HUD Inspector General: Actions Needed to Strengthen Management
and Oversight of Operation Safe Home (29-JUN-01, GAO-01-794).
This report reviews the Department of Housing and Urban
Development's (HUD) efforts to combat violent crime and drug
trafficking in public housing through Operation Safe Home. GAO
found that Operation Safe Home does not have the necessary
information systems and management controls to ensure that HUD's
Office of Inspector General (OIG) managers can readily monitor
the obligation and expenditure of funds and track the numbers of
arrests and convictions. As a result, the OIG does not have a
reliable mechanism for effectively allocating program resources
or for accurately estimating its funding needs. Furthermore, in
the absence of complete, consistent, or accurate information, the
OIG has not had the means to accurately report the results of its
investigations and thus to provide Congress with reliable and
supportable information on what Operation Safe Home has
accomplished. The OIG has recognized the need for more effective
management controls within Operation Safe Home and has begun to
address the problems. These actions, once implemented, should
improve the ability of the OIG to allocate resources more
effectively, better estimate future funding needs, and more
accurately measure and report the program's accomplishments.
However, GAO remains concerned about OIG's long-term involvement
in Operation Safe Home. The OIG cannot independently and
impartially audit or investigate Operation Safe Home, and may not
be perceived as impartial when auditing other similar HUD
programs. For these reasons, Operation Safe Home raises
questions about the OIG's ability to independently audit and
investigate HUD programs designed to reduce violent and
drug-related crime in public and assisted housing.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-01-794
ACCNO: A01311
TITLE: HUD Inspector General: Actions Needed to Strengthen
Management and Oversight of Operation Safe Home
DATE: 06/29/2001
SUBJECT: Crime prevention
Drug trafficking
Housing programs
Law enforcement
Public housing
Management information systems
Program evaluation
Inspectors general
HUD Operation Safe Home
HUD Public Housing Drug Elimination
Program
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GAO-01-794
Report to the Ranking Minority Member, Subcommittee on Housing and Community
Opportunity, House Committee on Banking and Financial Services
United States General Accounting Office
GAO
June 2001 HUD INSPECTOR GENERAL
Actions Needed to Strengthen Management and Oversight of Operation Safe Home
GAO- 01- 794
Page i GAO- 01- 794 HUD Inspector General Letter 1
Results in Brief 1 Background 5 Operation Safe Home Funding Not Effectively
Managed 5 Operation Safe Home Arrest and Conviction Data Are Unreliable 13
OIG Officials Identified Few Complaints Against Its Agents 14 Operation Safe
Home Raises Questions About OIG?s Independence 16 Conclusions 17 Matter for
Congressional Consideration 18 Recommendations for Executive Action 18
Agency Comments and Our Evaluation 18 Scope and Methodology 22
Appendix I Comments From the Office of Inspector General, Department of
Housing and Urban Development 24
GAO Comments 31
Appendix II GAO Contacts and Staff Acknowledgments 40
Figures
Figure 1: HUD OIG Allotments of Operation Safe Home Funding, Fiscal Years
1996 - 2001 6 Figure 2: HUD?s Public Housing Drug Elimination Program
Appropriation, Fiscal Year 2000 (Total $310 Million) 7 Figure 3:
Appropriations Available to HUD OIG, Fiscal Year 2000
(Total $93 Million) 8 Source: Public Law 106- 74 p. 113, Stat. 1058 and
1068. 8 Figure 4: Operation Safe Home: Status of Task Force Funds, Fiscal
Years 1996 - 2000 (by year) 9 Figure 5: Operation Safe Home: Estimated Funds
Expended on
Salaries and Expenses, Fiscal Years 1997- 2000 (by year) 11 Figure 6:
Operation Safe Home: Expenditure of Task Force Activity
Funds, Fiscal Year 2000 (Total $2.7 Million) 12 Contents
Page ii GAO- 01- 794 HUD Inspector General Abbreviations
HUD U. S. Department of Housing and Urban Development FBI Federal Bureau of
Investigation DEA Drug Enforcement Agency OIG Office of Inspector General
OMB Office of Management and Budget
Page 1 GAO- 01- 794 HUD Inspector General
June 29, 2001 The Honorable Barney Frank Ranking Minority Member
Subcommittee on Housing and Community Opportunity Committee on Banking and
Financial Services House of Representatives
Dear Mr. Frank: Since 1994, the Department of Housing and Urban
Development?s (HUD) Office of Inspector General (OIG) has devoted
substantial funding and personnel to combat violent crime and drug
trafficking through Operation Safe Home. The HUD OIG administers Operation
Safe Home by establishing, funding, and participating in law enforcement
task forces that operate in public and assisted housing where OIG special
agents- in partnership with federal and local law enforcement agencies-
investigate criminal activity, make arrests, and refer individuals for
criminal prosecution. In fiscal year 1996, the Congress began earmarking
funds for the HUD OIG to administer Operation Safe Home.
Concerned about the effectiveness of the HUD OIG?s management of Operation
Safe Home and whether the HUD OIG?s role in this initiative is appropriate,
you asked us to report on (1) the amount and source of Operation Safe Home
funding and how it was spent, (2) the number of arrests and convictions
resulting from Operation Safe Home investigations, (3) complaints lodged
against OIG special agents engaged in Operation Safe Home activities, and
(4) the impact Operation Safe Home activities could have on the OIG?s
independence to conduct audits and investigations of HUD?s programs to
reduce violent and drug- related crime in public and assisted housing. To
address these questions, we reviewed program documents, reports, and
databases, and spoke with OIG officials.
Since fiscal year 1996, the Congress has appropriated $92.5 million to the
HUD OIG to fund Operation Safe Home and these funds are available until
expended. The OIG has allotted annual appropriations to pay for (1) the
costs of supporting Operation Safe Home law enforcement task forces and (2)
the salaries and expenses of OIG special agents working on Operation Safe
Home activities. Of the amounts appropriated, the OIG did not spend a
substantial amount of funding allotted for task force activities from fiscal
United States General Accounting Office Washington, DC 20548
Results in Brief
Page 2 GAO- 01- 794 HUD Inspector General
year 1996 through 2000- about $10 million remains unobligated- however, the
OIG estimates that, during this same period, it used about $3.9 million of
other OIG funds to supplement the Operation Safe Home salaries and expenses
allotment. Furthermore, while the OIG provided overall information on the
level of obligations and expenditures for task force activities, it could
not readily identify how much money was allotted to and obligated and
expended by individual task forces or readily provide detailed information
on how the money was specifically spent. Thus, the OIG did not have a
reliable mechanism for estimating its funding needs, allocating program
resources, and determining how funds were spent. OIG officials stated that
HUD?s proposed fiscal year 2002 budget request for Operation Safe Home was
reduced from $20 million to $10 million and that Operation Safe Home?s
unobligated balances would finance task force activities through fiscal year
2002. In addition, the OIG is taking action to improve accountability,
including developing an improved and more detailed method of tracking
Operation Safe Home funds.
The HUD OIG cannot accurately determine the number of arrests and
convictions that have resulted from Operation Safe Home activities because
the data it maintains are unreliable. According to the OIG database,
investigations stemming from Operation Safe Home have resulted in about
25,000 arrests and 500 convictions since 1994; however, these data are
unreliable because they are not consistent, complete, or accurate. For
example, the OIG did not have a single information system in place and has
instead relied upon multiple data collection mechanisms of questionable
reliability. Further, OIG managers had differing interpretations of the
types of arrests and convictions to report. In addition, we found 57
apparent double entries of arrest data that potentially resulted in the OIG
overreporting 600 arrests. Moreover, the OIG could not provide documentation
supporting summary data, including the number of arrests, contained in 12
semiannual reports to the Congress. Due to the problems with these data
collection mechanisms and the lack of documentation, the arrest statistics
that the OIG has reported to the Congress since 1994 are neither reliable
nor supportable. The OIG has recognized the poor quality of its data systems
and in March 2001 implemented a new management information system designed-
among other things- to improve the reliability of its data. In response to
our review, OIG officials told us they are also developing guidance for OIG
special agents to use in reporting arrest and conviction data.
We were not able to precisely determine the number and disposition of
complaints filed against HUD OIG special agents engaged in Operation Safe
Home activities. During our review, the Assistant Inspector General
Page 3 GAO- 01- 794 HUD Inspector General
for Investigations told us that the OIG did not have a centralized system
for reporting, documenting, and addressing allegations and that the OIG?s 11
district offices adjudicated complaints filed against OIG special agents.
The Assistant Inspector General for Investigations and these Special Agents
in Charge told us that they were aware of seven complaints lodged against
HUD OIG special agents engaged in Operation Safe Home activities from
January 1997 through May of 2001, including allegations such as sexual
harassment, improper use of authority, and misuse of funds. OIG officials
said that of these seven complaints, three were still under investigation
and four were closed; in two of the four closed cases, the OIG had removed
special agents from federal employment. In commenting on a draft of this
report, the Acting Deputy HUD Inspector General stated that the OIG uses a
contractor to provide it centralized information concerning allegations of
misconduct filed against OIG employees, and that all complaint files were
also maintained at OIG headquarters. This information was not consistent
with information provided earlier by OIG officials and confirmed by the
Inspector General and other OIG officials in February 2001. The Acting
Deputy Inspector General also provided us a listing of disciplinary actions
taken against OIG employees from January 2000 through January 2001. However,
we reviewed the additional information and it was not sufficient to
determine whether it included any additional allegations against special
agents engaged in Operation Safe Home activities.
The HUD OIG?s role in Operation Safe Home raises certain questions about its
independence in connection with any related audit and investigation of HUD?s
programs that aim to reduce violent and drugrelated crime in public and
assisted housing. While the Congress has authorized the OIG to administer
Operation Safe Home and has appropriated funds to the OIG for this purpose,
in August 2000, we raised concerns about the impact the OIG?s role in
Operation Safe Home could have on its ability to independently assess law
enforcement activities undertaken by HUD, its grantees, and contractors at
public and assisted housing. 1 In a May 2001 letter to the Inspector
General, we further explained our concerns. 2 First, since the OIG directly
administers and participates in Operation Safe Home activities, it cannot
independently and impartially audit or investigate those activities. Second,
because HUD
1 GAO letter to James Walsh, Chairman of Subcommittee on VA, HUD, and
Independent Agencies, Senate Committee on Appropriations; August 9, 2000. B-
285066. 2. 2 GAO letter to the Honorable Susan Gaffney, May 24, 2001. B-
285066.3.
Page 4 GAO- 01- 794 HUD Inspector General
has other similar programs to reduce violent and drug- related crime in
public and assisted housing, the OIG may not be impartial or may not be
perceived as impartial when auditing these HUD programs.
Because of our concerns about the HUD OIG?s independence, this report makes
a matter for consideration to the Congress to assess whether the long- term
involvement of the HUD OIG in Operation Safe Home is worth the actual or
perceived impairment of the OIG's independence in performing audits and
investigations of HUD's programs to reduce violent and drug- related crime
in public and assisted housing. In addition, the report also contains
recommendations to either the HUD Inspector General or the Secretary of
HUD-- depending on the Congress? decision regarding the involvement of the
HUD OIG in Operation Safe Home. These recommendations include: (1) improving
the accountability over task force activity funds and (2) enhancing the
reliability of Operation Safe Home investigative data for such actions as
arrest and convictions.
On June 8, 2001, the Acting Deputy Inspector General of HUD provided the HUD
OIG?s written comments to a draft of this report (see app. I). The OIG
agreed with our proposed recommendations and reported that it had completed
actions to implement them. The OIG did not dispute our conclusions regarding
its independence to conduct audits and investigations of HUD?s programs, but
disagreed with a number of other facts and conclusions presented in our
report. We believe that the HUD OIG has not yet fully implemented two of the
three proposed recommendations contained in the draft report because further
action is needed to improve the accountability over task force activity
funds and to enhance the reliability of Operation Safe Home investigative
data. We therefore retained those recommendations in the final report.
However, we agree that on June 4, 2001, the HUD OIG fully implemented its
policies and procedures pertaining to employee misconduct, and we deleted
the proposed recommendation and revised the report to reflect this action.
The Acting Deputy Inspector General disagreed with a number of facts and
conclusions presented in our report. We carefully considered the Acting
Deputy Inspector General?s comments and, where appropriate, made
modifications to the report to clarify issues and add additional
information. However, we made no changes to the facts and conclusions in the
report. For example, while the OIG disagreed that it cannot accurately
determine the number of arrests and convictions that have resulted from
Operation Safe Home activities, it did not dispute the reliability problems
we identified in its arrest and conviction data or address the fact that it
could not provide documentation supporting the
Page 5 GAO- 01- 794 HUD Inspector General
summary investigative data reported to the Congress. Our evaluation of the
OIG?s comments are noted in app. I.
Operation Safe Home is administered by HUD?s OIG to combat violent crime and
drug trafficking in public and assisted housing. 3 It began as an anticrime
initiative in February 1994 and was announced as a joint effort among HUD,
the Department of Justice the Department of the Treasury, and the Office of
National Drug Control Policy. To implement Operation Safe Home, the OIG-
through its 11 district offices- establishes and participates in law
enforcement task forces. Its partners include federal law enforcement
agencies- such as the Federal Bureau of Investigation (FBI) and the Drug
Enforcement Agency (DEA)- as well as state and local law enforcement
agencies. The task forces investigate criminal activity in public and
assisted housing, and OIG special agents conduct undercover operations, make
arrests, and refer cases for criminal prosecution. As of December 2000, 280
task forces were active in numerous U. S. cities. In addition, under
Operation Safe Home, the OIG facilitates the relocation of witnesses and
their families who assist law enforcement efforts. According to the
Inspector General?s September 1999 Semiannual Report to the Congress, the
OIG had facilitated the relocation of 637 families since the beginning of
Operation Safe Home. The OIG supports this activity by using HUD Section 8
vouchers set aside for this purpose. 4
The HUD OIG has not effectively managed the Operation Safe Home funding
earmarked by the Congress since fiscal year 1996. Whereas the OIG did not
spend a substantial amount of the funds it allotted for Operation Safe Home
law enforcement task forces between fiscal years 1996 and 2000, the OIG also
estimates that-- during that same period-- it used other OIG funds to
supplement the Operation Safe Home salaries and expenses allotment. In
addition, the OIG did not have information on the amount of money allotted
to and spent by each of its 280 task forces, and had only limited
information on how this money was specifically spent.
3 Our review of Operation Safe Home focused on the OIG?s violent and drug-
related crime investigations; however, the OIG also uses the term Operation
Safe Home to encompass selected high priority white collar fraud
investigations.
4 The Section 8 program is administered by HUD and public housing
authorities to assist very low- income families, the elderly, and the
disabled obtain affordable housing- including subsidized housing as well as
single- family homes, townhouses, and apartments in the private market.
Background
Operation Safe Home Funding Not Effectively Managed
Page 6 GAO- 01- 794 HUD Inspector General
From fiscal year 1996 through 2001, the Congress earmarked $92.5 million to
the HUD OIG to fund Operation Safe Home, and these funds are available until
expended. The Congress began funding Operation Safe Home in fiscal year 1996
with $2.5 million and raised this to $10 million in fiscal year 1997. From
fiscal year 1998 through 2001, the Congress annually earmarked $20 million
to the OIG to administer Operation Safe Home. The OIG has allotted Operation
Safe Home funds for two purposes: (1) expenses associated with law
enforcement task forces such as overtime pay for local law enforcement,
vehicle leasing, and training, and (2) salaries and expenses of OIG special
agents working on Operation Safe Home drug and violent crime investigations
and witness relocation activities. As figure 1 shows, in fiscal year 1996,
the OIG allotted all of the appropriation-$ 2.5 million- for task force
activities, and since fiscal year 1997, the OIG has split the appropriation
evenly- 50 percent for task force activities and 50 percent for salaries and
expenses.
Figure 1: HUD OIG Allotments of Operation Safe Home Funding, Fiscal Years
1996 2001
Note: Data not independently verified by GAO. Source: HUD OIG.
Amount and Source of Operation Safe Home Funding
Page 7 GAO- 01- 794 HUD Inspector General
The source of congressional funding for Operation Safe Home is the Public
Housing Drug Elimination Program. The Congress established the Drug
Elimination Program to provide grants to public housing authorities to
reduce or eliminate drug- related crime in public housing developments.
Eligible uses of this grant money include- but are not limited to- employing
security personnel and making physical improvements to housing structures to
increase security. As figure 2 illustrates, in fiscal year 2000, about 6
percent of the Drug Elimination Program?s appropriation was earmarked for
the HUD OIG to fund Operation Safe Home. As figure 3 shows, the $20 million
the OIG received in fiscal year 2000 for Operation Safe Home represented
about 22 percent of the OIG?s budget for that fiscal year.
Figure 2: HUD?s Public Housing Drug Elimination Program Appropriation,
Fiscal Year 2000 (Total $310 Million)
Source: Public Law 106- 74, p. 113, Stat. 1057- 1058.
Page 8 GAO- 01- 794 HUD Inspector General
Figure 3: Appropriations Available to HUD OIG, Fiscal Year 2000 (Total $93
Million)
Source: Public Law 106- 74, p. 113, Stat. 1058 and 1068.
The HUD OIG has not spent a substantial amount of the funds it allotted for
Operation Safe Home task forces; conversely, it has expended all the funds
it allotted to pay for the salaries and expenses of OIG special agents
engaged in Operation Safe Home activities and has also used other OIG funds
for this purpose. In particular, from fiscal year 1996 through 2000 (the
last full fiscal year for which data are available) the OIG had not
obligated about $10 million of the $37.5 million it allotted to fund
Operation Safe Home law enforcement task forces. 5 In addition, of the $27.5
million that had been obligated, about $8 million had not been expended by
the end of fiscal year 2000. While these funds remain available to the OIG
until expended, more than half of the unexpended funds were obligated in
fiscal year 1999 or earlier, as shown in figure 4. We plan to review these
unexpended balances as part of our budget justification review of HUD?s
proposed fiscal year 2002 budget.
5 From fiscal year 1996 through 2001, the HUD OIG allotted $47. 5 million to
pay for Operation Safe Home task force activities. However, complete
expenditure data for fiscal year 2001 are not available; therefore, our
analysis of these funds covers fiscal years 1996 through 2000. Substantial
Amount of
Operation Safe Home Funding Not Spent
Page 9 GAO- 01- 794 HUD Inspector General
Figure 4: Operation Safe Home: Status of Task Force Funds, Fiscal Years 1996
2000 (by Year)
Note: Data as of January 2001. Data not independently verified by GAO.
Source: HUD OIG.
The Inspector General told us that Operation Safe Home task force money is
unobligated because the HUD OIG has received more funding than was needed.
OIG officials stated that as a result, HUD?s proposed fiscal year 2002
budget request for Operation Safe Home was reduced from $20 million to $10
million, and that Operation Safe Home?s unobligated balances would finance
task force activities through fiscal year 2002.
In contrast to the HUD OIG not expending the task force allotment, the OIG
estimates that it has used other OIG monies to pay for the salaries and
expenses of special agents working on Operation Safe Home activities.
Specifically, from fiscal year 1997 through fiscal year 2000 (the last full
fiscal year for which data are available) the OIG allotted $35 million of
Page 10 GAO- 01- 794 HUD Inspector General
Operation Safe Home earmarks for salaries and expenses. 6 However, the OIG
estimates that during this period it expended $38.9 million on salaries and
expenses of special agents working on Operation Safe Home activities. 7
Therefore, the OIG estimates that it used $3.9 million of other OIG funds-
about 10 percent more than initially allotted- to pay for the salaries and
expenses of special agents working on Operation Safe Home activities. The
use of other OIG funds to pay for Operation Safe Home activities was
permitted by law. Figure 5 illustrates the OIG's estimates of funds expended
annually to pay for the salaries and expenses of OIG special agents engaged
in Operation Safe Home activities.
6 From fiscal year 1997 though 2001, the HUD Inspector General allotted $45
million to pay for the salaries and expenses of special agents involved in
Operation Safe Home activities. However, complete expenditure data for
fiscal year 2001 are not available; therefore, our analysis of these funds
covers fiscal years 1997 through 2000.
7 The HUD OIG estimated these expenditures because funds allotted for
Operation Safe Home salaries and expenses are directly transferred into the
OIG's Salaries and Expenses account and the OIG does not and is not required
to separately account for how the allotted funds are spent.
Page 11 GAO- 01- 794 HUD Inspector General
Figure 5: Operation Safe Home: Estimated Funds Expended on Salaries and
Expenses, Fiscal Years 1997- 2000 (by Year)
Note: Data as of December 2000. Data not independently verified by GAO.
Source: HUD OIG.
HUD OIG officials were able to provide only limited information on how the
task force funds were spent. Specifically, while the OIG was able to supply
overall obligation and expenditure data, it could not readily identify how
much money was allotted to and obligated and expended by individual task
forces. Furthermore, it could not readily provide information on what
specific activities were funded. For example, HUD's accounting system could
not accurately provide information on how much was expended for training and
payment of overtime costs. OIG officials stated that while HUD's accounting
system has specific expenditure levels- such as training and payment of
overtime costs-- that OIG staff rarely use and have not been required to use
the more detailed levels. As figure 6 illustrates, in fiscal year 2000, 63
percent of the expenditures for task force activities were categorized as
?Other.?
Limited Information on Task Force Expenditures
Page 12 GAO- 01- 794 HUD Inspector General
Figure 6: Operation Safe Home: Expenditure of Task Force Funds, Fiscal Year
2000 (Total $2. 7 Million)
Note: Data as of September 2000. Data not independently verified by GAO.
Source: HUD OIG.
The OIG is acting to improve accountability over funds allotted for task
force activities. As a result of our review, the HUD OIG is instituting
additional mechanisms to identify the funding allotted to and obligated and
expended by each of its 280 task forces. The OIG has further advised its
district offices to provide more detailed information on specific task force
obligations and expenditures. In addition, in November 2000, the Inspector
General placed some restrictions on the use of Operation Safe Home funds
allotted for task force activities. These restrictions precluded the
formation of additional task forces, although existing task forces continue
to be funded and may request additional funding. OIG officials stated that
the restrictions were necessary because of delays in contracting for the
required audits of Operation Safe Home and due to allegations of misuse of
funding at the OIG?s Denver office. When we completed our review, the
required audit of Operation Safe Home was under way and was scheduled to be
completed in July 2001, and the FBI and OIG were investigating the
allegations in the Denver office (as discussed later in the report).
Page 13 GAO- 01- 794 HUD Inspector General
The HUD OIG cannot accurately determine the number of arrests and
convictions that have resulted from Operation Safe Home activities because
the data it has maintained are unreliable. According to the OIG database,
investigations stemming from Operation Safe Home have resulted in about
25,000 arrests and 500 convictions since 1994; however, these data are
unreliable because they are not consistent, complete, or accurate. We found
that the OIG lacked a single and reliable information system and instead
used multiple data collection methods of questionable reliability. For
example, the OIG:
used narrative reports composed by OIG special agents to compile arrest
and conviction statistics. However, the OIG had not developed guidance
detailing the type of information that should be included in the narrative
reports. As a result, OIG special agents could and did have differing
interpretations on what to include. For example, while some OIG special
agents told us they only counted arrests for which they were physically
present, others counted all Operation Safe Home arrests executed by any task
force participant. Also, some OIG special agents told us they only tracked
federal convictions, while others tracked federal, state, and local
convictions.
compiled the narrative reports by highlighting discussions of arrests and
convictions and then entered the data into a database. This method is highly
prone to error because it relied on the interpretation of the individuals
reading the narrative reports and manually identifying and transferring
information. For example, we found at least 57 instances of apparent double
entries of arrest data, potentially resulting in the OIG overreporting 600
arrests.
maintained arrest and conviction data in its Investigator Case Management
System database. This database was originally developed in 1980 to track the
time and attendance of OIG special agents but was expanded in 1994 to track
Operation Safe Home investigative data. OIG special agents told us the
system was antiquated, cumbersome, unreliable, and highly prone to error and
technical difficulties. For example, OIG staff said they frequently lost
data they had entered or were ?booted out? of the case management system for
no apparent reason. As a result, according to one OIG official, tracking and
inputting investigative data was a ?huge clerical effort? and was thus often
a low priority for special agents.
To supplement the data collected from the systems named above, the HUD OIG
also manually compiled investigative information through periodic
?data calls? to district offices. These calls were meant to collect
Operation Safe Home
Arrest and Conviction Data Are Unreliable
Page 14 GAO- 01- 794 HUD Inspector General
information on selected items such as indictments, prosecutions, and search
warrants that have resulted from OIG investigative activities.
The HUD OIG used these data collection mechanisms to compile summary data-
including the number of arrests resulting from Operation Safe Home
investigations- and reported to the Congress every 6 months on Operation
Safe Home and its other activities. However, the OIG could not provide
workpapers or documentation supporting the number of arrests reported in 12
semiannual reports to the Congress. Therefore, the arrest statistics that
the OIG reported to the Congress since 1994 are neither reliable nor
supportable. 8
The HUD OIG has recognized major weaknesses in its information systems and
has taken actions to improve the reliability of Operation Safe Home arrest
and conviction data. For example, the OIG began working with a consultant in
1995 to develop a new information system to better manage its investigative
data collection activities. The new system was implemented in March 2001. A
OIG official stated that it allows OIG special agents in the field to
directly input data into a single information system, and thus automates and
centralizes the OIG?s investigative data collection efforts. OIG officials
believe that this system will ultimately resolve reliability problems and
concerns. Further, as a result of our review, the OIG is developing guidance
for OIG special agents so that they consistently report arrests and
convictions.
We could not precisely determine the number of complaints lodged against HUD
OIG special agents working on Operation Safe Home investigations because OIG
officials told us that they had no central system for reporting,
documenting, and addressing allegations. Instead, a Special Agent in Charge-
at the OIG?s 11 district offices- adjudicated complaints filed against OIG
special agents. The Assistant Inspector General for Investigations and
Special Agents in Charge told us that they were aware of seven complaints
lodged against OIG special agents engaged in Operation Safe Home activities
from January 1997 through May of 2001. 9
8 The two most recent HUD OIG semiannual reports to the Congress (March and
September 2000) did not include summary data. 9 As of December 2000, 113 HUD
OIG special agents were engaged in Operation Safe Home activities. OIG
Officials
Identified Few Complaints Against Its Agents
Page 15 GAO- 01- 794 HUD Inspector General
An OIG special agent executing a search warrant with local police officers
was accused of excessive use of force when handcuffing residents- who were
minors- during a search. The OIG investigated the complaint, found that the
allegation of excessive use of force had no merit, and the OIG closed the
allegation.
An OIG special agent was accused of sexual harassment by a local police
officer. The complaint was investigated by the OIG. The investigation
disclosed that although no sexual harassment, per se, occurred, the special
agent acted inappropriately and unprofessionally to the police officer and
others. During the investigation, the OIG identified additional misconduct.
The special agent chose to leave the OIG and therefore, the OIG closed the
allegation.
An OIG special agent was accused of having an improper intimate
relationship with an informant. The OIG investigated the allegation and, as
a result, subsequently removed the special agent from federal employment.
An OIG special agent was accused of improper use of authority and other
infractions. The OIG investigated the allegation and, as a result, removed
the special agent from federal employment.
An OIG special agent was accused of multiple offenses including
mishandling evidence, insubordination, and conducting unauthorized
activities. The OIG was investigating the allegation.
An OIG special agent was accused of violating the guidelines of the HUD
OIG Firearms Manual. The OIG was investigating the allegation.
OIG special agents in the Denver district office were accused of misuse of
funds, abuse of authority, and personal misconduct. The FBI and OIG were
investigating these allegations.
In commenting on a draft of this report, the Acting Deputy HUD Inspector
General stated that the HUD OIG employs a contractor that provides it
centralized information concerning allegations of misconduct filed against
OIG employees, and that all complaint files were also maintained at OIG
headquarters. This was not consistent with the information provided earlier
by the former Assistant Inspector General for Investigations who stated that
no such system existed and that all records were kept in the 11 district
offices. Furthermore, during a meeting in February 2001 conducted to confirm
facts ascertained during our review, OIG managers- including
Page 16 GAO- 01- 794 HUD Inspector General
the Inspector General- agreed to the former Assistant Inspector General's
characterization. The Acting Deputy HUD Inspector General also provided
additional information concerning disciplinary actions taken against a
number of OIG employees from January 2000 through January 2001. However,
this information was insufficient to determine whether it included any
additional allegations against OIG special agents engaged in Operation Safe
Home activities.
In August 2000, the HUD OIG established policies and procedures pertaining
to employee misconduct that includes a centralized internal affairs
investigations unit and a unified process to (1) receive and investigate
allegations of employee misconduct, (2) evaluate the misconduct, and (3)
where appropriate, propose disciplinary action. These new policies and
procedures took effect on June 4, 2001.
The HUD OIG's independence to conduct audits and investigations of HUD?s
programs to reduce violent and drug- related crime in public and assisted
housing is subject to question given its role in Operation Safe Home.
Although the Congress has authorized the OIG to administer Operation Safe
Home to combat violent and drug- related crime and has earmarked funds to
the OIG for this purpose, in August 2000, we raised concerns about the
impact the OIG?s role in Operation Safe Home could have on its ability to
assess law enforcement activities at public and assisted housing by HUD, its
grantees, and contractors. 10 In a May 2001 letter to the Inspector General,
we further explained our concerns. 11
First, under applicable Government Auditing Standards, the OIG cannot
independently and impartially audit and investigate activities it is
directly involved in. 12 Since the HUD OIG directly administers and carries
out Operation Safe Home activities, the OIG cannot independently and
impartially audit and investigate those activities it carries out itself.
For example, OIG special agents investigate individuals committing violent
or drug- related crime in public and assisted housing, and the OIG
administers a funding program to compensate participating local law
enforcement agencies for overtime and investigative expenses.
10 See B- 285066. 2. 11 See B- 285066. 3. 12 Government Auditing Standards,
1994 Revision, June 1994, section 3.11, p. 22. Operation Safe Home
Raises Questions About OIG?s Independence
Page 17 GAO- 01- 794 HUD Inspector General
Second, since both HUD and the HUD OIG are involved in combating violent and
drug- related crime in public and assisted housing, the OIG may not be
perceived as impartial when auditing HUD?s efforts to combat drugs and crime
in public and assisted housing. HUD?s mission includes fostering safe and
decent public housing, and HUD?s programs include various activities to
reduce violent and drug- related crime in public and assisted housing in
support of that mission. For example, under the Public Housing Drug
Elimination program and other programs, public housing agencies receive
grants to reimburse local law enforcement agencies for additional security,
to reimburse local agencies to investigate and prosecute drug- related
crime, and other purposes. Given that Operation Safe Home is also designed
to reduce violent and drug- related crime in public and assisted housing,
the OIG may not be perceived as impartial when auditing or investigating HUD
programs that are also designed to accomplish the same objective.
Operation Safe Home does not have the necessary information systems and
management controls to ensure that HUD?s OIG managers can readily monitor
the obligation and expenditure of funds and track the numbers of arrests and
convictions. As a result, the OIG does not have a reliable mechanism for
effectively allocating program resources or for accurately estimating its
funding needs. Furthermore, in the absence of complete, consistent, or
accurate information, the OIG has not had the means to accurately report the
results of its investigations and thus to provide the Congress with reliable
and supportable information on what Operation Safe Home has accomplished.
The OIG has recognized the need for more effective management controls
within Operation Safe Home and has begun to address the problems. These
actions, once implemented, should improve the ability of the OIG to allocate
resources more effectively, better estimate future funding needs, and more
accurately measure and report the program?s accomplishments. Nevertheless,
while management improvements are under way, we remain concerned about the
consequences of a long- term involvement of the OIG in Operation Safe Home.
The OIG cannot independently and impartially audit or investigate Operation
Safe Home, and may not be perceived as impartial when auditing other similar
HUD programs. For these reasons, as we stated in August 2000, Operation Safe
Home raises questions about the OIG?s ability to independently audit and
investigate HUD programs designed to reduce violent and drug- related crime
in public and assisted housing. Conclusions
Page 18 GAO- 01- 794 HUD Inspector General
We believe that the Congress should consider whether the long- term
involvement of the HUD OIG in Operation Safe Home is worth the actual or
perceived impairment of the OIG?s independence in performing audits and
investigations of HUD?s programs to reduce violent and drug- related crime
in public and assisted housing.
We recommend that the HUD Inspector General or the Secretary of HUD-
depending on Congress? decision regarding the involvement of the HUD OIG in
Operation Safe Home- should ensure that actions begun by the Inspector
General to improve the management and oversight of Operation Safe Home are
fully and effectively implemented in a timely manner. Specifically,
improve the accountability over Operation Safe Home task force activity
funds by developing and implementing a system to track funding allotted to
and obligated and expended by individual task forces, and
improve the reliability of Operation Safe Home investigative data by (a)
promulgating additional guidance to be used by HUD staff when inputting
investigative information into the recently developed information system and
(b) properly maintaining documentation supporting investigative data
reported to the Congress.
On June 8, 2001, the Acting Deputy Inspector General of HUD provided the HUD
OIG?s written comments to a draft of this report (see app. I). The OIG
agreed with our proposed recommendations and reported that it had completed
actions to implement them. The OIG did not dispute our conclusions regarding
its independence to conduct audits and investigations of HUD?s programs, but
disagreed with other information presented in the report. Specifically, the
OIG suggested that the draft report's findings lacked supporting criteria,
that a number of facts presented were inaccurate, and that the conclusions
were overstated given the facts presented.
We believe that the HUD OIG has not yet fully implemented two of the three
proposed recommendations contained in the draft report. On June 5, 2001, the
OIG issued new procedures to track funding allotted to and obligated and
expended by individual task forces; however, further action is needed to
ensure that the OIG fully and effectively implements this system. Action
also is still needed to promulgate guidance for OIG staff in reporting
arrests and convictions and to establish procedures to properly Matter for
Congressional Consideration
Recommendations for Executive Action
Agency Comments and Our Evaluation
Page 19 GAO- 01- 794 HUD Inspector General
maintain documentation supporting investigative data reported to the
Congress. We therefore retained these recommendations in the final report.
However, we agree that on June 4, 2001, the HUD OIG fully implemented its
policies and procedures pertaining to employee misconduct, and we have
deleted the proposed recommendation and revised the report to reflect this
action.
Although the HUD OIG did not dispute our conclusions regarding its
independence to conduct audits and investigations of HUD?s programs to
reduce violent and drug- related crime in public and assisted housing, the
Acting Deputy Inspector General questioned our matter for congressional
consideration that the Congress should assess whether the long- term
involvement of the OIG in Operation Safe Home is worth the actual or
perceived impairment of the OIG?s independence. According to the Acting
Deputy Inspector General, the Congress has already considered our concerns
and ?apparently determined them to be without merit." We do not believe that
the Congress has made any definitive statement in law or legislative history
regarding the concern discussed in this report about Operation Safe Home and
the OIG?s audit and investigative independence. The OIG is relying upon the
absence of such a provision in a bill or proposed amendment to infer
approval; however, unless there is an explanation in the legislative history
or the reason is indisputably clear from the context, the effect of such an
omission or deletion is inconclusive. 13 Therefore, we made no change to our
proposed matter for congressional consideration.
The Acting Deputy Inspector General disagreed that the HUD OIG could not
identify how much funding was allotted to and obligated and expended by
Operation Safe Home task forces and that the OIG had limited information on
how task force funds were spent. The Acting Deputy Inspector General stated
that reliable financial information exists within the OIG but was
decentralized and under the control of Operation Safe Home case agents in
the field to protect sensitive and confidential investigative information.
While we acknowledge that a review of field office financial records was
outside the scope of our review, we disagree that it was incumbent upon us
to examine, review, summarize, and aggregate records in 11 locations to
reconstruct how the OIG spent its Operation Safe Home funds. Instead, we
believe that the OIG is responsible for maintaining useful aggregate
financial information and that confidentiality concerns do not obviate the
responsibility of program
13 Fox v. Standard Oil Co., 294 U. S. 87, 967 (1935); See, 1 Principles of
Federal Appropriations law (PFAL), 2- 71 - 2- 72 (2nd ed. 1991) and other
cases cited therein.
Page 20 GAO- 01- 794 HUD Inspector General
managers to exercise basic oversight. OMB Circular A- 127 requires that
federal agency financial management systems provide ?for tracking of
specific program expenditures,? that they ?ensure that consistent
information is readily available and provided to internal managers at all
levels within the organization,? and that they ?be able to provide financial
information in a timely and useful fashion to . . . support fiscal
management of program delivery and program decisionmaking.? 14 Without basic
financial information, such as the amount of funding allotted to individual
task forces and how it was spent, OIG managers did not have sufficient
information to effectively allocate resources or estimate funding needs. As
such, we disagree with the OIG that our conclusion that the OIG did not
effectively manage Operation Safe Home funds is overly broad and made no
changes to the report.
The Acting Deputy Inspector General also disagreed that the HUD OIG cannot
determine the number of arrests and convictions that have resulted from
Operation Safe Home activities. The OIG stated that although it is
developing a centralized management information system for arrest and
conviction data, it is not required to have one, and that we could have
accurately determined the number of arrests and convictions by reviewing or
sampling the nearly 300 case files in each of the OIG?s 11 district offices.
We disagree with the OIG that it is not responsible for centrally and
accurately accounting for investigative information. The Inspector General
Act of 1978, as amended, requires the OIG to report to the Congress on its
activities semiannually, including convictions resulting from cases it
refers for prosecution. While the OIG has provided investigative data to the
Congress, the OIG has not fulfilled the requirement effectively because the
data it has provided were unreliable and unsupportable. The OIG provided no
evidence during our review concerning the accuracy of its case files, nor
could it demonstrate or document whether or how such information was used to
compile and report arrest and conviction data. As OMB Circular 123
stipulates, agencies ?should design management structures that help ensure
accountability for results.? Agencies?
?management controls? must ?reasonably ensure that reliable and timely
information is obtained, maintained, reported and used for decision making.?
Additionally, ?documentation . . . must be clear and readily available for
examination.? 15 Furthermore, the Acting Deputy Inspector
14 OMB Circular A- 127, Financial Management Systems, July 23, 1993,
www. whitehouse. gov/ omb/ circulars/ a127/ a127. html. 15 OMB Circular A-
123, Management Accountability and Control, June 21, 1995,
www. whitehouse. gov/ omb/ circulars/ a123/ a123. html.
Page 21 GAO- 01- 794 HUD Inspector General
General did not dispute the facts presented in our draft report supporting
the conclusion that the OIG?s arrest and conviction data were unreliable and
unsupportable. We therefore made no changes to the report.
As discussed in the report, the Acting Deputy Inspector General disputed the
statement in our draft report that the HUD OIG had no centralized system for
reporting, documenting, and addressing allegations against OIG special
agents. He stated that the OIG uses a contractor to maintain information
concerning allegations of misconduct filed against OIG employees, and that
all complaint files were also maintained at OIG headquarters. We modified
the report to reflect the fact that this information was not consistent with
the information provided earlier by OIG officials during our review. The
Acting Deputy Inspector General also provided us additional information
concerning disciplinary actions taken against a number of OIG employees from
January 2000 through January 2001. As discussed in the report, we reviewed
the additional information and it was not sufficient to determine whether it
included any additional allegations against OIG special agents engaged in
Operation Safe Home activities.
In February 2001, we presented a written statement of facts concerning
Operation Safe Home financial information, arrest and conviction data, and
complaints filed against HUD OIG special agents to the HUD OIG. We discussed
this statement of facts with the Inspector General, the Deputy Inspector
General, the Assistant Inspector General of Audits, the Acting Assistant
Inspector General for Management and Policy, the Assistant Inspector General
for Investigations, the General Counsel, and others. 16 At that time, all
OIG officials agreed with the facts we subsequently presented in this
report. For these reasons, as well as the reasons discussed above, we made
no changes to the facts and conclusions presented. We have, however, made
modifications where appropriate to clarify the issues presented in the
report.
16 The Assistant Inspector General for Audits is currently the Acting Deputy
Inspector General.
Page 22 GAO- 01- 794 HUD Inspector General
To review Operation Safe Home issues, we reviewed HUD OIG reports, funding
data, regulations, databases, and other documents, and discussed these with
OIG staff in Washington, D. C., including the Assistant Inspector General
for Investigations and his staff, and the Acting Assistant Inspector General
for Management and Policy and his staff. We also conducted telephone
interviews with the Special Agents in Charge at each of the OIG?s 11
district offices. Our review of Operation Safe Home focused on the HUD OIG?s
violent and drug- related crime initiatives; however, the OIG also uses the
term Operation Safe Home to encompass selected high priority white collar
fraud investigations. We did not independently verify the HUD OIG?s budget
and financial data. In addition, we reviewed funding data at OIG
headquarters in Washington, D. C.; we did not review funding data maintained
by the 11 OIG district offices. Further, our review of federal funding for
Operation Safe Home was limited to the funding provided to the HUD OIG; we
did not determine what funds have been expended by other federal law
enforcement agencies, such as the FBI and DEA, participating in Operation
Safe Home activities.
To assess the reliability of arrest and conviction data, we (1) performed
checks of the data for accuracy, completeness, and reasonableness and (2)
interviewed OIG headquarters and field officials to learn how the
information system was structured, controlled, and used. We conducted our
review from November 2000 through May 2001 in accordance with generally
accepted government auditing standards.
We are sending copies of this report to the Senate Committee on Banking,
Housing & Urban Affairs; the Senate Appropriations Committee; the Senate
Budget Committee; the Senate Finance Committee; the Senate Governmental
Affairs Committee; the House Committee on the Budget; the House Committee on
Appropriations; the House Committee on Financial Services; the House
Committee on Government Reform; the Office of Inspector General, Department
of Housing and Urban Development; the Secretary of the Department of Housing
and Urban Development; the Attorney General of the Department of Justice;
the Acting Director of the Federal Bureau of Investigations; and the
Administrator of the Drug Enforcement Agency. We will also make copies
available to others upon request. Scope and
Methodology
Page 23 GAO- 01- 794 HUD Inspector General
If you have any questions regarding this report, please call me or Steve
Cohen at (202) 512- 7631. Key contributors to this report are listed in app.
II.
Sincerely yours, Stanley J. Czerwinski Director, Physical Infrastructure
Issues
Appendix I: Comments From the Office of Inspector General, Department of
Housing and Urban Development
Page 24 GAO- 01- 794 HUD Inspector General
Appendix I: Comments From the Office of Inspector General, Department of
Housing and Urban Development
Note: GAO comments supplementing those in the report text appear at the end
of this appendix.
See comment 3. See comment 2. See comment 1.
Appendix I: Comments From the Office of Inspector General, Department of
Housing and Urban Development
Page 25 GAO- 01- 794 HUD Inspector General
See comment 7. See comment 6.
See comment 5. See comment 4.
Appendix I: Comments From the Office of Inspector General, Department of
Housing and Urban Development
Page 26 GAO- 01- 794 HUD Inspector General
See comment 12. See comment 11.
See comment 10. See comment 9.
See comment 8.
Appendix I: Comments From the Office of Inspector General, Department of
Housing and Urban Development
Page 27 GAO- 01- 794 HUD Inspector General
See comment 15. See comment 14. See comment 13.
Appendix I: Comments From the Office of Inspector General, Department of
Housing and Urban Development
Page 28 GAO- 01- 794 HUD Inspector General
See comment 19. See comment 18.
See comment 17. See comment 16.
Appendix I: Comments From the Office of Inspector General, Department of
Housing and Urban Development
Page 29 GAO- 01- 794 HUD Inspector General
See comment 21 See comment 20.
Appendix I: Comments From the Office of Inspector General, Department of
Housing and Urban Development
Page 30 GAO- 01- 794 HUD Inspector General
See comment 22.
Appendix I: Comments From the Office of Inspector General, Department of
Housing and Urban Development
Page 31 GAO- 01- 794 HUD Inspector General
The following are GAO?s comments on the HUD Office of Inspector General?s
(OIG) letter dated June 8, 2001.
1. We agree that, on June 4, 2001, the HUD OIG fully implemented its
policies and procedures pertaining to employee misconduct, and we have
deleted the proposed recommendation and revised the report to reflect this
action. However, the OIG has not yet completed action on two other
recommendations. While on June 5, 2001, the OIG issued new procedures to
track funding obligated and expended by individual task forces, further
action is needed to ensure that the OIG fully and effectively implements
this system. Action is also still needed to promulgate guidance to be used
by OIG staff in reporting arrests and convictions and to establish
procedures to properly maintain documentation supporting investigative data
reported to the Congress.
2. The HUD OIG stated that although it agreed with the recommendations it
did not agree with many of the facts and conclusions supporting those
recommendations. However, the OIG did not provide evidence or additional
information to support its position. For example, although the OIG disagreed
that it cannot accurately determine the number of arrests and convictions
that have resulted from Operation Safe Home activities, it also did not
dispute any of the facts we presented to support our finding that Operation
Safe Home arrest and conviction data were unreliable. A more detailed
analysis of the statements in the OIG's letter is presented in the comments
that follow. While we made no changes to the facts and conclusions in our
draft report, we made modifications where appropriate to clarify the issues
presented in the report.
3. We agree that the HUD OIG does not maintain its own accounting system,
and have made modifications to the report where appropriate to reflect that
the OIG uses HUD?s accounting system. While we recognize there are
limitations in HUD?s accounting and financial management systems and have
reported on these limitations in the past, we do not believe that these
limitations inherently prevent the OIG from identifying funding by
individual task forces or preclude it from centrally maintaining more
detailed information spending data. For example, the OIG is currently
working with HUD to use HUD?s accounting system to enable it to track the
use of funds by individual task forces and provide greater detail on how
funds are spent. GAO Comments
Appendix I: Comments From the Office of Inspector General, Department of
Housing and Urban Development
Page 32 GAO- 01- 794 HUD Inspector General 4. We disagree that our finding
that the OIG has not effectively managed
Operation Safe Home funding is ?overly broad.? We based this conclusion on
several factors, including the OIG?s inability to readily identify how much
funding was allotted to and obligated and expended by individual task forces
and the limited information the OIG had centrally on how task force funds
were spent. As a result, it did not have a reliable mechanism for estimating
its funding needs, allocating program resources, and determining how funds
were spent- and thus effectively manage its Operation Safe Home funding. We
agree with the HUD OIG?s statement that administration and management
responsibilities for Operation Safe Home have been largely delegated to the
OIG?s 11 district offices and that decentralized financial information
exists in each of those offices. We acknowledged that we did not review data
maintained by the field offices; however, we do not believe that it was
incumbent upon us to examine, review, summarize, and aggregate records in 11
locations to reconstruct how the OIG spent its Operation Safe Home funds.
Instead, we believe that the OIG is responsible for maintaining useful
aggregate financial information and that decentralization of program
administration does not obviate the responsibility of headquarters program
managers to exercise basic oversight. For example, Office of Management and
Budget (OMB) Circular A- 127 states that financial management systems should
"ensure that consistent information is readily available and provided to
internal managers at all levels within the organization" and that they
?be able to provide financial information in a timely and useful fashion to?
support fiscal management of program delivery and program decision making?
(OMB Circular A- 127, Financial Management Systems, July 23, 1993,
www. whitehouse. gov/ omb/ circulars/ a127/ a127. html) (see also comment
13).
5. Where appropriate, we modified our discussion on the use of Operation
Safe Home funds to avoid any possible inference that the HUD OIG?s
allocation of funds was improper. See comments 7 through 12.
6. We disagree that this statement is inaccurate. As comment 13 discusses,
our finding that information on task force expenditures was limited was
based on the fact that the OIG could not readily identify the funding
allotted to and obligated and expended by its individual task forces and
could only account for Operation Safe Home obligations and expenditures in
four broad categories.
Appendix I: Comments From the Office of Inspector General, Department of
Housing and Urban Development
Page 33 GAO- 01- 794 HUD Inspector General
7. While we have no objection to the OIG?s allotment of its Operation Safe
Home appropriations, we disagree that the Congress ?mandated?
specific Operation Safe Home allotments for task force operations and
salaries and expenses from fiscal year 1996 through fiscal year 2001.
First, the OIG has more flexibility in allotting the funds than is stated in
its letter. The Congress appropriates monies for Operation Safe Home through
two set- asides in the Public Housing Drug Elimination Grant Program account
contained in HUD?s annual appropriation. One of the set- asides is to ?be
used in connection with efforts to combat violent crime in public and
assisted housing under the Operation Safe Home Program administered by the
Inspector General of the Department of Housing and Urban Development.? The
other set aside is ?provided to the Office of Inspector General for
Operation Safe Home.? See, for example, Pub. L. 106- 377, 114 Stat. 1441,
1441A- 24 (2000). The language of each set- aside is broad enough to permit
the payment of expenses incurred by the Inspector General in carrying out
Operation Safe Home. For example, the salary of an OIG agent working
undercover in connection with an Operation Safe Home investigation could be
funded out of either set- aside. Neither appropriation is limited as the OIG
has stated. Both appropriations are available for carrying out Operation
Safe Home.
Second, as a technical matter, the Congress does not allot funds. It
appropriates funds. Once the Congress appropriates funds, the OMB apportions
the funds to assure an effective and orderly use of the appropriated funds.
Upon receipt of an apportionment, the responsible agency official,
consistent with the apportionment, will allot the funds among the various
programs and activities for which the Congress had appropriated the funds.
Thus, the ?Congress
appropriates, OMB apportions, and the receiving agency allots (or allocates)
within the apportionment.? 1 Principles of Federal Appropriations Law Ch. 1,
Part D, Sec. 3. a (emphasis in original).
8. Our report does not suggest (as the HUD OIG stated on page 2 of its
letter) that there is "anything wrong" with the purpose and timing of the
OIG?s obligation and expenditure of Operation Safe Home funds. We made
modifications to the report to more clearly outline how the OIG obligated
and expended Operation Safe Home funds.
9. We do not believe, and the draft report did not state, that the existence
of unexpended or unobligated balances, by itself, means that the HUD OIG has
not effectively managed Operation Safe Home funds. Instead,
Appendix I: Comments From the Office of Inspector General, Department of
Housing and Urban Development
Page 34 GAO- 01- 794 HUD Inspector General
the report?s finding that the OIG has not effectively managed Operation Safe
Home funds is based on a combination of information gathered, including the
OIG?s inability to readily identify how much funding was allotted to and
obligated and expended by individual task forces, and the limited
information it had on hand on how task force funds were spent.
10. We believe we have given the HUD OIG?s fiscal year 2002 budget request
the proper emphasis. As stated in the report, we discussed our findings on
unobligated and unexpended Operation Safe Home funds with HUD and HUD OIG
officials in February 2001. Subsequent to this discussion, in April 2001,
HUD submitted its proposed fiscal year 2002 budget requesting that the
annual earmark for Operation Safe Home be reduced from $20 million to $10
million over fiscal year 2001 levels. OIG officials told us they plan to use
Operation Safe Home?s unobligated balances to finance task force activities
through fiscal year 2002. We made no modifications to the report.
11. As discussed in comment 7, the Congress has, in recent years, earmarked
a portion of the Drug Elimination Grant Program appropriation for Operation
Safe Home and the funds are transferred to the OIG Salaries and Expense
account (See, e. g., Pub. L. 106- 377, 114 Stat. at 1441A- 24 and 1441A-
48.) Our discussion in the draft report- that the OIG does not separately
account for the expenditure of earmarked funds it allots for OIG salaries
and expenses- was descriptive in nature and included, in the same sentence
quoted in the OIG?s letter, the statement that this practice was
permissible. Nevertheless, we amended our discussion to allay any concerns
that we were criticizing the OIG?s practices.
12. We agree with the OIG that the balance of its Salaries and Expenses
account, not solely the earmarked funds, is available to pay for salaries
earned and expenses incurred in connection with Operation Safe Home.
Although the draft report did not suggest otherwise, we have modified the
report to make clear that the use of funds from the OIG Salaries and Expense
account to pay for Operation Safe Home salaries and expenses was permitted
by law.
13. We disagree that the statements in the report cited by the OIG were
inaccurate. These statements were based on the fact that cognizant OIG
officials could not centrally and readily identify the funding it provided
to its individual task forces and could only account for Operation Safe Home
obligations and expenditures in four broad
Appendix I: Comments From the Office of Inspector General, Department of
Housing and Urban Development
Page 35 GAO- 01- 794 HUD Inspector General
categories. The OIG stated that more detailed financial records are
available in OIG?s 11 field offices, suggesting that an examination of these
records would have provided detailed information on Operation Safe Home task
force obligations and expenditures. We acknowledge that a review of field
office financial records was outside the scope of our review. However, we
disagree that it was incumbent upon us to examine, review, summarize, and
aggregate records in 11 locations to reconstruct how the OIG spent its
Operation Safe Home funds. Instead, we believe that the OIG is responsible
for maintaining useful aggregate financial information and that a
decentralized program management arrangement does not obviate the
responsibility of program managers to exercise basic oversight. OMB Circular
A- 127 requires that federal agency financial management systems provide
?for tracking of specific program expenditures,? that they ?ensure that
consistent information is readily available and provided to internal
managers at all levels within the organization,? and that they ?be able to
provide financial information in a timely and useful fashion to? support
fiscal management of program delivery and program decision making" ? (OMB
Circular A- 127, Financial Management Systems, July 23, 1993,
www. whitehouse. gov/ omb/ circulars/ a127/ a127. html). We also disagree
that the HUD OIG cannot have useful aggregate financial information about
Operation Safe Home without compromising sensitive and confidential
information, or that confidentiality concerns obviate the responsibility of
program managers to exercise basic oversight. It is not necessary to
centrally record ?every confidential informant payment, contraband purchase,
or hour of police overtime? as the OIG suggests. Without basic financial
information such as the amount of funding allotted to individual task forces
and how it was spent, OIG managers did not have sufficient information to
effectively allocate resources or estimate funding needs.
In addition, the HUD OIG?s statement that entries in HUD?s accounting system
?reflect the funding of task force cases and reference the corresponding
case numbers? is incorrect. The OIG headquarters did not maintain financial
data on Operation Safe Home by individual task forces until it issued new
procedures on June 5, 2001 to track the use of Operation Safe Home task
force funds by task force case number.
14. Although the HUD OIG states that its financial information must be
decentralized to protect sensitive and confidential information, we noted
that it has also initiated actions to centralize accounting for
Appendix I: Comments From the Office of Inspector General, Department of
Housing and Urban Development
Page 36 GAO- 01- 794 HUD Inspector General
Operation Safe Home task force funds. We welcome this development and urge
the OIG to fully and effectively implement these actions.
15. While the HUD OIG stated it disagrees that it cannot accurately
determine the number of arrests and convictions that have resulted from
Operation Safe Home activities, it also did not dispute any of the facts we
presented to support our finding that Operation Safe Home arrest and
conviction data were unreliable. For example, the OIG?s letter does not
address the problems we identified in the OIG?s mechanisms to aggregate
arrest and conviction data or the fact that the OIG could not provide
documentation supporting the summary investigative data reported to the
Congress. We therefore made no changes to the report.
Further, while the OIG stated that there is no requirement for it to have a
?management information system for arrest and conviction data,? it is
responsible for accurately and centrally accounting for investigative
information. The Inspector General Act of 1978, as amended, requires the OIG
to report to the Congress on its activities semiannually, including
convictions resulting from cases it refers for prosecution. While the OIG
has provided investigative data to the Congress, the OIG has not fulfilled
the requirement effectively because- as our report outlines- the data it has
provided are unreliable and unsupportable. The OIG provided no evidence
during our review concerning the accuracy of its case files, nor could it
demonstrate or document whether or how such information was used to compile
and report arrest and conviction data. As OMB Circular A- 123 stipulates,
agencies
?should design management structures that help ensure accountability for
results? and that ?management controls are? used to reasonably ensure that
reliable and timely information is obtained, maintained, reported and used
for decision making? and that
?documentation? must be clear and readily available for examination? (OMB
Circular A- 123, Management Accountability and Control, June 21, 1995, www.
whitehouse. gov/ omb/ circulars/ a123/ a123. html).
We welcome the implementation of a new management information system for
arrest and conviction data. While we believe that it is too soon to
determine if the information maintained by the new system will in fact
generate reliable arrest and conviction data, we urge the OIG to fully
implement the new system, including promulgating additional guidance to be
used by HUD staff when inputting investigative information into the recently
developed information
Appendix I: Comments From the Office of Inspector General, Department of
Housing and Urban Development
Page 37 GAO- 01- 794 HUD Inspector General
system and to also properly maintain documentation supporting investigative
data reported to the Congress.
16. The OIG states that we could have accurately determined the number of
arrests and convictions by reviewing or sampling records in each of the
OIG?s 11 district offices. First, as discussed in comment 15, the OIG is
responsible for accurately and centrally accounting for investigative
information and thus we disagree that it was incumbent upon us to collect,
interpret, and summarize nearly 300 case files in 11 locations to
reconstruct the number of arrests and convictions resulting from Operation
Safe Home investigations. Second, the OIG offered no evidence that case file
records located in its district offices were accurate. For example, although
the OIG said that internal reviews of case files demonstrated that summary
case data reported to OIG headquarters by the districts was accurate, the
OIG did not provide these assessments, nor was it able to provide any
documentation of any summary case file data reported to OIG headquarters, or
to demonstrate how that information was used to generate summary data
reported to the Congress. Further, given these reliability and
supportability concerns, there is no evidence to suggest that arrests have
been underreported.
17. The statement in the draft report- that we could not precisely determine
the number and disposition of complaints filed against HUD OIG special
agents engaged in Operation Safe Home activities- was based on statements
from the Assistant Inspector General for Investigations and other OIG
officials who told us that (a) the OIG did not have a centralized system for
reporting, documenting, and addressing allegations and (b) the OIG?s 11
district offices adjudicated complaints filed against OIG special agents.
Therefore, we- in coordination with OIG officials- constructed a record of
allegations filed against OIG special agents engaged in Operation Safe Home
activities since 1997 based on the OIG's collective institutional memory.
The OIG?s letter stated that (a) the OIG has a contractor that provides it
centralized information concerning allegations of misconduct filed against
OIG employees and (b) all complaint files are maintained at OIG
headquarters. This information was not consistent with the information
provided earlier by the former Assistant Inspector General for
Investigations and other OIG officials who stated that no such system
existed and that all records were kept in the 11 district offices.
Furthermore, during a meeting in February 2001 conducted to confirm
Appendix I: Comments From the Office of Inspector General, Department of
Housing and Urban Development
Page 38 GAO- 01- 794 HUD Inspector General
facts ascertained during our review, OIG managers- including the Inspector
General- agreed to the former Assistant Inspector General's
characterization. We revised the report to explain these events and to
reflect the new information provided by the HUD OIG.
Along with its letter the OIG provided information obtained from its
contractor concerning disciplinary actions taken against a number of OIG
employees from January 2000 through January 2001. We examined this
information; however, it reflected only a portion of the time frame we were
examining (January 1997- May 2001) and was insufficiently detailed to
determine whether it included any additional allegations against HUD special
agents engaged in Operation Safe Home activities. We therefore made no
changes to our statement that we could not precisely determine the number
and disposition of complaints filed against HUD OIG special agents engaged
in Operation Safe Home activities.
18. We agree that on June 4, 2001, the HUD OIG fully implemented a system
for reporting, documenting, and addressing allegations against OIG special
agents by completing the implementation of recently established policies and
procedures pertaining to employee misconduct. We therefore deleted our
proposed recommendation in our draft report and have revised the report to
reflect this action.
19. The draft report did not suggest that the HUD OIG was required to
centralize and segregate disciplinary files concerning complaints filed
against OIG special agents engaged in Operation Safe Home activities. As
stated in comment 17, based on information that no centralized system
existed, we worked with OIG officials to construct a record of allegations
filed against OIG special agents engaged in Operation Safe Home activities
since 1997. However, we disagree that the OIG erred on the side of inclusion
when providing us with information we requested. In fact, during the course
of our review, the OIG did not provide us any of the files maintained by the
Bureau of Public Debt and the OIG?s Legal Counsel?s office regarding the
misconduct of OIG special agents.
20. We disagree that the reason we were not able to precisely determine the
number of complaints lodged against OIG special agents engaged in Operation
Safe activities was the difficulty of attributing allegations of misconduct
to special agents engaged in Operation Safe Home activities versus other OIG
activities. Rather, we were not able to precisely determine the number of
complaints lodged against OIG
Appendix I: Comments From the Office of Inspector General, Department of
Housing and Urban Development
Page 39 GAO- 01- 794 HUD Inspector General
special agents engaged in Operation Safe Home activities because- according
to the Assistant Inspector General for Investigations and other OIG
officials- the OIG did not have a centralized system for reporting,
documenting, and addressing allegations. Further, as discussed in comment
17, the new information provided by the OIG was insufficient to determine
whether it included any additional allegations against special agents
engaged in Operation Safe Home activities.
21. We agree that the information concerning these cases would be enhanced
by discussing the number of HUD OIG special agents involved in Operation
Safe Home activities, and we modified the report to include this
information. However, we did not compare the number of complaints lodged
against OIG special agents with complaints lodged against employees of other
law enforcement entities because we were not requested to do so; therefore,
such a comparison was outside the scope of our review. In addition, the
OIG?s statement that the draft report did not provide the period of time the
complaints were received is not correct. Both the draft report and final
report stated that the complaints were received from January 1997 through
May 2001.
22. We do not believe that the Congress has made any definitive statement in
law or legislative history regarding Operation Safe Home and the HUD OIG?s
audit and investigative independence. The OIG is relying on the fact that
the Congress has not enacted a provision addressing its involvement in
Operation Safe Home as evidence that the Congress found these concerns to be
without merit. However, it is inappropriate for the OIG to rely upon the
absence of such a provision in a bill or proposed amendment to infer
approval. Unless there is an explanation in the legislative history or the
reason is indisputably clear from the context, the effect of such an
omission or deletion is simply inconclusive. Fox v. Standard Oil Co., 294 U.
S. 87, 967 (1935); See, 1 Principles of Federal Appropriations law (PFAL),
2- 71 - 2- 72 (2nd ed. 1991) and other cases cited therein. Therefore, we
made no change to our proposed matter for congressional consideration.
Appendix II: GAO Contacts and Staff Acknowledgments Page 40 GAO- 01- 794 HUD
Inspector General
Stanley J. Czerwinski, (202) 512- 7631 Steve Cohen, (202) 512- 7631
In addition to those named above, Anne A. Cangi, Thomas Armstrong, Edda
Emmanuelli- Perez, John McGrail, Barbara Johnson, and John Shumann made key
contributions to this report. Appendix II: GAO Contacts and Staff
Acknowledgments GAO Contacts Acknowledgments
(391018)
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