HUD faces heat for waste, questionable spending

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The Department of Housing and Urban Development disburses more than $40 billion in taxpayer money a year. Like a lot of federal agencies, HUD took a hit with mandatory budget cuts under sequestration. But even at a time of financial belt-tightening, the agency is facing heat for waste and questionable spending.

Rep. Patrick McHenry, R-N.C., heads a committee that examined waste and fraud at HUD this week. The agency's inspector general criticized a program that gave many Louisiana residents $30,000 apiece to prepare their homes for the next hurricane. Twenty-four thousand people spent the money on something else, but no one knows on what.

"We spend three quarters of a billion dollars to pay people to elevate their home that didn't do it," McHenry said.

And there are billions of dollars in disaster relief sitting in bank accounts unused, including money for Hurricane Katrina relief dating back to 2005.

Rep. Al Green, D-Texas, argues that sequestration has left HUD with fewer people to do oversight.

"I don't think we can overlook the fact that HUD is understaffed. I don't think we can overlook the fact that sequestration has had an impact on HUD and is having an impact on many of HUD's programs," he said.

HUD Inspector General David Montoya, who uncovered the waste, says states and cities that receive the billions are also to blame for lax controls.

"It is our fundamental belief -- and, I believe, HUD's - that these localities should also take responsibility for proper oversight in the management of those programs.

HUD wouldn't agree to an interview but told us it carefully "monitors the activities" of recipients all over the country and promptly fixes any problems.

Meantime, as of the end of March, not one penny of $5.4 billion in HUD money for Superstorm Sandy relief had been spent. And believe it or not, more than $500 million meant for the aftermath of the Sept. 11 terrorist attacks still hasn't been touched - 12 years later.

  • Sharyl Attkisson
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    Sharyl Attkisson is a CBS News investigative correspondent based in Washington.