Shortly after taking office as secretary of the U.S. Department of Housing and Urban Development, Dr. Ben Carson recruited a retired finance and strategy expert to become the agency’s chief financial officer.
Donald Trump appointed Irving Dennis in late 2017 to the job. He quickly found the mess he had inherited. Dennis spent 37 years at Ernst & Young, a major accounting firm. He would use his private sector experience to fix HUD.
In a new book, “Transforming a Federal Agency: Management Lessons from HUD’s Financial Reconstruction,” Dennis recounts the roadblocks he faced at HUD and the bureaucratic barriers he overcame to set the agency on a better course. His story shows there’s an alternative to the financial mismanagement that plagues federal agencies—and how he fixed one of them.
Dennis spoke to The Daily Signal regarding his experience. Read a lightly edited transcript below or listen to the interview on “The Daily Signal Podcast.”
Rob Bluey: We are joined on “The Daily Signal Podcast” by Irving Dennis. He’s the former chief financial officer at the U.S. Department of Housing and Urban Development and the author of a new book, “Transforming a Federal Agency: Management Lessons From HUD’s Financial Reconstruction.” Irv, welcome to the show.
Irving DennisThank you. Thank you for having us, and I look forward our conversation.
Bluey: I’ve had the opportunity to interview Dr. Ben Carson, HUD’s former secretary, twice on this program, and I’ve heard stories from him and others about the reforms at HUD. Before we begin, let’s take a moment and explain to us HUD, its purpose, and your role.
Dennis: HUD is a Cabinet-level agency, as you know, and we primarily serve to make sure that there’s affordable housing to the underserved, if you will. It’s a very complex organization. Rob, it has 40 programs. [the Federal Housing Administration]Ginnie Mae, which supports housing markets for people in need.
It’s a complex agency. I was brought on to assist with the reconstruction of their financial infrastructure. They had been without a CFO for many years and had many material weaknesses. I was very grateful for the opportunity to work alongside Secretary Carson and help transform the agency both from a financial and digital perspective.
Bluey: Irv, let’s go back to 2018. How was it when you arrived?
Dennis: When I arrived, they didn’t have a CFO. This was a serious consequence that had been in place for around eight years. Unfortunately, the previous administration had already appointed a CFO, but they didn’t replace him. It was basically without a chief financial officer. Without a CFO, there was a decline in their financial infrastructure.
There were nine material weaknesses. They had four disclaimers in the audits, and it’s not to bore the audience with the definition of material weaknesses and disclaimers, but think of it as 13 areas in the financial infrastructure that could not be audited and they did not have … controls in place to properly account for the flow of funds through the agency.
Additionally, there are multiple aspects of financial reporting that come out federal government. These include the GONE Act and DATA Acts and other financial reports with which HUD was not in conformity. Basically, think of it as all the financial reporting that’s required of a Cabinet-level agency, the HUD was not in compliance with any of them.
It’s interesting when you think about that compared to the private sector, and I spent 37 years with Ernst & Young … and I was an audit partner with Ernst & Young, so I had a strong sense of financial controls and financial discipline and what excellent looks like in that area.
HUD just wasn’t in compliance with any of it, so I knew we had a big hill to climb to transform the agency from getting the financial infrastructure in place that you would expect at a large agency.
Bluey: Well, Irv, I’m curious how it got so bad to the point that you just described, but also, how you were able to transform this massive government department in just a few short years?
Dennis: Yeah, it’s a good question. My book addresses many of those issues. My book covers the complexity and qualifications of HUD.
When you think about how it got so bad, I dedicate a chapter to this. I think of two things: the lack of leadership. You will see a decline of infrastructure if you don’t have a CFO to drive financial excellence. That happens in the private sector as well, and that’s sort of what happened at HUD.
The other big difference is there’s really a sort of a lack of accountability. In the private sector, if you have material weaknesses and areas that you can’t audit and you have disclaimers in the audit, your shareholders and the other stakeholders of that private entity [do]This should not happen. You’ve got to get that fixed pretty quick, or else you lose the confidence of those folks, and they will not invest or support the entity.
… That dynamic is different in federal government. There’s plenty of oversight between the [Government Accountability Office]Congress, and [the Office of Management and Budget], but there’s really no teeth to force accountability. I believe that the deterioration was caused by the lackluster leadership and the lackluster accountability.
The question is: How do you make it work? It’s a good question. That was something I spent a lot time on in the book. … I think of it as a 10-stage process. We had leadership. I brought the discipline and vision of how to fix it and how you can transform it.
We have leadership and … when I was in the private sector as an audit partner, I spent a lot of time evaluating governance, evaluating people, process, and technology. If all four of these areas are working well in a private business, then the company will succeed. You’ve got a good discipline, you’ve got good financial infrastructure, you have good controls, and you have confidence that all of the wheels are turning properly.
During my first 100 days, I spent much of my time studying governance and people, process, as well as technology. All of those areas required a lot of homework. After spending some time learning the business and developing relationships, as well as my own credibility, we set up a governance process.
HUD has 40 programs, FHA, Ginnie Mae and other programs. This created a bit of a silo. My first step was to dismantle those silos and make everyone work together with one HUD in view, instead of everyone owning their own businesses.
We spent a lot time improving the process. We spent a lot on the technology side. We introduced artificial intelligence, robotics and digital analysis. We also brought in some of IT modernization you see in the private sector. That HUD was aided by that.
We spent a lot time on the people side. We tried to get people to think differently about head HUD by introducing new processes and a new concept. It was actually quite successful.
The audit process took us a lot of time. There was a real disconnect between HUD and the auditors. I spent a lot time trying to improve that relationship. This was also a major part of our success.
We also spent a lot time on enterprise fraud prevention and risk management. This was an area that required some research. We had a great team of players, and that discipline was very helpful in HUD.
Bluey: Irv, you mentioned your role, you spent 37 years at Ernst & Young, a major accounting firm. Your experience in the private sector was an important part this transformation. What lessons did this experience teach you about transforming HUD?
Dennis: Yeah, it’s a good question, Rob. This is actually something I address in my book. Before I took the role, my initial interview with the chief of staff and Secretary Carson—I had just retired. For 37 years, I ran 130 miles per hour. I was actually supposed to teach at [Ohio State University].
I live out in Columbus, Ohio, and I didn’t think I wanted to jump into something as full-time as a CFO of a complicated Cabinet-level agency, but they kept calling every few weeks—I talk about this in the book, the process of getting into the role—and I really did some soul-searching: Am I qualified to jump into this role and make a real difference?
At Ernst & Young, spending 37 years, I worked on large public companies. Some of my clients that I was coordinating partner on included McDonald’s and Abbott Labs and large global companies.
When you’re an audit partner, you do develop an awful lot of knowledge on business processes, on business technology, financial controls, internal controls, and corporate governance. After reflecting on my experience at, I felt more confident. [Ernst & Young]It prepared me to take on the role of CFO and really make an impact and turn around the agency.
Public accounting, the Big Four accounting firms, and even the Big 10 accounting firm, prepare you for larger roles outside of the audit profession. My knowledge of governance and financial excellence gave me the confidence to do so.
Bluey: You mentioned that you weren’t necessarily eager to jump into such a complex situation, but Dr. Carson must have convinced you to leave retirement to accept this job. Is there a reason, a noble individual, HUD secretary, or something that made you decide that it was worth your time?
Dennis: Yeah, it’s a great question. It’s also something I discuss in the book. In retirement, my goal was to do meaningful work and give. I grew up in humble circumstances and I enjoyed my career. It has been a blessing for my family and me over the past 37 years. I was driven to give back and do meaningful work. That’s what teaching was going to be at Ohio State.
But meeting with Secretary Carson and his vision and his calm demeanor, and his very intellectual way, he said, “We have an opportunity here to make a difference in the American lives.” He came out of retirement to do this as well. It was very inspiring to me.
Every time he called, the juices flowed a little bit, and my wife said, “Every time they call, I see the excitement in your eyes, so let’s just make this happen.” She gave me the permission to come out of retirement.
It was a great team to work with. His presence alone is inspiring and gave me the strength to persevere. He said, “You’ll bring a lot of great experience here, and we’re all work together and make a big difference,” and that’s sort of what happened.
Bluey: He’s a great man. I had the opportunity to see him just a couple of weeks ago on “The Armstrong Williams Show.” I still look up to him as somebody who is a great public servant and has really done an enormous amount of good for Americans and our country as a result of not only his surface under President [Donald]Trump, but before that as a brain surgeon.
Irv: I’m curious. Others have said that these were the same problems that you were trying solve. address just couldn’t be fixed. I’m curious, when you arrived at HUD, what was the culture like there, maybe among the civil servants or some of the other political appointees you were serving with?
Dennis: Yes, I agree. Everyone was independent and did their thing in their own ways. Each program operated its own way.
I would say that morale was low in the CFO office. They felt like they were being beaten up for many years. I said to our team, I said, “Look … the CFO’s taking all the heat, but a lot of these issues stem from the program’s controls and processes,” and the programs were doing their own thing without any real oversight from the CFO office.
Strong governance and strong oversight are two key components of the transformation I describe in the book. I said to our CFO team, “We need to have a controllership function, like you would in the private sector, that oversees each of the programs, [the Federal Housing Administration]Ginnie Mae. We must all work together. If they’re making changes within their business processes or the controls, the CFO shop needs to be aware of that and almost approve it and make sure that the numbers are being rolled up properly with proper accounting.”
It was the governance that was key to the success. The CFO team had to be able to provide oversight and make the decisions.
We found it very helpful to get everyone to think differently about IT modernization, bringing in RPA robotics process programs, and doing the IT modernization in the private sector.
We started small. Our RPA process took 2,200 hours. We applied robotics to that process, which brought it down to 65 hours. We had 2,100 hours to improve other processes and not just move numbers around.
Once we planted that seed within our team, you could see the energy start, and you can see people’s minds start to explode with ideas of how we can make this more efficient and better and effective. The CFO office was buzzing with energy after that. It was thrilling to see. We were able to turn around the morale within three and a quarter years.
Bluey: You write in the book, which is called “Transforming a Federal Agency,” about some of the roadblocks you faced at HUD. It clearly wasn’t easy to overcome some of the bureaucratic barriers, as you’ve just explained to us. What are the things you are most proud of?
Dennis:There are a few things I think. I’m probably most proud of changing the culture in a way that people were energized to work.
We took our employee survey scores, which are closely monitored by the government, and the CFO shop was really low. It was in the lower quadrant among all federal agencies. It was last at HUD. When I finished my final year, we were leading HUD and were also in top quadrant for the measures that are monitored by the federal government. This change in morale was something I was proud of and proud to have witnessed with my team.
We also helped people think differently and see the possibilities. I was also proud to get a clean audit opinion, the first time in eighteen years. It gives everyone in the CFO shop and the HUD a sense of pride that their work is important. We were able and able to make improvements, and it makes you feel better about the work you do when you have a high scorecard at the end.
Bluey: You bet. Yeah, absolutely. Now, several years ago … I covered the EPA’s creation of an Office of Continuous Improvement—that’s the Environmental Protection Agency. I’m just curious, was there any competition among federal agencies during the Trump administration when it came to improving their performance and doing the things you were able to do at HUD?
Dennis: It’s a good question. I don’t know the answer to that and from a standpoint of, I was so laser-focused on what we were doing at HUD.
We were starting at the very bottom of the ladder and we needed to get us to, one, an even keel with other agencies and then if/when we did the IT modernization, maybe that … became a leading or best practice in many of processes and procedures. I don’t know that I felt necessarily competitive, but I was really focused on improving HUD and getting us to where I knew where they could be.
Bluey: Now, you were recognized for your accomplishments, winning awards—now, writing this book about where you were able to go and improve things. But I have a question: Will the changes you made last? We hear so often about good work being undone by the next administration. What’s the outlook today?
Dennis: I actually did dedicate a chapter to the book on what makes it sustainable and every time you reach your goal, you’ve got to think about the next thing and keep moving and keep improving.
Making a sustainable start, in my view—and like I had mentioned, I do address this in the book—keeping the government structure in place, that can be difficult in government because unlike the private sector where the executive team and the leadership team doesn’t change that often, you’ll have a change of a CEO, you’ll have a change of a couple of board members. You may change of a CFO, but by and large, the culture’s there, the strategy’s there, and 90% of the leadership team is there.
Government’s very different. You’ve got a different dynamic in that every four to eight years, you’re wiping out all of the politicos and all the leadership team, you’re coming in with perhaps a new agenda and a new strategy.
It is important to maintain the government structure. The controllership function, with oversight from the CFO office (which can be done at career level), I believe is very important to maintain.
I believe that developing the workforce of tomorrow is a key part of government at large and not just at HUD. I do think in the private sector, the workforce is a little more ahead of the government workforce and getting ready for this digital age that we’re in.
To continue the progress, it is vital to continue the RPA and digitalization programs. We used the shared services center. While I was there, we improved it. I think there’s more opportunity to utilize the shared service center that comes out of Treasury. That’ll be very important to expand that.
To make it easier for HUD users to work with us, we were doing a lot in the call center. There was still much work to be done in that area. I hope that it continues. Then there is the data analysis and analytics, and those initiatives that I believe will be very important to continue.
My team was aware of the vision and the road map, and I’m hopeful that will continue, but I do dedicate a chapter to that in “Transforming a Federal Agency,” in my book, because I think it is so important that some of that infrastructure stuff just hopefully gets embedded into the process and doesn’t fall apart later on.
Bluey: Irv, as we close here, would it be a good idea to encourage others to apply for a job in government based upon your experience? What advice would you give them if they were to follow your example?
Dennis: I actually spend a lot of time in my book talking about opportunities working … inside federal government.
I’m sort of embarrassed to say this, I wasn’t expecting the quality and the dedication of the federal workforce to the mission at hand. There are many intelligent people. People work very hard. It’s a story that doesn’t get told too often, so I spend a lot of time in my book talking about that. I encourage anyone who is interested in working for the federal government to apply.
I think of it myself, that if I had spent two or three years working in the executive branch, understanding how laws are passed, how policy is made, and how the regulatory environment works, I would’ve been a better adviser to my clients. In the reverse, I believe our government would be a better place if everyone on the infrastructure side had spent two to three years in the private financial sector and understood what financial excellence looks.
I spent a lot time talking with college students, and I added to my agenda speaking about opportunities in the federal government. There’s not a industry that’s not touched by government. It’s easy to move within agencies. I think it’s a tremendous career opportunity. I didn’t have that perspective before I worked at HUD, but I certainly do now, and I’ve become a big fan of what a meaningful career path it could be working inside of government.
Bluey: Irv, thank you for your public service. We appreciate it. Finally, you’re now working at the American Cornerstone Institute with Dr. Carson again. Can you tell our listeners more about the organization and the ways they can find out more?
Dennis: Sure. So, we have a tremendous website, it’s called American Cornerstone InstituteAs you stated. Secretary Carson wanted to create this not-for profit to promote the principles and history of our Founding Fathers, and to have civil discussion in a civil and non-partisan manner. The pillars are: faith, liberty, community and life.
We have a great website that talks about our programs and what we’re doing. There’s about six or seven of us from HUD that are working with Secretary Carson on this.
We’re not only doing op-eds and “Cornerstone Conversations” with talk about matters that are important in today’s society within our four pillars, but we’re also developing educational programs. Little Patriots is an educational program for kindergarten through fifth grades. We’ll expand that as we grow. Again, it’s talking about why America matters and promoting founding principles of our nation.
We’re also working on a program within our “More Perfect Union” agenda. What we’re doing there is developing a college certification course to educate people that are interested in the executive branch. Talking about the confirmation process, talking to people about getting a job in executive branch, and discussing how the executive branch interacts the the legislation and the judicial branch.
We’re excited about that, and we’ll be launching that sometime in early spring of next year, but it’s a great group of people. We’re working hard. We had a very productive first year. AmericanCornerstoneInstitute.com, and you can see all about what we’re doing and where we are.
Bluey: Irv Dennis. Thank you for your leadership at HUD in the past as well as today. It was a pleasure to learn more about your ability to transform this large government agency.
Again, the book is called “Transforming a Federal Agency: Management Lessons From HUD’s Financial Reconstruction.” We’ll be sure to leave a link in both the transcript and the show notes for any listeners who would like to learn more about it.
You have an opinion on this article? Send an email to let us know your opinion. [email protected] and we’ll consider publishing your edited remarks in our regular “We Hear You” feature. Be sure to include the article’s URL, headline, and your name.