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Quality Control in HUD Housing Assistance

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The Quality Control Project at the U.S. Department of
Housing and Urban Development (HUD) began in 1996 with a
study designed to measure - and curtail - the extent of
error in rent calculations and eligibility determinations
in most of HUD's assisted housing programs. Two
additional studies, in 2001 and 2003, continued the
effort to increase the administrative accuracy of Public
Housing Agencies and owner-administrators of assisted
housing.

Tenants who are eligible for HUD's various assisted
housing programs generally apply 30 percent of their
income to rent, and HUD pays the remainder. HUD can end
up paying too little or too much rental subsidy for
several reasons. Applicants supply information about
household characteristics, income, assets, and expenses
that must be recertified annually by existing tenants.
The information provided by tenants might be incorrect
and not subjected to proper verification, the applicant
or tenant might not be interviewed properly, or mistakes
can occur in calculations and/or billing.

For the Quality Control Project, an error is "any rent
calculation or eligibility determination that differs
from what would have occurred if..." all HUD requirements
were followed. The 2003 study sampled 600 housing
projects in the U.S. and Puerto Rico, and gathered
responses from 3,601 randomly selected households. A
quality control rent was calculated for each household,
using all of HUD's requirements, then compared to the
actual rent paid by the tenant. Any difference greater
than $5.00 between the actual rent and the quality
control rent was considered an error.

The 2003 study found that 60 percent of all households
were paying the correct amount of rent. Twenty-three
percent were paying less than the correct rent amount and
18 percent were paying too much. In terms of dollars,
this amounts to $377 million in over-subsidization for
the year.

Nonetheless, this represents a 36.7 percent improvement
in accuracy when compared to results of the 2000 study.
This can be seen as "a significant reduction in erroneous
payments attributed to program administrator income and
rent determinations between 2000 and 2003," according to
ORC Macro, an evaluator since the inception of the
Quality Control Program.

The report contains additional details about the sources
and frequency of particular types of error, describes
progress made between 2000 and 2003, and offers a number
of recommendations aimed at further error reduction. The
full report, "Quality Control for Rental Assistance
Subsidies Determinations for FY 2003," is available as a
free download at
https://www.huduser.gov/portal/publications/pubasst/qualcontrol03.html.
You can also read more about the Quality Control Project at
https://www.huduser.gov/portal/publications/pubasst/qualcntrlproj.html.

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