# Presentation: 891159

## HUD’S RENTAL HOUSING INTEGRITY IMPROVEMENT PROJECT (RHIIP)

## Table of Contents

**Introduction**
**Section I.****	****The Income and Rent Integrity Problem**
**Section II. ****	****Rental Housing Integrity Improvement Project**
**Section III.****	****Up-front Income Verification**
**Section IV.****	****Rental Integrity Monitoring**
**Conclusion/Questions and Answers**

**Rental Housing Integrity Improvement Project**

## Introduction 

- The ***income and rent integrity problem*** in public housing and voucher programs
- The RHIIP initiative, especially
- Up-front income verification
- The rental integrity monitoring (RIM) initiative
- Program simplification

**Rental Housing Integrity Improvement Project**

**Introduction **

- HUD RHIIP Training - Opening Plenary

- May 2003

## 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

**Rental Housing Integrity Improvement Project**

- HUD RHIIP Training - Opening Plenary

- May 2003

## Improper Payments Information Act of 2002

- If amount of improper payments exceeds $10 million, agency must report on resulting actions, including:
- Causes of improper payments, corrective action taken, and results
- Whether the agency has the systems and infrastructure to reduce improper payments
- Steps taken to ensure agency managers are being held accountable

**Rental Housing Integrity Improvement Project**

- HUD RHIIP Training - Opening Plenary

- May 2003

## 2003 PD&R Quality Control Rental Assistance Subsidies Study 

- HUD Office of Policy Development and Research (PD&R) measurement of progress in reducing number/dollar amounts of rent calculation errors for 2003
- Data collected from 2,700 households at 600 sites (Section 8, Section 811, Section 202, and public housing)
- Information from tenant files and in-person interviews
- Data collection completed before Summer 2003
- Results reported in 2003 Performance and Account Report and Financial Statement Audit

**Rental Housing Integrity Improvement Project**

## Section ITHE INCOME AND RENT INTEGRITY PROBLEM 

## What is the Overall Problem?

- GAO designated HUD’s rental housing assistance as one of 22 “high risk” federal government areas
- HUD overpaid $2.3 billion in annual housing subsidies
- $1.7 billion in administrative/component errors
- $600 to $900 million in unreported tenant income
- HUD underpaid $634 million in annual housing subsidies

**Rental Housing Integrity Improvement Project**

- HUD RHIIP Training - Opening Plenary

- May 2003

## Major Error Findings

- PD&R’s 2001 *Quality Control for Rental Assistance Subsidies Determinations* study found:
- 34% of households paying at least $5 per month less than they should
- 22% of households paying at least $5 per month more than they should
**60% of rent calculations contain some type of rent, administrative, or component error **

**Rental Housing Integrity Improvement Project**

## Rent Errors

- Household paid too much rent (overpayment) or too little rent (underpayment). Rent errors include:
-   Dollar rent errors
-   Gross rent errors
-   Net rent errors
-   Error rate
**Source: ***Quality Control for Rental Assistance Subsidies Determinations*, 2001, pp. 16-17.

**Rental Housing Integrity Improvement Project**

## Dollar Impact of Rent Errors

- Subsidy overpayments:
-  $95 (average monthly error per tenant)
-  $1.699 billion (total annual program errors)
- Subsidy underpayments:
-  $56 (average monthly error per tenant)
-  $634 million (total annual program errors)
**Source: ***Quality Control for Rental Assistance Subsidies Determinations*, 2001, p. 20.

**Rental Housing Integrity Improvement Project**

## Component Errors

- Incorrect calculation of income and expense components. Component errors include:
-   **Income Components:**
-   Earned income
-   Social Security and pensions
-   Public assistance (TANF)
-   Income from assets
**  ****Expense/Allowance Components:**
-   Elderly/disabled allowance
-   Dependent allowance
-   Medical, childcare, and disability expenses
**Source: ***Quality Control for Rental Assistance Subsidies Determinations*, 2001, p. 16.

**Rental Housing Integrity Improvement Project**

## Dollar Impact of Component Errors

| Administrative Type | Average Total Dollar Impact of Component Errors
(Per household, per year) |
| --- | --- |
| Public Housing | $4,837 |
| PHA-Administered Section 8 | $5,070 |
| Owner-Administered Section 8 | $3,351 |

**Rental Housing Integrity Improvement Project**

**Source: ***Quality Control for Rental Assistance Subsidies Determinations*, 2001, p. 29.

- HUD RHIIP Training - Opening Plenary

- May 2003

## Administrative Errors

- Errors that result from mistakes in procedure. Administrative errors include:
- Consistency errors
- Calculation errors
- Transcription errors
- Failure to conduct timely recertifications
- Failure to verify information (e.g., income, family composition)
**Source: ***Quality Control for Rental Assistance Subsidies Determinations*, 2001, pp. 16-17.

**Rental Housing Integrity Improvement Project**

## Dollar Impact of Administrative Errors

| Error Type | Percentage of Households in Error | Average Gross Dollars in Error
(Per household, per month) |
| --- | --- | --- |
| Transcription Errors | 50% | $12 |
| Calculation Errors—Allowances | 8% | $26 |
| Calculation Errors—Income | 3% | $10 |
| Calculation Errors—Other | 23% | $18 |
| Overdue Recertifications | 6% | $9 |
| Any Administrative Errors | 64% | $12 |

**Rental Housing Integrity Improvement Project**

**Source: ***Quality Control for Rental Assistance Subsidies Determinations*, 2001, p. 38.

- HUD RHIIP Training - Opening Plenary

- May 2003

## QC Study and IG Recommendations

- Provide POAs with forms/training/other tools needed to determine rent correctly
- Hold POAs accountable for implementing regulations and correct rent calculations
- Simplify federal laws/regulations/HUD requirements
- Support occupancy functions and conduct POA outreach regarding availability of occupancy-related resources

**Rental Housing Integrity Improvement Project**

- HUD RHIIP Training - Opening Plenary

- May 2003

## Section IIRENTAL HOUSING INTEGRITY IMPROVEMENT PROJECT 

## How HUD Is Addressing the Problem

- Reassessing operations
- Studying other agencies’ error reduction efforts (e.g., Food Stamp Program’s quality control program)
- Emphasizing options with the most error reduction payoff
**Rental Housing Integrity Improvement Project**
- Reduce errors
- Ensure the “right benefits go to the right persons”
- Stretch HUD’s limited program funds to serve as many people as possible

**Rental Housing Integrity Improvement Project**

- HUD RHIIP Training - Opening Plenary

- May 2003

## RHIIP Components

- Error measurement (PD&R)
- Training and technical assistance
- Program guidance
- Incentives and sanctions
**Program simplification**
**Up-front income verification (UIV)**
**Rental integrity monitoring (RIM)**

**Rental Housing Integrity Improvement Project**

- HUD RHIIP Training - Opening Plenary

- May 2003

## Impact of Improving Accuracy of Income and Rent

- Corrects subsidy estimates and payments
- Prevents costly and time consuming corrections
- Ensures fundamental fairness among families
- Serves more eligible households
- Ensures the integrity of HUD’s financial statement
- Reduces errors

**Rental Housing Integrity Improvement Project**

- HUD RHIIP Training - Opening Plenary

- May 2003

## Section IIIUP-FRONT INCOME VERIFICATION 

## Up-Front Income Verification (UIV) 

***Definition:*** Verification of income, before or during a family reexamination, through an independent source that systematically and uniformly maintains income information in computerized form for a large number of individuals.
- Key strategy for reducing the error rate
- Notice PIH 2001-15 strongly encourages UIV in addition to third party verification

**Rental Housing Integrity Improvement Project**

## Current Resources for UIV

- 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
- Credit Bureau Association (CBA) Credit Reports
- Internal Revenue Service (IRS) Letter 1722
- Private sector databases (e.g., The Work Number)

**Rental Housing Integrity Improvement Project**

## Model Programs

_***Delaware***_***: Delaware State Housing Authority***
- Mainframe computer linked with Department of Labor (DOL) and Department of Health and Human Services (HHS). Other state PHAs also have link
- Receives DOL wage/unemployment/disability benefits data
- Receives HHS welfare benefits/child support information
- Link prevents fraud since tenants know income and benefit checks are being performed

**Rental Housing Integrity Improvement Project**

## Other Model Programs

***Virginia:*** Fairfax County Department of Housing and Community Development, Compliance and Community Relations Program
***Arizona:*** City of Phoenix Housing Department
***South Carolina:*** Housing Authority of the City of Columbia
***Oklahoma:*** Oklahoma City Housing Authority and Oklahoma Housing Finance Agency

**Rental Housing Integrity Improvement Project**

## Future Resources for UIV

- HUD UIV system
- Health and Human Service’s (HHS) National Directory of New Hires Database
- HR-1030 (legislation pending) would allow HUD to compare public and assisted housing-related employment and income data with HHS New Hires Database

**Rental Housing Integrity Improvement Project**

## HUD UIV System

***Objective:*** Make integrated income data available to PHAs from one source, via the Internet, to improve income verification and reduce errors
- HUD agreements with SWICAs will let PHAs access information through HUD’s database
- Goal: Agreements with 20 states by end of 2003
- HUD UIV pilot (PHAs in Florida, Ohio, and Texas)
- Implementation

**Rental Housing Integrity Improvement Project**

## HUD UIV System (cont.)

***Protocol:***
- HUD matches Social Security Numbers (SSNs) and PIC data with SWICA data for all tenants over 18 years of age.
- If the SSN is not in PIC, data will not be made available
- Initially, 100% four times per year, may go to upcoming recertifications

**Rental Housing Integrity Improvement Project**

## HUD UIV System (cont.)

***Security (HUD):***
- Data held in secure sub-systems/modules in PIC system
- Internet data access limited to requesting agency
- Records maintained on PHA requests and responses from SWICAs, private vendors, and SSA
- Records maintained and reports sent to SWICAs, private vendors, and SSA on data archived or destroyed

**Rental Housing Integrity Improvement Project**

## HUD UIV System (cont.)

***Security (PHAs):***
- Form 9886 or equivalent information must be on file
- Tenant files must be securely maintained

**Rental Housing Integrity Improvement Project**

## Section IVRENTAL INTEGRITY MONITORING 

## 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

**Rental Housing Integrity Improvement Project**

## Establishing a Baseline for Measuring Error Reduction

- RIM Reviews of PHAs, conducted from 7/02 through 1/03, examined:
- Income and rent
- PHA management of the occupancy function
- Verification and documentation
- Consistency between HUD-50058 data and PHA onsite records
- RIM Review Error Tracking Reports, submitted 2/14/03, form baseline of rent/administrative/component errors affecting rental subsidy payments

**Rental Housing Integrity Improvement Project**

## 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 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

**Rental Housing Integrity Improvement Project**

## Selection of PHAs—Original 

- HUD Field Offices used the existing PIH risk model, especially SEMAP- and PHAS-troubled PHAs, to determine PHAs most likely to have serious rent and income errors. Model supplemented by:
- SEMAP Indicators #3, #9, and #10
- Information from the PD&R Quality Control Study on income errors
- REAC large-scale match data
- As a result of these criteria, over 360 PHAs already received RIM reviews

**Rental Housing Integrity Improvement Project**

## Selection of PHAs—New Guidance

***Top priority:***** **RIM Reviews completed for an additional 347 PHAs by September 30, 2003.** **
***Second priority:***** **Follow-up RIM reviews

**Rental Housing Integrity Improvement Project**

## RIM Review Onsite Monitoring Activities

-  Occupancy functions
- Skill level and competency
- Staff training program
- Occupancy policies
- PHA “job-aids” (forms, worksheets, guides, etc.)
- Process for accepting and processing applications
- Computer software and programs

**Rental Housing Integrity Improvement Project**

## RIM Review Onsite Monitoring Activities (cont.)

- Verification and documentation procedures
- Reliability and acceptability
- Extent of usage of UIV and third-party verification
- Tenant records
- Consistency
- Completion
- Security

**Rental Housing Integrity Improvement Project**

## PHA RIM Review Summary Report

- Describes findings and basis for findings
- Outlines strategies for correcting the findings
- Includes targeted dates for completing corrective actions
- Findings will be communicated to the PHA
- Preliminary findings to date mirror those from the PD&R Quality Control Study on income errors

**Rental Housing Integrity Improvement Project**

## Sample RIM Report Findings

- Lack of verification of income/deductions
- Earned income/pension/public assistance miscalculations
- Incomplete/outdated PHA policies
- Data not being transferred to MTCS/PIC
- Documentation in file did not match data used to determine income and rent
- Failure to offer choice of rent (flat rent or income-based)
- Hardship exemptions not being offered
- Improper calculation of utility allowances

**Rental Housing Integrity Improvement Project**

## Sample Recommended Corrective Actions

- Establishing or improving internal quality control systems
- Establishing or improving procedures for gathering data for rent calculations
- Providing additional staff training
- Developing a checklist and log of required documents
- Using up-front as well as third-party verification of data whenever possible
- Successfully submitting 85% of participant data into MTCS/PIC

**Rental Housing Integrity Improvement Project**

## Follow-up and Resolution

- HUD Field Offices will:
- Monitor on an on-going basis PHAs’ progress in resolving income and rent error findings/discrepancies
- Track PHAs’ responses to report issues
- Report findings to Headquarters via quarterly updates of the Error Tracking Reports
- Analyze any PHA difficulties in addressing issues/ taking appropriate actions and provide technical assistance, as needed
- Corrective Action Plan, if required

**Rental Housing Integrity Improvement Project**

## Next steps for PHAs

- Review occupancy procedures for compliance with regulations
- Update or develop worksheets or forms as needed
- Review the consent or release form
- Review competency of occupancy specialists and train as needed on income and rent determination, changes in the law, and revised forms
- Explore up-front and third party verification resources, including technological solutions
- Institute internal quality control checks

**Rental Housing Integrity Improvement Project**

## Conclusion

- HUD and PHAs need to work ***together*** to reduce income determination and rent calculation errors and meet the mandated goals:
- A** 15% **reduction in the dollar amount of error by FY 2003
- A **30%** reduction by FY 2004
- A **50%** reduction by FY 2005
- Reducing errors means more housing money for the people who need it the most.

**Rental Housing Integrity Improvement Project**

## Questions and Answers

**Rental Housing Integrity Improvement Project**

- HUD RHIIP Training - Opening Plenary

- May 2003