HUD reduces errant rental subsidies by centralizing access to wage data

The Housing and Urban Development Department has slashed its improper payments by $1.6 billion since 2000 through data matching with other agencies and sharing information with states. The housing agency expects to better that.

The department reported erroneous payments of $1.7 billion last year, which equates to a 6.9 percent improper payments rate.
To continue chipping away at the problem, HUD uses computer matching to verify income for its Section 8 rental housing assistance programs.

'Full implementation of the pending Enterprise Income Verification System has the potential to eliminate much of the remaining estimated improper payment problem in the rental housing assistance programs,' said James Martin, HUD assistant chief financial officer.

HUD and the 4,500 public housing agencies that administer two-thirds of HUD's rental housing assistance have always had the authority to perform computer matching with individual state wage agencies.

But it is costly and burdensome for each individual public housing agency to pursue such programs with the state wage agencies, Martin said.

To centralize the process, HUD began to establish matching agreements with individual states in 2002. It then established the national Up-front Income Verification System to share that state wage data with all the public housing agencies.

To date, HUD has set agreements with 32 states to provide wage data to the system. HUD's focus on improved matching efforts through the Up-front system has contributed to lowering improper rental housing assistance payments, Martin said.

HUD soon also will run matches of its Up-front data against records in the National Directory of New Hires. The new hires database created by the departments of Health and Human Services and Labor gathers employers' notifications of recently hired people and their income.

The department also swaps data with the Social Security Administration and shares any matches of questionable information with its program administrators over the Tenant Assessment Subsystem.

Ultimately, the Enterprise Income Verification System will incorporate all the matching and verification programs HUD has under way. It will eliminate the need for public housing agencies to obtain data directly from individual state wage agencies, Martin said.

HUD plans to roll out the enterprise system in August for rental assistance program administrators. Once the 4,500 public housing agencies are effectively using it, HUD plans to expand its use to more than 22,000 multifamily housing property owners and management agents that administer the other third of HUD's rental housing assistance

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