In the thick of federal budget season, it’s no surprise when pet programs and special initiatives flourish and fail like mushrooms. But this year’s rollercoaster award must go to the federal housing department’s Community Builders, the “urban Peace Corps” program that is the apple of HUD secretary Andrew Cuomo’s eye.

On Wednesday, it was the scourge of the agency, savaged by a new HUD Inspector General’s audit that called it little more than a patronage-driven PR campaign. The audit, released squarely in the middle of the budget negotiation process, gave Republicans all the ammunition they would need to sink the expensive and controversial program altogether. But by Thursday night, Community Builders had risen from its ashes, salvaged as part of a Congressional deal that saw HUD funding climb by 11 percent.

The original idea behind the program as it was launched in 1998 was that HUD would hire outside experts for two-year consulting stints to make the agency’s programs more visible in the communities that need them. Community Builders was supposed to get the faltering agency on its feet again. It generated a huge response among community development professionals, who submitted 8,400 applications for the 460 jobs on offer last year. Part of the draw: salaries up to $105,000.

But according to the IG’s audit, the hires were politically influenced. The program was swallowing up too much of HUD’s shrunken budget with expensive travel, training and salary costs. And the Community Builders hires, without staff or specific program assignments, simply weren’t very effective, said the audit. Plus, Republicans say that Community Builders was simply designed as a vehicle for the canny secretary to promote himself. “Nearly 10 percent of the Department’s personnel are now Community Builders,” pointed out Senator Wayne Allard during September’s funding debates. “As best we can tell these positions are largely public relations positions.”

HUD denies the accusations, and Democrats respond that the IG’s report was simply a political hatchet job designed to destroy an innovative program that made HUD look good–the outgrowth of a long-standing feud between the Secretary and the Inspector General. (They point out that the IG’s office was offered a $25 million budget boost by the Republican-controlled Senate just weeks before the audit was released.)

But some Community Builders themselves report different problems–and see them as simply part of the job. They dismiss the patronage accusations–but point out that there’s only so much that outside temporary consultants can do to fix the agency or help neighborhoods. “It’s like being a catalyst,” said one Community Builder. “We can think beyond HUD, get different institutions and organizations involved in projects, and do the networking to get resources committed. But it’s not like we can get HUD to give $50 million to your project.”

By the budget deal struck Thursday, the program will survive one more year, when the jobs will revert to regular civil service positions.

In other housing budget details, the deal will fund 60,000 new Section 8 vouchers, increase Community Development Block Grants by $50 million to $4.8 billion, provide $2.9 billion for public housing modernization ($300 million more than the president requested) and boost AIDS housing funding by $7 million to a total of $232 million. The Inspector General’s office wound up with $83 million, $13 million more than the president’s request.