Disclaimers, substance weaknesses no more time weighing down HUD’s money administration
7 min readThe Section of Housing and City Advancement built a 180 degree change in how it manages its finances.
About the previous two-furthermore a long time, HUD transformed its money administration programs, workforce and all round details to carry more value than perhaps ever in advance of.
Irv Dennis, HUD’s main monetary officer, mentioned the improvements to make HUD a photo of fiscal wellness did not take place right away nor by incident. He said the agency transformed its monetary procedures with a blend of listening, studying, swift wins and eradicating handbook, laborous processes from employees’ working day-to-working day get the job done.

“I thought this would be a three-to-5 yr strategy, and with the sturdy vision we experienced and the thorough designs we place in area, and the get-in from our crew and the assist we experienced from exterior contractors, we were ready to turn this all over and get it in position in a few many years,” Dennis stated in an interview with Federal News Community. “We ended up most likely past amid the cabinet agencies as much as financial infrastructure compliance. Right now, we are a top practice. We get phone calls from other businesses on how we’re undertaking matters, primarily in the knowledge analytics and robotics places, and CARES Act fund, and the processes we set in area on that. So it is a big turnaround and I know 1 of the secretary’s aims was to make improvements to operations and increase controls to emphasis on stopping fraud, waste and abuse with taxpayer resources, and happy to say mission achieved in many ways.”
And HUD’s financial administration transformation was significantly and broad. When Dennis joined the company in early 2018 in the Senate confirmed situation, he identified an workplace that was struggling to fulfill its mission.
HUD’s financial audits involved 4 disclaimers, which signifies there’s regions that can’t be audited, and 9 materials weaknesses. The company also was not in compliance with any of the economic reporting mandates this kind of as for the Information Act, several unique improper payments acts and internal controls. HUD also experienced tens of tens of millions of dollars in open grants, wherever method workplaces built an award to a grantee and hardly ever produced absolutely sure it handed out all the cash or shut the award.
On leading of these operational troubles, the CFO business experienced amongst the worst morale in all of HUD, according to the 2017 Federal Employee Viewpoint Survey. Throughout the whole agency, HUD’s engagement rating was 69%, but in the CFO’s business it was 54% in 2017. In 2019, HUD’s general engagement rating was 59.9% and its CFO’s office environment increased to 65%.
Struggles had been not new
Dennis stated there ended up a lot of explanations why the CFO’s business was struggling. 1st off, the management for the duration of the Obama administration was lacking with the CFO function getting vacant for quite a few many years.
“HUD did not have solid governance procedures. All the packages, Federal Housing Administration and Ginnie Mae, operated in silos as their possess tiny entity. So when a method makes a modify to a business enterprise approach or an IT process that impacts of economical reporting, there was not a good deal of coordination concerning that action and the consolidated economic statements,” Dennis reported. “One of the issues I put in location fairly immediately was a governance framework. We branded it the agencywide integrity job force. It was all of the plan leaders, assistant secretaries and the C suite leaders, and FHA and Ginnie Mae. We met as soon as a month and talked about matters that had been vital to HUD from a company system and economical procedure advancement. That governance structure we put in area was really handy to break down all those silos.”
Dennis additional that his aim was not to concentrate on the best strategies to remediate disclaimers and the product weaknesses, but put in spot a in-depth fiscal transformation system that included automation, robotics and additional emphasis on the shared products and services that the Treasury’s Administrative Useful resource Middle supplies HUD.
“We had a detailed plan and sources we needed from Congress. We got contractors in area, and we acquired our people centered, and we held everybody accountable,” he stated.
1st clean up audit in 8 many years
In December, that program and two years of energy paid out off.
HUD been given an unqualified, thoroughly clean audit for the initial time in eight yrs, which means Dennis and his personnel fixed the disclaimers and product weaknesses.
The open up grants, which as soon as totaled 186,000 out of a whole of 256,000 governmentwide, is down to a number of hundred.
“We had about $70-to-$75 million that was locked up in that. We opened that up, and some went back to the Treasury, and some were capable to repurpose, so it was a accomplishment tale and placing a system in location to not allow that take place. I imagine we’re now down to about 256 open up grants and most are smaller pounds,” he claimed. “Our tactic was just to list it out, deal with what we can immediately and stuff that is a very little for a longer period term, perhaps … can be remediated with far more sophisticated automation methods. We’re continuing the course of action of that, but it was truly just comprehending it and placing a potent aim, acquiring our people today bought in and getting the programs bought in.”
Dennis stated he had to convince the packages that the CFO workplace does more than just roll up the numbers.
“We had to improve some of the business enterprise procedures and some of the behaviors of the programs at Ginnie Mae and FHA, and once they fully grasp what we’re making an attempt to complete and understand the vision and realize the benefit of owning solid economical controls, just one issue I was truly happy with the persons at HUD acquired it and they purchased into it,” he stated. “That was definitely important to the good results of this. We have a ton of intelligent individuals at HUD, people today quite much have an understanding of are pushed by the mission.”
RPA cuts down tedious processes
The other piece to the puzzle was the addition of robotics method automation with the help of gurus from EY.
Dennis, who put in 36 a long time at EY before joining the govt, claimed the contractor aided detect and set in spot the RPA software and procedures to start out to get rid of low-benefit, guide get the job done.
“We did a compact robotics approach automation hard work in which we took a 2,600-hour guide approach and knocked it down to 65. I can not convey to you how that energized our folks. They ended up instructed to come again with a checklist of other locations that we change from handbook to robotics, and they saw that they are currently being extra economical, extra effective, and be in a position to go residence at 6:30 at night as opposed to 10 p.m. because they have been no extended pushing numbers all around,” he stated. “It was truly very pleasurable to enjoy that transformation and our people’s mindset.”
Invoice Colbert, a partner with EY, mentioned their purpose was to guidance HUD’s middle of excellence to generate automation more into the organization processes.
“The journey that HUD has been on from an clever automation standpoint is a single of the extra bold kinds that we’ve observed in federal federal government,” he said. “There are a lot of businesses that have been reaching out to HUD to chat with them, Irv and I are likely to be connecting with CFO from a different agency, soon after the to start with of the 12 months, on a incredibly equivalent topic.”
Dennis extra HUD now has identified 50 to 60 procedures within just the CFO office environment that could get edge of RPA, which include several procedures to help the agency control and oversee money from the pandemic aid charges.
“There’s some reporting necessities at the application amount that we were not necessarily prepared for. It is not just a reporting at HUD to the grantee, the general public housing businesses (PHA), but it is the sub-grantees and sub-recipients that there’s some reporting on and we understood that was likely to be an region that we’re we were being weakened early on. We realized it was an space we had to aim on,” he stated. “What we did with the venture administration group out of the CFO is we looked at the reporting method of the CARES Act, the packages that been given CARES Act funds, and we determined possibilities in that full procedures where by we could change from a manual to a robotics method. That’s the place the courses are now starting up to have visibility and obtaining energized about it. It is bettering our reporting for that certain software. What we’re hopeful is that when we get that rolled down, with the coordination and the collaboration with CIO, we’re putting in world-wide-web portals for the grantees to report in with the with the compliance side of the CARES Act. The intention is to develop that to other grant applications that do not get CARES Act money, but we’re not automatically in compliance ahead of. I’m looking at this as a terrific opportunity to bring in more broaden HUD’s abilities on the sub recipient in sub grantee reporting, and also get the program’s energized by what robotics can do.”