GAO blasts design of HUD grant system

A 3-year-old system used by the Department of Housing and Urban Development to distribute billions of dollars in grants and to collect information on the use of those funds is plagued with design flaws and could be a candidate for replacement, according to a General Accounting Office report released last week.

The Integrated Disbursement Information System (IDIS), developed by HUD and Computer Sciences Corp., provides the information needed to help HUD run its Grants Management System, which disburses about $6 billion in grants annually, or about one-quarter of HUD's budget.

The system is used by recipients and managers of federal money that flows through the Community Development Block Grant Program, the Home Investment in Affordable Housing program, the Emergency Shelter Grants Program and the Housing Opportunities for Persons With AIDS program.

IDIS users establish accounts, submit information on expenditures and track performance of the programs. The system also was designed to give HUD another way to monitor compliance with program rules and laws.

Testifying before a Senate subcommittee last week, Stanley J. Czerwinski, associate director of resources in GAO's economic division, said, "We found that it is so cumbersome that grantees make numerous data entry mistakes that cannot be easily corrected," Czerwinski said in testimony before the Housing and Urban Affairs Subcommittee of the Senate Banking, Housing and Urban Affairs Committee. "We also found that IDIS cannot track program income for the thousands of revolving funds that grantees have established. And IDIS has difficulty producing reports, and the reports it does produce are often confusing and error-prone."

Placing the Blame

Czerwinski attributed the design flaws to HUD's failure to involve users sufficiently in the initial design. He added that GAO's investigation of IDIS also turned up security problems, such as identifying that terminated employees retained access to IDIS and that access had been assigned to three people who were neither employees nor grantees.

Appearing before the subcommittee last week, Cardell Cooper, assistant secretary for community planning and development at HUD, defended IDIS, saying there has been no problem with the disbursement of funds, which is its primary function.

Cooper also said HUD has mounted a major effort to correct the problems in IDIS. The system has been in use since February 1996 and grew to 8,500 users in 11 states by September 1998 before HUD stopped adding new users so that the agency could fix things the system.

The agency plans to improve the speed of the system, add a Windows graphical user interface, make the system accessible over the Internet, provide more accounting options and develop a process for the revolving fund program. The agency is spending $4 million to complete the improvements, including about $2.5 million on fixes suggested by users, said Scott Cragg, director of HUD's Office of Information Technology. The agency's deadline for implementing all the changes is Sept. 30.

But the deadline may be too optimistic, according to Susan Elkins, director of Louisiana's Division of Community Development, who also testified before the subcommittee. Elkins said Louisiana has had to spend tens of thousands of dollars to support IDIS locally and still is waiting on a HUD promise to make the system accessible over the Internet.

The 39 states that have not started using IDIS will continue to be reluctant to begin until Internet access is available and field testing and training are provided, she said.