HUD Transformation Initiative

As mentioned here a few days ago in  blog entry on innovation, the Department of Housing and Urban Development has been given in fiscal year 2010, what seems to be a large pot of money and new authority to conduct a transformation initiative in four areas that have been historically underfunded in HUD as well as most other agencies:

  • Research, evaluation, and program metrics
  • Program demonstrations
  • Technical assistance and capacity building
  • Information technology

Secretary Shaun Donovan was given authority by Congress to set aside up to one percent of the department’s budget (nearly $230 million) to support a new “transformation initiative.”

“However, [the House Appropriations] Committee is not in a position to grant full flexibility at this time, nor does the Committee believe flexibility to be the key obstacle in solving these issues.” So the Committee put some constraints on HUD’s use of these monies:

Information Technology Plans. “. . . not less than $80,000,000 and not more than $180,000,000 shall be available for information technology modernization, including development and deployment of a Next Generation of Voucher Management System and development and deployment of modernized Federal Housing Administration systems”. . . and “. . . .not more than 25 percent of the funds made available for information technology modernization may be obligated until the Secretary submits to the Committees on Appropriations a plan for expenditure that:

(1) identifies for each modernization project (a) the functional and performance capabilities to be delivered and the mission benefits to be realized, (b) the estimated lifecycle cost, and (c) key milestones to be met;

(2) demonstrates that each modernization project is (a) compliant with the department’s enterprise architecture, (b) being managed in accordance with applicable lifecycle management policies and guidance, (c) subject to the department’s capital planning and investment control requirements, and (d) supported by an adequately staffed project office; and

(3) has been reviewed by the Government Accountability Office:

Technical Assistance Funds. Of the remaining money, “. . . not less than $45,000,000 shall be available for technical assistance and capacity building. . . “ And this “technical assistance activities shall include, technical assistance for HUD programs, including HOME, Community Development Block Grant, homeless programs, HOPWA, HOPE VI, Public Housing, the Housing Choice Voucher Program, Fair Housing Initiative Program, Housing Counseling, Healthy Homes, Sustainable Communities, Energy Innovation Fund and other technical assistance as determined by the Secretary” . . .

Research, Evaluation, Program Metrics, and Program Demos.  “. . . of the amounts made available for research, evaluation and program metrics and program demonstrations, the Secretary shall include. . .”

“. . ..  an assessment of the housing needs of Native Americans, including sustainable building practices” and “an evaluation of the Moving-to-Work demonstration program” . . . And the Senate Committee “. . .  encourages the Secretary to plan or begin a demonstration on the conversion of public housing to Section 8 project-based vouchers.”

 

Plans on Use of the Monies.  And to top it off: “. . . the Secretary shall submit a plan to the House and Senate Committees on Appropriations for approval detailing how the funding provided under this heading will be allocated to each of the four categories identified under this heading and for what projects or activities funding will be used.”  . . . . This plan is due 30 days after the bill was enacted – which would be January 15. . . . so some folks in HUD didn’t have much of a Christmas holiday!  Or, with the new monies, did they?

So, while there may not have been much flexibility provided in the use of the funds, if a similar opportunity was available other agencies, is this the kind of transformation initiative other agencies might want to have?

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Risky Business

Recovery Act guidance from OMB requires agencies to identify the risk associated with each program and develop a HardyCoverplan of action to reduce such risks.  After all, if a program gets 3,100 %  increase in funding, like the home weatherization program did, there must be some risk involved!  Vice President Biden has said he would like to see the entire government to adopt the new standards being developed under Recovery Act programs.  Well, just in time, the IBM Center has just published a new report, “Managing Risk in Government:  An Introduction to Enterprise Risk Management,” by Karen Hardy.

Hardy observes that, typically, agencies tend to deal with new risk-reduction requirements on a discrete, program-by-program basis.  They put in place compliance mechanisms to meet new IT security risk reduction requirements, or new financial management requirements, or new internal control requirements, or new erroneous payment reduction requirements, etc.  She says all of these requirements are geared to one end – improved risk management.  She says leading organizations in the private sector have undertaken enterprise-wide risk management efforts.  Holistic efforts across an organization can reduce risk – and administrative burdens – at the same time.

Identifying and keeping track of possible events, and classifying them into opportunities or risks, requires a taxonomy or classification scheme and a common language for understanding these risks. Improved data management allows a large organization to take advantage of modern analytical methods to quantify and track current trends and potential risks.

While the concept of enterprise-wide risk management may be new, the federal government has been adopting this approach on an ad hoc basis.  Hardy gives concrete examples of enterprise-wide efforts in government, noting that “for the first time in its 75-year history, the Federal Housing Administration (FHA) announced intentions to hire its first chief risk officer.”  She also describes efforts underway to address health risks (Food and Drug Administration and Centers for Disease Control and Prevention), security risks (Defense and Homeland Security), financial  risks (Ginnie Mae), transportation safety risks (National Transportation Safety Board), and operational risks (Internal Revenue Service and Student Aid).

Hardy notes that a group of government managers have self-organized into a Federal Executive Steering Group for Enterprise Risk Management and they’ve created an unofficial website to foster and continue a conversation on the topic.  You can join!