The Department of Housing and Urban Development has been significantly off in its budget estimates for rent subsidies in fiscal years 1992 and 1993, resulting in large shortfalls in some programs and equally large surpluses in others, according to a highly critical audit by the department's inspector general.
The audit, dated April 21 and obtained yesterday by the Boston Globe, concludes that the department's budgeting procedures are "unreliable" and "inadequate." The audit is based on comparisons of HUD's 1992 and 1993 budget requests to Congress with actual expenditures and newer estimates based on field surveys by department staff members.
HUD sources said yesterday that Undersecretary Alfred Delli Bovi, second in command to Secretary Jack Kemp, sent an internal memorandum earlier this week saying that correcting the budgeting system would be the department's top management priority for the year.
Without accurate budget estimates, HUD runs the risk of lobbying hard to win extra money from Congress for programs that do not need it, while neglecting programs for which some low-income families languish for years on waiting lists.
For instance, HUD requested and obtained $1.1 billion in budgeting authority for 1992 and 1993 to pay for special costs associated with rent subsidies, but now estimates it will need only $350 million, and return $743 million to the Treasury, according to the audit, for fiscal year 1992. HUD's estimates were off by 68 percent.
On the other hand, the department underestimated the cost of renewing tens of thousands of rent vouchers by $1.2 billion, forcing the department last year to ask Congress for a reappropriation for 1992. Now HUD is estimating an additional potential shortfall of $407 million, according to the audit.
"We believe that the deficiencies regarding HUD's Section 8 budgeting and accounting systems constitute a material weakness and should continue to be reported as such under the Federal Managers' Financial Integrity Act," said the audit, which was approved by Chris Greer, the department's assistant inspector general.
Assistant Secretary Joseph Schiff said Tuesday that HUD was assessing shortfalls and vowed to continue funding all existing vouchers and certificates.