[House Hearing, 119 Congress]
[From the U.S. Government Publishing Office]
DECADES OF DYSFUNCTION: RESTORING
ACCOUNTABILITY AT HUD
=======================================================================
HEARING
before the
SUBCOMMITTEE ON OVERSIGHT AND
INVESTIGATIONS
of the
COMMITTEE ON FINANCIAL SERVICES
U.S. HOUSE OF REPRESENTATIVES
ONE HUNDRED NINETEENTH CONGRESS
FIRST SESSION
__________
APRIL 8, 2025
__________
Serial No. 119-13
Printed for the use of the Committee on Financial Services
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
www.govinfo.gov
______
U.S. GOVERNMENT PUBLISHING OFFICE
59-943 PDF WASHINGTON : 2025
HOUSE COMMITTEE ON FINANCIAL SERVICES
FRENCH HILL, Arkansas, Chairman
BILL HUIZENGA, Michigan, Vice MAXINE WATERS, California, Ranking
Chairman Member
FRANK D. LUCAS, Oklahoma SYLVIA R. GARCIA, Texas, Vice
PETE SESSIONS, Texas Ranking Member
ANN WAGNER, Missouri NYDIA M. VELAZQUEZ, New York
ANDY BARR, Kentucky BRAD SHERMAN, California
ROGER WILLIAMS, Texas GREGORY W. MEEKS, New York
TOM EMMER, Minnesota DAVID SCOTT, Georgia
BARRY LOUDERMILK, Georgia STEPHEN F. LYNCH, Massachusetts
WARREN DAVIDSON, Ohio AL GREEN, Texas
JOHN W. ROSE, Tennessee EMANUEL CLEAVER, Missouri
BRYAN STEIL, Wisconsin JAMES A. HIMES, Connecticut
WILLIAM R. TIMMONS, IV, South BILL FOSTER, Illinois
Carolina JOYCE BEATTY, Ohio
MARLIN STUTZMAN, Indiana JUAN VARGAS, California
RALPH NORMAN, South Carolina JOSH GOTTHEIMER, New Jersey
DANIEL MEUSER, Pennsylvania VICENTE GONZALEZ, Texas
YOUNG KIM, California SEAN CASTEN, Illinois
BYRON DONALDS, Florida AYANNA PRESSLEY, Massachusetts
ANDREW R. GARBARINO, New York RASHIDA TLAIB, Michigan
SCOTT FITZGERALD, Wisconsin RITCHIE TORRES, New York
MIKE FLOOD, Nebraska NIKEMA WILLIAMS, Georgia
MICHAEL LAWLER, New York BRITTANY PETTERSEN, Colorado
MONICA DE LA CRUZ, Texas CLEO FIELDS, Louisiana
ANDREW OGLES, Tennessee JANELLE BYNUM, Oregon
ZACHARY NUNN, Iowa SAM LICCARDO, California
LISA McCLAIN, Michigan
MARIA SALAZAR, Florida
TROY DOWNING, Montana
MIKE HARIDOPOLOS, Florida
TIM MOORE, North Carolina
Ben Johnson, Staff Director
------
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS
DANIEL MEUSER, Pennsylvania, Chairman
TIM MOORE, North Carolina, Vice AL GREEN, Texas, Ranking Member
Chairman RASHIDA TLAIB, Michigan
ANN WAGNER, Missouri NIKEMA WILLIAMS, Georgia
BARRY LOUDERMILK, Georgia CLEO FIELDS, Louisiana
ANDREW R. GARBARINO, New York SAM LICCARDO, California
ANDREW OGLES, Tennessee
MIKE HARIDOPOLOS, Florida
C O N T E N T S
----------
Tuesday, April 8, 2025
OPENING STATMENTS
Page
Hon. Daniel Meuser, Chairman of the Subcommittee on Oversight and
Investigations, a U.S. Representative from Pennsylvania........ 1
Hon. Al Green, Ranking Member of the Subcommittee on Oversight
and Investigations, a U.S. Representative from Texas........... 2
STATEMENTS
Hon. French Hill, Chairman of the Committee on Financial
Services, a U.S. Representative from Arkansas.................. 4
Hon. Maxine Waters, Ranking Member of the Committee on Financial
Services, a U.S. Representative from California................ 4
WITNESSES
Mr. Stephen M. Begg, Acting Inspector General, U.S. Department of
Housing and Urban Development.................................. 5
Prepared Statement........................................... 7
APPENDIX
MATERIALS SUBMITTED FOR THE RECORD
Hon. Al Green:
The Majority Memorandum Dated April 3, 2025.................. 40
Antonio Gaines on behalf of the American Federation of Government
Employees (AFGE), Housing and Urban Development, Council 222... 41
Daniel Horowitz on behalf of the AFGE, AFL-CIO................... 44
National Housing Resource Center (NHRC).......................... 45
LEGISLATION
H.R. 225, HUD Transparency Act of 2025........................... 47
DECADES OF DYSFUNCTION: RESTORING
ACCOUNTABILITY AT HUD
----------
Tuesday, April 8, 2025
U.S. House of Representatives,
Subcommittee on Oversight and Investigations,
Committee on Financial Services,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:06 a.m., in
room 2128, Rayburn House Office Building, Hon. Dan Meuser
[chairman of the subcommittee] presiding.
Present: Representatives Meuser, Moore, Wagner, Loudermilk,
Garbarino, Haridopolos, Green, Tlaib, Williams of Georgia, and
Liccardo.
Also present: Representatives Hill, Steil, Flood, De La
Cruz, and Waters.
Chairman Meuser. Good morning. The Subcommittee on
Oversight and Investigations will come to order.
Without objection, the chair is authorized to declare a
recess of the committee at any time.
This hearing is entitled, ``Decades of Dysfunction:
Restoring Accountability at HUD.''
Without objection, all members will have 5 legislative days
within which to submit extraneous materials to the chair for
inclusion in the record.
I now recognize myself for 4 minutes to give an opening
statement.
OPENING STATEMENT OF HON. DANIEL MEUSER, CHAIRMAN OF THE
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, A U.S.
REPRESENTATIVE FROM PENNSYLVANIA
Today's hearing is entitled, again, ``Decades of
Dysfunction: Restoring Accountability at HUD.'' I would like to
thank the acting inspector general for being here today to
discuss persistent waste, fraud, and mismanagement at the
Department of Housing and Urban Development (HUD).
For decades, HUD's Inspector General (IG) has investigated,
uncovered, and highlighted severe deficiencies plaguing the
agency. HUD's core mission is to provide safe and affordable
housing, something very, very important, and it is something we
all support on this subcommittee. However, HUD continues to,
very often, waste taxpayer funds while failing to meet its most
basic responsibilities and has little to no mechanisms to track
and report these issues. This is a fact.
Year after year, HUD's appropriations are squandered,
mismanaged, or lost in fraud and improper payments. In 2017,
$1.7 billion was lost through improper payments, and there is
no evidence to suggest anything has been corrected or improved.
Accountability is in short supply, and a lack of transparency
has eroded public trust. Yet, HUD's spending increased from
$45.4 billion to $78.4 billion from 2021 to 2024.
Unfortunately, HUD's failures extend beyond the risks of fraud
and its inability to track or report improper payments. The
agency relies on outdated information technology (IT) systems,
some designed and built in the 1970s, and in turn, lacks the
data collection processes required for effective oversight.
When I served in Pennsylvania as the Revenue Secretary, we
modernized our IT systems, and the improvements in tax revenue
were so significant people actually asked what we were doing
differently, how were things improving so much. It was not
magic; it was better data, better oversight, and better
decision making.
While HUD faces many challenges its minimal oversight of
programs and grantees also raises serious concerns, requiring
grantees to have a fraud prevention plan as part of the grant
application, along with enforcing enhanced data sharing across
HUD programs, would be a beneficial step toward achieving a
more efficient, accountable HUD.
Public housing authorities under the supervision of HUD
have operated unchecked and without consequence. Many routinely
fail to meet basic HUD quality standards with no commitment to
improving operations. Requiring such public housing agencies
(PHAs) to timely and accurately report overpayments should be a
condition of their funding. Republicans want HUD to provide the
most effective housing for Americans as possible. Fraud and
overpayments take valuable dollars away from that mission.
One thing is very clear: HUD cannot continue on its current
path. Things need to change. That is why I sent the letter to
the Government Accounting Office (GAO) asking for a report on
HUD's improper payments and fraud risk management structure. I
believe that with President Trump's Department of Government
Efficiency (DOGE) Committee, proper congressional oversight,
and Secretary Turner at the helm, a new day at HUD is soon
approaching. I yield back.
The chair now recognizes the ranking member of the
subcommittee, the gentleman from Texas, Mr. Green, for 4
minutes for an opening statement.
OPENING STATEMENT OF HON. AL GREEN, RANKING MEMBER OF THE
SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS, A U.S.
REPRESENTATIVE FROM TEXAS
Mr. Green. Thank you, Mr. Chairman.
I thank the witness for appearing. I will add for the
record; I have great respect for this witness and will enjoy
hearing his testimony.
Mr. Chairman, I have received a memo dated April 3, 2025.
This is from the majority, and I will read in part what it
says. It says, ``This hearing will underscore the critical need
for congressional oversight and review of the Department of
Government Oversight and Efficiency, DOGE, to ensure
transparency, accountability, and operational effectiveness
within the agency.''
I regret to inform my colleagues, first, that DOGE is not a
department. It is not. DOGE is an entity that replaced another
entity that was created by President Barack Obama. It is an
administrative agency at best. DOGE, which is headed by a
temporary employee, Mr. Elon Musk, temporary because he is
there for about 130 days, and then he will be gone. DOGE is a
temporary entity, not a department. Some things bear repeating.
I say this because it is important for us to note that the
person who is heading DOGE has not been elected, has not been
vetted, and for Republicans to now decide that they are going
to turn the review of certain practices within the Department,
the Housing and Urban Development Department, turn it over to a
person who is un-vetted, a person who has not been elected, is
unthinkable.
This hearing should be about whether we should allow DOGE
to be involved with our government. The hearing should be about
whether or not DOGE has the authority to do much of what it is
doing. The stock market is in turmoil. People are very much
concerned about what is happening to them in this country.
Economic uncertainty is pervasive, and we have a jester with a
chain saw cutting jobs.
We find ourselves today, this very powerful committee, the
powerful Financial Services Committee, with oversight authority
in this subcommittee--This powerful committee is allowing its
very responsibility to be usurped, or, in fact, we are
abdicating, abdication of the power of the committee to an
unelected, unvetted, temporary employee.
Now, why are we doing it? Friends, I regret to inform you
of something more, because there is fear of Elon Musk. People
are afraid of him. They are afraid to take him on. They are
afraid to ask him to come before this body, this august body,
and give testimony. He should be in that seat. He is the person
who is going to make the cuts. He is the person who has
demonstrated that he has power beyond that which Congress has
accorded to him. He should be here, but we do not have the
courage to have him sit in that seat and allow us to ask him
questions.
Mr. Musk is, at best, a wannabe President who serves with a
wannabe dictator who believes that he has the power and the
authority to literally control not only the executive branch,
but also the legislative branch, as well as the judiciary. We,
at some point, have to draw a line in the dirt and say to Mr.
Musk, no more. You cannot do this. You cannot just willy nilly
arbitrarily and capriciously cut jobs. You have to do studies.
You have to get some insight.
I would like to ask, Mr. Chairman, at this time, that,
without objection, my memorandum from the majority be placed in
the record.
Chairman Meuser. Without objection.
[The information referred to can be found in the appendix:]
Mr. Green. Thank you. I yield back.
Chairman Meuser. The gentleman yields.
The chair now recognizes the chairman of the full
committee, Mr. Hill, for 1 minute.
STATEMENT OF HON. FRENCH HILL, CHAIRMAN OF THE COMMITTEE ON
FINANCIAL SERVICES, A U.S. REPRESENTATIVE FROM ARKANSAS
Chairman Hill. I want to thank the Acting Inspector General
for appearing before us today.
I want to thank Subcommittee Chair Meuser for holding this
hearing.
HUD has an important mission, providing safe and affordable
housing to Americans. Unfortunately, over the years, in my
view, the agency has shown time and time again they are unable
to perform even the most basic functions. The agency
continually fails to hold local, public housing authorities
responsible for not providing safe housing.
For example, in my hometown in Little Rock, the Little Rock
Housing Authority has allowed the residents of one complex to
live in unsafe conditions without electricity while the owners
of the complex collect utility payments. It is an outrage.
Additionally, the problems in Little Rock Housing Authority
included unauthorized transfers of funds, deceased citizens
receiving housing vouchers, and over $700,000 in Coronavirus
Aid, Relief and Economic Security Act (CARES) Act funds
unaccounted for, just to name a few.
These issues are not limited to one public housing agency.
This is a rampant nationwide issue that must be addressed, and
HUD must be able to exercise appropriate oversight of its
programs or else billions of dollars of taxpayer resources will
continue to be at risk of fraud and improper payments. I look
forward to our hearing today. I yield back.
Chairman Meuser. Thank you, Mr. Chairman.
The chair now recognizes the ranking member of the full
committee, Ms. Waters, for 1 minute.
STATEMENT OF HON. MAXINE WATERS, RANKING MEMBER OF THE
COMMITTEE ON FINANCIAL SERVICES, A U.S. REPRESENTATIVE FROM
CALIFORNIA
Ms. Waters. Thank you very much, Mr. Chairman.
Trump and Musk are dismantling the Nation's housing
agencies and raising housing costs with tariffs on some
building materials while this committee pretends nothing
unusual is happening. Committee Democrats and I have sent three
letters to and requested a briefing from HUD Secretary Turner.
I have also asked Chair Hill to invite him to testify. We have
received zero responses.
Our Republicans, who have been instructed to not hold town
halls anymore, scared by what the public will think if Turner
has to answer for how Trump is ruining our housing market and
economy. Hopefully, my Republican colleagues will uphold their
oath to protect the Constitution and the American people and
finally conduct oversight of HUD.
I wish I had more time. I would talk about the entire
dysfunction of this government under Trump, all of the
recalling that they have to do, the changes they have to make.
Even our nuclear program was at risk, because they fired the
employees and then had to call them back. I could go on and on
and on. If you want to talk about dysfunction, let us talk
about what is happening with this administration. I yield back.
Chairman Meuser. The gentlelady yields back.
I will now introduce our witness. Today we welcome the
testimony of Mr. Stephen M. Begg, the Acting Inspector General
of the Department of Housing and Urban Development. Mr. Begg
was appointed Deputy Inspector General in July 2020. He
previously was the Office of Inspector General (OIG) Chief of
Staff, and before that, was an Attorney Advisor to the OIG's
Office of Legal Counsel. Mr. Begg earned his bachelor's degree
from James Madison University, his law degree from the Catholic
University of America, Columbus School of Law.
We thank you for taking the time to be here. You will be
recognized for 5 minutes to give an oral presentation of your
testimony. Without objection, your written statement will be
made part of the record.
Mr. Begg, you are now recognized for 5 minutes for your
oral remarks.
STATEMENT OF STEPHEN M. BEGG, ACTING INSPECTOR GENERAL, U.S.
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
Mr. Begg. Chairman Meuser, Ranking Member Green, members of
the subcommittee, thank you for inviting me to testify about
the important oversight work that the HUD Office of Inspector
General does to detect and prevent fraud, waste, and abuse, and
to promote integrity, efficiency, and effectiveness in HUD
programs.
My testimony will focus on several longstanding challenges
that HUD faces and actions that can be taken to address them.
HUD's portfolio is massive, and its programs affect every
community in America. HUD programs provide hundreds of billions
of dollars in grant funding, as well as trillions of dollars in
mortgage insurance and mortgage-backed securities.
HUD oversees a vast network of participants that administer
its programs, including public housing authorities, landlords,
nonprofit organizations, State and local government entities,
and mortgage lenders and servicers. HUD needs a highly skilled
workforce, efficient processes, and up-to-date technology to
effectively manage a portfolio of this size.
In recent years, HUD has sustained progress in key areas,
like financial management and human capital management.
However, we have consistently reported that HUD struggles to
maintain the capacity needed to tackle its most pressing
challenges. A common theme across those challenges is the need
to modernize HUD's IT systems.
HUD needs better data to improve performance and ensure
funding is spent properly. The key to collecting and leveraging
that data is IT modernization. Inadequate systems and lack of
data affect many critical HUD program functions, like
monitoring grantee activities and performance, particularly sub
recipients; preventing duplication of benefits and ineligible
use of funds and disaster recovery programs; ensuring HUD-
assisted properties are inspected timely, and that the health
and safety problems identified are addressed quickly;
documenting the number of public housing units that contain
lead hazards and monitoring the confirmed cases of lead
poisoning of children; measuring public housing authority
performance in maximizing success rates in the Housing Choice
Voucher Program; and protecting HUD systems and personally
identifiable information from cybersecurity threats.
HUD IT systems and data limitations also frustrate its
ability to identify and prevent improper payments and fraud.
For 8 consecutive years, HUD has not been able to estimate how
many improper payments are made in its largest rental
assistance programs, because its current systems do not have
the payment data needed to test for improper payments.
These programs represented approximately $50 billion in
2024, roughly two-thirds of HUD's annual expenditures. Because
it cannot estimate and identify improper payments in these
programs, HUD cannot develop specific action plans to reduce
them, leaving tens of billions of dollars at increased risk
each year.
HUD needs to collect more information about payments made
at the ground level to prevent taxpayer funds from being spent
improperly. HUD can also better leverage data from other
agencies, such as Treasury's Do Not Pay Portal, to ensure that
payments are not made to those who have been excluded from
participating in Federal programs or have disqualifying
delinquent debt. With better data, HUD can prevent improper
payments rather than chase them. The same is true of fraud.
Having better data related to payments and sub recipient level
activities is necessary to target fraud schemes proactively.
Our office continues to stress the need for stronger fraud
risk management practices at HUD. That starts with a commitment
to preventing fraud from HUD leadership. In my first meeting
with Secretary Turner, he expressed a strong desire to
strengthen the Department's anti-fraud practices, improve
payment integrity, and to hold HUD program participants
accountable for doing the same.
HUD can put this commitment into action by assessing each
of its programs for fraud risks and developing a proactive
approach for fraud prevention. HUD should require its program
participants to establish fraud risk programs in their
organizations and provide guidance to them on how they should
manage fraud risk.
Ultimately, reducing improper payments and preventing fraud
will better position HUD and its partners to maximize taxpayer
funds in achieving the goals and outcomes intended in its
programs. The OIG stands ready to assist the Department in
these efforts.
To conclude, I am proud to represent the dedicated
professionals at HUD OIG, and I want to thank them for their
outstanding effort to help HUD be successful. I look forward to
continuing our work with this subcommittee and answering your
questions today.
[The prepared statement of Mr. Begg follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Chairman Meuser. Thank you, Mr. Begg.
We will now turn to member questions, and the chair will
now recognize himself, myself, for 5 minutes.
Mr. Begg, thank you for your very sound and goal-oriented
testimony. That is very important. This hearing is very
important. HUD is very important. Our goal is to improve the
Housing and Urban Development Department, not to--only to point
out the problems. Although, we need to point out the problems,
the inherent problems, in order to truly focus on where the
corrections need to take place. Just keep in mind, this is to
be constructive so we can actually make a difference moving
forward. That is all of our goals.
Mr. Begg, you are speaking quite a bit about modernizing
the IT systems at HUD. I do know something about this, as I
mentioned earlier, my previous time in State government. Can
you talk about that a little bit more. How will modernizing IT
improve the effectiveness, the efficiencies, and as well as the
proper allocation of the all-important funds to those who
benefit from the HUD program?
Mr. Begg. Thank you for the question. Modernizing IT across
HUD has many potential values, but in terms of effectiveness,
many of the systems, as you mentioned, were designed a long
time ago. They do not match the current state of programs. They
do not capture enough data for HUD to know how well it is
performing in its programs and how well its partners are.
So much of the monitoring effort that HUD has to undertake
is manual. The information that HUD receives about how grants
are being executed, it is difficult to digest for HUD staff. It
is inefficient. GAO has pointed out it is confusing and hard
for HUD staff to even read the information that comes through,
so----
Chairman Meuser. Do you plan on providing us with some sort
of plan on what type of IT systems? Is this something that we
can work together on?
Mr. Begg. Absolutely.
Chairman Meuser. Because it is very important, I think. If
you would not mind, Mr. Begg, just speak up a little bit more,
if you would not mind, or lean closer to the mic.
Mr. Begg. Sure.
Chairman Meuser. So, your 2024 report highlights that HUD
cannot produce reliable estimates of improper payments. This is
a real problem, because we have over $100 billion, $150
billion, over $200 billion, according to the GAO, not just from
HUD, of course, but government across all departments.
You had in 2017, the last time a report was done was $1.7
billion, which after the 4 years of high inflation, $2.2
billion adjusted for inflation today. Are we working on
something to resume this reporting, and if not, what is the
main barrier to providing such reports?
Mr. Begg. We are working closely with HUD on finding a
solution. The key here is technology and collecting the data.
The information that is needed is local rent payment data that
is managed in a distributed way across the Nation. HUD has to
manually collect it to do that. Technology is the key to
solving that problem.
Chairman Meuser. Okay. Thank you.
Mr. Begg. We will----
Chairman Meuser. What penalties, for those who have
mismanaged funds, fail to report funds, or defraud our
government, our taxpayers, are being instituted at the present
time?
Mr. Begg. The options in terms of penalties from a
regulatory perspective include HUD can issue corrective action
orders that become part of their contracts with housing
authorities. They can require them to repay funds with non-
Federal funding.
Chairman Meuser. Would these IT systems and other solutions
you have, would that have prevented the theft and corruption at
the New York City Housing Authority that led to 70 bribery
charges in a single day? Did you find that level of prosecution
acceptable?
Mr. Begg. We are certainly pleased with the prosecutorial
results of that investigative work, which we played a big part
in. To say that technology could solve for that, I cannot say
it would go that far. It could go a long way in detecting and
giving a chance to prevent.
Chairman Meuser. Okay. Do grantees and public housing
authorities currently have to submit any type of fraud
prevention plan before receiving HUD funds?
Mr. Begg. I do not believe so.
Chairman Meuser. Okay. Is that something you might
consider?
Mr. Begg. We would see that as very valuable.
Chairman Meuser. Okay. Last month, I introduced the Payment
Information Integrity Reform Act, which requires Federal
agencies to create stronger financial management plans to
reduce payment errors, creates an overpayment czar at the
Office of Management and Budget (OMB), and lays out penalties
for agencies that consistently fail to follow payment integrity
laws. Do you think these changes would drive faster reform at
HUD?
Mr. Begg. We do. Many of the requirements as proposed match
with recommendations that our office and GAO have made for
strengthening Federal programs against fraud, so we do.
Chairman Meuser. Great.
Over the past 4 years, I mentioned in my beginning
testimony that the funding from HUD went from $45 billion to
$78 billion. Did that have any sort of ratio to improvements at
HUD?
Mr. Begg. HUD has made a number of improvements across the
board. That is a direct result of some of the funding, but the
funding does increase the risk for----
Chairman Meuser. My time has expired. Thank you, Mr. Begg.
I now call on the ranking member of the full committee, Ms.
Waters, for 5 minutes of questions.
Ms. Waters. Thank you very much.
I am going to quickly try and get a couple of questions in.
Could you tell me, how did DOGE come into HUD? Did they come in
with employees? Did they have a previous meeting? Did they have
analysis of what was going on with HUD? Who did they talk to,
and how did they get the records? Quickly.
Mr. Begg. Thank you for the question, ma'am. It is my
understanding that the HUD DOGE lead and DOGE team members have
met with many program officers, possibly all of them. In terms
of how they have obtained access, I do not know how those
determinations have been made, but I understand that they are
working closely with program staff across the Department to----
Ms. Waters. How many program officers are you talking
about?
Mr. Begg. I cannot say definitively, but it is my
understanding that they are working with all program officers.
Ms. Waters. When did that start, before or after the
inauguration?
Mr. Begg. I cannot say for certain.
Ms. Waters. You do not know?
Mr. Begg. I do not know the specific date.
Ms. Waters. What and how did they access to the records?
Mr. Begg. It is my understanding that the HUD DOGE team
personnel have been assigned to be employees of HUD, and so
they can be granted access to HUD systems like any other HUD
employee----
Ms. Waters. Who granted access?
Mr. Begg. I do not know specifically who granted access.
Ms. Waters. Was there some authorization by HUD personnel
for them to do what they were doing?
Mr. Begg. There would have to be an authorization from the
system owners at HUD to grant access.
Ms. Waters. Did this authorization take place?
Mr. Begg. I believe so.
Ms. Waters. But, do you know so?so?
Mr. Begg. I do not know specifically when it occurred or
who authorized it.
Ms. Waters. Okay. All right. So, we do not know how they
operate, because it says, we understand they have been
delegated authorities by HUD personnel to illegally withhold
and claw back housing funds appropriated by Congress. Do you
know about that?
Mr. Begg. I am sorry, could you repeat that question?
Ms. Waters. According to court documents, the Trump
Administration claims that DOGE had been delegated authorities
by HUD personnel to illegally withhold and claw back housing
funds appropriated by Congress. Do you know about that?
Mr. Begg. With respect to the delegations, that sounds
consistent with my answer before. That would make sense that
HUD personnel would authorize DOGE personnel----
Ms. Waters. It would make sense. Was it done?
Mr. Begg. I am sorry.
Ms. Waters. Was there authorization by something, somebody,
some people?
Mr. Begg. That would be the process by which----
Ms. Waters. I beg your pardon?
Mr. Begg. The process by which DOGE personnel would get
access to a system would come from a delegation.
Ms. Waters. What is the process? For example, would they
talk with the existing CEO of HUD, the second in charge, the
third in charge? How does that work?
Mr. Begg. I cannot say specifically who gave the
authorizations. The delegations would flow down from the
Secretary to senior officials at HUD.
Ms. Waters. Since you have been named, have you
investigated what authorizations each DOGE staffer has been
granted and who granted the authorizations?
Mr. Begg. We have not reviewed that.
Ms. Waters. Whether those grants have authority, adhered to
Federal law, have you examined that?
Mr. Begg. We have not.
Ms. Waters. The lack of oversight of DOGE actions and
process is deeply concerning and inherently inefficient. Based
on what you have learned since you have been there, for a short
period of time, are you concerned at all about the funding
process and whether or not those who are eligible for funding
the programs all over the country are being undermined in some
way?
Mr. Begg. We are absolutely monitoring the situation. It is
currently in litigation. We are tracking the situation. We
communicate with HUD leadership about it regularly. We are
monitoring the situation for sure.
Ms. Waters. What do you plan on doing now, in your job?
Mr. Begg. What we focus on right now as decisions are being
made is communicating regularly with HUD leadership, career and
political staff, about the need to maintain capacity across the
Department. I mentioned in my opening statement, capacity has
been a struggle for a long time, and any adjustments to the
programs and the staff should----
Ms. Waters. You have served as deputy for a long time or
something?
Mr. Begg. Since 2020.
Ms. Waters. Did Elon Musk come and talk to you?
Mr. Begg. I have not spoken to Mr. Musk.
Ms. Waters. Did he come to HUD?
Mr. Begg. I cannot say for sure. I have not seen him in the
building.
Ms. Waters. Who did he delegate to talk to you?
Mr. Begg. There is a HUD DOGE team lead.
Ms. Waters. I yield back.
Chairman Meuser. The gentlelady yields back.
The gentleman from Arkansas, Chairman Hill, is now
recognized for 5 minutes.
Chairman Hill. Thank you, Chairman.
Again, Acting Inspector General, thank you for being with
us today.
As I noted in my opening comments, the Metropolitan Housing
Alliance in Little Rock has faced significant financial
mismanagement, failing property conditions, and leadership
instability for years. As chairman, ensuring HUD works for the
American people and not against the American people is a
priority for me. HUD has been long aware of the mismanagement
at the Metropolitan Housing Authority, and yet, issues persist.
How, in your view, should HUD engage with troubled public
housing authorities like the one in my district?
Mr. Begg. Thank you for the question. Oversight of troubled
housing authorities is a very challenging endeavor, and the
best answer to your question is engaging with housing
authorities before they become troubled. When housing
authorities become substandard, really working with them
closely to avoid a scenario where they get into a troubled
status, because it is very hard to get out of it once you are
in it.
Chairman Hill. Yes. In other words, trying to be proactive
at the local office and the regional office, in your view is--
should be a priority. In your view, has that been a systemic
problem at HUD? How many troubled--how many public housing
agencies are classified as troubled by HUD?
Mr. Begg. I do not have the number off the top of my head,
but I do not believe it is a substantial number compared to the
overall footprint of over 3,000 housing authorities. What you
have said about my view on the topic is correct.
Chairman Hill. How should new HUD leadership--and every
time we have a new HUD Secretary, we have a new way to turn the
page and do it differently--if you are advising Secretary
Turner, how can he achieve that proactive approach, and how
could we see better enforcement of housing rules by, again, the
local HUD office versus--or a regional office?
Mr. Begg. Again, it starts with systems. The current
systems that HUD uses to manage its public entity and housing
portfolio lack key data inputs. They rely on self-certification
from housing authorities, and the information that is available
to HUD to monitor them is challenging to work with. Enhancing
those systems, getting better data in real time, would allow
HUD staff a better chance of working with more housing
authorities to avoid a scenario where they become troubled,
because the staff is limited in capacity on how many housing
authorities they can really dedicate time to.
Chairman Hill. Do you find that HUD's approach, in addition
to being slow, is too deferential to the local housing
authority to try to solve its--essentially try to solve its own
problem, and therefore, they are just letting it fester with
the local officials not hearing directly from Federal
oversight?
Mr. Begg. I do not know if it is deferential as much as a
true capacity challenge. There are so many issues in the
portfolio, both in the physical conditions of property and then
the execution of the programs that I do not think there are
enough people to work with all the housing authorities, and
there is not enough information available to them to do it
efficiently.
Mr. Begg. If I told you a particular multifamily housing
complex that took Section 8 vouchers, who was routinely failing
local property code inspections, routinely the site of police
multiple times a week pursuing criminal activity, and that the
local housing authority, the local HUD office consistently let
that owner have access to the Section 8 voucher program, would
that concern you?
Mr. Begg. Yes, but unfortunately it is a common occurrence.
The affordable housing supply is in such a shortage that many
times, the HUD staff is forced to try to find alternatives that
do not exist and so, sometimes the best option is to try to
continue to work out of the scenario. Sometimes they work it
out, and sometimes they do not.
Chairman Hill. Well, here it was an outrage by the local
City Council that nothing was done at the Metropolitan Housing
Authority, nothing was done at HUD, and nothing was done at the
Fort Worth regional office. Finally, the State Attorney General
had to take action and bring criminal charges against the land
owner in this case, and there was an $11 million judgment. I
think that is a situation run amuck. I think all this could
have been stopped by just the most basic oversight with bad
systems or not. We look forward to working with you on how to
improve accountability at HUD.
I thank the Chairman, and I yield back.
Chairman Meuser. The gentleman yields.
The gentlewoman from Georgia, Ms. Williams, is now
recognized for 5 minutes.
Ms. Williams of Georgia. Thank you, Chairman Meuser and
Ranking Member Green.
Under former HUD Secretary Marcia Fudge, you all HUD's
mission was very clear: Create strong, sustainable, inclusive
communities, and quality, affordable homes for all. I am
curious today, exactly what part of that mission statement are
President Trump and his billionaire buddy against? Let us start
with the part about building strong, sustainable, inclusive
communities. How is Trump and Musk building on this with firing
so many HUD staff that it cannot even carry out its statutory
requirements?
Trump and Musk are illegally firing hundreds of HUD staff,
including Trump's own former HUD Inspector General, and closing
critically needed field offices. All of this is happening when
I know, just as my Republican colleagues know, just as our
witness said today, that we still face a housing affordability
and availability crisis in this country.
This is not about cutting waste, because that is something
that we can all agree on. You should see how I pinch a penny in
my monthly budget. My husband will let you know, and my son,
who wants to shop all the time, but we just cannot. So, we get
that.
This is about destroying and dismantling HUD while our
communities back home are left to suffer these disastrous
decisions of Trump and Musk that my Republican colleagues are
enabling. This is the exact opposite of what HUD was doing
under the leadership of Democratic former Secretary Marcia
Fudge.
How about the next part of HUD's former mission statement,
creating quality, affordable homes for all. With the reckless
Trump tariffs taxing hardworking Americans and massive cuts to
Federal housing, the Trump-Musk Administration is making
housing even more unaffordable for folks back home while giving
tax cuts to billionaires.
The bottom line is, Trump is prioritizing his billionaire
buddies and personal vendettas over what is right for the
household budgets of hardworking American families. To sum it
all up, Trump and Musk are only trying to widen the racial
wealth gap and increase housing insecurity for families and
communities across the country that we were all sent here to
represent. The only way that we are going to stop this is--stop
them from making American families pay for billionaire tax cuts
as if we expose them, and then, together, Democrats and
Republicans must demand better from our government. Let us do
that today.
Mr. Begg, Elon Musk and DOGE gained access to the personal
confidential data of the American people through government
data bases. DOGE gained access to HUD's enforcement management
system, which contains medical records, financial files, Social
Security numbers, medical details, and the addresses of
domestic violence survivors. What controls does HUD have in
place to protect the data of the people of America from private
entities seeking to exploit the data for their own personal and
private gain?
Mr. Begg. Thank you for the question. In general, the data
that you are mentioning is protected from improper disclosure
under the Privacy Act. That is the primary legal control in
place. HUD has a number of information security controls within
its information security program that are designed to ensure
that information is not improperly released----
Ms. Williams of Georgia. Mr. Begg, who is enforcing that?
Mr. Begg. That would be the Chief Information Officer.
Ms. Williams of Georgia. Do you have safeguards in place?
Have you been aware that this data is being secured by the
Chief Information Officer?
Mr. Begg. We do an annual review of their information
security program.
Ms. Williams of Georgia. So, that has not yet been done
since January 20th?
Mr. Begg. It is ongoing. So, it would be--our review would
include any--and it would look to identify any improper
disclosures or removals of information from HUD systems.
Ms. Williams of Georgia. That is just one of the many
concerns that I am hearing about from constituents back home
since January 20th.
Another concern that I am hearing a lot about is canceled
HUD contracts. The city of Atlanta, which is in my district,
has one of the widest racial wealth gaps in the country, and
many of my constituents rely on HUD to help them just get a
jump start.
Mr. Begg, there are multiple fair housing advocates in my
district, all of whom have shared concerns about DOGE's cuts at
the Office of Fair Housing and Equal Opportunity. One example
is the fair housing initiative program grant termination. On
the night of February 27, 2025, HUD sent notices terminating 78
grant contracts effective immediately. These canceled contracts
severely impacted communities and their longtime work to
enforce the Fair Housing Act protecting seniors, veterans,
survivors of domestic violence, families with children, people
of color and faith, LGBTQ+ individuals, underserved rural
communities, and other people who have been victims of housing
discrimination.
Mr. Begg, can you speak to the contract agreements or
activities relating to fair housing that have been canceled, or
are being considered for cancellation?
Mr. Begg. The cancellations are currently subject of
litigation, and so what we are doing right now is monitoring
the litigation to see what the outcome would be.
Ms. Williams of Georgia. Mr. Begg, I am sorry. My time has
expired, but I would love an answer to this in writing. Thank
you, Mr. Chairman, and I yield back.
[The information referred to was not received prior to
printing.]
Chairman Meuser. The gentlelady's time has expired. The
gentlelady yields back.
The gentleman from Georgia, Mr. Loudermilk, is now
recognized for 5 minutes.
Mr. Loudermilk. Well, thank you, Mr. Chairman.
Mr. Begg, thank you for being here today. We are in
interesting times in this country, and one thing in the 10
years that I have been in Congress I have learned is that this
city and the government loves status quo. Part of the status
quo is a lot of times turning your head to a problem or
sticking your head in the sand and just ignoring it. As over
the past 10 years, one of my priorities has been finding areas
of waste and fraud within our government, and that has been a
priority of this administration. That has upended the status
quo and has a lot of people uncomfortable, but they should be.
One thing that I have learned is, through my 10 years in
Congress, we have uncovered a lot of areas of fraud and waste,
but they still exist today because we are handcuffed by our own
laws that we cannot get rid of the perpetrators of fraud and
waste because they are protected.
That is why I have introduced again for the sixth or--yes,
6 years now, the Model Employee Reinvestment for Ill-advised
Termination (MERIT) Act, which would reform our employment laws
and policies in the Federal Government to allow for a
reasonable time of termination of bad employees, not the
current 24 to 48 months. I just bring that up because,
regardless of what you find or what we find, unless we can get
rid of those who are doing the wasteful spending of taxpayer
dollars, we are never going to do anything. What this city is
good of is doing oversight and reports and rarely fixing
problems.
Mr. Begg, HUD Secretary Turner, recently announced the
creation of a DOGE task force to help uncover the waste, fraud,
and abuse that we all want to get rid of. What is the
relationship with this task force to your office in the HUD IG?
Mr. Begg. We have coordinated at a high level with the HUD
DOGE lead and offered to collaborate on combating fraud, waste,
and abuse in the Department. We have offered examples of
significant open HUD recommendations that, if action was taken
on them, would generate significant cost savings. We have been
communicative with the HUD DOGE team lead and the HUD
leadership about our interest in working together to prevent
fraud, waste, and abuse.
Mr. Loudermilk. Thank you. Can you explain the difference
between fraud and fraud risk?
Mr. Begg. Fraud is something--potential fraud and fraud
risk is something that can be identified in data but verifying
it and validating it and then adjudicating it in court requires
human effort beyond just a data exercise.
Mr. Loudermilk. How severe is fraud risk at HUD?
Mr. Begg. It is significant. Many of HUD's programs are
decentralized in terms of how the money moves, so it moves from
HUD to a grantee, to a subgrantee, to a contractor. Each time
it goes through a layer, the risk of improper payments and
fraud increases.
Mr. Loudermilk. So, how does that compare with the actual
instances of fraud that you have seen?
Mr. Begg. It is hard to say. In some instances, we are
asking to prove a negative here because we are not able to
quantify the things that we do not know about, and without data
sources for us to test against, and to really come up with good
estimates, which HUD has been unable to do for a long time, it
is hard for us to quantify how much is out there that we are
not able to see.
Mr. Loudermilk. Is HUD responsible for mitigating fraud
within its programs, or is fraud risk management largely
delegated to the public housing authorities?
Mr. Begg. HUD is responsible, we believe, under the law for
managing fraud risk in its programs and responsible for
ensuring that its grantees have strong fraud risk management
programs as well.
Mr. Loudermilk. Okay. Over the years, HUD has struggled to
incorporate common sense accountability measures into its
programs. Why is that?
Mr. Begg. That is a good question. I think that the folks
who are operating the programs at HUD are doing their best to
incorporate those commonsense approaches, but many of the
programs are designed for flexibility. Anytime flexibility is
introduced in the use of funding it creates opportunities for
it to be misused. It is a difficult balance between flexible
grant programs for the communities and trying to put internal
controls in place to make sure that the money is spent
appropriately, but we think more can be done on the control
side.
Mr. Loudermilk. What else can HUD do to mitigate fraud
risk?
Mr. Begg. The first step, like I mentioned, is assessing
each program for fraud--and this is a basic concept--just sit
down with the people who run the program, get in front of a
whiteboard and say, If I wanted to steal from it, how would I
do it? You list it all out. We could be part of that discussion
as well. We investigate and help prosecute cases, and then
think about how can you stop it within your program, what
systems do you have in place? What potential controls are there
to mitigate it? Test those and start the cycle over again.
Mr. Loudermilk. All right. Thank you.
My time has run out. I yield back.
Chairman Meuser. The gentleman yields.
The gentleman from California, Mr. Liccardo, is now
recognized for 5 minutes.
Mr. Liccardo. Thank you, Mr. Chair.
Mr. Begg, thank you for coming to testify today. The
purpose--the function of your office, Office of Inspector
General is, fair to say, primarily to help identify waste,
fraud, and abuse so they can be rectified, and to ensure the
Department follows the law in executing its mission. Is that
fair?
Mr. Begg. That is correct. I would add to that, we also
have a big emphasis on making recommendations to make programs
more efficient and effective.
Mr. Liccardo. As part of these recommendations, you present
semiannual reports to Congress, and, I think, based on your
written testimony, quite a lot of work had been done over the
last year, in Fiscal Year `24. For example, your work
resulted--I say, ``your work,'' the work of your office
resulted in almost $87 million in collections, identifying
nearly $1 billion in funds that could be put to better use. Is
that fair?
Mr. Begg. That is correct.
Mr. Liccardo. Your investigations resulted in more than $63
million in restitution, more than $14 million in total
recoveries, and in 125 administrative sanctions to remove or
limit bad actors from participation in HUD programs?
Mr. Begg. That is correct.
Mr. Liccardo. You had identified 278 HUD actions that
produced systemic benefits for the programs, participants and
beneficiaries. Is that fair?
Mr. Begg. Yes.
Mr. Liccardo. Well, thank you for all that great work. That
work was done, certainly, not just by you, but by others in the
office and, of course, by your predecessor. I know you are the
acting, but the predecessor Inspector General is Ray Davis. Is
that right?
Mr. Begg. That is correct. Our team in HUD OIG does the
work, not me.
Mr. Liccardo. When the executive branch, in this case HUD,
does not follow the law, what typically should happen? What are
the remedies, the Inspector General's involvement?
Mr. Begg. It depends on the context. In a scenario where
someone is not following the law and violating criminal
provisions, we would work with the Department of Justice to
prosecute bad actors. In an instance where the Department might
not be following the law, the Payment Information Integrity
Act, that noncompliance results in reporting requirements to
Congress. We publicly report their noncompliance. They are
required to work with OMB on corrective action, so it really
depends on the context.
Mr. Liccardo. There is a sanction. There is a consequence.
Mr. Begg. Yes.
Mr. Liccardo. Now, you became the Acting Inspector General
on January 24th. Is that right?
Mr. Begg. Correct.
Mr. Liccardo. President Trump became President on January
20th. Is that fair?
Mr. Begg. Yes.
Mr. Liccardo. You took this role 4 days after President
Trump took office because Ray Davis was fired by President
Trump?
Mr. Begg. That is right.
Mr. Liccardo. Now, Federal law requires the President to
follow a process when terminating the Inspector General.
Senator Grassley, as I understand it, Republican Senator,
authored an amendment that was approved by Congress to mandate
that the President provide Congress 30 days advance notice
before terminating inspector generals. Is that right?
Mr. Begg. That is correct.
Mr. Liccardo. That notice would include written in detailed
communication about the rationale for the termination?
Mr. Begg. That is right.
Mr. Liccardo. Why would there need to be protections in
place from the politicization of the termination of an
inspector general?
Mr. Begg. I believe the genesis of those protections was
designed to protect the independence of offices of inspector
general.
Mr. Liccardo. That independence is incredibly important for
you to do your job and detect waste, fraud, and abuse, identify
conflicts of interest, and the like?
Mr. Begg. Absolutely. It is the backbone of what we do.
Mr. Liccardo. Did the President follow the law in this
case?
Mr. Begg. The notices were not provided consistently with
the law, which is my understanding.
Mr. Liccardo. I know Chairman Hill raised a lot of
important issues with regard to poor maintenance at public
housing. I think that has been well-detailed in the media and I
think in every community. There has been a lot of discussion on
that. That maintenance is paid for by a capital fund. Is that
right?
Mr. Begg. Yes.
Mr. Liccardo. That is allocated by Congress, that funding.
Is that fair?
Mr. Begg. Yes.
Mr. Liccardo. I believe that 10 months ago, the National
Association of Housing and Redevelopment Officials increased
its estimate of the backlog repairs needed for existing public
housing stock from $70 billion to $90 billion, in its words,
all due to Congress chronically underfunding the public housing
capital fund. Are you aware of that?
Mr. Begg. I am aware of the report and the figures.
Mr. Liccardo. In your view, is the disrepair and poor
maintenance, while, undoubtedly, there is plenty of waste,
fraud, and abuse in this agency and any other, is it primarily
the result of waste or underfunding?
Mr. Begg. The need for funding is certainly an important
contributing factor in this scenario. The funding has not kept
pace with the needs, and so the critical problems that generate
long-term physical condition issues at properties have not been
addressed. You can paint the mold on the wall, but if you do
not fix----
Chairman Meuser. The gentleman's time has expired.
Mr. Liccardo. Thank you. I yield.
Chairman Meuser. The gentleman yields.
The gentleman from North Carolina, Mr. Moore, is now
recognized for 5 minutes.
Mr. Moore. Thank you, Mr. Chairman.
Mr. Begg, thank you for coming before the committee today.
I have a slightly different series of questions than some
of the folks who have spoken already. Back last September,
Western North Carolina was significantly impacted by Hurricane
Helene. The estimates are, in our State alone, roughly $80
billion in damage. Families and businesses lost everything
because of where this happened. Most folks did not have any
kind of flood insurance of any kind. Estimates are indicating
that it could be around $15 billion needed for housing
assistance and recovery alone, so just an absolutely immense
amount.
I can tell you that after the aftermath, I witnessed,
firsthand, the resilience of the folks in my district and
throughout Western North Carolina. Our State legislature that I
was a member of last year, stepped up and provided some amazing
relief to get funds out there and resources out there to help
deal with this catastrophe. I have got to say, folks in North
Carolina stepped out in a significant way to help one another,
and folks from outside the State, volunteers, you name it.
One of the questions that kept coming up and where folks
were scratching their heads was the Federal response. I have to
say that the Federal response, prior to this year, was very
lacking, particularly as it pertains to HUD and on the housing
side. A lot of folks were not being told exactly what to
expect. They were getting, I guess, for lack of a better word,
the runaround. They were not even sure what resources were
being made available. There were folks having their temporary
housing potentially going to be cutoff, I mean, just a lot of
really bad things.
I do have to say that after the new administration came in
a lot of that has significantly improved, although it is not
perfect, but it has improved, so we do appreciate that. The
Department of Housing and Urban Development Community
Development Block Grant Disaster Recovery Program is going to
be a critical part of our long-term recovery.
One of the things though that--and I do not fully
understand it frankly, as a Member of Congress, is the formula
that HUD uses to determine the Community Development Block
Grant Disaster Recovery (CDBG-DR) allocations, as far as I
know, that may not even be public. What--I guess that sort of
fuels a number of questions. One is, what vulnerabilities to
fraud or abuse are created by the lack of transparency in this
allocation process?
Mr. Begg. With respect to the allocation process, I am not
sure that we have studied how it contributes to potential
fraud, waste, and abuse. There are a number of things that do
contribute to that in the disaster program, but we have not
examined the allocation as a contributor to that.
Mr. Moore. Would you believe that it is essential that the
CDBG-DR money is spent in helping these communities recover?
Mr. Begg. Absolutely.
Mr. Moore. In January 2024--of course, this is before your
time--the HUD OIG launched an audit to determine whether four
community development block grant disaster recovery grantees
had made improper payments. According to you-all's office, the
grantees have budgeted more than $904 million, and it spent
almost $356 million on completed and underway match activities.
Why did--do you know--again, this is before your time,
but--I do not know if you had a chance to look--why did their
spending raise red flags?
Mr. Begg. I was the Deputy Inspector General when we
launched the audits, so I am familiar with it. The match
program allows grantees to use HUD funding to contribute their
match portion with other Federal programs. The concern that we
have is that HUD does not require grantees to report to them or
track how they use match funds.
In our examination, we have seen instances where if the
match requirement is 90 percent Federal Emergency Management
Agency (FEMA), 10 percent on the grantee, there are instances
frequently where we see 90 percent FEMA, 90 percent HUD. So,
grantees are not tracking it. They are not reporting it to HUD.
HUD is not able to monitor it. The data system does not capture
it. That is our concern that HUD funding is just being wasted
above the amount that has been authorized.
Mr. Moore. I guess, like, what kinds of payments is your
office looking to identify and remedy?
Mr. Begg. It would be those that are above the match cap.
Those are technically improper payments in our view.
Mr. Moore. Okay. You shared the status of that audit?
Mr. Begg. We are in the process of issuing a report in that
audit. We believe it will be in the coming months. We issued an
interim report when we identified the lack of tracking to flag
that issue for HUD, because we thought they needed to take
action on it immediately, but we will be issuing another report
on the review soon.
Mr. Moore. Thank you, sir.
I yield back, Mr. Chairman.
Chairman Meuser. The gentleman yields.
The gentleman from Florida, Mr. Haridopolos, is now
recognized for 5 minutes.
Mr. Haridopolos. Thank you, Mr. Chairman and thank you, Mr.
Begg, for coming today. We appreciate your candor and these
answers as we fire them at you right away.
I think the area that I want to get into in the report is
the frustration that these incidents, let us just say at least
of curiosity or concern, usually go unaddressed. It has got to
be frustrating in your role that you make a solid
recommendation, and then no one ever follows up on the darn
thing.
I am excited about what DOGE has done. It gives even more
opportunity to put sunshine on some of these matters, and maybe
can make your job easier, to make sure those reforms get to the
folks who want to buy a house or get in a better living
condition can make use of the good programs that are available
as opposed to the fraudsters, who unfortunately take advantage
of the system.
Let me ask you a very wide open question that you might
have gotten into earlier. Can you give a number or estimate how
many high-priority recommendations still remain open or
unimplemented after the recommendations were made by your group
to HUD?
Mr. Begg. Yes. We issued our priority open recommendations
report for 2024 last year, and of the 35 we identified, I
believe, 24 remain open. We are in the process of updating that
report and issuing a new one here in the next coming weeks, but
the number will be in that 20, 30 zone.
Mr. Haridopolos. Then if you could give a little color to
the ones that were, quote, addressed. Did we see savings there
or did we see arrests made if fraud was conducted? What were
the results of the ones that were, quote, addressed?
Mr. Begg. The recommendations that we are referencing are
programmatic in nature. We have seen enhancements in
information security. We have seen HUD's rental assistance
program offices take action to clarify guidance, to put
protocols in place, to better track health and safety issues.
It is those types of issues that we are seeing.
Mr. Haridopolos. With that in mind, too, as a former
businessperson myself, return of investment (ROI) is what we
always look at--where do you get the most bang for the buck.
The idea is that, is there one that--some of these
recommendations that would yield the most results in twofold.
One is, of course, savings. Of course, we are all looking for
that given the budget shortfalls, but the other, more
importantly, is to assist folks who truly need it and make sure
the fraudsters are kind of addressed.
That said, which one of these recommendations would you put
at the top of the list where you would get the most benefit so
that we can kind of focus on that as opposed to just looking at
a number, this last case being 35?
Mr. Begg. Sure. I will give a twofold answer since you
posed it two ways. In terms of fraud prevention, one of our
priority open recommendations is creating stronger fraud risk
management assessments across HUD's programs. If HUD starts the
process of assessing those risks and builds prevention into its
programs, that will reduce the negative impacts fraud has on
its programs.
With respect to financial recoveries, we did a review of
how many people obtained Federal Housing Administration (FHA)-
insured loans who had delinquent Federal tax debt. In a 1-year
period, we estimated that $13 billion in FHA loans went to
ineligible borrowers with Federal tax debt, which would
translate, in our view, to roughly a $6 billion monetary impact
if you factor in the average loss rate for FHA on a mortgage.
Taking action to obtain the tax information needed to prevent
those ineligible borrowers from getting the loans in the first
place could have a huge impact on HUD's mutual mortgage
insurance fund.
Mr. Haridopolos. With that in mind, Mr. Begg, whose fault
was it that these were approved in the first place? Was it a
fraudulent application, or was it the actions of the folks
working at HUD who made a mistake?
Mr. Begg. It is hard to say. Our review examined how many
folks with delinquent Federal tax debt obtained loans. The
reason, or the State of mind they had in obtaining those loans,
we did not examine. What needs to happen is HUD either needs to
obtain that information, and HUD, I believe, it may require
congressional authority to get that information from the
Internal Revenue Service (IRS), or it needs to require mortgage
lenders to obtain that in their review of the applications.
Mr. Haridopolos. I will just close with this, Mr. Chairman:
I think the frustration a lot of folks feel is that they feel
like their resources are there, the missed allocation of funds
to put it simply. Whether it be with Medicaid, HUD, so many
vital programs where people are truly in need, it could be the
disabled or folks in nursing homes, in the Medicaid world, or
in this case, folks who are just getting on their feet and they
are doing the right thing, they do it lawfully, but the folks
who break the law never suffer a penalty.
At some point when people are either knowingly breaking the
law, and it was shown by fact pattern, we need to put
proverbially someone in handcuffs and say you are not going to
defraud the United States anymore. I think that the IG report
needs to focus on is simply who are the worst actors and the
folks who are breaking the law. They are denying people
benefits let alone defrauding taxpayers.
I am glad to see you lead this charge, Mr. Chairman, and I
appreciate you bringing the witness forth.
Chairman Meuser. I thank the gentleman for his comments.
Well assessed. The gentleman yields.
I now recognize the gentlewoman from Michigan, Ms. Tlaib,
for 5 minutes.
Ms. Tlaib. Thank you so much, Chairman.
Thank you, Acting Inspector General, for being here. I
think a lot of us have a lot of questions. I come from Detroit,
the most beautiful, blackest city in the country. We used to
have 70 percent homeownership. It was one of the most thriving
communities where many Black families would come, create
careers out of the auto industry, and so much more.
I want to get straight at it. Mr. Begg, this is important
for my constituents at home. You are a public servant now.
Understand. You really do work for the American people. Even as
you have somebody that appoints you, you still have a duty and
responsibility to the American people, people we represent.
Under what authority can the administration withhold
funding that has already been appropriated by Congress?
Mr. Begg. Thank you for the question. I am not aware of an
authority that an administration would be able to use to
withhold funding that has been appropriated by Congress.
Ms. Tlaib. Okay. The Trump Administration just terminated
$60 million in Section 4 funding. Are you familiar with that?
Mr. Begg. Yes.
Ms. Tlaib. Acting Inspector, this funding supports my
district. Grandmont Rosedale Development Corporation relies
heavily on Section 4 funding for years. Many of my seasoned
residents who are on fixed income--right--as the prices of--as
the housing crisis just continues to exacerbate, they rely,
again, on organizations like that and being able to access that
funding. Section 4 funding--canceling Section 4 funding
threatens hundreds of housing projects around our Nation right
now.
It is mind-boggling, though, to me from--Elon Musk and DOGE
have reportedly called cutting the Fair Housing and Equal
Opportunity (FHEO) staff by 77 percent. That is from 572
employees down to 134 people.
I have been here now going on 7 years, and one of the
things that continues to come out in the previous Office of
Inspector General report from 2024 is that the primary obstacle
to timely completion of any investigations was limited
staffing. Limited staffing, and I see that a lot. I always see
people attacking the Social Security office, attacking the
Postal Service, but when it came down to it, it was about the
lack of capacity to deal with the rise and, of course, the need
for many of our community members.
Mr. Begg, if the Office of Fair Housing and Equal
Opportunity was already struggling to meet its statutory
requirements--Mr. Begg, statutory requirements--Okay-- for the
Fair Housing and Equal Opportunity was already struggling,
right? From existing staff, how can it effectively uphold fair
housing laws with the face of 77 percent staffing cuts?
Mr. Begg. A 77 percent staffing cut is significant. As you
mentioned, we highlight it in our report--in our top management
challenges report and in our report on the 100-day
investigation report.
Ms. Tlaib. Have you started an investigation into the mass
layoffs or firings?
Mr. Begg. We have not started an investigation related to--
--
Ms. Tlaib. I think you should.
Mr. Begg [continuing]. layoffs and firings.
Ms. Tlaib. I think you should find out and really
investigate into the firings and how that impacts the statutory
requirement laws for the Fair Housing and Equal Opportunity
division.
Mr. Begg. What I can say we have been doing is
communicating with HUD leadership regularly and consistently
about the status of the planned reductions and voicing our--
advocating for those decisions to be carefully considered and,
for any decision that is made to reduce HUD's footprint, to
take into account the need for capacity in each program and the
challenges that already exist for capacity. We are having those
conversations regularly, and HUD leadership has been receptive
to the information we are bringing to them, and we are
monitoring decisions that have not been made yet in many
instances and looking for opportunities.
Ms. Tlaib. I do not know. My residents cannot stop living.
Like, we cannot wait. These are programs, again, appropriated
by Congress. Like, I do not understand. They do not have time
to wait until we can kind of have a good conversation with the
administration. Either follow the law or do not, right? I say
that, again, we need to move with a lot more urgency and
understanding that laws are being--this lawlessness, this
recklessness, it will impact our residents.
Really quick in February, when Secretary Turner announced
the creation of a DOGE task force at HUD, he charged it with
eliminating fraud, waste, and abuse, as you probably are
familiar. So, Mr. Begg, how are DOGE's activities not redundant
with the activities and purpose at your office? Is not that
what you do?
Mr. Begg. It is what we do.
Ms. Tlaib. So, is he doing your job?
Mr. Begg. He is not doing our job. We are doing our job.
Ms. Tlaib. So, why is DOGE trying to do your job right now?
Mr. Begg. I cannot speak for the administration----
Ms. Tlaib. That is right.
Mr. Begg [continuing]. or the Department or DOGE, but----
Ms. Tlaib. I just need my colleagues to understand the
depth of what is going on here. It is reckless and it is
incredibly hurtful for many families.
With that, I yield, Mr. Chair.
Chairman Meuser. The gentlelady yields.
The gentlewoman from Texas, Ms. De La Cruz, is now
recognized for 5 minutes.
Ms. De La Cruz. Thank you, Mr. Chairman, and thank you for
allowing me to waive on to this hearing. This is a very
important topic, HUD. As the Vice Chair of Housing and
Insurance Subcommittee, efficiency and a properly functioning
HUD is of great importance and very important to me.
In my district, HUD housing is something that we have in
all of my district. Efficiency, identifying fraud, waste, and
abuse, as you have done so--and thank you for your very candid
response. In fact, some of the things that I heard is that you
and your team have identified several areas where we can cut
back on fraud, waste, and abuse. What was concerning to me is
that you had, in 2025, high-priority items--35 of them--which,
at the end of the year, 24 approximately were still open.
When I looked at your office and the fact that the IG had
not been--the OIG had not been forced to testify in front of
Congress and that it had been 5 years since we had heard from
your team about the fraud, waste, and abuse, I thought to
myself, well, that is just unacceptable. As a small business
owner myself, I regularly have meetings with my employees to
say, where are you at? What is the temperature? What challenges
are you facing? How can we help?
This is when I decided to create something to help us. One
of my bills focused on preventing fraud, waste, and abuse at
HUD is noticed in this hearing. It is H.R. 225, HUD
Transparency Act of 2025, which at last Congress passed with
overwhelming support from both sides of the aisle, and it
passed by voice vote on the House floor. The bill is really
simple. It requires the HUD Office of Inspector General to
testify annually before Congress. Again, very important. The
need for this legislation is underscored by the fact that the
HUD Inspector General's Office, again, had not testified since
2023.
Mr. Begg, having hearing you today--having you here today
and listening to what you have said furthers my resolve for the
need for this bill. My question to you is, as acting HUD IG,
can you speak about the impact that pointed congressional
attention in the form of a required annual HUD OIG testimony
would have on HUD and the OIG's mission to help prevent fraud,
waste, and abuse?
Mr. Begg. Thank you for the question. We welcome the
opportunity to come before this committee and our other
committees of jurisdiction, as requested, to provide testimony.
We are thrilled to have an opportunity to talk about the
important work our staff is doing and also stress the need for
actions that can help HUD be more successful.
Ms. De La Cruz. Do you feel that, by coming here on an
annual basis and bringing your concerns to our committee, that
will help further support the need to stop the waste and abuse
and give you the tools that you need?
Mr. Begg. I do.
Ms. De La Cruz. Excellent. Thank you.
The last question that I have in this short minute is I
also introduced another piece of legislation which is ensuring
access to the Whistle Protections Act to provide whistleblower
protection for employees of HUD contractors, with contracts
predating 2013, Section 4712, the anti-retaliation provisions.
I know this is one of the first topics that you mention at the
top of your management challenges report in Fiscal Year 2025.
Can you briefly share with us how important whistleblower
protections are to help prevent fraud, waste, and abuses at
HUD?
Mr. Begg. Whistleblowers are critically important for
identifying fraud, waste, and abuse, and the thousands of
contractors that HUD utilizes have many thousands of employees
who have direct knowledge of and access to information that we
would want to know about fraud, waste, and abuse. Ensuring that
they are free from retaliation is key so that they feel
protected to come forward. Without those protections, the
chilling effect on them disclosing information that is critical
to improving HUD programs is significant.
Ms. De La Cruz. Thank you so much.
I yield back.
Mr. Begg. Thank you.
Chairman Meuser. The gentlelady yields.
The gentleman from Wisconsin, Mr. Steil, who is also the
Chair of the Subcommittee on Digital Assets, is now recognized
for 5 minutes.
Mr. Steil. Thank you very much, Mr. Chairman. Thank you for
holding today's hearing.
Mr. Begg, thanks for being here. I want to talk to you
about the waste, fraud, and abuse occurring in Milwaukee,
Wisconsin. As you may know, $2.8 million in rental assistance
funds went for other purposes. It went to payroll, to
oversight, to administrators, not to helping people in the city
of Milwaukee get housing, many of whom are challenged. We face
national challenges with housing right now.
I want to talk about what went on. We have a new CFO at the
Milwaukee Housing Authority who I know is engaged in this and
trying to get this back on track, but what are the consequences
for individuals who cause the problem and what are the
consequences across the board at HUD? Are people arrested? Are
there charges made? What are the penalties and how did this
occur for years in the city of Milwaukee before this came to
light?
Mr. Begg. Thank you for the question. We are acutely aware
of the scenario in Milwaukee. It is one we have been tracking,
and it is one that we have considered doing our own oversight
over. Quite frankly, it is a crowded room there. There are
many, many people looking at this issue now based on the
status.
In terms of penalties, if employees of a housing authority
are found to have misused Federal funding, we would investigate
those potential crimes and refer them for prosecution. We would
work with HUD's Office of General Counsel to seek to debar them
from Federal programs, and we would seek any other potential
administrative penalties for others involved in the actions.
Mr. Steil. I appreciate you engaging on this and being
serious. I think the new administration, the Trump-appointed
Administration at HUD--we have a big opportunity to get to the
bottom of the waste, fraud, and abuse because what we want to
do is actually help people who are challenged and need the
assistance. What we do not want to see is it going into
programs that it is not designed for.
Walk me through how no penalties came to be over the course
of 3 years, in particular as it relates to the 2.8 million
misused funds at the Milwaukee Housing Authority.
Mr. Begg. If you are referring to penalties from HUD, I
cannot speak to their specific decision making, but they do
have penalties and remedies available to them which include--
can include limiting and withholding assistance to housing
authorities.
Mr. Steil. At what point does HUD apply those penalties?
Mr. Begg. That is a discretionary function for the program
offices to decide. It is a policy call for them ultimately. In
many instances, they will try to work with housing authorities
to get out of troubled or difficult situations where things are
not going correctly before going to the penalties because, as I
mentioned earlier, there are not a lot of nonFederal funds
available from housing authorities to pay penalties. If you
withhold new funding from them, it----
Mr. Steil. We enter a catch-22 once there is a bad problem,
which kind of brings the question of how problems like this
stem and grow over a period of years before they are caught. Is
there an unwillingness, do you think, in some housing
authorities to correct bad behavior?
Mr. Begg. I would not say that. What I would say is that
many housing authorities are facing the same capacity
challenges that HUD and its staff are facing. They frequently
do not have adequate systems in place. They might not have
processes in place necessary to run efficiently and
effectively, and they have a large charge and, frequently, it
is one that is difficult for them to manage. The problems
snowball over time.
Mr. Steil. It seems to me at least that HUD appears asleep
at the wheel while this is ongoing in the city of Milwaukee and
that this is not being covered and held accountable because you
are exactly right. The longer it takes for this to come to
light, these penalties are simply pulling money back from a
system that does not have it because the money was swindled in
the first place, which puts us in a catch-22 and shows the need
to investigate this and hold people accountable in the first
place.
Let me go big picture because I think one of the questions
is, are the people who are engaged in this inappropriate
behavior nervous of being caught? How often is HUD applying
penalties? Is HUD arresting people and making charges across
the board at housing authorities across the United States when
they see this type of waste, fraud, and abuse?
Mr. Begg. What I can tell you is our office is responsible
for doing the criminal investigations, and almost half of our
portfolio is dedicated to public corruption in these programs.
Mr. Steil. How often are persons actually held accountable?
Mr. Begg. We could point to investigative case outcomes,
prosecutions, and sentencing weekly. It happens all the time.
In many ways, we are only scratching the tip of the iceberg.
Mr. Steil. That is my concern that we are only scratching
the tip of the iceberg. Your words. That is my concern that we
are not taking this seriously enough to root out waste, fraud,
and abuse because every dollar that is wasted inside HUD is a
dollar that is not going to improve housing or provide access
to individuals who do need housing. I appreciate the work you
are doing at HUD and others to root out this waste, fraud, and
abuse.
Mr. Chairman, thank you for holding the hearing. I yield
back.
Chairman Meuser. The gentleman yields.
The gentleman from New York, Mr. Garbarino, is now
recognized for 5 minutes.
Mr. Garbarino. Thank you, Chairman.
Thank you, Mr. Begg, for coming here today.
Two thousand twenty four was a record-setting year for the
New York City Housing Authority (NYCHA), not just--but it just
was not for the right reason. In February 2024, 70 NYCHA
current and former superintendents and staff were arrested for
allegedly pocketing bribes in exchange for granting no-bid or
micro-contract repair work. This 10-year, $2-million classic
pay-for-play corruption scheme was the largest number of
Federal bribery arrests brought in a single day in the
Department of Justice (DOJ) history and included public housing
employees at developments in every borough.
The employees had the power to hand out smaller micro-
purchase contracts of $5,000 which increased to $10,000 after
2019 that fell below the amounts that triggered competitive
bidding. The contractors would then pay kickbacks to NYCHA
employees who awarded the contract.
Mr. Begg, following this incident, your office released a
report examining NYCHA's findings. Its mitigation processes are
largely reactionary. NYCHA is the largest public housing
authority in the United States, correct?
Mr. Begg. That is correct.
Mr. Garbarino. NYCHA receives billions of Federal funding
from HUD each year?
Mr. Begg. I believe over 3 billion.
Mr. Garbarino. In fact, NYCHA receives over 25 percent of
HUD's rental assistance funding nationwide?
Mr. Begg. Correct.
Mr. Garbarino. Yet, the report found that NYCHA did not
assess fraud risks across the entire organization. In fact,
NYCHA did not develop a process to identify fraud risks, it did
not develop a response plan, and it did not implement a process
to monitor and evaluate the effectiveness of fraud risk
management activities. As the largest public housing authority
in the United States, one would hope that they would be more
organized or better organized.
Mr. Begg, I understand that varies amongst housing
authorities. I worked at a law firm before I came to Congress.
I represented a housing authority. We did not have this
problem. I would say that--would you venture to say that these
failures are common across other public housing authorities?
Mr. Begg. I would, and with respect to NYCHA, it is a
sophisticated organization. They have many things that are in
place. They have a lot of anti-fraud activities that are
happening across their programs. They are just not structured
in a way that is coordinated across the organization and
proactive. In many instances, they are actually farther along
than most housing authorities. They are leading the pack, but
they still have room to go. We do think that these issues are
very pervasive at other housing authorities.
Mr. Garbarino. That is kind of scary that you said that
they are further along than other housing authorities, but this
is still happening--it is still happening there. It just
happened last year.
What can HUD do to provide more guidance when it comes to
mitigating public housing authority fraud risk?
Mr. Begg. First, they need to assess the risks in each of
the programs that housing authorities operate. HUD needs to do
that and identify what it sees as fraud risks and then require
housing authorities to have anti-fraud programs that meet the
standards that GAO has established for Federal programs and
then give them guidance on how to meet those expectations and
work with them to strengthen those anti-fraud controls over
time.
Mr. Garbarino. Do the fraud risks vary by size of a housing
authority or, like, is it--if they do an assessment, is it--
does one cover NYCHA all the way down to a small-town housing
authority, or how does----
Mr. Begg. They do vary depending on the size. We
recommended in that report that the Office of Public and Indian
Housing (PIH) assess fraud risks at large housing authorities
like NYCHA.
The no-bid contracts that you mentioned in a large
organization where there are many of them happening all the
time, it is hard to oversee low-dollar contracts, but if you
are in a small housing authority that may have only a handful
of people, you are not going to have that kind of traffic. At
the smaller housing authorities, the issues are usually a lack
of segregation of duties. One person controls the money and the
accounting, and so there is no one to know whether it has gone
missing.
Mr. Garbarino. It sounds like a lack of formal guidance is
a factor in the--a lack of formal guidance from HUD is a factor
in this risk of fraud. How often does HUD terminate or suspend
funding due to underperformance or fraudulent activity?
Mr. Begg. I do not have the answer to that off the top of
my head. I would be happy to get back to you on that.
Mr. Garbarino. I have my last question. Public housing
authorities have a governance structure. Should there be
reforms over the makeup of those boards that could result in a
more competent or effective board?
Mr. Begg. I think that depends on the context in terms of
governance, but I know that governance structures across the
PHA space have been a challenge.
Mr. Garbarino. I am out of time. Thank you very much for
being here today. I yield back.
Mr. Begg. Thank you.
Chairman Meuser. The gentleman yields.
The gentleman from Texas, Mr. Green, the Ranking Member of
Oversight and Investigations, is now recognized for 5 minutes.
Mr. Green. Thank you, Mr. Chairman.
Friends, for reasons that I shall not announce, I believe
the chairman to be an honorable person, and I want to make that
a part of the record today.
Mr. Begg, are there people in this country who engage in
invidious discrimination when it comes to housing?
Mr. Begg. Yes.
Mr. Green. Do these people engage in a form of invidious
discrimination that would deny a person access to housing
because of color?
Mr. Begg. Yes.
Mr. Green. Is there a department within HUD that deals with
this invidious discrimination?
Mr. Begg. Yes. The Office of Fair Housing and Equal
Opportunity.
Mr. Green. Have you heard, sir, that there is a possibility
of substantial cuts in personnel in this department?
Mr. Begg. Yes.
Mr. Green. Have you heard a number, sir?
Mr. Begg. I have seen the reporting, and I think it was
mentioned earlier in the hearing that 77 percent was a
possibility.
Mr. Green. If 77 percent of the persons charged with
enforcement are removed from their positions, what would this
portend for people who are seeking housing without being
discriminated against?
Mr. Begg. We discussed the already strained capacity in
that office earlier. A significant cut could increase the
strain on capacity. What we would want to see in a plan is how
HUD plans to account for that reduced staff and what other
tools or alternatives would it use to prevent the capacity from
going too low that it cannot perform its programmatic function.
Mr. Green. You mentioned a plan. Have you been presented
with a plan?
Mr. Begg. I have not.
Mr. Green. If I wanted to know the plan, would it be
judicious to ask you or Mr. Musk? If I assume that one of you
has knowledge of the plan, which of you would be better to
answer the question about the plan?
Mr. Begg. HUD is in the best position to answer what is in
its plan, and it is my understanding that the plan has not been
finalized in many respects yet.
Mr. Green. If I wanted to know the plan that Mr. Musk has
that you have not been given, would it be better to ask you or
Mr. Musk?
Mr. Begg. I would not be able to speak to the plan. So, I
believe, Mr. Musk.
Mr. Green. If I want to know about the cuts that he has in
mind, would it be better to have you tell me or Mr. Musk?
Mr. Begg. I think the same answer applies, sir.
Mr. Green. I think you are right, sir, and I ask the
question because it is my belief that Mr. Musk should be here
to talk about the cuts.
There is more involved in this than technology. We are
talking about laying people off in significant numbers and, I
do not think you are in a position to tell us what Mr. Musk
plans to do with reference to these layoffs. I contend that he
should come before this committee.
There has been some indication that you should be here or
some person in your position should be here on an annual basis.
Well, if Mr. Musk is a temporary employee--he is only going to
be on the job about 130 days max, and then maybe he will be
reinstated at a later time--but it would seem to me that
temporary employee who has this awesome amount of authority, he
ought to come and sit in that seat and explain what he plans to
do to the lives of these people.
I do not ask you to answer anything in response to that or
make any comment. I am just concerned about the way we are
doing business. I am. I am concerned about how we are literally
abdicating our responsibility. I am concerned about the
country.
We should know that a democracy--a republic, if you will,
but a democracy. This is the methodology about which you can
get people in office. A democracy is not inexpungible. It is
not invictus. A democracy is a work in progress, and every time
we allow a chipping away, we are diminishing some aspects of
our democracy. The democratic way to deal with this would be to
have Mr. Musk come before the committee. He knows the answers.
I yield back and thank you, Mr. Chairman.
Chairman Meuser. The gentleman yields back.
The gentleman from Nebraska, Mr. Flood, who is also the
Chair of the Subcommittee on Housing and Insurance, is now
recognized for 5 minutes.
Mr. Flood. Thank you, Mr. Chairman.
Inspector General Begg, as the Chairman of the Housing and
Insurance Subcommittee, I have significant interest in the
operations of HUD and their efficiency. We need to ensure that
HUD has strong processes in place to track funds once they are
disbursed and prevent waste, fraud, and abuse, and I appreciate
your work in outlining some of the key challenges with the
agency.
I would like to focus on one program you mentioned as
needing greater oversight: that is the CDBG Disaster Relief
program. Given the prevalence of several large weather events
and increased congressional conversation on DR funding and
additional financial support, can you speak to the oversight
challenges that persist at the block grant and subgrantee level
for DR recipients?
Mr. Begg. Thank you for the question. As you mentioned,
disasters are occurring more frequently, and they will continue
to occur more frequently. This program has grown exponentially
in recent years, and the HUD systems and processes in place
were not designed to oversee the DR program in the same way
that it was designed to see the regular CDBG entitlement
program.
The Department has done many things to try and make up for
that gap. The Universal Notice that they published helped
streamline the processes, and HUD has done everything within
their control that they can to try to tighten up the timeliness
in which funding flows out, but the system limitations and the
lack of a regulatory statutory framework for the program still
create a lot of risks in terms of what data is available to
know whether it is working and how can we be sure that the
streamlining is going to be in place when it can change over
time if it is simply a HUD notice.
Mr. Flood. Is HUD, in your opinion--do they have, like, a
robust fraud, waste, abuse management effort to make sure those
things are not happening? Is there a system in place to ensure
these dollars are not being wasted?
Mr. Begg. In the Disaster Recovery program, we think they
have room to improve. The Community Planning and Development
Program Office does have a fraud risk specialist. They have
expressed interest in working with us more on fraud risk, but
they still have not assessed their particular fraud risks in
that program and then come up with corrective actions to
mitigate those and require grantees to do the same. Taking
those first steps are really key, in our opinion.
Mr. Flood. In your prior testimony, you highlighted an
instance where the Puerto Rico Department of Housing did not
implement sufficient fraud risk management processes on 20
billion of HUD funding they received for disaster recovery and
mitigation. It is remarkable to me that $20 billion could be
awarded if the grantee does not have basic processes in place
around managing fraud risks.
I think you have answered this question, but is there a
need for uniform processes around fraud risk management? More
importantly, would congressional authorization of the CDBG-DR
program be helpful in potentially establishing some uniform
requirements for dealing with fraud?
Mr. Begg. I think the answer to both is yes. Permanent
authorization is not necessarily a silver bullet to all the
challenges in the program, but it would help in going a long
way to standardize and reduce the variance in programs which it
does, in fact, contribute to the fraud risk.
Mr. Flood. Have you ever put together some kind of
guidelines or ideas about what that authorization should look
like from the DR perspective?
Mr. Begg. We have worked with various members over the
years to provide technical assistance. We would be happy to
work with your office in doing that.
Mr. Flood. I would encourage you to reach out to Mr.
Pliemtos in my office because this is something I want to focus
on, and I think the ranking member also knows it is an issue.
Moving to the HOME Investment Partnership Program, the
Ranking Member, Mr. Cleaver, and I are working on reauthorizing
that. Have you, in your work, seen any challenges unique to
oversight of the HOME program that you would like to highlight?
Mr. Begg. Many of the challenges that we have seen with
respect to HOME are common grants management challenges. Data
limitations are more kind of a standard that we see across CDBG
programs. What I can say is we know that the HOME program is
incredibly important to the stakeholders and the flexibilities
it provides in creating solutions is very valuable.
Mr. Flood. Thank you very much for your testimony and for
your work on behalf of the American people.
With that, Mr. Chairman, I yield back.
Chairman Meuser. The gentleman yields.
Seeing we are ready to adjourn, I would like to thank our
witnesses--witness--our only witness--for your testimony today.
Without objection, all members will have 5 legislative days
within which to submit additional written questions for the
witnesses to the chair. Questions will be forwarded to the
witness for their response, and I ask our witnesses to please
respond no later than May 13, 2025.
[The information referred to can be found in the appendix:]
I will add, this committee recognizes the Secretary of HUD,
Mr. Scott Turner, as the HUD authority.
This hearing is adjourned.
[Whereupon, at 11:39 a.m., the subcommittee was adjourned.]
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