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Contractors comprise around half of HUD’s workforce. We reviewed progress HUD had made in addressing previously identified background investigation issues. Personnel Security Division (PSD) had reduced the backlog of suitability adjudication cases, but on average it took about four times longer than the Office of Personnel Management standard of 90 days to complete a case—resulting in several hundred contractor employees working at HUD without a final suitability determination.  PSD had not issued comprehensive policies and procedures or implemented an automated case management system.  Administrative and program offices within HUD that were responsible for personnel, physical, and information security did not collaborate effectively at the policy-making level.  During the evaluation, the Office of Administration established a security council to identify and address cross-HUD security issues. We identified successful practices of other Federal agencies that would address HUD’s contractor employee security risks and made recommendations to improve the timeliness and reliability of security processes.