The acting inspector general sounded the alarm on Capitol Hill this week, warning of the consequences of future funding and staff cuts at the U.S. Department of Housing and Urban Development.
The White House and its Department of Government Efficiency are weighing whether to cut about half of the department's 5,300 staff and close 34 field offices across the country, Bloomberg has reported.
There have already been funding cuts, including to Section 8 housing voucher assistance, to technical aid and to the Capacity Building for Community Development and Affordable Housing Program, or Section 4. Those cuts occurred in February, and their elimination led to pushback from housing advocates.
“These programs, though, aren’t just about affordable homes," Shaun Donovan, former HUD secretary and Enterprise president and CEO, said in a statement the day the February cuts were announced. Enterprise, a Columbia, Maryland-headquartered nonprofit, financially supports affordable housing and community developments across the country. "They allow urban, rural, and Tribal communities to assess their own needs and leverage private dollars to invest in senior housing, establish local health clinics, fund childcare centers," Donovan said.
Launched in 1965 under the Johnson administration, HUD addresses housing needs in a variety of ways. It provides rental assistance and grants for community development and advocates against housing discrimination.
Further cuts to funding or staff would be detrimental without the implementation of artificial intelligence or technology to replace roles, Stephen Begg, acting HUD inspector general, told the House Committee on Financial Services and Subcommittee on Oversight and Investigations Tuesday.
The federal agency already works with limited resources, Begg said. Since 2020, the department has been dealing with a shortage of staff to meet its responsibilities and demand.
“All we have been suggesting is that HUD carefully evaluate the scope of potential cuts in consideration of the capacity it needs to perform in its programs,” he said.
'We're taking inventory of every program'
Later that afternoon, HUD Secretary Scott Turner underscored that message when he addressed the Mortgage Bankers Association during the National Advocacy Conference at the Capital Hilton, down the street from the White House.
“At HUD we’re taking inventory of every program, so every program at HUD is being reevaluated. Is it helping us to carry out our mission or, if not, is it causing us to succeed?” Turner said. “If not, then we’re not comfortable with it.”
Still, the department faces too little resources to manage the proper administration of services, including monitoring fraudulent activity, Begg said.
Rep. Bryan Steil, Republican of Wisconsin, said federal auditors uncovered that Milwaukee Housing Authority executives misused funds from 2019 to 2022, paying staff salaries with $2.8 million meant for Section 8 rental assistance.
Rep. Mike Flood, Republican of Nebraska and a member of the Financial Services Committee, raised another example, flagging the case of the Puerto Rico Department of Housing receiving $20 billion for hurricane relief after Hurricane Maria battered the island in 2017. After a 2018 investigation involving the Office of Management and Budget, investigators found few guardrails for fraud risk management.
“We need to ensure that HUD has strong processes in place to track funds once they are dispersed and prevent waste, fraud and abuse,” Flood said.
Begg's response? More resources, not less, need to be in place to boost services and ensure efficiency.