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HUD Watchdog Complains Of Inadequate Management Money

December 9, 1992

WASHINGTON (AP) _ The Housing and Urban Affairs Department could face another scandal unless it gets enough money to keep track of its far-flung programs, the agency’s deputy inspector general says.

Despite the efforts to reform department programs and operations, ″another HUD scandal is a distinct possibility unless the department has sufficient resources to carry out its formidable mandate,″ John J. Connors wrote in the HUD inspector general’s semiannual report to Congress.

″It is extremely troubling″ that the 1993 budget proposes new work for HUD staff without the resources to carry them out, he wrote.

An independent prosecutor has been investigating the Reagan administration’s management of HUD and people who landed federally aided contracts based on political connections. Three individuals and a company have pleaded guilty in that scandal, and there are four pending prosecutions.

The inspector general’s report, distributed this week, does not say how much money is needed to keep an eye on operations to forestall new problems.

However, HUD’s budget is declining in 1993 from $25.2 billion to $24.3 billion, even as the amount slated for housing subsidies is rising $1.6 billion to $17.7 billion. Where HUD had $9.1 billion to run the department and programs in 1992, it will have $6.6 billion in 1993, according to department figures.

HUD Secretary Jack Kemp acknowledges the budget crunch, saying in the report’s introduction, ″For the foreseeable future, HUD will continue to face increased workload demands coupled with fiscal constraints on hiring new staff,″ so it will have to be more efficient.

The report summarizes the inspector general’s actions during the six months ended Sept. 30. The hundreds of audits and investigations led to:

-Savings or recovery of more than $26.5 million.

-Indictments of 285 people or companies and convictions of 151.

-Suspensions of 73 people or companies doing business with HUD and debarments of 32 more.

-About $9.56 million in court-ordered restitutions and more than $820,000 in fines.

-Sentences totaling 150 years in prison and 405 years of suspended or probationary terms. Some sentences were for people convicted before the six- month period, said Patrick J. Neri, assistant inspector general for investigations.

Among the audits recounted were those of eight large troubled public housing agencies that managed a total of nearly 70,000 units of conventional public housing in Jacksonville, Fla.; Kansas City, Mo.; Los Angeles; Newark, N.J.; New Haven, Conn.; Philadelphia; San Francisco and Washington, D.C.

″Millions of dollars are being spent on maintenance, but the quality of housing continues to be a major problem and unit inspections are inadequate,″ the report says. ″Vacancies are increasing despite huge waiting lists for public housing.″

A total of 423 investigations were opened during the six months.

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