Agency of the Month: How USDA's Rural Housing Service recovered from a 30 percent staff reduction

By Rahul Bali
Federal News Radio

Tony_HernandezAs the federal government marks June as National Ownership Month, USDA Rural Housing Service Administrator Tony Hernandez has travelled around the country promoting homeownership in rural communities.

“Housing is a conduit to family, neighborhood and community. So what we are trying to do is give people the opportunity to move into the middle class.  The best way to do that is buying a house,” Hernandez told Federal News Radio's Agency of the Month radio program.

The Rural Housing Service does that through grants, direct loans and guaranteed private loans for housing and community facilities, like libraries and hospitals.

“We’re like a big bank. We lend money and give grants. Mostly we lend money to help communities build infrastructure and build their communities," said Hernandez. "We work with them to help them achieve vision of what their rural town should look like.”

Administrator Hernandez said the Rural Housing Service had 83 employees when he took over in December 2013. During the federal hiring freeze, Hernandez said the service lost close to 30 percent of its staff due to retirement, but it has regained those employees and hired more in the past year. It's current staff size sits at 103.

“We’re a big bank. We have to have certain skill sets here," said Hernandez. "What we want to do is help the employees have the right skills. Have employees have the right tools. So, we have been spending lots of time trying to make sure those two things happen: training and the right tools. Part of that is to reduce the burden on our staff because we get more dollars with less staff. So, you have to ask the question, 'how do we do our business?' That is why we are spending so much time on what we call process improvement."

One major process improvement was making the single-family guaranteed home loan program paperless. Those loans were manually processed. Paperwork and checks were mailed to and from the lenders. By going paperless and transferring paperwork electronically, processing each loan was cut by 58 minutes. In 2014, more than 139,000 loans were processed in the single-family guaranteed home loan program, according to Administrator Hernandez.

Currently, there are no backlogs of loan applications in the program and 37,500 reams of paper were saved in one year. Customers also saved $4.2 million. 

Administrator Hernandez said going paperless “reduced the burden on the field by using better processes, so it is not so manually intensive. You allow our staff, who are very qualified staff, to use the skills they have. Which is more analysis and judgement, rather than just passing papers.”

Administrator Hernandez said they have been working on process improvement through Lean Six Sigma.

“It is a technology or methodology that has been used in the private sector that we are bringing forward into the federal government. What it does, it helps you to analyze … what we call, define the problem," said Hernandez. "You’re getting metrics. How to do measure what is happening. How many days does it take … how many steps are there. For example, in St. Louis, when we were doing this process improvement, we found out there were 42 steps to something. So we asked the question, ‘Why are there 42 steps? Is there a way to do this in less steps?' Turns out. We could.”

Administrator Hernandez pointed out that employees are key to process improvements.  

“The employees know where the problems and barriers are in their process and how they do their jobs. What is nice about working for the federal government, you are a public servant. So, what we are trying to do is to create the environment so people have a sense of urgency to get the work done. Why? When we are a customer, we want it done right away. So, to do that, we have to find ways to reduce the burden for field staff, giving them better tools and, most importantly, focusing on the customer.”

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