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Prepared Statement of John W. Cox
March 29, 2007
|Period||Over Payments*||Under Payments||Net Over-Payments||Gross Improper Payments|
* - Amounts shown in millions
This reduction � and the underlying internal control improvements -- was one of the key reasons HUD's rental housing assistance program area was removed from the GAO high-risk list in January 2007.
The reductions in housing subsidy determination errors resulted from HUD efforts to work with its housing industry partners at public housing agencies and multifamily housing projects through enhanced program guidance, training, oversight, and enforcement. The reduction of erroneous payments due to tenant under-reporting of income resulted from: improved income verification efforts by housing program administrators; increased voluntary compliance by tenants due to promotion of the issue; HUD's initiation of improved computer matching processes for upfront verification of tenant income; and an improved methodology for reviewing income discrepancies identified through computer matching to better determine actual cases of under-reported income impacting subsidy levels.
While the total gross level of improper payments in the rental housing assistance programs remained relatively constant between FY 2004 and FY 2005, the percentage of total payments that were improper dropped from 5.6 percent to 5.4 percent, exceeding HUD's goal of 5.6 percent. HUD paid over $27.2 billion in rental housing assistance in FY 2005, representing over 46 percent of all HUD payments.
In FY 2006, HUD implemented its new Enterprise Income Verification System for use by Public Housing Agency program administrators in conducting improved verifications of tenant income during the annual recertification process. I want to thank our agency partners at the Department of Health and Human Services and the Social Security Administration for their assistance. The new web-based, secure verification system will be expanded to the Multifamily Housing Project-Based Assistance Programs during the current fiscal year. This improved computer matching capability for verifying income has the potential to eliminate the majority of the remaining estimated improper rental housing assistance payments. This system is not only faster and more efficient, but just as importantly, it affords more privacy to tenants by eliminating the paper income verification letter that was formerly mailed to the assisted tenant's employer for completion and returned to the Public Housing Agency or other HUD program administrator for income verification. HUD's long-range strategic goal is to reduce improper rental assistance payments to less than 2.5 percent of total payments by the end of FY 2008. That would be quite an accomplishment, given the high degree of complexity of the housing subsidy determinations and the decentralized nature of the program administration.
In conclusion, Mr. Chairman, I want to thank the employees of HUD, and our agency and industry partners, for working together to tackle the tough issue of improper rental housing assistance payments. These efforts not only reduced improper payments, allowing more funds to be available for HUD's mission, but we proved that working together we could correct long-standing issues. Utilizing enhanced technology and continued partnership with agency and industry partners will allow the Department to meet its goal of further reducing improper payments.
I am pleased to answer any questions you may have.
Content Archived: June 25, 2010
Content Archived: June 25, 2010