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Annie Stevenson

Verification Techniques. Annie Stevenson. Welcome to Lunch N Learn!. Upcoming topics for the occupancy series: 6/12/08: Public housing rent calculation 9/1/06: HCV rent calculation. Welcome to Lunch N Learn!. Today’s topics: Verification techniques Introduction: error-reduction strategies

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Annie Stevenson

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  1. Verification Techniques Annie Stevenson

  2. Welcome to Lunch N Learn! • Upcoming topics for the occupancy series: • 6/12/08: Public housing rent calculation • 9/1/06: HCV rent calculation

  3. Welcome to Lunch N Learn! • Today’s topics: • Verification techniques • Introduction: error-reduction strategies • HUD’s verification guidance • Frequently asked questions (FAQs)

  4. Introduction HUD’s Error Reduction Strategies

  5. 2001 Quality Control Report • Published by HUD Policy Development & Research (PD&R) • Available online at http://www.huduser.org/publications/pubasst/qualitycontrol.html • 60% error rate for rent and subsidy calculations in assisted housing programs

  6. 2001 Quality Control Report • Estimated annual subsidy overpayments: • $2.6 billion • Approximately 70% of subsidy payment errors are attributable to tenant under-reporting and/or non-disclosure of income • Intentional or unintentional

  7. 2001 Quality Control Report • Families statistically most likely to conceal income • Families with 2 or more sources of earned income • Families with TANF and at least 1 source of earned income

  8. 2001 Quality Control Report • Most error-prone components of rent calculation (PHA and tenant error) • Earned income • Social Security benefits • Allowances and deductions

  9. 2001 Quality Control Report • Most common sources of errors: • Calculation errors • Failure to verify income/expenses • Failure to use UIV tools & techniques • Incorrect income and deduction amounts

  10. 2001 Quality Control Report • The President's Management Agenda mandated HUD to reduce the number and dollar amount of errors by 50 percent, from 60 percent to 30 percent, by 2005

  11. HUD’s RHIIP Initiative • RHIIP: Rental Housing Integrity Improvement Project • Comprehensive strategy designed to reduce income and rent errors and improper payments in the administration of both public housing and Section 8 programs

  12. RHIIP Components • Upfront Income Verification (UIV) • Training and technical assistance • RHIIP Summits • Program guidance • HCV Guidebook • PH Guidebook • Verification Guidance

  13. RHIIP Components • RIM reviews • Incentives and sanctions • Notice PIH 2003-34 • Notice PIH 2005-7 • Program simplification

  14. Verification Guidebook

  15. HUD’s Verification Guidance • Notice PIH 2004-1 • Introduces a new 5-level hierarchy of verification methods • Provides guidance on forms of acceptable verification at each level of the hierarchy • By income source

  16. Regulatory Verification Requirement • 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: • 24 CFR 982.516 (HCV) • 24 CFR 960.259 (PH)

  17. Regulatory Verification Requirement • Factors requiring verification: • Reported family annual income • The value of assets • Expenses related to deductions from annual income • Other factors that affect the determination of adjusted income

  18. 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

  19. Release Forms • 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

  20. Release Forms • Resource for verification & consent forms: • HUD’s Public Housing Occupancy Guidebook, Appendix VIII • http://www.hud.gov/offices/pih/programs/ph/rhiip/phguidebook.cfm • Sample forms useful for HCV & PH

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

  22. Authorization for Release of Information • HUD-9886 may be used only for: • Wage & unemployment compensation from SWICAs • Salary and wages from current/former employers • Unearned income from financial institutions

  23. Authorization for Release of Information • PHAs cannot view information available in HUD’s Enterprise Income Verification System (EIV) until they obtain a signed form HUD-9886 in file for each adult household member • Head, spouse or co-head, regardless of age

  24. Hierarchy of Verification Methods • HUD has established a hierarchy of five verification levels • Using this hierarchy, PHAs should develop and adopt verification policies as to what qualifies as adequate verification • Policies must be consistent with the regulatory requirements

  25. Recommended Levels of Verification • Highest - Up-front income verification (UIV) • High - Written third- party • Medium - Third party oral • Medium-low - Document review • Low - Tenant declaration

  26. 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.

  27. UIV Resources • Current UIV resources include: • HUD’s EIV system • State Wage Information Collection Agencies (SWICAs) • State TANF systems

  28. UIV Resources • Credit Bureau Association (CBA) credit reports • Internal Revenue Service (IRS) – Tax transcript • Request with IRS form 4506-T • Private sector databases (e.g. The Work Number)

  29. Use of UIV for Verification • UIV is third-party verification • Most preferred form • Meets regulatory requirements • UIV is intended to streamline the verification process • Eliminates the need for written third-party verification in many cases

  30. NEW! HUD Guidance on EIV • HUD webcast 1/16/08 contained revised guidance on use of EIV • Previous guidance is obsolete and has been removed from EIV website • Webcast available at http://www.hud.gov/webcasts/archives/ph.cfm • 4 hours

  31. HUD Guidance on EIV • EIV is sufficient as third-party verification when: • The family does not dispute the data, and • Current tenant-provided documents (i.e. paystubs) are available

  32. HUD Guidance on EIV • The PHA MUST obtain additional third-party verification when the family disputes EIV employer data

  33. HUD Guidance on EIV • The PHA MAY obtain additional third-party verification when the PHA determines that additional information is necessary, such as: • Effective dates of employment • Pay rate, hours worked for new jobs • Confirmation of a change in circumstances (reduced hours, reduced rate of pay)

  34. HUD Guidance on EIV • Use tenant-provided documents to project annual income, unless: • The family disputes EIV employer data, OR • The PHA determines that additional information is necessary

  35. HUD Guidance on EIV • HUD recommends that tenant-provided documents should be dated within 60 days of interview date • Current and consecutive

  36. HUD Guidance on EIV • Quote from webcast: • “The PHA will use tenant-provided documents or most current information to calculate anticipated annual income.” • EIV quarterly wages are NOT used to project annual income

  37. HUD Guidance on EIV:File Documentation • If the family does not dispute EIV employer data, and the PHA determines that additional information is not necessary: • EIV income details report • ICN in FL • Tenant-provided documents

  38. HUD Guidance on EIV:File Documentation • If the family disputes, or PHA requires additional information: • EIV printout (except in FL) • Tenant-provided documents • Third-party written verification

  39. Zero Income Families • A family budget or statement of financial responsibility may be required • Use up-front verification, for example: • EIV • Credit report

  40. Zero Income Families • PHAs must attempt to determine the source of income when the family’s regular expenditures conflict with their claim of zero income • Useful tool: • Zero Income Checklist • PH Occupancy Guidebook, Appendix VIII

  41. Third Party Verification • Third-party verification is obtained independently from information sources identified by families • The sources may have income information or expense information

  42. Third Party Verification • Written • Documents must be supplied directly to independent sources by PHAs and returned directly to PHAs from the independent sources (not hand carried by family)

  43. Third Party Verification • Written • PHAs may mail, fax, or email verification requests to independent sources • HUD strongly encourages PHAs to make at least two attempts to obtain third-party verification

  44. Third Party Verification • Oral • PHAs contact the independent sources by telephone or in-person • Third-party oral verification may be used when requests for written verification have not been returned within a reasonable time – e.g. 10 business days

  45. Document Review • PHA reviews original documents provided by family as verification of a given income or expense item • Document viewed may be used when third party verification cannot be obtained

  46. Document Review • Acceptable documents: • Consecutive and original pay stubs • SSA award letters • Bank statements • TANF award letters • Other official and authentic documents from federal, state or local agencies

  47. Document Review • To be acceptable for this method of verification, documents must be original and authentic

  48. Document Review • PHA must: • Make and retain copy of document in file • Note in the file that the original has been received, reviewed and copied • Documents should be as current as possible (e.g. dated within 60 days of the family’s interview)

  49. Provisional Verification • When third party verification is not received in time to establish eligibility or complete the reexam • PHA should establish annual income on a provisional basis and recalculate when third party verification has been completed

  50. Tenant Declaration • An applicant or participant submits an affidavit or notarized statement to certify income or expenses that s/he has reported • This method should be used as a last resort when no other verification method is possible

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