The Government Accountability Office (GAO) released a report on October 30 that examined the processes for referring cases of potential noncompliance to HUD’s Departmental Enforcement Center (DEC). The GAO looked at three HUD program offices: the Office of Multifamily Housing Programs, Public and Indian Housing (PIH), and Community Planning and Development (CPD). The GAO’s main conclusion is that PIH and CPD do not provide their field staff with specific guidance on when to make referrals to DEC. In contrast, the GAO concluded that Multifamily does make referrals based on defined thresholds for noncompliance, such as properties that do not pass physical inspections (see “HUD Updates Guidance Addressing Low Physical Inspection Scores in Multifamily Housing” in this Memo).
The DEC’s mission is to provide independent oversight of the administration of HUD programs. According to HUD, the DEC’s primary goal is to bring owners to full compliance so that the quality of HUD-assisted housing is not compromised.
The GAO reports that PIH and CPD have broad guidelines but not specific thresholds for when field staff should refer an entity to the DEC. PIH and CPD field staff use their discretion in deciding which cases to refer to the DEC, but these decisions do not appear to always be based on well-supported risk assessments. Without specific guidance to help field staff direct their decision making, the DEC, PIH, and CPD cannot ensure that referrals are made using a consistent and risk-based approach, limiting the DEC’s effectiveness at providing independent oversight.
PIH guidance is in the form of periodic emails sent to field offices requesting potential candidates for referrals to the DEC. Those emails list factors that might warrant referrals, like potential violations of statutes, regulations, or agreements. PIH does not provide direction to field offices on how to use the results of their quarterly risk assessments to identify high-risk PHAs for referral to the DEC. PIH officials stated that they did not want to be too prescriptive.
A CPD official told the GAO that CPD does not provide direction to field offices on how to use the results of their risk-based assessment of grantees to identify potential DEC referrals. CPD officials said that they do not provide guidance because they think that their current approach, allowing field offices to make referrals to the DEC on a case-by-case basis, is better and more effective.
The GAO suggested that PIH and CPD provide additional guidance that could include information on how the field offices should incorporate the results from their risk assessments, more detailed criteria on when the field offices should make a referral, and examples of potential noncompliance that could be referred.
The GAO’s “Department of Housing and Urban Development: Better Guidance and Performance Measures Would Help Strengthen Enforcement Efforts” (GAO-19-38) dated October 2018 is at: https://bit.ly/2DgSwop