Key Takeaways
- •The subcommittee reviewed oversight of record funding for DOT and HUD, focusing on the FAA’s $17.5 billion modernization effort and HUD’s $66 billion housing assistance programs.
- •Brian Harrison (Acting Inspector General, U.S. Department of Housing and Urban Development) reported $227 million in questioned costs and warned that poor data infrastructure prevents effective tracking of spending.
- •Rep. Womack (R, AR-3) pressed Mitch Behm (Deputy Inspector General, U.S. Department of Transportation) on whether the FAA is prepared to avoid past NextGen failures during its new modernization.
- •Rep. Clyburn (D, SC-6) criticized the administration’s hiring freeze and lack of permanent Inspectors General, while Republicans prioritized investigating CDL fraud and recovering improper federal payments.
- •These findings will guide fiscal year 2027 appropriations as the subcommittee monitors whether agencies implement sufficient internal controls to prevent fraud in massive new infrastructure projects.
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Hearing Analysis
Key Testimony
The House Appropriations Subcommittee on Departments of Transportation, and Housing and Urban Development, and Related Agencies held a hearing on March 5, 2026, to conduct oversight of the Offices of Inspector General (OIG) for the Department of Transportation (DOT) and the Department of Housing and Urban Development (HUD). Chairman Steve Womack (R, AR-3) convened the hearing to evaluate the fiscal year 2027 budget needs for these watchdog agencies and to assess their progress in rooting out waste, fraud, and abuse following record funding levels provided in previous fiscal cycles. The hearing featured testimony from Mitch Behm, Deputy Inspector General of the DOT, and Brian Harrison, Acting Inspector General of HUD.
Mitch Behm (DOT OIG) testified that his office achieved a return on investment of $25 for every dollar appropriated in fiscal year 2025. He identified three primary oversight areas: enhancing safety, curbing fraud, and advancing modernization. Behm highlighted critical staffing shortages at the Federal Aviation Administration (FAA), noting that many air traffic control facilities are 15 percent below staffing targets, with some facilities like the New York TRACON and Miami at only 60 percent capacity. He also discussed the FAA’s new $30 billion initiative to modernize the national airspace, warning that the agency must apply lessons learned from the "NextGen" program, which suffered from decades of cost overruns and delays. Behm noted that the FAA has hired Peraton as a lead integrator for this new system, and the OIG plans to audit the effectiveness of this contractor-led oversight model.
Notable Exchanges
Brian Harrison (HUD OIG) emphasized a "war on fraud" and the need for modernized data infrastructure. He reported that in fiscal year 2025, HUD OIG audits produced over $227 million in questioned costs and $80 million in investigative restitutions. Harrison introduced "Project HUGS" and "Project Vouchers" as internal initiatives designed to use data analytics to identify improper payments and fraud in tenant-based rental assistance. He expressed significant concern regarding HUD’s lack of transparency once funds reach sub-recipients, describing the current environment as "non-transparent" and reliant on "guesstimation" for reconciling funds across approximately 3,300 to 3,700 Public Housing Authorities (PHAs).
Overview
Policy proposals discussed included the potential codification of the Community Development Block Grant Disaster Recovery (CDBG-DR) program to standardize rules across different disaster events. Harrison argued that the current inconsistency frustrates both HUD monitoring and OIG oversight. Additionally, members discussed the need for better coordination between HUD and the Department of Veterans Affairs (VA) to improve the utilization rates of HUD-VASH vouchers, which currently suffer from high housing costs and overly restrictive referral criteria.
The hearing revealed sharp partisan divisions regarding the Trump administration’s management of federal agencies. Ranking Member James Clyburn (D, SC-6) and Rep. Mike Quigley (D, IL-5) expressed alarm over a "deferred resignation program" and a federal hiring freeze, which they claimed led to the loss of over 4,000 employees at DOT and HUD. Democrats argued these staffing cuts threaten core government functions and fair housing enforcement. Conversely, Republican members like Rep. Stephanie Bice (R, OK-5) and Rep. Dale Strong (R, AL-5) focused on criminal activity, specifically Commercial Driver’s License (CDL) fraud and cargo theft. Rep. Strong pressed for stricter enforcement of English-language requirements for CDL holders to prevent fraud.
Several notable exchanges occurred regarding the distribution of federal funds. Rep. Norma Torres (D, CA-35) accused the administration of withholding $34 billion in disaster aid from California for political reasons, citing court findings that grant decisions were based on state voting patterns. She demanded an investigation into "unlawful cuts" to California and other Democratic-leaning states. Rep. Adriano Espaillat (D, NY-13) similarly criticized the withholding of funds for major infrastructure projects like the Second Avenue Subway in New York and the Gateway project in New Jersey, characterizing these actions as "killing jobs."
The following organizations were identified and discussed: - Department of Housing and Urban Development (HUD): The primary subject of oversight regarding fraud prevention and staffing. - Department of Transportation (DOT): The primary subject of oversight regarding infrastructure grants and safety. - Federal Aviation Administration (FAA): Discussed extensively regarding air traffic controller shortages and its $30 billion modernization initiative. - Office of Inspector General (OIG): The agencies represented by the witnesses, tasked with auditing DOT and HUD. - Federal Motor Carrier Safety Administration (FMCSA): Referenced regarding the oversight of CDL programs and enforcement of trucking safety. - Government Accountability Office (GAO): Mentioned as a partner in coordinating audits and defining improper payments. - Department of Veterans Affairs (VA): Discussed in the context of its partnership with HUD for the HUD-VASH veteran housing program. - Peraton: Identified as the lead integrator company for the FAA’s new air traffic control modernization effort. - Arizona Department of Transportation (ADOT): Mentioned regarding concerns over the transparency of federal grant evaluation criteria. - Federal Bureau of Investigation (FBI): Referenced as part of the federal investment footprint in North Alabama. - Prevost: Mentioned by Rep. Strong regarding his family’s experience in the busing industry.
Next steps for the subcommittee include reviewing the President’s fiscal year 2027 budget request once submitted. The OIGs committed to providing several reports later in 2026, including a final report on the airspace surrounding Reagan National Airport (DCA) and an audit of FMCSA’s oversight of state CDL programs.
Transcript
The subcommittee will come to order. Today we are pleased to welcome Brian Harrison, Acting Inspector General of the Department of Housing and Urban Development, and Mitch Behm, Deputy Inspector General of the Department of Transportation. Thank you for appearing before us today, both of you, and for your service as you lead these two critical offices. One of our fundamental roles as members of the Appropriations Committee is to make sure that departments and agencies we support perform their mission for the benefit of the American public. We rely on your offices to assist us in that effort. When you find instances of waste, fraud, and abuse at your agencies, it helps us better refine our appropriations. When you find programs operating successfully, it always gives us confidence in continuing our funding for such activities. While we have not yet received the President's fiscal 2027 budget, I want to highlight the funding we gave your offices in 2026. We provided 113 million to the DOT OIG and 144 and a half million for the HUD OIG to ensure you can meet your mission. We look forward to learning about your fiscal 2027 needs in the coming weeks. This hearing comes on the heels of Congress appropriating record funding for many DOT accounts and activities and HUD's housing programs. As such, the work of the IG remains very critical. We can look at your investigations to inform the current work of the departments. For example, FAA's air traffic control modernization effort received 4 billion in the fiscal 2026 bill. That's a billion dollars in IIJA funding and 12 and a half billion from the one big beautiful bill. We've all invested interest in the success of this investment. We cannot repeat the past mistakes and failures of the NextGen where schedule delays and cost overruns were routine, benefits not fully realized. As another example, the cost of maintaining housing assistance for vulnerable citizens continues to increase, requiring more than 66 billion in fiscal 2026, an increase of nearly 6 percent or 3.7 billion over 25. We have to modernize HUD's oversight tools to root out fraud and ensure that each dollar goes as far as possible to house Americans who need support. I look forward to hearing more about your audits and investigations and getting your insights on where congressional attention might be directed. With that in mind, again, we welcome you to the panel here today, and I'd like to recognize my dear, dear friend, Mr. Clyburn, the ranking member of this subcommittee, for any opening comments he'd like to make. Jim, the floor is yours.
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