The Division of Housing and City Improvement made a 180 diploma flip in the way it manages its funds.
Over the past two-plus years, HUD reworked its monetary administration programs, workforce and general knowledge to convey extra worth than perhaps ever earlier than.
Irv Dennis, HUD’s chief monetary officer, mentioned the adjustments to make HUD an image of monetary well being didn’t occur in a single day nor accidentally. He mentioned the company reworked its monetary processes with a mixture of listening, studying, fast wins and eradicating guide, tedious processes from workers’ day-to-day work.
“I believed this may be a three-to-five 12 months plan, and with the sturdy imaginative and prescient we had and the detailed plans we put in place, and the buy-in from our staff and the assist we had from outdoors contractors, we have been capable of flip this round and get it in place in three years,” Dennis mentioned in an interview with Federal Information Community. “We have been in all probability final among the many cupboard companies so far as monetary infrastructure compliance. At this time, we’re a number one follow. We get calls from different companies on how we’re doing issues, particularly within the knowledge analytics and robotics areas, and CARES Act fund, and the processes we put in place on that. So it’s a enormous turnaround and I do know one of many secretary’s targets was to enhance operations and enhance controls to deal with stopping fraud, waste and abuse with taxpayer funds, and completely satisfied to say mission achieved in some ways.”
And HUD’s monetary administration transformation was far and huge. When Dennis joined the company in early 2018 within the Senate confirmed place, he discovered an workplace that was struggling to fulfill its mission.
HUD’s monetary audits included 4 disclaimers, which implies there’s areas that may’t be audited, and 9 materials weaknesses. The company additionally was not in compliance with any of the monetary reporting mandates reminiscent of for the DATA Act, a number of completely different improper funds acts and inside controls. HUD additionally had tens of hundreds of thousands of {dollars} in open grants, the place program workplaces made an award to a grantee and by no means made certain it handed out all the cash or closed the award.
On prime of those operational points, the CFO workplace had among the many worst morale in all of HUD, in accordance with the 2017 Federal Worker Viewpoint Survey. Throughout your complete company, HUD’s engagement rating was 69%, however within the CFO’s workplace it was 54% in 2017. In 2019, HUD’s general engagement rating was 59.9% and its CFO’s workplace elevated to 65%.
Struggles weren’t new
Dennis mentioned there have been many the explanation why the CFO’s workplace was struggling. First off, the management through the Obama administration was missing with the CFO position being vacant for a number of years.
“HUD didn’t have sturdy governance insurance policies. All of the packages, Federal Housing Administration and Ginnie Mae, operated in silos as their very own little entity. So when a program makes a change to a enterprise course of or an IT system that impacts of monetary reporting, there wasn’t plenty of coordination between that exercise and the consolidated monetary statements,” Dennis mentioned. “One of many issues I put in place fairly rapidly was a governance construction. We branded it the agencywide integrity process power. It was all the program leaders, assistant secretaries and the C suite leaders, and FHA and Ginnie Mae. We met as soon as a month and talked about issues that have been vital to HUD from a enterprise course of and monetary course of enchancment. That governance construction we put in place was very useful to interrupt down these silos.”
Dennis added that his aim wasn’t to deal with one of the best methods to remediate disclaimers and the fabric weaknesses, however put in place an in depth monetary transformation plan that included automation, robotics and extra emphasis on the shared providers that the Treasury’s Administrative Useful resource Heart gives HUD.
“We had an in depth plan and sources we wanted from Congress. We bought contractors in place, and we bought our individuals targeted, and we held everybody accountable,” he mentioned.
First clear audit in 8 years
In December, that plan and two years of effort paid off.
HUD obtained an unqualified, clear audit for the primary time in eight years, that means Dennis and his workers fastened the disclaimers and materials weaknesses.
The open grants, which as soon as totaled 186,000 out of a complete of 256,000 governmentwide, is down to a couple hundred.
“We had about $70-to-$75 million that was locked up in that. We opened that up, and a few went again to the Treasury, and a few have been capable of repurpose, so it was successful story and placing a course of in place to not let that occur. I believe we’re now all the way down to about 256 open grants and most are small {dollars},” he mentioned. “Our strategy was simply to listing it out, sort out what we will rapidly and stuff that’s a bit long run, perhaps … might be remediated with extra subtle automation strategies. We’re persevering with the method of that, but it surely was actually simply understanding it and placing a powerful focus, getting our individuals purchased in and getting the packages purchased in.”
Dennis mentioned he needed to persuade the packages that the CFO workplace does extra than simply roll up the numbers.
“We needed to change a few of the enterprise processes and a few of the behaviors of the packages at Ginnie Mae and FHA, and as soon as they perceive what we’re attempting to perform and perceive the imaginative and prescient and perceive the worth of getting sturdy monetary controls, one factor I used to be actually happy with the individuals at HUD bought it and so they purchased into it,” he mentioned. “That was actually vital to the success of this. We now have plenty of sensible individuals at HUD, individuals very a lot perceive are pushed by the mission.”
RPA reduces tedious processes
The opposite piece to the puzzle was the addition of robotics process automation with the assistance of specialists from EY.
Dennis, who spent 36 years at EY earlier than becoming a member of the federal government, mentioned the contractor helped determine and put in place the RPA software program and processes to start to get rid of low-value, guide work.
“We did a small robotics course of automation effort the place we took a 2,600-hour guide course of and knocked it all the way down to 65. I can’t inform you how that energized our individuals. They have been advised to come back again with a listing of different areas that we convert from guide to robotics, and so they noticed that they’re being extra environment friendly, more practical, and be capable to go residence at 6:30 at night time versus 10 p.m. as a result of they have been now not pushing numbers round,” he mentioned. “It was actually fairly enjoyable to look at that transformation and our individuals’s angle.”
Invoice Colbert, a associate with EY, mentioned their aim was to assist HUD’s heart of excellence to drive automation additional into the enterprise processes.
“The journey that HUD has been on from an clever automation perspective is without doubt one of the extra bold ones that we’ve seen in federal authorities,” he mentioned. “There are plenty of companies which were reaching out to HUD to speak with them, Irv and I are going to be connecting with CFO from one other company, after the primary of the 12 months, on a really comparable subject.”
Dennis added HUD now has recognized 50 to 60 processes inside the CFO workplace that would make the most of RPA, together with a number of processes to assist the company handle and oversee cash from the pandemic aid payments.
“There’s some reporting necessities on the program stage that we weren’t essentially prepared for. It’s not only a reporting at HUD to the grantee, the general public housing companies (PHA), but it surely’s the sub-grantees and sub-recipients that there’s some reporting on and we knew that was going to be an space that we’re we have been weakened early on. We knew it was an space we needed to deal with,” he mentioned. “What we did with the mission administration group out of the CFO is we seemed on the reporting technique of the CARES Act, the packages that obtained CARES Act funds, and we recognized alternatives in that full processes the place we might convert from a guide to a robotics course of. That’s the place the packages at the moment are beginning to have visibility and getting enthusiastic about it. It’s bettering our reporting for that exact program. What we’re hopeful is that when we get that rolled down, with the coordination and the collaboration with CIO, we’re placing in net portals for the grantees to report in with the with the compliance facet of the CARES Act. The aim is to increase that to different grant packages that don’t obtain CARES Act funds, however we’re not essentially in compliance earlier than. I’m this as a fantastic alternative to herald additional increase HUD’s capabilities on the sub recipient in sub grantee reporting, and in addition get this system’s energized by what robotics can do.”
