Sneak Preview: HUD To Issue Plan To Address Improper Payments
(The following was excerpted from a recent Thompson Grants Compliance Expert article.) By late February, the Department of Housing and Urban Development (HUD) intends to develop a detailed plan for testing payments made to recipients under the Tenant-Based Rental Assistance (TBRA) program and the Project-Based Rental Assistance (PBRA) program to better determine internal controls needed to prevent improper payments, in response to a recent management alert issued by the HUD Office of Inspector General (OIG).
OIG annually audits HUD’s compliance with the Payment Integrity and Information Act (PIIA) (Pub. L. 116-117), which requires OIG to review and report on the agencies’ annual improper payment information. While conducting its current PIIA audit, OIG was told by HUD’s Office of Chief Financial Officer (OCFO) that the agency could not estimate improper payments for the TBRA and PBRA programs, which are two of HUD’s largest programs, comprising $45.3 billion in spending in federal fiscal year (FY) 2023. In response, OIG issued a management alert stating that this is the seventh consecutive year that HUD could not report improper payment estimates for these programs.
OIG particularly notes in the alert that OCFO improperly closed two prior OIG audit recommendations related to the agency’s process for sampling and testing the full cycle of payments made through its programs. OCFO closed these recommendations after it documented a plan that, according to OIG, “did not include legitimate steps for creating a statistically valid sample of payments” made from public housing authorities (PHAs) and performance-based contract administrators (PCBAs) to landlords and owners. Because it closed these recommendations, OCFO told OIG that it would not be able to produce estimates of improper payments in these programs for FY 2023, and may not be able to do so until FY 2027, depending on funding.
“If left unaddressed until then, hundreds of billions of dollars in HUD rental assistance payments will continue to be at heightened risk of waste, mismanagement and fraud,” the alert warns. “Action is needed immediately from HUD leadership to resolve its systemic challenges in preventing, identifying and remediating improper payments and better protect taxpayer-funded expenditures made through these programs. The lack of proper planning and coordination from leadership in HUD’s program and support offices prevents HUD from addressing the root causes behind the failure to comply with improper payment laws.”
(The full version of this story has now been made available to all for a limited time here.)
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