office of multifamily housing programs general rhiip presentation

Office of MultifamilyHousing ProgramsGeneral RHIIP Presentation

June 14, 2004

2Office of Multifamily Housing Programs

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


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


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)


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


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


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.


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


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.


Sources of Errors

Administrative Component Rent


Administrative Errors

Consistency errors Calculation errors Transcription errors Recertifications not completed on time Unverified tenant file information


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


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


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


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


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


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.


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


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


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




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:




RHIIP and You

A Cooperative Effort


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


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


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)


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


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


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


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


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


Questions and Answers

office of multifamily housing programs general rhiip presentation

Documents

rental assistance programs

error goals

error measurementnote

management performance

right benefits

huds strategy

causes of errors

error reduction percentage