Under the Improper
Payments Information Act of 2002, agencies are required to annually
review all programs and activities they administer and identify those
that may be susceptible to significant erroneous payments. Accordingly,
HUD must measure annually the number and dollar amounts of errors
and track its progress towards reducing subsidy payment errors.
If the amount of improper payments exceeds $10 million, HUD must
report to the President and Congress:
- Causes of improper payments, corrective action taken, and results
of those actions
- Whether the agency has the systems and infrastructure needed
to reduce improper payments
- Steps to ensure agency managers are being held accountable
for improper payments
The President's
Management Agenda for Fiscal-Year 2002 mandated that HUD reduce
by 50 percent both the frequency of calculation and processing errors
and the amount of subsidy overpayment by 2005. Interim goals call
for:
- A 15% reduction in the dollar amount of errors by FY 2003
- A 30% reduction by 2004
Baseline Estimates of Error
HUD's Office of Policy Development and Research (PD&R) collected
data for the 2001 Quality
Control for Rental Assistance Subsidies Determinations (QC)
study in mid-2000 to establish a baseline of the extent of errors
in the income and rent determinations that set the subsidies HUD
pay on behalf of families who receive public housing and Section
8 program assistance. The study revealed that more than 60 percent
of rent calculations contained some type of rent, administrative,
or component error, resulting in more than $600 million in rent
overpayments and $1.7 billion in underpayments.
Methodology
Onsite tenant interviews, file reviews, and third-party income
verifications were conducted by an independent contractor for a
nationally representative sample of families who received public
housing and Section 8 subsidies. Using these data, the Department
made income, rent, and subsidy determinations based on all HUD requirements
and guidelines (e.g., Code of Federal Regulations, handbooks, and
notices). These determinations were then compared with those made
by local public housing and Section 8 occupancy staff.
Successive QC Studies
To track the effectiveness of the RHIIP initiative and progress
made, PD&R began overseeing the 2003 Quality Control Rental
Assistance Subsidies study. This study used the same methodology,
sampling procedures, and sample sizes as the 2001 QC study. This
includes:
- Collecting data from 2,403 households at 600 sites, including
Section 8, Section 811, Section 202, and public housing
- Obtaining information by reviewing tenant files and conducting
in-person interviews
The 2003 QC study results for the first half of FY 2003 show a
significant reduction in erroneous payments attributed to program
administrator income and rent determinations. The independent source
of income data matching to determine tenant income reporting errors
for the 2003 sample will not be available until the latter part
of 2004, so the 2000 baseline estimates on that component continue
to be reported.
For more information regarding the 2003 QC study covering the first
half of FY 2003, see Note 17 in the 2003
Performance and Accountability Report and the December
19, 2003 Inspector General's Audit Report. The final report
for the 2003 QC study will be available on this website for viewing
when published.
Other Means of Error Measurement
Since the 2001 QC study was conducted, HUD began implementing the
RHIIP initiative to address the causes of errors and reduce incorrect
subsidy payments. This includes conducting Rental
Integrity Monitoring (RIM) reviews, and, most recently, RIM
Re-reviews. These reviews entail:
- Reviewing sample tenant files
- Identifying errors in income and rent calculations at targeted
PHAs
- Analyzing identified income and rent errors to establish root
causes and recommend corrective actions
- Monitoring the implementation of corrective actions and their
impact on errors