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What Is the Overall Problem?
A 2001 Office of Policy Development and Research (PD&R) study found that HUD:
Overpaid $2.6 billion in annual housing subsidies $1.7 billion in administrative/component
errors $600 to $900 million in unreported tenant
income Underpaid $634 million in annual
housing subsidies
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HUD Rental Program
Excess Subsidy-Unreported Earnings
Excess Subsidy-Unreported Unearned
Excess Subsidy-POA Error
Subsidy Shortfall-POA Error
Net Total QC/Income Match Error
Public Housing
$280 $14 $431 $201 $524
HCV/ Mod Rehab
$369 $49 $876 $256 $1,038
Section 8- Project Based
$199 $67 $362 $177 $451
Total $848 $130 $1,669 $634 $2,013
Error Measurement Estimates from 2001 QC Study and Income
Matching
This chart includes a breakdown of the various subsidy determination errors by program groupings in $ millions. The first two columns of data come from income matching, the third and fourth from the QC study.
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Presidential Management Initiative
#10 Mandate HUD mandated to reduce errors by
50% by 2005
HUD’s Annual Performance Plan set interim goals:
A 15% reduction in the dollar amount of error by FY 2003
A 30% reduction by FY 2004
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Rental Housing Integrity Improvement
Project (RHIIP) Comprehensive approach that
identifies the best methods of reducing program errors
Addresses the root causes of income and rent errors in public housing and Section 8 HCV programs
Takes action to ensure the “right benefits go to the right persons”
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RHIIP Formula for Success
HUD and PHAs must work together to reduce errors and ensure fundamental fairness among families.
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RHIIP Components
Error measurement Program guidance Training and technical assistance Program simplification Up-front income verification (UIV) Rental integrity monitoring (RIM) Consequences and Fraud
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2003 PD&R Quality Control Rental
Assistance Subsidies Study HUD PD&R measurement of progress
in reducing number/dollar amount of rent calculation errors for FY 2003
Data collected from 2,700 households at 600 sites (Section 8, Section 811, Section 202, public housing)
Information from tenant files & in-person interviews
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2003 PD&R Quality Control Rental Assistance
Subsidies Study Data collection completed in early
Summer 2003 for first half of FY 2003 with results available late 2003 for the Performance and accountability Report and Financial Statement Audit
Additional data collected in the last six months of FY 2003, with results available in mid-2004.
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PIH Guidance Materials Pubic Housing Occupancy Guidebook
Housing Choice Voucher Program Guidebook
Program Fact Sheets
Forthcoming Verification Guidance for HUD Field Offices and Public Housing Authorities
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PIH RHIIP Web Site
Source for information and links to critical documents, HUD regulations, guidebooks, and fact sheets
FAQs on RHIIP, RIM, verifications, and income and rent
Training materials and presentations
PIH RHIIP website location: http://www.hud.gov/offices/pih/programs/ ph/rhiip/index.cfm
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Training—HUD Field Office Staff
Purpose: To Enhance occupancy knowledge and skills of HUD staff
Focus: Basic occupancy with emphasis on eligibility, income, rent, and subsidy calculations
Spring 2002: Field Office basic rent and income training
June 17, 2002: RIM satellite training May 5-9, 2003: RHIIP Training Conference
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Training—PHA Staff
PIH Rental Integrity Summits Orlando, Florida
January 26-28, 2004 January 28-30, 2004
Anaheim, California February 2-4, 2004 February 4-6, 2004
Look for registration details on RHIIP Web Site!
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Technical Assistance
PIH has a contract with MDStrum Housing Services to:
Provide technical assistance to challenged PHAs
Identify and address root causes of error
Perform HUD-Form 50058 software analysis
To date, onsite TA has been provided to 8 selected sites
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Up-front Income Verification
Definition: Verification of income through an independent source making use of income information databases maintained systematically and uniformly, such as those maintained by the State Wage Information Collection Agencies (SWICAs), the Social Security Administration (SSA), and private vendors before and during a family reexamination.
Key strategy for reducing the error rate
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Current Sources for UIV Data
Social Security (SS) and Supplemental Security Income (SSI) information accessed via a secure Internet facility (TASS)
State Wage Information Collection Agencies (SWICAs)
State TANF systems Private sector databases (e.g., The
Work Number)
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HUD’s Tenant Assessment Subsystem
(TASS) The system compares tenant-reported information to other HUD systems with income data stored in the SSA and the IRS databases
HUD strongly encourages PHAs to systematically use the system to reduce incidents of undisclosed SS and SSI income
HUD TASS website location: http://www.hud.gov/offices/reac/online/reasyst.cfm
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UIV System Pilot
Commenced on August 18, 2003
Participants: Select PHAs in Florida and Texas
The UIV application was deployed as part of the HUD Tenant Assessment Subsystem (TASS)
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UIV System Pilot (cont.)
Objectives:
Obtain feedback on how wage and benefit data is displayed
Identify and assess implications of accessing SWICA data
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HUD UIV System: Rollout Schedule
August through October 2003: TASS/PASS UIV System Pilot
Late 2003: Selected PHAs will participate in pilot of UIV System
Early 2004: UIV System available to all PHAs within states where HUD received income data
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Coming Soon: HUD UIV System
Will make integrated income data available to PHAs from one source via the Internet
Allows PHAs to view quarterly wage, weekly/bi-weekly unemployment, and monthly SS benefit information for tenants in their jurisdiction
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UIV System
Provides wage and benefit information through a data matching process for households covered by a HUD Form 50058
For tenant recertifications, not new admissions, as wage and benefit data is pulled from existing Social Security Numbers (SSNs) in the PIC system
PHAs may not view the tenant data without a signed Authorization for the Release of Information/Privacy Act Notice (e.g., Form HUD-9886) in the household’s file
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UIV System Discrepancy Reports
Compares total benefits reported by tenant to total benefits reported by SSA and SWICAs
Shows if the tenant’s SSN-date of birth-surname combination does not match SSA records
Shows if tenant’s claim was denied or benefits terminated
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UIV System Privacy Requirements
Data must only be used for verification of tenant income and eligibility
• Data must not be disclosed in any way that would violate the privacy of the individuals represented in the system
Tenants must be provided with access to their records and an opportunity to correct or challenge their contents
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UIV System Security
Ensures that access rights, roles and responsibilities within PHAs are appropriately and adequately assigned and monitored
Quarterly reviews conducted for all User IDs to determine if user still needs access to UIV data
Maintain security-related records Conduct security awareness training
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Rental Integrity Monitoring (RIM)
In June of 2002, HUD Headquarters directed HUD Field Offices to conduct onsite monitoring of PHAs—RIM reviews—to:
Detect and reduce errors in income and rent calculations at targeted PHAs
Reduce rent underpayments and overpayments by residents
Maximize HUD’s limited housing resources
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What Is a RIM Review?
Onsite monitoring of PHA policies and procedures related to income and rent determinations, performed by Field Office reviewers, including: Review of randomly selected sample tenant files Gathering of PHA income and rent information Assessment of PHA policies and procedures Identification of income and rent errors Analysis of income and rent errors to establish
root causes/recommended corrective actions Recording of income and rent findings and
errors
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RIM Review Close-Out
HUD Field Offices will:
Meet and discuss preliminary finds and observations/concerns with PHA staff
Discuss strategies for corrective action
Gives PHAs an opportunity to discuss RIM review finds and observations/concerns
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Post Review Activities
HUD Field Offices: Issue RIM review reports to PHAs on findings,
concerns, observations, and recommended actions
Monitor PHAs’ progress in correcting findings and errors
Provide ongoing technical assistance
Close findings when required actions are completed
Submit error reports to HUD Headquarters
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Corrective Action Plans (CAPs)
Required if a finding is not resolved by the time a PHA responds to a RIM report (within 45 days)
Finding: A condition not in compliance with handbook, regulatory, or statutory requirements
Systemic Finding: A pattern of deficient PHA performance in one or more areas of income and rent determination
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Baseline for RIM Review Results Report
368 reviews conducted between June 2002 and January 2003
144 of the 368 reviews involved large PHAs that comprise over 25% of HUD’s subsidies
Income and rent errors recorded on Error Tracking Reports for each RIM review formed the baseline results
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Second Round of RIM Reviews
April 2003 through September 2003
346 targeted PHAs administering public housing and HCV programs, covering 55% of HUD subsidies paid
RIM Review Results Report to be completed early 2004
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Baseline RIM Review Results
Errors found in Public Housing and Housing Choice Voucher programs in initial 368 reviews divided into two categories:
Component Errors: Errors in specific income and expense components used to calculate rent (e.g., earned income, Social Security, pensions, dependent allowance, etc.)
Administrative Errors: Errors in procedures, including calculation and transcription errors and failure to verify information
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Top Three Component Errors
Public Housing Calculation of earned income (wages) Calculation of pensions, public assistance
& other income Application of allowable deductions
Housing Choice Voucher Calculation of earned income (wages) Calculation of pensions, public assistance
& other income Using incorrect utility allowance schedule
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Top Three Administrative Errors
Public Housing Improper transfer of 50058 data from file
to PIC Lack of quality control Lack of verification of income/deductions
Housing Choice Voucher Lack of verification of income/deductions Lack of quality control Improper transfer of 50058 data from file
to PIC
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Re-reviews
PHAs receiving initial review in the first two rounds will receive a re-review to ensure corrective actions were implemented
Approximately 20 re-reviews completed to date, remaining conducted during FY 2004
Study of 50 PHAs undergoing re-reviews to be included in FY2003 Performance and Accountability Report
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Consequences of Program ErrorsRIM
Follow-up by HUD Field Offices and the Inspector General
May impact several performance indicators found under the Section Eight Management Assessment Program (SEMAP)
Expect PHAs to implement CAPs in timely manner to prevent adverse action
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Consequences of Program Errors (cont.)
UIV
HUD will examine discrepancy reports for large numbers of errors in wage and benefit determination
HUD will target PHAs with multiple errors for further action
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Letter to CPAs
August 26, 2003 letter from PIH Assistant Secretary Liu to CPAs who audit PHAs
Outreach to independent auditors to assess/mitigate PHA program risk and to identify and report improper calculation of subsidy payments
Errors identified during the RIM reviews are being compared to the income and rent findings identified in the PHAs audit reports
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OFFICE OF INSPECTOR GENERAL U.S. Department of Housing and Urban Development WASHINGTON, D.C. 20410-4500
HOTLINE COMPLAINT INTAKE FORMCOMPLAINT INFORMATION
Date:_______
COMPLAINANT CONTACT INFORMATION
PHA Name:________________________
Point of Contact Name:______________________
Address:___________________________ (Street)
___________________ _____________ _______________ (City) (State) (Zip Code)
Telephone: (Work)___________ (Cell Phone)_________________
Email:___________________________
SUBJECT INFORMATION
Subject Name or Name of Business:_____________________________________
Subject Address (If known) __________________, _________, ______ _________ (Street) (City) (State) (Zip Code)
COMPLAINT SUMMARY (Attach additional pages if necessary):
Loss Amount:
Nature of Allegation:
Initial Certification:________Recertification:________ U.S. Department of Housing and Urban
Development WASHINGTON, D.C. 20410-4500
Reporting Fraud
Hotline: 800-347-3735
Fax: 202-708-4829
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United States Attorney Southern District of New York
FOR IMMEDIATE RELEASE CONTACT: U.S. ATTORNEY’S OFFICEJUNE 3, 2003 MARVIN SMILON, HERBERT HADAD,
MICHAEL KULSTADPUBLIC INFORMATION OFFICE(212) 637-2600
BARBARA GUSS(914) 993-1903
31 CHARGED WITH FEDERAL HOUSING FRAUD THAT COST THE GOVERNMENT MORE THAN $650,000
JAMES B. COMEY, the United States Attorney for the Southern District of New York; RUTH A. RITZEMA the Special Agent in Charge of the New York/New Jersey Office of the Inspector General of the U.S. Department of Housing and Urban Development (“HUD”); and CHARLES A. COLA, the Commissioner of the Yonkers Police Department, announced that 31 defendants were charged with obtaining private housing rental subsidies to which they were not entitled. Twenty-seven were arrested and 4 others were being sought. The defendants were charged in 14 separate criminal Complaints unsealed in White Plains federal court and were presented in Court today before United States Magistrate Judge George A. YANTHIS. The defendant’ fraud is alleged to have costthe federal government more than $650,000.
Reporting
Fraud
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Yonkers housing fraud bust nets charges against 31
By WILL DAVID THE JOURNAL NEWS (Original publication: June 4, 2003)
YONKERS — A federal and local investigation aimed at stamping out fraud in the Yonkers Municipal Housing Authority's Section 8 rent subsidy program culminated yesterday with the arrests of 27 people, and four others are being sought in connection with the probe, authorities said.
The 31 people charged in the investigation — all but two from Yonkers — are accused of obtaining private housing rental subsidies they were not entitled to because their incomes were too high, said James B. Comey, the U.S. attorney for the Southern District of New York.
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PHAs and RHIIP
HUD is committed to its error reduction goals, but we need PHA cooperation and support to succeed in all our RHIIP initiatives!
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PHA Action—UIV
Use the TASS system now to verify benefit information and reduce incidents of undisclosed income
Use the UIV system, when it is operational, to ensure all wage and benefit income is disclosed
Implement controls that encourage follow up on significant income discrepancies
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PHA Action—UIV System
PHAs should review policies, practices, and SWICA regulations in preparation for availability of wage information and possibility of increases in cases of undisclosed income. Policies include:
Criteria for repayment agreements
Thresholds for legal action related to fraud Zero income policies Interim reexamination thresholds
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PHA Action—UIV System (cont.)
Maintain, communicate, and enforce standard operating procedures for UIV data
Emphasize to staff the importance of carefully and accurately entering tenant data into PIC HUD Form 50058 for accessing wage and benefit information
Ensure all staff accessing UIV System have a current signed user agreement and PIH Access Authorization Form on file
Inform tenants that your PHA has access to wage, SS, and unemployment benefit information
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PHA Action—RIM
Develop/implement an internal quality control system to ensure income and rent determination policies/procedures are followed consistently and accurately
Address concerns raised during RIM reviews and create and execute corrective action plans to address all findings
Use UIV sources and/or third party verification to verify wage/benefit data
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PHA Action—RIM (cont.)
Review competency of occupancy specialists and train as needed on income and rent determination
Update policies and procedures and interview forms
Ensure consistency between policy and practice (e.g., occupancy file, Form 50058, administrative plan/ACOP)
Document, document, document!
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General Recommendations
Know resources available, including: 24 Code of Federal Regulations (24
CFR) PIH notices and Federal Registers Public Housing Occupancy
Guidebook Housing Choice Voucher Guidebook Rental Integrity Monitoring Guide
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General Recommendations
Bookmark the PIH RHIIP Web Site and check it often for program updates, new guidance, and new FAQs
Keep in contact with your HUD Field Office
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Conclusion
Working together, HUD and PHAs can reduce income determination and rent calculation errors and ensure that there’s more housing money for those who need it the most.