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From eliminating rats and mold in housing, to managing the agency’s human capital, the Housing and Urban Development inspector general has issued a list of priority open recommendations. It is the first report of its kind from the HUD OIG. To inquire about the highlights, the Federal Drive with Tom Temin spoke with Inspector General Rae Oliver Davis.

Interview transcript:

Tom Temin: So this report is the first of its kind tell us more about it, its genesis and what you’re trying to accomplish with it.

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Rae Oliver Davis: As you said, it’s the first priority top priority recs report we’ve ever done. The idea is really just to focus leadership, focus the discussion between myself the secretary, the deputy secretary on the most important topics, the things that we really think are standing in the way of the ultimate success of HUD in carrying out its mission. We’ve done a lot of work in this area. When I first stepped into this role back in January of 2019, we had over 2000 open recs with the department, we have now I believe 800. So we’ve made a real concerted effort in order to make a positive impact on the department. These things, the 2000 recommendations, they’re all important, but they all can’t be at the very top. So this just brings everything to the top of mind, the things that we meet about and discuss everyday, the most important recommendations. So that’s what it’s really about.

Tom Temin: Is this a compilation of material from other reports into a kind of meta report, you might say?

Rae Oliver Davis: It absolutely is, you know, every year we do the top management challenges. So that’s really guided us. But we have, we look back year over year, we’ve also looked at GAO’s recommendations to see the commonalities we have there. You know, GAO has always done a very good job of when there’s a new administration handing them a letter, here’s what we have new secretary, here’s what we want you to focus on. So this is really our answer to that.

Tom Temin: And let’s talk about one that’s at the top of the list, eliminating hazards in HUD assisted housing, if you look at the HUD mission, it’s to insure housing for people that might not otherwise be able to afford it. And so as the government pursues customer experience, you might say that’s the customer experience challenge for HUD, you know, the ultimate customer, if not the housing authorities it deals with but the residents of that housing. And tell us what’s going on there. What’s the major challenge in housing itself?

Rae Oliver Davis: Well, absolutely, you’ve said it, we’re talking about HUD’s beneficiaries, it’s usually our most vulnerable populations, those of the lowest income, some that are disabled, some that are elderly. And this is where they turn for housing. And you know, I think this idea of hazards in public housing is even more dire. When you look at the affordability crisis, people are having trouble finding homes, much less safe, sanitary homes. So in particular, when it comes to our recommendations, we’re talking about lead paint, we still see lead paint in public housing.

Tom Temin: That’s really surprising. That is still lead paint since it was outlawed almost 60 years ago. That means places haven’t been painted in 60 years.

Rae Oliver Davis: It doesn’t mean they haven’t been painted it, but it means that the housing stock is actually quite old, much of our public housing stock predates 1978 when lead paint was outlawed, so I’m not surprised, Tom, I get that all the time. When I go talk to groups about this, people are surprised that lead paint is still an issue. And in fact, if you look at the CDC and the EPA, I mean, they put out stats about this, children are the most vulnerable for elevated blood levels and lead poisoning. And we have roughly about half a million children in the U.S. with elevated blood levels. And that’s those that we know of that means that there’s actual testing going on, and that we’re aware of that. So it’s still a very, very real issue.

Tom Temin: And what is HUD’s proper mechanism for getting at issues of substandard housing, they have to work through housing agencies, correct?

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Rae Oliver Davis: They do. They are supposed to ensure compliance with lead safe housing rules. And they are supposed to raise awareness out in the community as well. So our strategy is to really ensure there is compliance, we’re hoping if we can get compliance out in the field, we’ll see less lead poisoning long term.

Tom Temin: And then the flip side related issue is ensuring access to and availability of affordable housing. What’s the big issue there?

Rae Oliver Davis: Oh, gosh, that might be in some ways, the top priority rec for me, what we’re really talking about here is rental assistance. And this is something that HUD provides to beneficiaries. It allows them to take a voucher, it’s a housing choice voucher, go out into the private sector and find their own unit, which sounds good. It gives our beneficiaries autonomy over their own lives. And then they can go out and find their own unit, but it’s much more difficult than what it sounds. And frankly, some of this is out of HUD’s control. We have landlords that don’t want to accept the vouchers. We have a very high rental market right now, as we all know, this is in the news every day. So individuals have trouble finding units where their voucher will even pay the rent, some of them will become rent poor because they’ll be accountable for the difference between the voucher and the actual rent. Now HUD has done some work here. They’ve done some work on what we call their fair amount market rent value. This last year, they really looked at private sector numbers in that methodology to try to account for some of the challenges we’re seeing in the housing market right now, the other thing is, is people have to go where the jobs are. And often that’s where the higher rent is. But what we’re trying to do is get HUD to come up with a strategy to explore reallocating these vouchers when they go unused. We did some work back in 2020. And we found that 62% of PHAs, had unused voucher authority, the PHA is the public housing agencies, they’re the ones that administer the voucher program, they hand out the vouchers, a beneficiary gets the voucher and then takes it out and finds their own unit. So that’s what we really want is we want those programs to be more helpful to beneficiaries.

Tom Temin: We’re speaking with Rae Oliver Davis, the inspector general at the Department of Housing and Urban Development. And another one on the list away from the housing programs itself is managing human capital. My understanding of HUD is that many of the employees there tend to stay a very long time because they consider themselves housing people, as opposed to, you know, some other mission in the government. And what are the issues with respect to managing human capital?

Rae Oliver Davis: I think, you know, that is in some ways a great benefit to the department, right? It’s really a great benefit to have people who have that sort of calling or that passion and build up that expertise and housing, what we’re really talking about there. And frankly, human capital management is a government wide challenge. If you look at my colleagues in CIGI, they all flag this, most of them in their own respective departments. But we really want them to just retain knowledge, knowledge around hiring, we did some work a while back, we looked at time to hire, how fast can HUD get people on board that they need with the right skill set. And we found they were pretty challenged in that area, they’ve improved, but we want them to draw on that knowledge and come up with standard operating procedures, office protocols, program sheets, because when there is turnover, people lose that knowledge. And it becomes again, just another challenge in the hiring process. It’s like reinventing the wheel every time.

Tom Temin: And that relates to a couple of issues you mentioned also, which I think are related management and oversight of information technology. And right below that on the list is fraud risk management. And there’s a element of relationship between those very two issues, isn’t there?

Rae Oliver Davis: Well, it’s right. And honestly, the human capital management is something that overlays every other recommendation, every other challenge that the department has that affects the way they address all of these things. In terms of information technology, I mean, if you look at HUD’s information technology, they are using systems that have billions of records on them that have personally identifiable information. The systems also track 1000s of transactions, so HUD and their stakeholders rely upon that. So you’re right, they have to have the right human capital management there. What we’re really talking about in terms of information technology is cybersecurity. You know, we really want the department to be improving its ability to monitor everything inbound and outbound on its network, to look for bad actors, things like web applications. You know, right now, the program offices are accountable for their own web applications. But we want them to bring the CIO’s office in, they need to understand the inventory of web applications they have out there and be in the position to approve all of them and monitor them. If I could, Tom, if I could comment on the fraud risk. You know, that’s something that, of course, HUD OIG, we talk about quite a bit. There is a tremendous amount of money that flows through HUD, and it is all susceptible to fraud. We looked at HUD’s fraud risk management in particular, and we use GAO’s framework as a best practice. And we like that, because it calls into question whether or not HUD is doing continuous monitoring, you know, so much of this money is funneled out to the grantees. That’s where we really want HUD to be doing its oversight, not just at the HUD operations level, but are they looking at the grantees and how they’re spending this money, and also this GAO fraud risk framework, it calls for them to bring us in, frankly, for us to help them look at a fraud risk inventory for us to help them assess their internal controls. And that’s what we want. If you look at the pandemic, there was such a huge influx of money. In one particular instance, we had a pandemic program aimed at homelessness, grantees were receiving over 1,000% more funding than they typically get an annual year, that is a remarkable amount of money to track for fraud. Now something HUD does is they do these front end risk assessments. Again, that is what it says it is it’s on the front end. And it’s particularly useful. I think, when they have a program, new program, or when they have a program that has an existing influx of funds. They listen to us, you know, they’ve added fraud as an element there. The program offices are bringing in some people with some fraud background, so it remains to be seen what that will yield. But we’re excited about that, for sure.

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Tom Temin: Kind of makes you wish they brought in those people before the money went out and not two years later.

Rae Oliver Davis: Well, hey, we’re gonna keep monitoring this we appreciate the effort and we’re gonna see what comes from it.

Tom Temin: And just a final question, this sounds like a weighty report that would have landed with a thud on the secretary’s desk. Are you getting the sense that Marcia Fudge has read it, and takes it seriously? And she used to call up and said, Rae Oliver Davis, let’s get on this?

Rae Oliver Davis: You know, I am certain that it’s gotten her attention. These are things that I know from talking to her personally, whether it’s cybersecurity, whether it’s certainly lead in housing, these are things that she’s certainly on top of. The deputy secretary and I have talked about this already, we’ve talked about how we can move the ball on some of these. And with respect specifically to the secretary. You know, I did hear from her recently on our top management challenges which all of these party recs come from our top management challenges. And she responded and was quite complimentary. It seemed as if the department recognized themselves and our TMC. So I suspect they recognize themselves in the top recs report as well.

Tom Temin: And again, this report is something you’re going to update yearly.

Rae Oliver Davis: That’s our goal. This is the first one of its kind. So we’re gonna see how a year of having this report on file goes, and if we can move the ball on some of these, but I think that would be a best practice for us if we could do that. Yes. You know, it’s interesting, the dialogue around these, I suspect, when we talk to the department, we’re going to talk a lot about capacity, you know, whether or not they have the capacity to do these things, whether or not there are any legislative or regulation changes that are needed. These are the top priority, because they’re also some of the hardest to tackle, right. But I’m looking forward to the year ahead and looking forward to working with the department to do just that.

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