HUD 2020 Management Reform Plan: Business Line Reform Plans, Part II

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OFFICE OF COMMUNITY PLANNING AND DEVELOPMENT

"National social problems will be solved the same place they are manifested — at the grass-roots level. National governments will be standard setters, supporters of local development, suppliers of resources, and facilitators or guardians of economic and political activity…"
Rosabeth Moss Kanter, World Class

SUMMARY Problems encountered by Community Planning and Development (CPD) include limited resources for managing competitive grants; limited staff for on-site monitoring; fragmented approaches to solving community problems; and an inability to completely track and respond to market trends. CPD is in the process of correcting these weaknesses by converting competitive grants into performance-based grants; outsourcing discrete functions; using advanced mapping software to aid community planning; aligning resources within a new Economic Development and Empowerment Service; and downsizing its headquarters staff.

CPD has had many successes, including: increasing the number of homeless families and individuals helped to reach self-sufficiency from 20,000 to nearly 290,000; creating 1.4 million jobs; and serving nearly 1.7 million people through CDBG and Home programs. Yet CPD also sees the need to improve its performance. CPD has identified several areas where reforms are necessary. Key problem areas include:

• Resources are limited and on-site monitoring is inadequate
  Limited staff and budgets prevent adequate on-site monitoring and oversight of high-risk activities.

• Grant award staff are overloaded
  CPD approves over 1,300 competitive grants a year, but staff reductions of 23% since 1992 have prevented adequate monitoring of thousands of competitive grants.

• Insufficient resources to monitor the rapid increase in development projects
  CPD has insufficient staff resources, both in number and expertise, to adequately monitor hundreds of economic development projects approved in the past several years.

• Solid data are unavailable
  Timely, complete, and accurate data to measure program outputs are often lacking.

REFORMS

Elements of new and continuing management reforms are:

• Combining planning and application reports into a single plan;

• Using comprehensive plan software that allows applications to display proposed projects as maps and submit data electronically;

• Upgrading information systems to the Communities 2020 system;

• Implementing the Integrated Disbursement and Information System, an automated reporting system showing "real time" achievements;

• Introducing the Grants Management System, which includes an annual comparative review of all entitlement grantees, showing the full spectrum - from "best practices" to high-risk projects and cities in need of technical assistance and monitoring.

CPD is assessing the following structural changes:

• Combining the Office of Block Grant Assistance and the Office of Affordable Housing into an Office of Community Development.

• The Office of Economic Development will be consolidated into the Economic Development and Empowerment Service. It will retain the economic development function and handle the brownfields program, if authorized and given to CPD. This combination will enhance efficiency and give communities the help they need to address problems holistically and will bring needed economic development expertise to CPD's largest program.

• Regulatory oversight and policy functions of the Office of Environment and Energy will move to the Office of General Counsel; other environmental functions will be contracted out.

• The Office of Executive Services and Office of Administration will be retained with reduced staff.

• The Office of Management would ensure that all offices have adequate technology to do their jobs.

Administration of the remaining 312 loan functions will be transferred to the Government National Mortgage Association.

Additional considerations:

• Assess how CPD can support the central coordination of the EZ/EC program for both existing and proposed zones and communities;

• Consider contracting out monitoring functions, if homeless assistance legislation is not approved to reduce competitive grants volume; and

• Develop an automated system to manage competitive grants, integrated with IDIS and the Grants Management System, and provide a seamless process for recipients. The system should identify high-risk recipients and projects for targeted monitoring.

Benefits of Reform

Benefits of enacting these reforms include:

• Serving CPD's mission by enabling communities to apply a more comprehensive approach to solving myriad urban problems;

• Reducing unnecessary paperwork;

• Helping citizens play a more meaningful role in the community development process by making proposed plans clearer and more accessible;

• Improving the speed, ease, and accuracy of reporting achievements and drawing down funds; and

• Improving monitoring and oversight by targeting scarce resources on high-risk projects and publicizing high-performing projects and cities.

PROPOSED LEGISLATION

Proposed legislation has been or will be introduced to create a homeless assistance performance fund and streamline the HOME program.

Proposed legislation will provide a single performance fund distributed by formula for all homeless programs to: (1) Reduce staff time on grant approvals, since funds will be distributed by formula; (2) Approach homeless problems locally and comprehensively; (3) Ensure role of non-profits and other community organizations in shaping and operating programs to help homeless persons reach self-sufficiency to the extent possible; and (4) Give cities responsibility for monitoring homeless problems in future block grants.

PROPOSED LEGISLATION

HOMELESS ASSISTANCE AND MANAGEMENT REFORM ACT
Convert 6 Separate Homeless Programs to Performance-based Formula Grant Program	Permanent consolidation will eliminate the need for HUD to administer staff-intensive, multiple competitions for funds. The new program will allow communities through local planning boards to shape comprehensive "continuum of care" systems. This plan would lie within the overall consolidated plan for that community.

OFFICE OF FAIR HOUSING
AND EQUAL OPPORTUNITY

"Reengineering is about Reinvention - not improvement, enhancement, or modification. Radical redesign means getting to the root of things: not making superficial changes or fiddling with what is already in place."
Michael Hammer and James Champy,
Reinventing the Corporation

SUMMARY Fair Housing and Equal Opportunity faces challenges in fragmented responsibilities and lack of accountability; duplication of field oversight functions; inefficient separation of staff resources between enforcement and program/compliance; and inadequate use of technology. To overcome these problems, FHEO will eliminate the separation between enforcement and program/compliance functions; cross-train staff; consolidate field oversight and policy functions; integrate fair housing principles throughout HUD's other program areas; and make greater use of other areas' technology.

THE NEED FOR CHANGE

Since its establishment in 1969, FHEO has evolved according to changing statutes and program needs. This sporadic approach to building a business line has created a number of service delivery problems. The areas that most need to change are:

• Lack of clear responsibility and accountability for policy development, planning, program evaluation, control, and performance standards and measurement;

• 48 local offices report to multiple sets of field oversight offices in headquarters;

• A split in field management between enforcement and program/ compliance, resulting in a "two FHEO" phenomenon;

• A structure top-heavy with supervisors;

• Inadequate integration of fair housing policies into other HUD program areas;

• Redundant, inefficient paperwork and processes; and

• Outdated technology and data tracking systems.

Organizational inefficiency is most noticeable in field operations, where two separate FHEO staffs oversee investigations and programs. In headquarters, this organizational structure has resulted in six distinct offices and14 divisions, directed by three Deputy Assistant Secretaries.

REFORMS

• Eliminate the current division of civil rights enforcement and program responsibilities in headquarters and field offices so that FHEO operates more uniformly and cohesively.

  A new position, Deputy Assistant Secretary for Enforcement and Programs, will combine the functions currently performed by the Deputy Assistant Secretary for Enforcement and Investigations and Deputy Assistant Secretary for Programs and Compliance, and will report to the newly created position of General Deputy Assistant Secretary, the chief operating official.

• New Field Organization

  Field offices will be organized into ten program hub offices and program center offices. Each program hub office will provide civil rights complaint assessment/control services for its entire area. Each program hub's director will be accountable to the General Deputy Assistant Secretary for all FHEO functions, and will be the point of contact on all major policy and program issues regarding HUD's civil rights responsibilities in that area.

  Program center offices will process complaints, review programs and compliance, and investigate complaints, among other tasks. Program center

directors will work with other program directors to carry out community-based customer service.

Program center offices will have new, consolidated responsibility for all FHEO civil rights enforcement and program activity functions — investigations, compliance, and programs. Directors at the local level will deliver effective enforcement, compliance, and program results, and will assign staff to highest priorities.

• Use staff more efficiently

  FHEO Civil Rights Analysts will investigate violations of civil rights laws, as well as perform program/compliance work, while directors balance workloads among different requirements and priorities with the full complement of staff available. Use of BPR reforms, including enhanced technology to increase efficiency, will be expanded.

• Consolidate field oversight

  Field oversight functions will be consolidated into one office under the General Deputy Assistant Secretary. The number of offices reporting to headquarters will drop from 48 to 10. The General Deputy Assistant Secretary will also direct FHEO's consolidated policy and program evaluation functions, gaining a better understanding of current issues and problems, and providing clearer guidance to field offices on litigation and policy initiatives.

• Streamline headquarters functions
  • Headquarters will be streamlined and its functional areas reconfigured to reflect those in the field;

  • One Deputy Assistant Secretary will be responsible for both enforcement and program functions; and

  • All field oversight, policy formulation, program evaluation, and the development of program standards will be consolidated to eliminate duplication and to establish clear lines of accountability and responsibility.

• Integrate fair housing into HUD's other program areas

  FHEO will continue to focus on:

  • Technical assistance on civil rights requirements for recipients of HUD funds;

  • Section 202/811 application reviews;

  • Supporting fair housing on-site monitoring;

  • Voluntary programs with housing industry groups; and

  • Fair housing planning.

  HUD will focus on mainstreaming fair housing government-wide and throughout the Department through:

• Streamline existing front-end reviews

  Other program areas will expand their current application procedures to include routine front-end reviews now performed by FHEO for the: Comprehensive Improvement Assistance Program; Family Self-Sufficiency; Comprehensive Grant Program; Multifamily Development Programs; Section 108 Loan Guarantees; and Annual Action Plans.

• Standard information collection

  PIH and CPD will expand their standard data collection (e.g., IDIS) to include indicators of fair housing compliance by grantees.

• Integrate fair housing into the proposed assessment centers

  FHEO will support a process to ensure that fair housing compliance is included in assessing public housing authorities.

• Section 3

  Section 3 can be moved from FHEO to the Office of Small and Disadvantaged Business Utilization, to take advantage of greater expertise in economic development and procurement.

• Training of Community Resource Representatives

  New Community Resource Representatives will be trained in fair housing laws, issues surrounding Section 8 recipients, and other thorny fair housing issues.

Benefits of Reform

• A unified FHEO

• More flexible staff who can handle both enforcement and program/compliance functions

• More effective field offices due to clearer guidance on policy initiatives

• Less duplication and paperwork

• More effective elimination and prevention of discriminatory practices

• More effective use of technology and other program areas' data.

OFFICE OF THE
CHIEF FINANCIAL OFFICER

"The major complaint about organizations is that they have become more complex than is necessary."
Tom Peters, In Search of Excellence

SUMMARY The Chief Financial Officer is unable to provide cost-effective, efficient accounting services within the current decentralized structure and lacks the ability to link budgeting, strategic planning, and financial management, thwarting clear accountability. To remedy these problems, the Office of the CFO will consolidate accounting operations from ten centers to one accounting center and will absorb budgeting operations into strategic planning and financial management operations within the office.

THE NEED FOR CHANGE

• Consolidating Program and Accounting Operations

  Performing accounting services in multiple locations with large numbers of staff is no longer cost effective. Better financial management and information systems make it possible to reduce staffing, streamline operations, and strengthen management controls.

• Consolidating Budget and CFO Operations

  Budgeting, strategic planning, and financial management are critical to HUD's success. But these functions are currently independent, with little or no coordination. This has led to criticism from the GAO, IG, and NAPA. Effective management means we must weave budgeting, strategic planning, and financial management oversight together. This requires matching workload planning (estimates and allocations) through the use of GPRA performance measures, HUD's strategic plan, and a new management plan process.

• Implementing New HUD Management Integrity Plan

  Program managers must be responsible for their programs' financial management. They must be held accountable for results and rewarded for excellent results. Managers will be provided with clear, reasonable expectations and the resources necessary to meet them. The CFO must be a partner with and advocate for program managers.

• Linking Budget, Performance Measures, and Program Delivery

  GPRA recognizes the natural links between budget operations and program outputs and outcomes. At HUD, budget operations, program performance, and program delivery are fragmented and disjointed.

• Estimating Resources and Making Budget Allocations

  The GAO and HUD's own Inspector General have criticized the Department for its weak and fragmented ability to estimate its resource needs and make budget allocations.

• Financial Systems Integration

  Since 1989, HUD has reported under FMFIA that it does not have an efficient, effective, and integrated financial management system that can be relied on to provide timely, accurate, and complete financial information to management. Also, in February 1997 the GAO reported that HUD's financial management systems were "poorly integrated, ineffective, and generally unreliable." In his confirmation hearing, Secretary Cuomo stated his top priority is to put HUD's management systems in order and to restore effective management and financial accountability at HUD.

• The Office of the CFO will consolidate its programs and administrative accounting operations from ten field accounting divisions into one accounting center; all accounting operations will be performed at this center.

• Consolidate headquarters budget operations into the Office of the CFO to ensure budgeting is integrated with financial management oversight.

• Accountability is the cornerstone of HUD's new business culture. Effective systems of management controls are critical to the long-term success of the Department's mission, and outstanding performance in this area should be rewarded. Employees will be held accountable for carrying out responsibilities related to financial credibility. The new focus will be on positive reinforcement, rather than negative sanctions. For instance, managers who demonstrate outstanding performance or who contribute to HUD's financial management will be considered for Secretarial awards and recognition. Also, the CFO will partner with programs as the principal driver of financial management to ensure that programs achieve intended business results.

• Risk management is a major component of financial management. If it is to be integrated in the day-to-day operations of HUD's programs, risk management must be as simple as possible. It must focus on prevention, not process, and must balance risk and resources with reasonable controls and verification procedures. A new Office of Risk Management will be established to play a key role in changing managers' perspective of the review/audit function.

• Linking budget, performance measures, and program delivery will enable the Department to meet the requirements of the CFO Act, ensure the integration of financial systems and controls, and consolidate monitoring of all performance measures in the same organization. The CFO will lead the Department's GPRA implementation efforts.

• The newly merged budget office will implement a proposed Resource Estimation and Allocation Process (REAP) that will link resources to results as required by GPRA. The fiscal year 1999 call for budget estimates and legislative proposals will incorporate this new process.

• The Department will develop and implement an integrated financial management system that is accurate, reliable, and timely.

Benefits of Reform

Staff cost savings and financial management improvements will accrue from these consolidations and streamlining efforts. Specific benefits include:

• Stronger internal management controls;

• Better access to consistent, uniform financial data;

• Linking budget, performance measures, and program delivery will enable the Department to meet the requirements of the CFO Act;

• Greater accountability through linked budget and financial management responsibilities;

• Improved resource estimation and allocation capability;

• Less duplication of resources and effort; and

• Clear lines of authority and responsibility.

OFFICE of ADMINISTRATION

"Mobilizing an organization to adapt its behaviors in order to thrive in new business environments is critical. Without such change, any company today would falter."
Ronald A. Heifetz and Donald L. Laurie,
Harvard Business Review

SUMMARY In many ways, the Office of Administration faces a dual challenge. It must help the Department make sweeping changes, while at the same time reforming itself, streamlining and becoming as efficient as possible. Implementing such massive change in a Department of this size impels the Office of Administration to be as flexible and performance-oriented as possible. Each of these areas will help: Human Resources, Information Technology, Training, Management and Planning, Administrative Services, and Procurement and Contracts. Supporting business lines with new staffing plans, technology assessments, training programs, and equipment planning are just a few of the many services the Office of Administration will offer.

The Departmental organization described in this plan will help the Office of Administration identify what services it can provide to meet the needs of its customers within HUD. While an earlier reorganization of the Office of Administration achieved significant staffing reductions, greater efficiency and the ability to better target our services will provide further opportunities for downsizing.

Once implemented, the HUD 2020 reform plan is designed to achieve support staff levels comparable to private sector personnel efficiencies. As part of the reform effort, the Office of Administration is examining and streamlining its own core functions and processes.

In the near future, the Office of Administration will:

• Manage client requests using our Automated Client Request System, state-of-the-art technology;

• Increase our use of satellite technology to train employees;

• Execute personnel actions through the Internet and HUD's own Intranet site, HUDweb;

• Create flexible workspaces, technology, and furniture in "Workplaces of the Future" to enhance teamwork and dynamic work environments; and

• Use visual and voice technology to manage remote staff.

The Office of Administration's highest priority is to support organizational changes that most impact HUD's ability to fulfill its mission. Changes within the Office of Administration will parallel those in business lines, as we identify the needs of a restructured HUD.

Creating a leaner, smarter, and more effective Department is the primary focus of the Office of Administration. The Office of Administration will plan, develop, and implement a realistic strategy for helping executives and managers carry out approved management reforms. Individual offices within the Office of Administration will provide the following assistance:

Human Resources will provide labor-management relations strategy; organization change and personnel processing services; staffing and classification support; support in performance management planning; and buyout, outplacement, and employee career transition assistance.

Information Technology will identify technology needs; realign technology investments and services; and provide contractor and staff support for major reforms.

Training Academy will carry the message of management reforms to employers and customers; assess current workforce skills against new requirements and adapt training programs; provide employee career counseling; and adapt current university partnerships to address new program and technical training needs (including procurement, contractor management, financial analysis, internal controls, and community and economic development).

Specific Training will also be conducted for Community Resource Representatives and Public Trust Officers. Because the Community Resource Representatives will epitomize the facilitation function in the new HUD, a special national recruitment open to new hires and existing HUD employees will be launched.

University Training will make certain that employees in both of these new categories are fully equipped with the latest knowledge and skills to carry out their important functions. HUD will arrange for high quality, university-based training emphasizing a broad overview of HUD programs, community development skills for the Community Resource Representatives and program monitoring for the Public Trust Officers. The university training will be interspersed with regular HUD work to enrich both experiences. The Department is prepared to make a major commitment to this training which is central to acheiving the aims of the Management Reform Plan.

Management and Planning will support organizations as they develop and follow plans for reassessing their business processes; and provide attendant organizational development, team building, and culture change support.

Administrative Services will help client organizations develop plans to address space, equipment, and other administrative requirements; and realign current administrative resource plans with long-term management reforms.

Procurement and Contracts will work with affected organizations to assess procurement and contracting requirements; develop specific procurement plans; and support expedited assistance.

The Office of Administration will assign interdisciplinary teams, comprising experts in all administrative functions, from both headquarters and the field, to each area undergoing change to work through implementation details and ensure global logistical and policy coordination.

Procurement and Contracting will work with affected organizations to assess procurement and contracting requirements, develop specific procurement plans, and support expedited assistance. At the same time, it will work with NAPA to analyze and reconstruct a more efficient procurement process, as executed by both the Office of Procurement and Contracts and by the business lines.

ADMINISTRATIVE SUPPORT STRATEGY
Office of Administration

REFORMS	ADMINISTRATIVE SERVICES	MANAGEMENT & PLANNING	PROCUREMENT & CONTRACTING
#1 Reorganize by function rather than program "cylinders"	Identify space, equipment, and other administrative needs; develop and coordinate plans to speed organizational changes.	Develop process redesign and cultural change strategies.	Support plans for outsourcing and contracting; assist in A76 process; help expedite procurements. Assist as needed.
#2 Modernize and integrate HUD's outdated financial management systems with an efficient, state-of-the-art system	Assist as needed.	Provide contract support and assistance	Advise project leaders and managers.
#3 Create an Enforcement Authority with one objective: to restore the public trust	Provide same support services as #1.	Provide contract support, advice, and assistance.	Provide same support services as #1.
#4 Refocus and retrain HUD's workforce to carry out our revitalized mission	Assist as needed.	Provide same support services as #1.	Assist as needed.
#5 Establish new performance-based systems for HUD programs, operations, and employees	Assist as needed.	Advise on culture changes and team building strategies.	Assist as needed.
#6 Replace HUD's top-down bureaucracy with a new customer-friendly structure	Consider alternative office and worker locations, consistent with management reforms.	Develop new organization development strategies to improve customer service.	Assist as needed.