Federal Manager's Daily Report

The Government National Mortgage Association–Ginnie Mae–a government owned corporation that is part of HUD, relies “heavily” on contractors to make up for shortfalls of in-house employees, GAO has said.

It said the reliance on contractors–the full-time equivalent position count is about 84 percent contractor–is partly due to the fact that Ginnie Mae has authority to use certain fee revenue to fund contractors but not in-house staff. While Ginnie Mae received $27 million in appropriations for in-house staff in fiscal year 2018, it obligated about $616 million on contractors.

“However, it has not routinely analyzed if using its own in-house staff instead of contractors for certain functions would be more efficient. Such analyses could help inform Ginnie Mae and Congress about the optimal mix of contractors and staff and potential need for greater budget flexibility.”

GAO noted that the inspector general’s office of HUD also has repeatedly raised concerns about the employee to contractor mix at Ginnie Mae, saying that contractors are performing many of its core functions and that the small in-house staff lacks the skills to immediately respond to new risks. However, the agency has not been able to boot its in-house portion despite authorization to increase that portion, it said.

GAO said that Ginnie Mae “faces challenges recruiting and retaining staff, in part due to its lower pay scale relative to some of its competitors. But it has not exhausted all options under its current authority to revise its pay scale to mitigate these challenges or evaluated the costs and benefits of other options. Such actions could help inform Ginnie Mae about how it could use current authorities to address these challenges and provide Congress with the information needed to consider providing Ginnie Mae with additional pay flexibility.”