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HUD Rental Assistance: Progress and Challenges in Measuring and Reducing Improper Rent Subsidies

GAO-05-224 Published: Feb 18, 2005. Publicly Released: Mar 21, 2005.
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Highlights

In fiscal year 2003, the Department of Housing and Urban Development (HUD) paid about $28 billion to help some 5 million low-income tenants afford decent rental housing. HUD has three major programs: the Housing Choice Voucher (voucher) and public housing programs, administered by public housing agencies; and project-based Section 8, administered by private property owners. As they are in every year, some payments were too high or too low, for several reasons. To assess the magnitude and reasons for these errors, HUD established the Rental Housing Integrity Improvement Project (RHIIP). In response to a congressional request, GAO examined the sources and magnitude of improper rent subsidy payments HUD has identified and the steps HUD is taking to address them, including efforts to simplify the process of determining rent subsidies.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Housing and Urban Development To enhance HUD's ability to reduce improper subsidies in its public housing and voucher programs, Secretary of HUD should make regular monitoring of PHAs' compliance with HUD's policies for determining rent subsidies a permanent part of HUD's oversight activities.
Closed – Implemented
In January 2006, HUD issued guidance directing its field offices to conduct annual reviews of 275 PHAs (100 PHAs that receive 80 percent of the rental assistance funds and 175 PHAs selected on the basis of field office risk assessments) for compliance with HUD's rent determination policies and other requirements. These "consolidated reviews" institutionalize HUD's efforts to address PHAs' improper rental assistance payments.
Department of Housing and Urban Development To enhance HUD's ability to reduce improper subsidies in its public housing and voucher programs, Secretary of HUD should collect complete and consistent information from these monitoring efforts and use it to help focus corrective actions where needed.
Closed – Implemented
In response to our recommendations, HUD reported that it has begun the process of automating its RIM monitoring process for the public housing and Housing Choice Voucher programs within the department's Comprehensive Compliance and Monitoring (CCM) system. Launched in 2006, the CCM system contains a module that allows HUD to record and track findings from consolidated and other reviews, including RIM reviews, of PHAs. The system generates management reports that provide summaries and detailed data on the status of all open findings and corrective actions, allowing staff throughout HUD to monitor PHAs' progress in addressing and closing findings from reviews and to target corrective actions. HUD has rolled out this new module in CCM public housing and Housing Choice Voucher program.
Department of Housing and Urban Development To ensure that HUD's rental assistance programs are administered effectively and that policymakers have sufficient information with which to consider potential simplification approaches, the Secretary of HUD should study the possible impact of alternative strategies for simplifying program policies on subsidy errors, tenant rental payments, program administrators' workload, and program costs. As part of the study, HUD should determine how it intends to implement proposed changes and indicate how the department would help tenants transition from the old to the new rent structures.
Closed – Implemented
In September 2007, HUD awarded a contract to study the current rent structures in the Public Housing and Housing Choice Vouchers programs. The study assesses the impact of potential changes to the current rent structures, such as the introduction of flat rents, on various tenant groups including the elderly and disabled. The study's findings will be used to help develop regulatory and/or legislative proposals to simply the current rent structures. The study methodology includes visits to 25 public housing authorities, phone surveys of an additional 200 public housing authorities, and interviews with 1,000 residents and individuals on the waiting list for housing assistance. The final analysis is due in September 2009 and the final report is due in November 2009. The final report will address our recommendation that HUD study and assess the impact of rent simplification approaches on subsidy errors and tenant groups.

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Topics

Administrative errorsErroneous paymentsHousing programsInternal controlsProgram evaluationProgram managementPublic assistance programsPublic housingRent subsidiesRental housingStrategic planning