Several federal housing programs that were targeted for reform after scandals exposed long-term management problems are still poorly monitored and will continue to lose millions of dollars in the future, according to two new internal reports.
The reports sent to Congress this week suggest that the Department of Housing and Urban Development, though making strides in curtailing or restructuring some troubled programs, still faces significant problems.
In Secretary Jack Kemp's semiannual report to Congress, HUD states that the 304 audits of individual programs and housing authorities that remain unresolved represent a potential loss to the government of $222.2 million.
In a separate report on his office's investigations, Inspector General Paul Adams documents continued problems in HUD's public housing, rent subsidy and single family loan and community development grant programs that, taken together, amount to at least $50 million in misspent or ineligible funds.
Both reports, however, stressed the improvements that HUD officials have put in place since the department became the focus of a wide-ranging congressional inquiry into influence-peddling and fraud during the years that Samuel R. Pierce Jr. served as secretary.
In the letter to Congress that accompanied HUD management's latest self-assessment, Kemp said that "substantial progress" has been made in resolving more audit recommendations during his tenure than Pierce addressed in six years.
"I knew that reforming HUD would be a marathon, not a sprint," Kemp said in a statement. "This report shows that we're making great progress, and that while HUD is stronger, there is need for further reform."
Among the problems documented in the two reports:
The department has recovered $10.5 million identified in outstanding audits since October and written off $18.8 million in unrecoverable funds.
Another $222.2 million in questionably spent HUD funds remains outstanding, pending the outcome of litigation, legislation or further investigation.
Forty-two "material weaknesses" remain in HUD programs, although Kemp said that 27 of those will be eliminated by the middle of 1991.
HUD's method of selling off foreclosed properties -- which had been abused by unscrupulous closing agents like Marilyn Harrell, the Camp Springs, Md., woman nicknamed "Robin HUD" -- "is still susceptible to fraud and abuse, because of significant problems in HUD's financial records and ineffective departmental monitoring. . . . "
HUD's voucher program for rental payments, widely touted as a more efficient and flexible way of supplying low-income housing, in many cases has given excessive subsidies. A study of 18 public housing authorities conducted by the inspector general found that 92 percent of the subsidized households received vouchers based on incomplete applications.
The Section 8 subsidy program, which continues to be the federal government's chief rent support program, has "serious deficiencies in controls and procedures. . . . "
Adams's report also documented significant problems in HUD's monitoring of single family home loans, the Community Development Block Grant and Urban Development Action Grant program and in the 1987 housing authority decontrol program.
The reduction in HUD oversight, the inspector general's report found, contributed to the abuses discovered in the Passaic, N.J., housing authority, where the executive director was paid three times his budgeted salary and other abuses forced HUD to take over the management of the authority.
In his letter to Congress, Adams said his office will need additional staff to keep up with the new demands for monitoring the department's troubled programs. The scandals, he said, "have been the impetus for much-needed oversight by the Congress -- not just of HUD, but of other departments and agencies as well."