U. S. Department of Housing and Urban Development 

Office of Inspector General for Investigation 

Inspections and Evaluations Division 

Inspection of Whether Duplicate Rental Assistance 

Payments Were Made To CPD Grant Recipients

September 2009 

IED-09-004
ii 

Executive Summary 

The Office of Inspector General, Inspections and Evaluations Division, conducts 

independent, objective examinations of U.S. Department of Housing and Urban 

Development (HUD) activities, programs, operations, and organizational issues. 

We completed an inspection to determine whether recipients of rental assistance 

payments under HUD’s Community Planning and Development (CPD) Programs also 

received rental subsidies from HUD’s Section 8 Housing Programs. CPD funding for 

rental assistance to eligible individuals is provided through five separate grant programs. 

These programs are in addition to HUD’s Section 8 programs that also pay for rental 

assistance. HUD’s CPD Director for the New York office expressed concern that the 

duplication of subsidy payments may be occurring between the programs. 

This inspection was limited to rental assistance payments made under two CPD homeless 

grant programs during 2008 to grantees/sponsors (service providers) in the New York 

downstate area. We also determined what measures HUD’s New York CPD office and 

the grantees/sponsors are taking to enforce the federal regulations that prohibit 

individuals from receiving rental assistance from more than one federal source. 

Based on a sample of 123 CPD grant recipients in the New York office, our inspection 

disclosed no instances of duplication of rental assistance payments made using both CPD 

funds and Section 8 funds. However, we did find that the CPD grantees administering the 

programs were not consistent in their approach to enforcing the prohibition against such 

duplications. 

 

During our inspection, we also searched public record databases to determine the 

addresses of program participants, and followed up with grantees when discrepancies 

existed. While all the discrepancies were resolved, we identified one instance where a 

sponsor continued to pay rent for an individual after the person moved out. 

We discussed the results of our inspection with HUD’s CPD Director in New York who 

advised us that he will follow-up with the grantees to ensure compliance with federal 

regulations. 

If you have any questions concerning this report, please call Jennifer Sorenson, Director, 

Inspections and Evaluations Division, Office of Investigation at (202) 402-0390. 
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Table of Contents 

Introduction ..........................................................................................................................1 

Scope and Methodology ..................................................................................................... 2 

Observation 1: No Instances of Duplicate Rental Assistance 

 Payments Were Found ............................................................................................3 

Observation 2: Measures Taken by Grantees to Prevent 

 the Duplication of Rental Assistance Payments Are Not Consistent ......................3 

Observation 3: Other Matters .............................................................................................5 

Recommendations ................................................................................................................5 
1 

Introduction 

The Department of Housing and Urban Development provides funding to help pay the rent for 

eligible individuals through a number of programs. The most familiar are the Section 8 rental 

subsidy programs administered by the Office of Public and Indian Housing and the Office of 

Multifamily Housing. In addition, the Office of Community Planning and Development (CPD) 

administers five programs that provide rental assistance to individuals. The majority of these 

programs were originally authorized under the McKinney-Vento Act, and are administered by 

HUD’s Office of Special Needs Assistance Programs. 

The five CPD programs are: (1) Shelter Plus Care (S+C), (2) Supportive Housing Program 

(SHP), (3) Housing Opportunities for Persons with AIDS (HOPWA), (4) Section 8 Moderate 

Rehabilitation for Single Room Occupancy (SRO), and (5) HOME Investment Partnerships 

Program. 

During Fiscal Years 2005 through 2008, HUD awarded substantial CPD funds in the New York 

downstate area for the five programs. The amounts shown below include funding to cover all 

program activities, which include a component for rental assistance. However, the amount for the 

S+C program is primarily for rental assistance. 

Program Amount Awarded 

to Grantees 

Amount 

Disbursed by 

Grantees 

S+C $80.4 million $45.8 million 

SHP $40.7 million $33.8 million 

HOPWA $4.7 million $2.7 million 

SRO $6.4 million* Not available 

HOME $81.0 million** Not available 

 

 * Amount is for all of New York State 

 ** FYs 2006 - 2008 

Typically under these CPD programs, the organization that provides the direct rental assistance 

for a program participant is responsible for determining the participants’ eligibility. HUD and/or 

the grantee are responsible for program oversight. The grantee can be the direct service provider 

(typically a state or local government agency or in some cases a private nonprofit organization) 

or may contract with a sponsor to service the program activities and provide the rental assistance 

to the participating individuals. 

The Code of Federal Regulations (CFR) prohibits individuals from receiving rental assistance if 

they are already receiving assistance from other federal sources. Specifically, 24 CFR 582.105 

prohibits the receipt of Shelter Plus Care (S+C) funding if the participant is receiving federal 

funding for rental assistance under other HUD programs. The CFR covering the Supportive 

Housing Program (SHP) does not contain specific language that prohibits the receipt of dual 

subsidies; however, 24 CFR 583.315 states that rents paid with SHP funds should be adjusted to 
2 

reflect either a portion of the participants’ income or housing costs already being paid for by 

public agencies. 

HUD’s CPD Director in the New York office raised concerns that the federal prohibition against 

the duplication of rental assistance using CPD and Section 8 program funds may be violated 

because there is no established protocol to identify such duplications. 

Scope and Methodology 

This inspection focused on the CPD programs that provide rental assistance to individuals in the 

downstate geographic area covered by the HUD New York office. Because the purpose of the 

inspection was to determine whether there is a current problem with duplicate rental assistance 

between the CPD and Section 8 programs, we reviewed rental assistance payments made during 

the most current complete year from January 1 to December 31, 2008. 

We selected two S+C grantees and one SHP grantee. Our review of these three grantees involved 

five separate program grants and included three different S+C sponsors. The five grants reviewed 

accounted for the disbursement of approximately $660,000 in rental assistance funds on behalf of 

123 individuals. The basis for our selection was to achieve a representative sample of grantees 

(e.g., state and city agencies as well as nonprofit organizations), and to include large and small 

grants. Our sample was not drawn statistically and the results are not intended to be projected to 

the universe of all program participants. 

Five CPD Grants Selected for Inspection 

Grantee/HUD 

Grant No. 

Sponsor (Service 

Provider) 

Rental 

Assistance 

Payments In 

2008 

Number of 

Participating 

Individuals 

NYC HPD/ 

NY0C70-0183 

Odyssey House 

Haven $280,077 57 

NYS OMH/ 

NY0C50-5020 

A.J. Melillo 

Center for Mental 

Health 

$181,899 19 

NYS OMH/ 

NY01C70-0203 

Pibly Residential 

Programs, Inc $157,539 23 

MTI Residential 

Services, Inc./ 

NY01B60-5013 

No Sponsor 

$20,350 9 

MTI Residential 

Services, Inc./ 

NY01B60-5012 

No Sponsor 

$20,000 15 

 

Totals $659,865 123 
3 

We obtained listings of program participants from each of the three grantees. The listings 

included pertinent identifying information of the participants which we used to compare against 

Section 8 tenant rolls reported in HUD’s Public Inquiry Communications Subsystem (PICS) and 

the Tenant Rental Assistance Certification System (TRACS). 

We met with staff from the Offices of Public Housing, Multifamily Housing and CPD in HUD’s 

New York office, and reviewed CPD guidance pertinent to the monitoring of grantees. We also 

interviewed the management at each of the three grantees and two of the sponsors about the 

process and procedures they had implemented to enforce related federal regulations. We 

obtained and reviewed the grantee’s written procedures and protocol regarding the screening of 

applicants and the monitoring of the program sponsors and individual participants. 

We also conducted a search of computerized public records to determine whether the recorded 

addresses were the same as the CPD program participant’s address during 2008. 

We initiated the review in December 2008. However, the review was suspended on December 

28, 2008, at the request of HUD CPD senior management until February 2009 due to heavy 

workload demands of its staff. The field work resumed on February 4, 2009, and was completed 

in mid-May 2009. 

We conducted the inspection in accordance with the Quality Standards for Inspections issued by 

the President’s Council on Integrity and Efficiency. 

Observations 

Our inspection disclosed no instances of duplication of rental assistance payments made using 

both CPD funds and Section 8 funds. However, we did find that the CPD grantees administering 

the programs were not consistent with their approach to enforcing the prohibition against such 

duplications. Also, we identified one instance where rental assistance payments continued for an 

individual after the person moved out. 

Observation 1: No Instances of Duplicate Rental Assistance Payments Were Found

Our review of 123 CPD program participants covering five CPD grants showed that none of the 

participants received Section 8 funding in 2008 during the same period they were receiving CPD 

funding. 

Observation 2: Measures Taken by Grantees to Prevent the Duplication of Rental 

Assistance Payments Are Not Consistent 

Pursuant to 24 CFR 582.400 and 24 CFR 583.400, HUD holds the S+C and SHP grantees 

responsible for the overall administration of the program, including overseeing the performance 

of its sub-recipients (i.e., sponsors). The Director of the HUD CPD office in New York affirmed 

these citations, and also advised that both the S+C and SHP grant agreements with HUD hold the 

grantees responsible for compliance with the applicable regulations codified in the respective 

CFRs. 
4 

Our inspection found that the HUD CPD office in New York does not match individual 

participants of the various CPD rental assistance programs to HUD Section 8 tenant information 

systems. Moreover, the CPD office does not monitor S+C and SHP grantees to specifically 

determine whether duplicative rental assistance payments have been made. While the CPD 

handbook (HUD Handbook 6509.2 REV-5) used by the staff to monitor both S+C and SHP 

grantees does not include specific work steps to address the duplication of rental assistance 

payments, it does include steps to ensure that the subsidized rents are accurately calculated. 

Our inspection also found that the HUD CPD New York office relies on the grantees to enforce 

the federal regulations prohibiting the duplication of rental assistance payments. However, two 

of the largest S+C grantees operating in the New York downstate area, the New York City 

Housing, Preservation and Development (HPD), and the New York State Office of Mental 

Health (OMH), have differing views of their responsibilities and their approaches reflect that. 

 

HPD (primarily a housing agency) actively checks to assure that its S+C participants are not also 

receiving other sources of federal rental assistance. HPD uses computer software for its initial 

intake filing of program applicants that automatically rejects any individual who is already in the 

database as participating in other HPD administered housing programs, such as Section 8 

Moderate Rehabilitation and Single Room Occupancy programs. Additionally, HPD routinely 

compares its S+C applicants against HUD’s dual subsidy report which identifies households who 

receive assistance through multiple public housing authorities (PHAs) or are in both HUD public 

housing and/or multifamily programs administered by the PHAs. Furthermore, the contract HPD 

enters into with the property owner stipulates that the owner must disclose to HPD any related 

assistance from federal, state and/or local governments. 

The OMH (primarily a mental health agency) does not conduct any matching of databases to 

determine whether program applicants or participants are also receiving other federally funded 

rental assistance. OMH management stated that they do not have access to information systems 

that would allow checking of S+C applicants against Section 8 tenant rolls. According to OMH 

management, it is the responsibility of the program sponsors to ensure that their clients are not 

receiving other sources of rental assistance. Although OMH does not provide specific guidance 

to its sponsors on how to do any such checking, it does inform its sponsors of the federal 

regulation prohibiting the duplication of rental assistance payments. OMH distributes to its 

sponsors a program management guide book that specifically cites that sponsors cannot accept 

program applicants who are currently receiving other ongoing housing assistance, such as 

Section 8. The guide book also states that once an individual is accepted into the program, they 

cannot receive rental subsidies from any other source. Furthermore, the contract that OMH enters 

into with its sponsors incorporates a copy of the CFR pertaining to the S+C program, including 

the section of the duplication of federal funded rental assistance. 

The two nonprofit sponsors that operated the S+C grants for OMH did not establish procedures 

to collect information from program applicants on whether they are currently receiving rental 

assistance benefits from other federal sources. These sponsors do not conduct any matching of 

applicants against Section 8 tenant rolls. Management from both sponsors told us that they do not 

have the tools (nor access to Section 8 data), or the staff resources to identify possible 

duplications of federally funded rental assistance. Furthermore, they stated that because the S+C 
5 

participants were formerly homeless, they believe that the chance of the participants also 

receiving Section 8 benefits is very negligible. 

Finally, we found that the nonprofit grantee, MTI Residential that operated the SHP grant does 

not conduct any check to determine independently whether its clients are receiving other sources 

of rental assistance, such as from Section 8. MTI management stated that they do not have access 

to public housing or HUD databases to conduct matching to Section 8 tenant rolls. MTI requires 

applicants to provide information of their various sources of income, such as wages, pension and 

social security payments in order to do rent calculations. 

Observation 3: Other Matters 

During our inspection we also compared CPD program participant addresses reported in 2008 to 

addresses disclosed in various public records. When discrepancies existed, we spoke to staff of 

the grantee/sponsor to obtain additional documentation supporting the participant’s address. We 

were able to resolve all initial discrepancies. However, our review of documentation provided by 

a sponsor contracted by the OMH disclosed that one individual moved out of the CPD subsidized 

residence several months before rent payments were stopped. We referred this information to the 

Director of the HUD CPD New York office for appropriate corrective action. 

Recommendations 

We recommend that the Deputy Assistant Secretary for Special Needs Programs advise 

1. Regional CPD Directors to provide clear guidance and technical support to its grantees to 

ensure that they clearly understand their responsibilities in enforcing federal regulations 

pertaining to the proper payment of rental assistance subsidies under the Shelter Plus Care 

and Supportive Housing Programs. 

2. The New York CPD Director to follow-up with the New York State Office of Mental Health 

(OMH) to determine whether an overpayment of rental assistance was made, as cited in the 

Other Matters Section of this report. If so, the OMH should be directed to take appropriate 

measures to recapture the funds.