The U.S. Government Accountability Office (GAO) recently completed a study entitled “Efforts to Identify and Reduce Improper Rental Assistance Payments Could Be Enhanced” in order to examine improper rental assistance payments within the U.S. Department of Agriculture (USDA) Rural Housing Service (RHS). GAO reviewed the extent to which RHS has examined the sources and magnitude of improper rental assistance payments, RHS’s compliance with requirements and guidance concerning improper payments, and potential lessons RHS could learn from HUD efforts to identify and reduce improper rental assistance payments.

RHS paid property owners about $1 billion in fiscal year 2011 to help more than 270,000 low-income rural tenants afford rental housing but each year, some of RHS’s rental subsidy payments are improper””that is, too high or too low. The Agency found that between FY 2007 and 2010, RHS reduced its reported error rate from 3.95 percent (representing $35 million in errors) to 1.48 percent (representing $15 million in errors). However, these figures may be understated because RHS has not estimated improper payments due to unreported tenant income, and lacks the authority to match tenant data to federal income data. Additionally, RHS has not recently estimated payment processing errors and has not strictly adhered to procedures for classifying payments as improper. Further, in 2008, RHS began excluding improper payments of less than $100 from its estimated error rates.

In order to help reduce improper payments caused by unreported tenant income, GAO suggests that Congress should consider authorizing RHS access to the Department of Housing and Human Services (HHS) New Hires database and recommends that RHS develop proposed legislation to gain access to social Security Administration (SSA) benefits data. GAO also recommends that USDA submit RHS’s method for estimating improper payments to OMB for review and that RHS take steps to consistently apply procedures for classifying payments as improper, examine improper payments made on behalf of deceased tenants or caused by payment processing errors, and hold agency managers accountable for reducing improper payments.

Click here to read the full report.