Housing: HUD’s Oversight of Housing Agencies Should Focus More on  Inappropriate Use of Program Funds, GAO-09-33 (Washington, D.C.: June 11, 2009). In  this report, we recommended that HUD (1) regularly summarize and evaluate the results  of audits of PHAs to identify common problems, monitor emerging issues, and evaluate  overall monitoring and oversight processes; and (2) develop mechanisms—such as  financial indicators—and use them as part of its ongoing monitoring and review of housing  agencies’ use of public housing funds. HUD implemented these recommendations. ensure that the Section Eight Management Assessment Program was  effective in identifying underperforming PHAs. That same year, the  Inspector General found that HUD did not effectively oversee and  manage the administrative receivership of the East St. Louis Housing  Authority. The large number of PHAs nationwide (about 3,300) and  the significant physical and financial challenges some of them face  highlight the importance of effective HUD oversight of these housing  agencies.
In conclusion, our reviews of public and Indian housing programs since  2012 have identified a number of areas in which PIH could strengthen its  program assessments, increase efficiencies, and enhance collaboration  efforts. HUD has made progress in implementing some of our  recommendations, but additional actions are needed to address others.  We look forward to continuing to work with this committee in overseeing  PIH and other HUD programs to ensure that they are operating in the  most effective and efficient manner. As you know, we are conducting  ongoing work for this committee examining broad management issues at  HUD, including risk management and program oversight and evaluation,  that may further address some of the topics I have discussed today.
Chairman Luetkemeyer, Ranking Member Cleaver, and Members of the  Subcommittee, this concludes my prepared statement. I would be happy  to respond to any questions that you may have at this time.
section_title: GAO Contact and Staff Acknowledgments
paragraphs: For further information about this testimony, please contact me at 202- 512-8678 or garciadiazd@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this statement. Individuals making key contributions to this testimony  include Steve Westley, Assistant Director; Don Brown, Analyst-in-Charge;  Bernice Benta-Jackson; Emily Chalmers; Andy Finkel; Tarek  Mahmassani; Cory Marzullo; John McGrail; Lisa Moore; Josephine Perez;  Paul Schmidt; and Paige Smith.
section_title: Appendix I: Content and Status of Relevant GAO Recommendations
paragraphs: The following table summarizes the status of our prior recommendations  to the Department of Housing and Urban Development (HUD) from our  April 2012, July 2013, March 2012, and March 2014 reports that discuss  Office of Public and Indian Housing (PIH) programs. We classify each  recommendation as either open (the agency has either not taken or  completed steps to implement the recommendation) or implemented. The  recommendations are listed by report.