Office of Public Housing and Voucher Programs NAHRO Detroit Conference Detroit, Michigan

1. Office of Public Housing and Voucher Programs NAHRO Detroit Conference Detroit, Michigan July 16, 2004

2. Table of Contents Welcome and Introduction • Section I. Rental Housing Integrity Improvement Project (RHIIP) • Section II. Income and Rent Problem • Section III. Overview of Upfront Income Verification (UIV) • Section IV. UIV System Roll Out & Implementation • Section V. Using the UIV System • Section VI. Office of Inspector General (OIG) Role • Section VII. PHA Perspective on UIV • Section VIII. Other RHIIP Initiatives • Section IX. RHIIP and You Office of Public Housing and Voucher Programs

3. Section I Rental Housing Integrity Improvement Project Our Strategy for Improving Income Integrity

4. Rental Housing Integrity Improvement Project (RHIIP) • Initiated in 2001 • Addresses root causes of errors and improper payments • Department-wide effort to ensure that the right benefits go to the people who need it most Notes: Initiated in 2001, after the release of the 2001 (QC) study. Comprehensive strategy designed to reduced income and rent errors in public housing and HCV programs. Program Office Participants include: Office of Multifamily Housing Programs, Office of Policy Development and Research (PD&R), and the Office of Chief Financial Officer (CFO). Office of Public Housing and Voucher Programs

5. Section II Income and Rent Problem

6. 2001 Quality Control for Rental Assistance Subsidies Determination Study • The 2001 (QC) study found that: • HUD overpaid $2.6 billion • Underpaid $634 million in annual housing subsidies • Estimated that 60% of all rent and subsidy calculations contained some type of error Source: 2001 Office of Policy Development and Research (PD&R) Quality Control for Rental Assistance Subsidies Determination study Office of Public Housing and Voucher Programs

7. Most Common Sources of Errors • Administrative • Calculation errors • Failure to verify income/expenses • Failure to use UIV techniques • Component • Incorrect income and deduction amounts (i.e., earned income, pension income, and medical allowances) Office of Public Housing and Voucher Programs

8. Improper Payments Information Actof 2002 • Requires agencies to: • Annually review all programs susceptible to significant erroneous payments • Measure the number and dollar amounts of errors • Track progress towards reducing errors • Report to the President and Congress, if the amount of improper payments exceeds $10 million Office of Public Housing and Voucher Programs

9. Presidential Management Agenda • Mandated HUD to reduce: • The processing (administrative errors) error and improper payment rate by 50%, from 60% to 30% by FY 2005 • HUD set aggressive interim goals in its Annual Performance Plan: • A 15% reduction by FY 2003 • A 30% reduction by FY 2004 Office of Public Housing and Voucher Programs

10. Section III Overview of Upfront Income Verification (UIV) The Biggest Bang for the Buck!

11. UIV • Highest form of income verification • Verification Guidance, Notice PIH 2004-01 (see attachment) • Verification of income, before or during, a family re-certification through an independent source Notes: HUD strongly recommends PHAs make use of the Tenant Assessment Subsystem (TASS), now, to verify tenant-reported income. PHAs may also obtain UIV through the following methods: (1) computer matching agreements with a Federal, State, or local government agency, or a private agency; and (2) submit direct requests for income verifications to a Federal, State, or local government agencies or a private agency. Office of Public Housing and Voucher Programs

12. Why Is UIV Important? • To: • Ensure that more eligible families have an opportunity to benefit from HUD’s rental assistance programs • Increase the accuracy of rent and income determinations • Reduce incidents of underreported and unreported household income Office of Public Housing and Voucher Programs

13. UIV – Overall Impact • Integral to meeting the 50% error reduction goal by FY 2005 • Will reduce incidents of underreported and unreported household income • Will replace the more time-consuming and less accurate third-party verification process Office of Public Housing and Voucher Programs

14. UIV – Dollar Impact • Of the $2.6 billion in overpayment errors, per the 2001 QC study, $1.8 billion (69%) was attributed to unreported and earned income-related errors. $860 Other 33.1% $130 Million Excess Subsidy – Unreported Unearned Income 5% 31.1% 32.6% $848 Million Excess Subsidy – Unreported Earnings $809 Million Macro Earned Income Related Errors Office of Public Housing and Voucher Programs

15. 2001 Study Results Dollars in Millions Office of Public Housing and Voucher Programs

16. Section IV UIV System Roll Out & Implementation Making it Happen!

17. UIV System • Integrated data available through HUD’s secure-system via the Internet • Provides wage, unemployment compensation, Supplemental Security Income (SSI) and Social Security (SS) benefit information • Provides income discrepancy reports Notes: Allows PHAs to view quarterly wage, employer, weekly/bi-weekly unemployment benefit payments, monthly Social Security (SS) and Supplemental Security Income (SSI) benefits, and Medicare deductions and/or buy-ins for tenants in the PHA’s Jurisdictions. Provides income discrepancy reports to identify families who may have substantially underreported household income. Users must have a valid Form HUD-9886, Authorization for the Release of Information/Privacy Act, signed by all household members who are at least 18 years of age to view income data in the system; alternative consent forms are not acceptable for PHA use. Office of Public Housing and Voucher Programs

18. Benefit of the UIV System • Replaces the more time consuming income verification process • Available on-line at staff level • Provides for integrity in HUD programs • Under the FVP, can lead to higher income to PHAs Office of Public Housing and Voucher Programs

19. UIV System • Wage and benefit data is pulled for existing Social Security Numbers (SSNs) in the PIC system (i.e. Form HUD-50058) • PHAs must not view the tenant data without a signed Form HUD-9886, Authorization for the Release of Information/Privacy Act Notice in the tenant’s file Office of Public Housing and Voucher Programs

20. UIV System Privacy Requirements • Data must only be used for verification of tenant income and eligibility • Data must not be disclosed in any way that would violate the privacy of the individuals represented in the system • Tenants must be provided with access to their records and an opportunity to correct or challenge their contents Office of Public Housing and Voucher Programs

21. UIV System – Roll out • System goes live in August 2004, with phased implementation, NY first • Satellite training was held on 6/28/04, available at: http://www.hud.gov./webcasts/archives/ph.cfm Office of Public Housing and Voucher Programs

22. Executed Computer Matching Agreements with SWICAs Office of Public Housing and Voucher Programs

23. States In Production Florida Iowa Illinois Indiana Kansas Louisiana Michigan Minnesota Missouri North Carolina North Dakota Nebraska New Mexico New York Ohio Pennsylvania Rhode Island South Carolina Texas Vermont Office of Public Housing and Voucher Programs

24. UIV System – Getting Ready • PHAs should be: • Determining who will need access to the system • Reviewing and revising policies as a result of implementing UIV into PHA’s operations • Concluding how the PHA will include UIV as a part of the reexamination process • Reviewing policies impacted by the prospect of underreported and unreported income Note: Questions regarding UIV should be directed to: UIV_help@hud.gov Office of Public Housing and Voucher Programs

25. UIV Security – Management • Review internal security procedures • Ensure PHA’s ability to safeguard UIV data • Conduct periodic reviews of all User IDs to determine if the user still needs access • File and maintain UIV data in a secure area • Conduct security awareness training for authorized UIV system users Office of Public Housing and Voucher Programs

26. Section V Using the UIV System The KEY to reducing income and rent errors

27. UIV System Web Site:http://www.hud.gov./offices/pih/programs/ph/rhiip/uivsystem.cfm Office of Public Housing and Voucher Programs

28. Accessing the UIV System • From your PC, open a web browser, for example, Internet Explorer 4.0+ or Netscape 4.0 • Type the Uniform Resource Locator (URL) or web address of the UIV Logon screen Office of Public Housing and Voucher Programs

29. UIV System – Preview Office of Public Housing and Voucher Programs

30. Welcome Page Office of Public Housing and Voucher Programs

31. You’re In! • Along the left-hand side of the Welcome Page, see navigation commands: • Log Off • Search Income Records • By Head of Household Information • Exceeds Threshold Reports • User Manual Office of Public Housing and Voucher Programs

32. Search for Head of Household Information Office of Public Housing and Voucher Programs

33. Household Summary and Income Records Status Office of Public Housing and Voucher Programs

34. Household Income Details Office of Public Housing and Voucher Programs

35. Discrepancy Reports • Includes: • Total wages, unemployment compensation, and SS benefits reported to HUD by the tenant • Total wages, unemployment compensation, and SS benefits reported to HUD by the SSA/SWICA Office of Public Housing and Voucher Programs

36. UIV Case Study #1 – Valid Wage Discrepancy • PHA staff interviewed Mr. and Ms. Jones on 6/12/03 • The projected anticipated annual income was taken from HUD Form-50058 (effective date 9/01/03) • The actual annual income from UIV is for the period of 1/01/03 through 12/31/03 • HA receives a UIV Wage Discrepancy Report on 5/7/04 Office of Public Housing and Voucher Programs

37. Potential Income Discrepancy Office of Public Housing and Voucher Programs

38. Potential Income Discrepancycont. • Potential income discrepancy for the Jones family: • $48,800 • Tenant Reported Income = $0 • UIV Reported Income = $48,800 Office of Public Housing and Voucher Programs

39. What Should You Do? • Action 1: • Obtain UIV Household Income Details Report from the UIV system or interim manual UIV Wage Report. • Action 2: • Compare UIV data to tenant-reported income to determine if the tenant failed to report income at the time of the re-exam interview. Office of Public Housing and Voucher Programs

40. Things to Consider… • Does the UIV data indicate earnings during Quarter 4 of 2002, or Quarter 1 or 2 of 2003? • Did the discrepant household member sign a declaration of no income? • Did the household member fail to provide documentation of earnings? • Is the household entitled to an EID and is it correctly reflected on the 50058? Office of Public Housing and Voucher Programs

41. What’s Next? • Action 3: • Contact the tenant to discuss the discrepancy. • Request current income documents from the tenant. • If the tenant disputes the UIV data, request written third-party verification of UIV data. Office of Public Housing and Voucher Programs

42. What’s Next? cont. • Action 4: • Upon validation or confirmation of discrepancy, calculate the correct total tenant payment (TTP) and retroactive rent payment due to the agency. • Inform the tenant of retroactive rent due and execute a repayment agreement with the tenant. • Action 5: • Determine the type of adverse action that will be taken as a result of lease violation. Office of Public Housing and Voucher Programs

43. Adverse Action(s) as Appropriate • Execute repayment agreement • Lease termination • Referral to the OIG • Other Office of Public Housing and Voucher Programs

44. UIV Case Study #2 – Invalid Wage Discrepancy • HA receives a UIV Wage Discrepancy Report for its PH program on 5/14/04 • Projected anticipated annual income was taken from Form HUD Form-50058 (effective date 11/01/03 • The actual annual income from UIV is for the period of 1/01/03 through 12/31/03 Office of Public Housing and Voucher Programs

45. Potential Income Discrepancy Office of Public Housing and Voucher Programs

46. Things to Consider… • PHA completed Mr. Smith’s annual re-exam on 07/05/03 • PHA does not require tenants to report increases in income between annual re-rexams • Based on tenant-reported pay stubs and independent third-party verification, the PHA projected the Smith’s annual household income at $26,000 • At the time of the re-exam interview, the following UIV data was available Office of Public Housing and Voucher Programs

47. Available UIV Wage Data • Quarter 1 - 2003: $6,200 • Quarter 4 - 2002: $6,800 • Quarter 3 - 2002: $6,500 • Quarter 2 - 2002: $6,500 Office of Public Housing and Voucher Programs

48. Additional UIV Wage Data Attached to UIV Wage Discrepancy Report • Quarter 2 - 2003: $6,600 • Quarter 3 - 2003: $9,100 • Quarter 4 - 2003: $18,100 Office of Public Housing and Voucher Programs

49. What Should You Do? • Action 1: • Obtain UIV Household Income Data Report from the UIV system or interim manual UIV Wage Report. • Action 2: • Compare UIV data to tenant-reported income, based on documents submitted to complete the re-exam. Office of Public Housing and Voucher Programs

50. What Should You Do? cont. • Action 3: • Determine if the tenant failed to report income at the time of the re-exam interview. • Action 4: • In cases where the PHA is uncertain of whether or not the increase in income occurred prior to the re-exam interview date, the PHA may obtain independent third-party verification of the UIV reported wages by an employment verification request form to the employer listed in the UIV system. Office of Public Housing and Voucher Programs