
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, June 1, 1990                   TAG: 9006010108
SECTION: NATIONAL/INTERNATIONAL                    PAGE: A-4   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

CLEANUP NOT OVER FOR HUD

The Department of Housing and Urban Development has made substantial progress in rooting out mismanagement and corruption, but costly problems remain, HUD's inspector general told Congress on Thursday.

Inspector General Paul Adams, who sparked several investigations of the department with a report issued just over a year ago, praised Housing Secretary Jack Kemp for encouraging and enacting reforms.

"I find this refreshing," Adams said of Kemp's cooperation.

But in his semiannual report to Congress, Adams said some HUD field offices have been slow to implement needed reforms and that other changes have been delayed because poor accounting and planning have left HUD unable to properly monitor some multimillion-dollar programs.

Adams recommended using HUD staff instead of outside contractors for many of the evaluations and testing of HUD management controls initiated by Kemp.

Virtually all of the department's major programs are plagued by questionable spending and are difficult to monitor because of poor internal accounting and management controls, Adams said.

For example, he said originations of HUD-backed loans are "still susceptible to fraud and mismanagement because of ineffective departmental policies and systems. . . . Our audits and investigations indicate that individuals and companies across the nation continue to improperly originate loans for personal gain."

In the last six months, Adams said, five lenders have been referred to a HUD panel for sanctions because of improper loan activity.

Major problems also remain in HUD's Section 8 assistance program because of management problems.

"HUD does not have long-range plans for the Section 8 program," Adams wrote. "As a result, it can neither plan or budget effectively for its programs, systems and procedures for future years."

Adams said the work of his office has been slowed as well because of limited investigative authority and the growing amount of time his auditors spend with U.S. attorneys, the FBI and other law enforcement agencies investigating HUD-related crimes.

Adams requested that Congress expand his staff in fiscal 1991.

Adams said the congressional and public scrutiny resulting from disclosures of mismanagement and influence-peddling at HUD during the Reagan administration have served as a needed impetus for reforms.

by CNB