Investigative Group

HUD Can’t Do Math, But Congress Keeps Giving It More Cash

Congress has consistently rewarded Department of Housing and Urban Development (HUD) officials with bigger budgets despite their demonstrated inability to manage tax dollars efficiently, but that may be about to change under President Donald Trump.

Instead of cutting the department’s funding when it failed each year since 2014 to obtain an audit opinion from its Inspector General (IG), Congress has increased HUD’s budget, to $47.3 billion in 2016.

It was in 2014 that HUD’s budget was $45.5 billion and its spending had become so incomprehensible that the department’s Inspector General (IG) said it was impossible to figure out its books. The IG still can’t complete an audit on HUD’s 2015 and 2016 financial statements.

The department’s books are indecipherable even after officials there corrected $520 billion in bookkeeping errors from its 2015 and 2016 books. The IG consistently highlights HUD’s financial material weaknesses deficiencies and failures to comply with laws and regulations in its reports to Congress.

Even so, Congress has failed to impose any penalties on HUD, and Republican chairmen of the Senate and House committees that oversee the sprawling department aren’t eager to say why, either failing to respond to The Daily Caller News Foundation Investigative Group’s requests for comment or outright refusing to do so.

Sen. Mike Crapo, for example, is chairman of the Senate Committee on Banking, Housing and Urban Affairs. Crapo declined to sit down for an interview or offer any comment on the lack of penalties for HUD’s chronic financial mismanagement. The Idaho Republican’s committee has oversight authority for HUD.

Similarly, South Carolina Republican Sen. Tim Scott, chairman of the banking and urban affairs panel’s subcommittee on housing, transportation and community development, did not respond to requests for an interview or comment.

On the House side, Rep. Mario Diaz-Balart, chairman of the House Committee on Appropriations’ Subcommittee on Transportation, Housing and Urban Development, and Related Agencies, did not return requests for an interview or comment.

Trump and his new HUD Secretary, Dr. Ben Carson, appear to be set on a different course. Preliminary budget documents first reported by the Washington Post indicate Trump is considering cutting HUD’s 2018 budget by more than $6 billion to about $40.5 billion.

A spending reduction of that magnitude would put HUD’s total annual budget at its lowest since 2007, before the Great Recession and housing crisis hit. The Office of Management and Budget (OMB) may release Trump’s proposed budget Wednesday. (RELATED: Ben Carson Could Change The Culture Of Subsidized Housing) 

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Howard Husock, vice president for research and publications at the Manhattan Institute who has studied housing policy for decades, said HUD’s financial failures strike him “as another justification for the skepticism the new administration is likely to bring to HUD.”

Husock is a strong advocate of imposing time limits on subsidized housing, but only a handful of the country’s 3,000 local housing authorities have been empowered by Congress to implement the reform.

“Along with reforms of the department’s public housing and voucher programs, this should be raised in committee hearings,” Husock said of HUD’s inability to manage its finances.

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