Chapter 4. Verifications

1. Chapter 4. Verifications

2. Chapter 4. Section 1.Overview Learning Objective Apply HUD requirements and standards for effective verification techniques

3. Overview • The issue of verification cuts across all occupancy areas. • All information in tenant family’s file must be verified and properly documented • PHAs need to establish detailed verification procedures within the Admin Plan (or separately) for management control purposes

4. Overview • Each PHA should ensure that staff interviewers are trained to explain the following points during face-to-face interviews or over the phone if necessary: • The types of information that the PHA will verify • The methods of verification, including computer matching, that the PHA will use

5. Overview • PHAs share the responsibility for documentation and verification of income information with families • To fulfill their responsibilities, families must: • Complete all necessary paperwork • Sign all required release forms • Be responsive to PHA requests • Provide requested items and documents in a timely manner • PHAs must follow-up with third party sources

6. Overview • Verifications are essential to high quality administration • Verifications ensure that the income information provided by families and used by PHAs to determine eligibility and rent subsidy amounts is correct • PHAs must take measures to ensure that each regulatory and policy item that needs to be verified is, in fact, verified consistently by all staff members

7. Overview • Learning Activity 4-1: • Minimum Rent Verification • Page 4-3 • Instructions: review the shaded area from the policy on page 4-4 and answer questions 1a-c about that item on page 4-5. Take the others home for yourself or staff to complete.

8. Chapter 4. Section 2.Verification Policies

9. Regulatory Verification Requirement • The regulatory requirement is stated below. • The PHA must obtain and document in the family file third party verification of the following factors, or must document in the file why third party verification was not available: • Reported family annual income • The value of assets • Expenses related to deductions from annual income • Other factors that affect the determination of adjusted income

10. Hierarchy of Verification Methods • HUD has established a hierarchy of five verification levels. • Using this hierarchy, PHAs should develop and adopt verification policies to guide staff in determining what qualifies as adequate verification for specific items that affect the determination of income and rent. • Policies must be consistent with the regulatory requirements.

11. Hierarchy of Verification Methods • On following pages, you will find two samples: • General verification policy that follows HUD’s hierarchy (page 4-9) • Policy that applies specifically to the verification of assets (page 4-11)

12. Release Forms • Before requesting any verifications, PHAs must obtain signed consent forms from family members authorizing release of information. • One such consent form must be consistent with 24 CFR 5.230 regulations • PHAs must also use other consent forms to request verification of information not covered by this form • Because of privacy act issues, PHAs are advised to use specific, rather than generic, consent forms

13. Authorization for Release of Information/ Privacy Act Statement (form HUD-9886) • Form 9886 must be signed by: • All adult family members (18 years of age +) • Head & spouse, regardless of age • Form can be used between regular reexams to verify unreported income • Valid for 15 months from date of signature

14. Authorization for Release of Information/ Privacy Act Statement (form HUD-9886) • HUD-9886 may be used only for: • Wage & unemployment compensation from SWICAs • Salary and wages from current/former employers • Unearned income from financial institutions • Form 9886 (page 4-15)

15. Chapter 4. Section 3.Recommended Levels of Verification

16. Recommended Levels of Verification • Highest • Up-front income verification (UIV) – to become mandatory when HUD’s UIV system is available • High • Written 3rd party – mandatory when UIV is not available or sufficient • Medium • Third party oral – mandatory if written 3rd party is not available • Medium-low • Document review - to be used on provisional basis or in situations where UIV and third-party verification are unavailable • Low • Tenant declaration – to be used only as a last resort

17. Upfront Income Verification • What is it? • The verification of income, before or during a reexamination, through an independent source that systematically and uniformly maintains income information in computerized form for a large number of individuals.

18. Recommended Levels of Verification • Because UIV is particularly useful in identifying undisclosed income, HUD believes that it offers the best opportunity for making the biggest impact on reducing the excess rental assistance subsidies in the QC Study.

19. Recommended Levels of Verification • UIV opportunities to reduce errors: • $900 million per year (over $2 million dollars per day) – and UIV is particularly useful in identifying this income • HUD estimates that 50% of the errors associated with earned income could be reduced by using UIV techniques. • Reducing that number is a major challenge and opportunity for the housing industry, including HUD.

20. Recommended Levels of Verification • HUD maintains a website devoted to UIV, and links to many current UIV resources are posted on this website. • See Appendix A, page A-1, for address.

21. Recommended Levels of Verification Current UIV resources include the following: Social Security (SS) and Supplemental Security Income (SSI) information accessed via a secure Internet facility (TASS) State Wage Information Collection Agencies (SWICAs) State TANF systems Credit Bureau Association (CBA) credit reports Internal Revenue Service (IRS) letter 1722 Private sector databases (e.g. The Work Number) See Useful Website Addresses in References

22. Recommended Levels of Verification • PHAs may execute UIV agreements, such as SWICA agreements and agreements with TANF agencies, independent of HUD. • PHAs may execute UIV agreements with SWICAs only in states where HUD has not already executed such agreements.

23. Use of UIV for Verification • When UIV does not differ substantially from participant-provided documents, PHAs may use UIV to satisfy their regulatory obligation to obtain third-party verification. • PHAs are not required to obtain additional third-party verification from employers. • PHA will need to define “differ substantially.” • HUD suggests $200 or more per month as reasonable guideline

24. Use of UIV for Verification • When UIV differs substantially from participant-provided documents, third-party verification is still required. For example: • Participant discloses an employer that is not represented in the UIV system. • UIV reveals employer or other income source that participant did not disclose. • The income amounts on UIV and participant-provided documents differ substantially.

25. Use of UIV to Project Income • PHAs can also use UIV to project income. However, since UIV information is not up-to-date, PHAs may need to use it along with participant-provided documents, such as pay stubs or SS/SSI award letters when making their income projections.

26. Use of UIV to Project Income • UIV and pay stubs are complementary sources of information. • UIV satisfies the third-party obligation; pay stubs do not. • UIV reveals undisclosed income; pay stubs do not. • Pay stubs provide hours worked and rate of pay; UIV does not. • Pay stubs are current; UIV is dated (usually 3-5 months old.)

27. Upfront Income Verification:Projecting Annual Income • HUD has established criteria for what constitutes a substantial difference in cases where UIV data differs from tenant-provided and/or other verified income. • HUD defines a substantial difference as $200 or more per month. • UIV may alleviate the need for 3rd party verification if not a substantial difference.

28. UIV Income Data is Not Substantially Different • If UIV income data is less than current tenant-provided documentation, use tenant-provided documents to calculate anticipated annual income.

29. UIV Income Data is Not Substantially Different • If UIV income data is more than current tenant-provided documentation, use UIV to calculate anticipated annual income unless the tenant provides documentation of a change in circumstances. • Upon receipt of acceptable tenant-provided documentation of a change in circumstances, use tenant-provided documents to calculate anticipated annual income.

30. UIV Income Data is Substantially Different • Request written 3rd party verification from the discrepant income source. • Review historical income data for patterns of employment, paid benefits, and/or receipts of other income, if you can not readily anticipate income, i.e. seasonal employment, etc.

31. UIV Income Data is Substantially Different • Analyze all data (UIV data, 3rd party verification and other documents/information provided by the family) and attempt to resolve the income discrepancy. • Use the most current verified income data (and historical income data if appropriate) to calculate anticipated annual income.

32. Upfront Income Verification Projecting Annual Income • HUD recommends that tenant-provided documents should be dated within the last 60 days of the PHA interview date. • PHA may average amounts received/earned, if unable to anticipate annual income using current information due to historical fluctuations in income.

33. Upfront Income Verification Projecting Annual Income • If the tenant disputes UIV SS/SSI benefit data, request the tenant to provide current, original SSA notice or benefit letter within 10 business days of PHA interview date. • Tenant may contact SSA at 1-(800) 772-1213 or visit their local SSA office.

34. Upfront Income Verification Resources for Historical Income Data • Social Security Earnings Statement, request via mail or online at www.ssa.gov • Two years of earnings may be obtained from UIV System or Local State Wage Information Collection Agency (SWICA) • Last eight (8) amounts of SS benefits paid to a participant may be obtained from the TASS or UIV system

35. Use of TASS • PHAs should use UIV routinely to verify SS and SSI income information. • In its initial round of RIM reviews, HUD did not make failure to use TASS to obtain UIV of SS and SSI income a finding. • Field offices were instructed to note on their RIM reports that such failure will be a finding next time if there is no other third-party verification of SS and SSI income (from a local SSA office) in a participant’s file. • UIV from TASS is far superior to third party verification because PHAs often fail to ask for information on all family members, including children.

36. HUD’s UIV System Background and Rationale: PIH is developing UIV to provide PHAs with a single source for obtaining verification of wages, unemployment and social security benefits HUD has invested millions of dollars in this system to assist in the reduction of subsidy payments for unreported income Goal is to achieve reduction of subsidy errors: 30 percent by FY 2004 50 percent by FY 2005

37. HUD’s UIV System Background and Rationale: HUD has been negotiating cooperative agreements with SWICAs nationwide Computer matching enables HUD to receive wages and unemployment compensation on ongoing basis through a computer matching operation for disclosure to PHAs PIH anticipates having more than 40 cooperative agreements executed by midyear 2004

38. HUD’s UIV System • The UIV system will contain: • Wage and unemployment information from SWICAs across the nation • Social security benefits from the Social Security Administration (SSA)

39. HUD’s UIV System All housing program participants whose SSNs are transmitted to PIC will be matched on a quarterly basis with UIV data Will allow HUD to provide most recent income information from SWICAs and SSA Wages and social security benefits are largest unreported income components Therefore, UIV is best tool for PHAs to identify potential wage and benefit underreporting

40. PHA Responsibilities • While UIV will be excellent tool, PHAs will be responsible to: • Compare UIV information with tenant-provided information • Resolve income discrepancies promptly to determine accurate tenant rents

41. PHA Responsibilities • In addition, PHAs will be responsible for: • Maintaining a current form HUD-9886 in each applicant’s and participant’s file • Restricting access to UIV data to employees have a recognized need to know for valid administration reasons • Ensuring UIV data is stored in secure places

42. PHA Responsibilities • HUD plans to provide guidance to PHAs to ensure they implement appropriate physical, technical and administrative safeguards in their business operations.

43. PHA Responsibilities • Safeguards will include: • ED certification re security plan • Appointment of a security coordinator • User agreements signed by all PHA users • Physical security of tenant information (files, offices, etc.) • UIV system security • Updating of user IDs quarterly • Monitoring of system usage • Training for staff

44. HUD’s UIV System • How the system will work: • To log onto UIV system, an authorized user will enter PIC ID and password (p. 4-23) • PHAs may request additional PIC IDs and passwords

45. Page 4-23 System Preview (Screens subject to modification) Log in screen: UIV uses PIC User ID and Password

46. HUD’s UIV System • How the system will work: • The starting point for the user will be the welcome page (p. 4-24)

47. Page 4-24 Welcome Page

48. HUD’s UIV System • How the system will work: • The user will then search income records by household information (any of the following) • Head of household’s SSN • Head of household’s last name • Head of household’s date of birth

49. Page 4-25 Household Search Screen

50. HUD’s UIV System • How the system will work: • The search may bring up more than one name; the user will pick the correct person