Office of MultifamilyHousing ProgramsGeneral RHIIP Presentation
June 14, 2004
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Introduction
The purpose of this presentation is to:• Explain HUD’s Rental Housing Integrity
Improvement Project (RHIIP) initiative• Provide an overview of the extent of the income
and rent problem in HUD’s rental programs• Communicate your role in RHIIP
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Preview
What is RHIIP? Performance Goals Background RHIIP Components Accomplishments Materials and Resources RHIIP and You
What is RHIIP?
Right Benefits to the Right Persons
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About RHIIP
Initiated in 2001, RHIIP is a comprehensive strategy to address causes of errors and improper payments
Department-wide effort, including:• Office of Housing (Housing)• Office of Public and Indian Housing (PIH)• Office of Policy Development & Research (PD&R)• Chief Financial Officer (CFO)• Office of General Council (OGC)• Office of Administration (OA)
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Multifamily Housing Programs Covered under RHIIP
Project-based Section 8 Section 202/811 – Project Rental Assistance
Contract (PRAC); 202/162 – Project Assistance Contract (PAC)
Section 221(d)(3) Below Market Interest Rate (BMIR)
Section 236 Rental Assistant Payments (RAP) Rent Supplement
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RHIIP Objectives
Improve the Department’s program and management performance
Reduce errors in project-based rental assistance programs
Ensure that the right benefits go to the right persons
Performance Goals
Embracing high standards of management and accountability
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RHIIP Goals
President’s Management Agenda – government wide initiative to reduce program errors
RHIIP is HUD’s strategy to reduce errors in the administration of HUD’s rental housing assistance funds.
Reduce errors in rent and income determinations by:• 15% in 2003• 30% in 2004• 50% by 2005
Notes:Error goals are cumulative 15 percent by 2003, 30 percent by 2004, and 50 percent by 2005. Error reduction percentage is determined by comparing error rate in current year with the baseline data.
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RHIIP Goals
Demand excellence in monitoring, rent and income determination knowledge, and program administrator compliance
Reduce the number and dollar amount of errors
Complete Management and Occupancy Reviews (MORs) that are designed to find and correct errors
Background
Income and Rent Calculation Dilemma
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2001 Quality Control for Rental Assistance Subsidies Determination Study (QC)
Estimated that 60% of all rent and subsidy calculations contained some type of error
Dollar error impact:• $2.6 billion in HUD annual housing subsidy overpayments• $634 million in HUD underpayments
Set the baseline for error measurement
Note:Of the $2.6 billion in annual housing subsidy overpayments, $1.7 billion were attributed to administrative and component errors and 600-900 million were attributed to unreported tenant income.
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Sources of Errors
Administrative Component Rent
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Administrative Errors
Consistency errors Calculation errors Transcription errors Recertifications not completed on time Unverified tenant file information
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Component Errors
Income Components• Earned income• Social Security and pensions• Public Assistance (Temporary Assistance for
Needy Families (TANF)) Expense/Allowance Components
• Elderly/disabled allowance• Dependent allowance• Medical, childcare, and disability expenses
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Rent Error Rate by Program Type
ProgramRent
Underpayment(Subsidy
Overpayment)
Rent Overpayment(Subsidy
Underpayment)
Owner-Administered Section 8 27% 25%
Public Housing 33% 20%PHA-Administered Section 8 42% 20%
Total 34% 22%
Source: 2001 Quality Control for Rental Assistance Subsidies Determination Study, pg. ES-iii
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Improper Payments Information Act of 2002 Requires agencies to:
• Annually review all programs susceptible to significant erroneous payments
• Estimate the annual amount of improper payments
• Report to Congress and the President the action being taken to reduce improper payments
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2003 QC Study
Update to the 2001 error measurement baseline report Focused on the first half of FY 2003 Estimated a 26% reduction in gross erroneous
payments:• $562 million in rent underpayments annually• $987 million in rent overpayments annually
Source: FY 2003 Performance and Accountability Report, Note 17
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2003 PD&R Quality Control Rental Assistance Subsidies Study Results
Rental Assistance Program
FY 2000 Estimates of Errors/Gross Erroneous Payments
FY 2003 Estimates of Errors/Gross Erroneous Payments
Percent of Reduction in Gross Errors
Project-based Assistance $539,160 $395,796 26.6%
Vouchers & Mod Rehab $1,132,560 $797,508 29.6%
Public Housing $631,776 $356,040 43.6%Total PHA Administered $1,764,336 $1,153,548 34.6%
Total$2,303,496
(+/– $275,000)$1,549,344
(+/– $229,000)32.7%
– All values are presented in the thousandsSource: FY 2003 Performance and Accountability Report, Note 17
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Results of 2003 QC Study
Type of Payment Error
Public Housing
Voucher and Mod Rehab
Project Based
Total All Programs
Error in Subsidy Determinations (2003)
$356 $797 $396 $1,549
Tenant under-reported Income (2002)
$294 $418 $266 $978
Billing error (To be determined in 2004)
N/A N/A N/A N/A
Total gross error $650 $1,215 $662 $2,527FY 2003 expenditures
$3,435 $13,409 $7,737 $24,581
Percent of error 18.9% 9.0% 8.6% 10.3%* All values are presented in millions.
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2004 Studies
For FY 2004, HUD will submit an error estimate report to OMB and Congress that will include:• Errors in subsidy determinations data from QC
study conducted for the first half of FY 2003 combined with data from study conducted for the second half of FY 2003
• Billing error data from billing study conducted by contractor
• Unreported tenant income data from income match with National New Hires Data Base
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National Directory of New Hires Consolidated Appropriations Act of
2004 provides authority to obtain information from the Directory
Authority was given to disclose information to public housing agencies to verify employment and income
May be available to owners in the future through HUD
Materials and Resources
Job Aides for Program Administration and Oversight
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Materials and Resources
Handbook 4350.3, Revision 1 Rent and Income Determination Quality
Control Guide Automation Rule Information Sheet Multifamily RHIIP Web Site RHIIP Help Desk Representatives RHIIP Newsletter, brochure, and information
sheets Materials Available at:
http://www.hud.gov/offices/hsg/mfh/rhiip/mfhrhiip.cfm
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Multifamily RHIIP Web Site
A “Crosswalk between the Old and Revised Handbook”
FAQs on occupancy and income and rent determinations
Fact sheets on “How Your Rent is Determined” Handbook 4350.3 summaries for owners and
tenants Located at:
http://www.hud.gov/offices/hsg/mfh/rhiip/mfhrhiip.cfm
RHIIP and You
A Cooperative Effort
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HUD Headquarters
Issue updated guidance Develop tools and resources to assist
HUD staff and CAs Ensure adequate and sufficiently
trained HUD staff Communicate RHIIP goals and
objectives to Industry partners
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HUD Field Staff
Perform MORs for all properties for which HUD serves as the CA
Conduct reviews of non-PBCAs, as well as PBCAs Provide guidance and technical assistance to
non-PBCAs, PBCA, and owners/agents Assess compliance with occupancy rules, and
assure the correction of compliance deficiencies Verify and ensure owners have corrected voucher
errors and taken corrective actions to reduce the chances of errors in the future
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Contract Administrators
Verify and certify housing assistance payments (HAPs)
Ensure owners correct their vouchers and that they take corrective actions to reduce errors
Enforce the execution of corrective action plans (CAPs) submitted by owners
Track the correction of errors on the quality control tracking log
Conduct MORs as required by the annual contributions contract (ACC)
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Contract Administrators (cont.)
Verify that rent and income determination errors have been corrected
Document all owner-corrected underpayment and overpayment errors on the quality control tracking log
Provide technical assistance and training to owners and management agents
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Owners and Management Agents
Know the rules and regulations governing income and rent calculations
Submit all tenant certification data to the Tenant Rental Assistance Certification System (TRACS)
Ensure that staff are trained on requirements Develop written policies and procedures for onsite
staff to ensure compliance with HUD requirements Verify tenant information via third-party verification Maintain complete and up-to-date tenant
files/records
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Tenants
Provide current and accurate income and expense information at certification/recertification
Consent to the release of information for third-party verification
Report changes in income, benefits, and family composition
Know your rights and follow the rules governing your assisted property
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Tenants (cont.)
Be aware of allowable exclusions and deductions that will benefit you and your family
Contact your property owner/agent regarding questions on how your rent is calculated and documented
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Conclusion
HUD’s top-priority for FY 2004 is to build on 2003 successes and exceed HUD’s goal for FY 2005
Awareness, Collaboration and Tenacity (ACT) ACT to ensure that the right benefits go to the
right people
Awareness
Collaboration
Tenacity
The right benefits for the right persons
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Questions and Answers