The House Transportation-HUD Appropriations Subcommittee held an oversight hearing on February 12 to review HUD’s management of project-based rental assistance contracts that expired during the partial federal government shutdown. Brian Montgomery, HUD’s Federal Housing Administration commissioner and acting deputy secretary, testified that HUD would take the lessons learned from the shutdown and will improve its communication with Congress and housing stakeholders if another shutdown occurs. He also said that the agency was updating its contingency plan, as HUD relied on an older version from the Obama administration during the shutdown. He confirmed that HUD has authorized the renewal of all the rental assistance contracts that expired during the shutdown and that property owners should be receiving funds imminently if they have not already.
Both the members of the subcommittee and the testifying witnesses focused during the hearing on HUD’s outdated and decades-old information technology (IT) systems that impeded the agency’s ability to effectively manage and oversee its programs before and during the shutdown.
“The biggest frustration we have at HUD is the technology,” said Irv Dennis, HUD’s chief financial officer. “I had our team put together a matrix of all the systems and how they interface. It’s old. It’s antiquated. It’s clumsy. It doesn’t interface well. It’s hard to move information from point A to point B. Sometimes that’s a manual process. Sometimes it’s on an Excel spreadsheet. It’s very dated stuff. The number one thing we need is to improve that technology.”
Mr. Dennis further explained that because HUD’s IT systems are so outdated, the agency must shut down its system that oversees project-based rental assistance contracts for two and half weeks to close out the books from the prior fiscal year, which ends in September. HUD typically uses its advanced appropriation provided by Congress for project-based rental assistance as bridge funding during that time. Because the advanced appropriation had already been spent in the fall when HUD had to shut down its system, the agency did not have those funds on hand to renew expired or expiring contracts during the shutdown.
Representative Katherine Clark’s (D-MA) expressed concerns that some people receiving housing assistance did not have their leases renewed because of the shutdown. Mr. Montgomery replied that, to his knowledge, no one was evicted, but he also said HUD did not have the chance to investigate the issue because agency staff are still trying to catch up on work that had piled up during the shutdown.
Representatives Clark and Norma Torres (D-CA) also asked the witnesses why HUD had delayed awarding funding to homeless service providers during the shutdown, pointing out that such services can be the difference between life and death. Mr. Montgomery stated that HUD could not obligate funding it did not have as that would have violated federal law. The money HUD eventually awarded to service providers after the shutdown ended, however, was allocated to the agency by Congress in the last fiscal year. Because of this delay, some service providers had to take out loans or experienced gaps in service.
Subcommittee Chair David Price (D-NC) asked Mr. Montgomery about whether the Trump administration planned to redirect funding intended for areas impacted by disasters to help build a southern border wall. Mr. Montgomery said that to do so would require an act of Congress. Mr. Montgomery testified that HUD’s ability to review pending long-term disaster recovery action plans was suspended during the shutdown but that HUD was now working hard to review and approve those plans so that states impacted by disasters could access their Community Development Block Grant-Disaster Recovery (CDBG-DR) funding as soon as possible. He added that HUD took the necessary steps to ensure that Puerto Rico could access during the shutdown the already obligated $1.5 billion in CDBG-DR funds for which an action plan had already been approved.
Both Mr. Montgomery and Mr. Dennis discussed the difficulty HUD faces when it must operate under short-term spending bills, known as a continuing resolutions (CRs). Congress often passes CRs when lawmakers cannot reach an agreement on how to fund the government through full-year spending bills.
“Operating under a CR is extremely difficult,” Mr. Dennis told the subcommittee. “The money that’s appropriated on the first day of the CR is not available immediately for obligation. We have funds controls that go in place. It’s really a five-step process. For those five processes, there are multiple levels of review and control. It could take up to one-and-a-half-to-three weeks for the money to get from CR to obligation.”
Learn more about the hearing at: https://bit.ly/2tpSXpi