Waste, fraud, and abuse get bigger funding at HUD

Often during the health-care overhaul debate, we hear often hear that having the government in charge will allow bureaucrats and Congress to wring the “waste, fraud, and abuse” out of the American health-care system.  Their management of Medicare makes that claim laughable, of course, but it doesn’t help their cause when Congress pours more money into already-failing efforts elsewhere.  For instance, HUD has had its housing-counseling budget tripled and will raise it an additional 54% next year, while the program has a success rate of 23%, is already ridden with waste and abuse, and doesn’t address the real problem anyway (h/t William Amos):

Federal funding for a housing counseling program carried out by local non-profit groups such as ACORN has more than tripled since 2002, even though it has been criticized by government auditors for failing to show results.

President Obama’s budget calls for a 54% increase next year – $100 million in all – for the program, which helps people buy or refinance a home, prevent a foreclosure or find rental housing. The Senate agreed, while the House of Representatives suggested $70 million; final negotiations over the bill are pending.

The Department of Housing and Urban Development (HUD) has been unable to provide much proof the program works, according to government reports, despite an increase in funding from $20 million in 2002 to $65 million last year.

This must be a great program to go from $20 million to over $100 million in eight years, right?  Not exactly.  According to a study commissioned by HUD, counseling only helped 23% of the program’s clients stay in their homes — and that was in 2007, before the housing bubble burst.  A GAO audit also found that none of the counselors for the elderly on reverse-mortgage loans offered complete advice on the complicated issue.  Its Inspector General raised a huge red flag to Congress in 2006 over a lack of supervision and proper metrics on performance.  Despite all of this, Congress has consistently increased funding to HUD for the program, without demanding any concrete improvements in its delivery.

Who gets the money?  No one will be surprised by this:

None of the government reports singled out any groups that received federal funding for criticism. However, one of them – the ACORN Housing Corp. – drew national attention last month after conservative activists released undercover videos taken at several offices of ACORN affiliates, including in New York and Washington, where housing counselors gave advice on buying a house for a brothel. The employees worked for a program that gets HUD funding but were not paid with government funds, ACORN Housing spokeswoman Alyson Chadwick said.

Mead said in an e-mail that HUD has no way of knowing whether the workers caught on the videos were involved in government-funded programs.

Perhaps the ACORN employees on tape in six different offices didn’t get directly paid with HUD funds while they counseled undercover reporters on how to accomplish tax evasion and cover up a child-prostitution ring while purchasing a house with HUD-funded programs.  However, they certainly administered the program on behalf of HUD.  In fact, this demonstrates quite nicely the fact that HUD has exercised no supervision over the use of the funds or the advice given by community organizers acting as their proxies.

USA Today notes that HUD has begun to use “mystery shoppers” to explore problems in the reverse-mortgage counseling activities cited by the GAO as failing.  Wouldn’t James O’Keefe and Hannah Giles qualify as “mystery shoppers”, too?

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