2. 2 Rental Housing Integrity Improvement Project (RHIIP) Initiative  Secretarial initiative designed to reduce income and rent errors and improper subsidy payments  A comprehensive strategy to address 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”

3. 3 Background  The 2001 Office of Policy Development and Research (PD&R) Quality Control for Rental Assistance Subsidies Determination (QC) study found that HUD overpaid $2.6 billion and underpaid $634 million in annual housing subsidies  The QC study estimated that 60% of all rent and subsidy calculations contained some type of error

4. 4 Presidential Management Initiative #10  Mandated HUD to reduce the processing (administrative errors) error and improper payment rate by 50%, from 60% to 30% by 2005  HUD set aggressive interim goals in its Annual Performance Plan:  A 15% reduction by FY 2003  A 30% reduction by FY 2004

5. 5 Improper Payments Information Act of 2002  Requires agencies to:  Annually review all programs susceptible to significant erroneous payments  Measure the number and dollar amounts of errors and track progress towards reducing those errors  Report to the President and Congress, if the amount of improper payments exceeds $10 million

6. 6 2003 PD&R Quality Control Rental Assistance Subsidies Study Methodology  HUD PD&R measurement of progress in reducing errors during FY 2003  Data collected from over 2,400 households at 600 sites  Information from tenant files & in-person interviews

7. 7 2003 PD&R Quality Control Rental Assistance Subsidies Study Results Rental Assistance Program FY 2003 Estimates of Errors/Gross Erroneous Payments FY 2000 Estimates of Errors/Gross Erroneous Payments % Reduction in Gross Errors Public Housing$356,040$631,77643.6% Vouchers & Mod Rehab $797,508$1,132,56029.6% Total PHA Administered $1,153,548$1,764,33634.6% Project-based Assistance $395,796$539,16026.6% Total$1,549,344 (+/– $229,000) $2,303,496 (+/– $275,000) 32.7% * – All values are presented in the thousands.

8. 8 FY 2003 Performance and Accountability Report, Note 17  Reports that HUD has exceeded its interim 2003 goal of a 15% reduction in administrative errors, based on study results for the first half of FY 2003  Describes the methodology used for updating the 2000 baseline error measurement  Discusses the corrective actions HUD has taken to address the causes of erroneous subsidy payments

9. 9 RIM Review Case Studies  Examined 37 large PHAs who had RIM reviews and follow-up reviews  Concluded that significant errors still existed, particularly regarding:  Verification of income  Improper calculations, including problems with utility allowances, deductions, and expenses

10. Accomplishments

11. 11 Accomplishments for 2003—Error Reduction Efforts  Exceeded HUD’s interim FY 2003 goal of a 15% reduction in estimated program administrator errors  Worked and coordinated with the Inspector General (IG) on fraud cases  Issued a letter to Certified Public Accountants (CPAs) to assess, mitigate, & report PHA improper calculation of subsidy payments  Presented the strategic goals and RHIIP objectives at over 30 conferences/meetings to industry group leaders

12. 12 Accomplishments for 2003— Monitoring/Reporting  Conducted over 700 RIM reviews at PHAs managing over 80 percent of PIH's funding  Exceeded the goal of an 85 percent PIC reporting rating -- 89 percent for public housing and 98 percent for HCV

13. 13 Accomplishments for 2003— Income Matching  Developed and began to test pilot the Upfront Income Verification (UIV) System at 40 PHAs in 7 pilot states  Established agreements with 24 states to allow computer matching of tenant income and State wage data  Legislation was introduced in Congress to access and use the National Directory of New Hires Database to detect unreported income

14. 14 Accomplishments for 2003— Guidance/Staff Training  Released the first Public Housing Occupancy Guidebook in over 20 years  Issued the Notice PIH 2003-34, Rental Integrity Monitoring (RIM) Disallowed Costs and Sanctions under RHIIP  Launched the new PIH RHIIP website  Provided occupancy training to Field Office staff and scheduled two regional trainings in occupancy for PHA: 1/26 to 1/30 and 2/2 to 2/6

15. Policy/Guidance

16. 16 PIH Policy and Guidance  Program Simplification Proposals  Pubic Housing Occupancy and HCV Program Guidebooks, June 2003  Fact Sheet on Income and Rent Determinations, November 2002  Notice PIH 2003-34, Rental Integrity Monitoring (RIM) Disallowed Costs and Sanctions under RHIIP, December 19, 2003  Verification Guidance for PHAs (early 2004)

17. Up-front Income Verification (UIV)

18. 18 Current Sources for UIV Data  Social Security (SS) and Supplemental Security Income (SSI) information accessed via the Tenant Assessment Subsystem (TASS)  State Wage Information Collection Agencies (SWICAs)  State Temporary Assistance for Needy Families (TANF) systems  Private sector databases (e.g., The Work Number)

19. 19 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  Displays gross and net benefits for any Social Security Number (SSN) that is subsidized by HUD  HUD strongly encourages PHAs to systematically use the system to reduce incidents of undisclosed SS and SSI income

20. 20 HUD’s Tenant Assessment Subsystem (cont.)  HUD TASS Point of Contact (POC): Myra Newbill 202-708-4932 ext. 3211  HUD TASS website location: http://www.hud.gov/offices/reac/products/pro dtass.cfm

21. 21 UIV System Pilot  Commenced on August 18, 2003  Participants: 40 PHAs in 8 states, with over 400 users  Currently testing release 3.0.1

22. 22 UIV System Pilot (cont.) Objectives:  Obtain feedback on how wage and benefit data is displayed  Identify and assess implications of accessing SWICA data

23. 23 UIV System  For tenant recertifications, not new admissions-- wage and benefit data is pulled for existing Social Security Numbers (SSNs) in the PIC system  PHAs may not view the tenant data without a signed Form HUD-9886, Authorization for the Release of Information/Privacy Act Notice in the tenant’s file

24. 24 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  Provides wage and benefit information through a data matching process for households covered by HUD Form 50058

25. 25 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

26. 26 UIV System Security PHA Responsibilities:  Ensure that access rights, roles and responsibilities within PHAs are appropriately and adequately assigned and monitored  Conduct 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

27. Fraud

28. 28 OFFICE OF INSPECTOR GENERAL U.S. Department of Housing and Urban Development WASHINGTON, D.C. 20410-4500 HOTLINE COMPLAINT INTAKE FORM COMPLAINT 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 Note: Incidents of fraud may be followed- up by HUD Field Offices and the Inspector General

29. 29 United States Attorney Southern District of New York FOR IMMEDIATE RELEASE CONTACT: U.S. ATTORNEY’S OFFICE JUNE 3, 2003 MARVIN SMILON, HERBERT HADAD, MICHAEL KULSTAD PUBLIC 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 cost the federal government more than $650,000. Reporting Fraud

30. 30 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.

31. Rental Integrity Monitoring (RIM) Re-reviews

32. 32 Purpose of Re-reviews  Confirm whether the PHA has implemented corrective actions as outlined in its approved corrective action plan (CAP)  Verify that the implementation of corrective actions has led to a reduction of errors  Determine whether errors identified during the initial RIM review have been corrected

33. 33 Scheduling of Re-reviews  Field offices must perform re-reviews to PHAs that received initial reviews during periods:  Baseline I (completed prior to 1/31/03). Re- reviews to be completed by 4/30/04  Baseline II (completed after 4/21/03 guidance). Re-reviews for PHA programs requiring CAP or when systemic errors were found to be completed by 9/30/04

34. 34 Re-review Protocol Field Offices must:  Review approved PHA CAP; verify implementation and establishment of internal controls  Review initial and newly selected tenant files to ensure errors are corrected and determine accuracy of income/rent calculations after CAP implementation  Take appropriate action when PHA fails to comply with initial RIM review requirements

35. 35 Re-review Reporting Requirements All re-reviewed PHAs receive a report that:  Details whether all corrective actions have been implemented  Lists findings, required corrective actions, observations & recommendations from review of new file sample  Details results of re-review of initial RIM review tenant files  Explains any actions/sanctions to be taken against the PHA

36. 36 Re-review Reporting Requirements (cont.)  PHAs are provided with final written report within 45 days of completion of re-review  PHAs are required to respond to the review report within 30 days, but not later than 45 days  Response must address problems found or enter into CAP; any disagreements with findings or proposed corrective actions must be addressed with the FO at this time

37. 37 Re-review Reporting Requirements (cont.)  If systemic or material findings exist, a copy of the review report should be sent to the PHA’s Independent Public Accountant (IPA) auditor  If actions must be taken against a PHA for failure to address deficiencies from the first RIM review, Field Offices must advise the Financial Management Center (FMC) to take appropriate action

38. Sanctions

39. 39 Sanctions Notice PIH 2003-34  Highlights the importance of timely and accurate income and rent determinations by PHAs and establishes consequences for failure to identify and correct deficiencies  An concerted approach to ensuring improved government performance and proper subsidy determinations in HUD’s rental programs

40. 40 Sanctions Notice PIH 2003-34 (cont.)  Applies to Public Housing and Section 8 HCV Program  Issued December 19, 2003 and its application became mandatory for all RIM actions—including reviews, required PHA responses, and corrective actions— subsequent to December 31, 2003

41. 41 Sanctions Notice—Areas Addressed  Incentives, disallowed costs, and collection of excess subsidies paid  Sanctions for failure to timely respond to the RIM Review Report and to implement a CAP  Adjustment of Section 8 Management Assessment Program (SEMAP) scores when inconsistent with RIM review findings  Self-assessment reviews  Appeals

42. 42 Disallowed Costs  Relate to PHA errors uncovered during RIM reviews resulting in HUD overpayment of subsidy  Subsidy overpayments must be returned to HUD  Note: Disallowed costs due to HUD shall be forgiven if amounts are less than or equal to $2,500 per PHA program review

43. 43 Disallowed Costs/Excess Subsidies—HCV Program Tenant Fraud  Overpayments: PHAs who enter into a repayment agreement with the family, initiate litigation against the family to recover excess subsidies, or initiate termination from the program may keep 50% of HCV funds collected if certain conditions are met. PHAs that do not do any of the above actions must return to HUD all amounts that constitute a subsidy overpayment  Underpayments: Not applicable

44. 44 Disallowed Costs/Excess Subsidies—HCV Program (cont.) PHA Errors  Overpayments: PHA reimburses HUD for 50% of disallowed costs in excess of $2,000 dating from latest reexamination. PHA must correct tenant records and ensure accurate rent payments  Underpayments: PHA may only be reimbursed for current fiscal year not yet settled in HUDCAPS. PHA reimburses tenant according to PHA policy

45. 45 Disallowed Costs/Excess Subsidies—Public Housing Program Tenant Fraud  Overpayments: If PHAs detect tenant fraud and enter into a repayment agreement with the family, sue the family to recover excess subsidies, or initiate eviction (public housing), they may keep 100% of fraud collections. PHAs that do not do any of the above actions must return to HUD all amounts that constitute a subsidy overpayment  Underpayments: Not applicable

46. 46 Disallowed Costs/Excess Subsidies— Public Housing Program (cont.) PHA Errors  Overpayments: If the errors affect the rent roll used for operating subsidy calculation, HUD will calculate disallowed costs based on subsidy overpayment  Underpayments: PHAs will not be reimbursed by HUD. PHA reimburses tenant according to PHA policy

47. 47 Sanctions  If a PHA does not respond to a RIM Review Report within 45 days or does not implement corrective actions within approved timeframes, the Field Office can withhold:  10% of its monthly scheduled HCV administrative fee  5% of its monthly scheduled Public Housing operating subsidy  Withholding begins with the month the sanction is imposed and lasts until the PHA complies with program requirements

48. 48 SEMAP Indicator 3  A RIM review may serve as a SEMAP confirmatory review  If a RIM review doesn’t support a PHA’s self- certification of SEMAP Indicator 3 (Determination of Adjusted Income) the Field Office must adjust the SEMAP score, regardless of its impact on the PHA’s performance designation  If a RIM review finds other indicators are not supported by file or other documentation, the SEMAP score for those indicators shall be adjusted

49. 49 Self-Assessment Reviews  During FY 2004 and FY 2005, HUD will conduct targeted and random RIM reviews of PHAs managing over 250 combined units of public housing and vouchers  HUD strongly encourages PHAs to conduct self- assessment reviews to quality control and ensure that the PHA’s income and rent determination process is in compliance with program requirements  RIM reference materials are available at: http://www.hud.gov/offices/pih/programs/ph/rhiip /index.cfm

50. 50 Sanctions Notice—Appeals  A PHA may appeal a sanction/disallowed cost to its Field Office within 30 days of imposition of adverse action(s)  Written appeals must provide material evidence or justification of any arguments or additional facts and data concerning the action  The Field Office must respond within 30 days from the receipt of a request for an appeal or the appeal is automatically granted

51. 51 Sanctions Notice—Appeals (cont.)  If the Field Office denies the appeal, the PHA has 15 days to appeal to the PIH Assistant Secretary  If the appeal is denied by the Assistant Secretary, there are no further appeals permitted for that sanction/disallowed cost  Note: For adjustments of SEMAP scores as a result of a RIM review, please refer to the SEMAP appeals process

52. 52 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!

53. 53 PHA Action: The Key to a Successful 2004!  Know and refer to HUD guidance materials  Follow-up on RIM review findings  Implement TASS and UIV to the extent possible  Visit the new PIH RHIIP website often at: http://www.hud.gov/offices/pih/programs/ph/ rhiip/index.cfm  Run your program like a business!

54. 54 Resolution for 2004 To continue to work together to further reduce errors in 2004 and ensure that there’s more housing money for those who need it the most.

55. 55 Questions and Answers