U.S. HUD’s Quality Control for Rental Assistance Subsidies Determinations studies provide national estimates of the extent, severity, costs, and sources of rent errors for the Public Housing, Section 8 Housing Choice Voucher, Section 8 project-based, and Section 202 and Section 811 programs with PRAC or PAC tenant subsidies. These so-called “deep subsidy” programs account for nearly all of HUD’s current housing assistance outlays administered by the Offices of Housing and Public and Indian Housing, as well as the large majority of units assisted by HUD. This study was designed to measure the extent of administrative error by housing providers. The errors found affect the rent contributions tenants should have been charged. Findings show that efforts made by HUD and program sponsors have had a significant impact on reducing program errors since the last Quality Control (QC) study in 2000.

HUD’s rental housing assistance programs are administered on HUD’s behalf by third-party program administrators, including public housing agencies (PHAs), public and private project owners, and contracted management agents. In the programs examined, eligible tenants generally are required to pay 30 percent of their income toward rent, with HUD providing the balance of the rental payment. New program applicants are required to provide certain information on household characteristics, income, assets, and expenses that is used to determine what rent they should pay. Existing tenants are required to re-certify this information on an annual basis and also, in some circumstances, when significant changes occur in household income. Applicant or tenant failure to correctly report their income may result in the Department’s over- or underpayment of housing assistance. The failure of the responsible program administrator to correctly interview the tenant or process, calculate and bill the tenant’s rental assistance also may result in the Department’s over- or underpayment of housing assistance.

In 2000, HUD began to establish a baseline error measurement to cover the major types of rental housing assistance payment errors: (1) program administrator income and rent determination error, (2) intentional tenant misreporting of income, and (3) errors in program administrator billings for assistance payments. The tenant data collected for this study will also be used to provide the sample and data used for income matching to measure the extent of intentionally unreported tenant income. A methodology for developing baseline estimates for the third error component, billing error, has been developed and tested, but studies with sufficient sample sizes to produce nationally reliable error estimates will not provide results until later in FY 2005. The balance of this report relates solely to program administrator income and rent determination error.

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The Quality Control Project

This report is part of the collection of Quality Control.