IT modernization proved critical to the Department of Housing and Urban Development issuing a clean, audited financial statement for the first time in eight years in December.
HUD began working with the General Services Administration’s IT Centers of Excellence (CoE) in the summer of 2018 on its data analytics, contact centers, cloud adoption and customer experience. And after recently completing Phase 1 of work with the CoEs, the department was able to audit 14 areas it couldn’t previously account for in its statement.
“The financial infrastructure and reporting in the IT systems at HUD were fairly weak,” Chief Financial Officer Irv Dennis told FedScoop. “Probably the weakest of all of the Cabinet-level agencies.”
Dennis joined HUD from the private sector in January 2018 and aggressively lobbied for the department to become the CoEs’ second agency partner, knowing that better IT could make a huge difference in the department’s accounting. HUD’s financials were in disarray, audits were a mess and IT systems were antiquated with “lots of paper processes” still around, he said.
Among the areas HUD couldn’t audit were a loan portfolio Ginnie Mae had taken over servicing, fixed assets, multiple liabilities, and some Community Policing Development grant approvals. HUD was also not in compliance with several financial reporting requirements in the DATA Act, GONE Act, and Improper Payments Elimination and Recovery Improvement Act (IPERIA).
Now HUD is compliant with all such regulations, having analyzed $1 trillion in spend data over the past 22 years for display in an internal dashboard launched three months ago. Data can be displayed at the state, congressional district or city level or by grant program or grantee.
Dennis wants to eventually make the dashboard publicly accessible, but first, a process must be established to ensure it’s updated monthly or weekly. But whether the Biden administration continues HUD’s work with the CoEs remains to be seen.
“We’re now starting Phase 2,” Dennis said. “And I hope that’s something that the next administration continues.”
Much of HUD’s data remains stored in hard-to-access ways, so Dennis’ team has begun the process of standing up a centralized data warehouse. Dennis hopes to set up a chief data officer shop either separately or within another office like that of the chief information officer.
A full-time CDO could lead an agencywide effort to use data and dashboard it, Dennis said.
Another major aspect of HUD’s CoE work has been streamlining its six different call centers with hundreds of phone lines. The Federal Housing Administration already has a “strong” call center worth replicating across agencies, Dennis said.
What’s more, the call centers capture data that HUD could use to predict where services are needed.
Unstructured data from outside HUD, such as on social media, could also be used to improve department services, but first resources must be provided to a customer experience officer, Dennis said.
“I’m a big fan of Centers of Excellence shared service centers,” Dennis said. “I would encourage each agency to have a very open mind, understand what their capabilities are and then reach out to them; go through your Phase 1.”
The centers helped HUD perform a gap analysis and identify acquisition needs, but putting together a team to work with them took time, he added.
Improved IT systems have benefitted HUD in other ways as well, such as helping the department quickly award the “lion’s share” of $12.5 billion in CARES Act funds, Dennis.
At the same time HUD has been working with the CoEs, it’s also launched a robotic process automation initiative.
The department started by bringing one small, manual process down from six-and-a-half months to three-and-a-half weeks to complete with automation. Since then the CFO’s Office has identified more than 60 other processes taking a cumulative 70,000 hours to automate.
Grant accrual is a big one with emails sent out to hundreds of public housing authorities (PHAs) to do accounting. Now those emails are automated, as is the process of moving the numbers they contain into a consolidating Excel spreadsheet.
HUD is exploring other automation techniques like intelligent data extraction to review PDF files for high-risk areas and agencies.
All 24 CFO Act agencies, not just HUD, have struggled to meet federal requirements for implementing financial management systems, according to an August report from the Government Accountability Office. The CFO Act charged CFOs with approving and managing the upgrade of such systems, but they still lack a standardized set of responsibilities.
HUD was no exception.
“Programs would make business process changes, IT changes and accounting policy changes without any interaction, coordination or oversight from the CFO,” Dennis said. “All the programs were operating their own little businesses in silos.”