The PHA is committed to ensuring that funds made available to the PHA are spent in accordance with HUD requirements.
This chapter covers HUD and PHA policies designed to prevent, detect, investigate and resolve instances of program abuse or fraud. It also describes the actions that will be taken in the case of unintentional errors and omissions.
Part I: Preventing, Detecting, and Investigating Errors and Program Abuse. This part presents PHA policies related to preventing, detecting, and investigating errors and program abuse.
Part II: Corrective Measures and Penalties. This part describes the corrective measures the PHA must and may take when errors or program abuses are found.
I: PREVENTING, DETECTING, AND
INVESTIGATING ERRORS AND PROGRAM ABUSE
15-I.A. PREVENTING ERRORS AND PROGRAM ABUSE
HUD created the Enterprise Income Verification (EIV) system to provide PHAs with a powerful tool for preventing errors and program abuse. PHAs are required to use the EIV system in its entirety in accordance with HUD administrative guidance [24 CFR 5.233]. PHAs are further required to:
§ Provide applicants and residents with form HUD-52675, “Debt Owed to PHAs and Terminations”
§ Require all adult members of an applicant or participant family to acknowledge receipt of form HUD-52675 by signing a copy of the form for retention in the family file
BHHC anticipates that the vast majority of families and BHHC employees intend to and will comply with program requirements and make reasonable efforts to avoid errors.
To ensure that BHHC’s program is administered effectively and according to the highest ethical and legal standards, BHHC will employ a variety of techniques to ensure that both errors and intentional program abuse are rare.
§ BHHC will provide each applicant and resident with a copy of “Is Fraud Worth It” (form HUD-1141-OIG) which explains the types of actions a family must avoid and the penalties for program abuse.
§ BHHC will provide each applicant and resident with a copy of “What You Should Know about EIV” a guide to the Enterprise Income Verification (EIV) system published by HUD as an attachment to Notice PIH 2010-19. In addition BHHC will require the head of each household to acknowledge receipt of the guide by signing a copy for retention in the family file.
§ BHHC will require mandatory orientation sessions for all prospective residents either prior to or upon execution of the lease. BHHC will discuss program compliance and integrity issues. At the conclusion of all program orientation sessions, the family representative will be required to sign a program briefing certificate to confirm that all rules and pertinent regulations were explained to them.
§ BHHC will routinely provide resident counseling as part of every reexamination interview in order to clarify any confusion pertaining to program rules and requirements.
§ BHHC staff will be required to review and explain the contents of all HUD- and BHHC-required forms prior to requesting family member signatures.
§ BHHC will place a warning statement about the penalties for fraud (as described in the False Statement Act, U.S.C. 1001 and 1010) on key BHHC forms and form letters that request information from a family member.
§ BHHC will provide each BHHC employee with the necessary training on program rules and the organization’s standards of conduct and ethics.
For purposes of this chapter the term error refers to an unintentional error or omission. Program abuse or fraud refers to a single act or pattern of actions that constitute a false statement, omission, or concealment of a substantial fact, made with the intent to deceive or mislead.
15-I.B. DETECTING ERRORS AND PROGRAM ABUSE
In addition to taking steps to prevent errors and program abuse, the PHA will use a variety of activities to detect errors and program abuse.
Quality Control and Analysis of Data
BHHC will employ a variety of methods to detect errors and program abuse, including:
§ BHHC routinely will use available sources of up-front income verification, including HUD’s EIV System, to compare with family-provided information.
§ At each annual reexamination, current information provided by the family will be compared to information provided at the last annual reexamination to identify inconsistencies and incomplete information.
§ BHHC will compare family-reported income and expenditures to detect possible unreported income.
§ At each annual reexamination, BHHC will conduct a Credit Check to verify any periodical payment(s) information provided by the family this information will be compared to information provided at the last annual reexamination to identify inconsistencies and incomplete information.
Independent Audits and HUD Monitoring
OMB Circular A-133 requires all PHAs that expend $500,000 or more in federal awards annually to have an independent audit (IPA). In addition, HUD conducts periodic on-site and automated monitoring of PHA activities and notifies the PHA of errors and potential cases of program abuse.
BHHC will use the results reported in any IPA or HUD monitoring reports to identify potential program abuses as well as to assess the effectiveness of BHHC’s error detection and abuse prevention efforts.
Individual Reporting of Possible Errors and Program Abuse
BHHC will encourage staff, residents, and the public to report possible program abuse.
BHHC will post and provide the following information
Report Abuse HUD Hotline
By Phone: Call toll free: 1-800-347-3735 - TDD: (202) 708-2451
By Fax: (202) 708-4829
By email: firstname.lastname@example.org
By Mail: HUD Office of Inspector General Hotline, OIG
-451 7th Street, SW
-Washington, DC 20410
15-I.C. INVESTIGATING ERRORS AND PROGRAM ABUSE
When the PHA Will Investigate
BHHC will review all referrals, specific allegations, complaints, and tips from any source including other agencies, companies, and individuals, to determine if they warrant investigation. In order for BHHC to investigate, the allegation must contain at least one independently-verifiable item of information, such as the name of an employer or the name of an unauthorized household member.
BHHC will investigate inconsistent information related to the family that is identified through file reviews and the verification process.
Consent to Release of Information [24 CFR 960.259]
The PHA may investigate possible instances of error or abuse using all available PHA and public records. If necessary, the PHA will require applicant/resident families to give consent to the release of additional information.
Analysis and Findings
BHHC will base its evaluation on a preponderance of the evidence collected during its investigation.
Preponderance of the evidence is defined as evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence that as a whole shows that the fact sought to be proved is more probable than not. Preponderance of evidence may not be determined by the number of witnesses, but by the greater weight of all evidence.
For each investigation BHHC will determine (1) whether an error or program abuse has occurred, (2) whether any amount of money is owed BHHC, and (3) what corrective measures or penalties will be assessed.
Consideration of Remedies
All errors and instances of program abuse must be corrected prospectively. Whether the PHA will enforce other corrective actions and penalties depends upon the nature of the error or program abuse.
In the case of family-caused errors or program abuse, BHHC will take into consideration (1) the seriousness of the offense and the extent of participation or culpability of individual family members, (2) any special circumstances surrounding the case, (3) any mitigating circumstances related to the disability of a family member, (4) the effects of a particular remedy on family members who were not involved in the offense.
Notice and Appeals
BHHC will inform the relevant party in writing of its findings and remedies within 10 business days of the conclusion of the investigation. The notice will include (1) a description of the error or program abuse, (2) the basis on which BHHC determined the error or program abuses, (3) the remedies to be employed, and (4) the family’s right to appeal the results through an informal hearing or grievance hearing (see Chapter 14).
PART II: CORRECTIVE MEASURES AND PENALTIES
15-II.A. UNDER- OR OVERPAYMENT
An under- or overpayment includes an incorrect tenant rent payment by the family, or an incorrect utility reimbursement to a family.
Whether the incorrect rental determination is an overpayment or underpayment, the PHA must promptly correct the tenant rent and any utility reimbursement prospectively.
Increases in the tenant rent will be implemented only after the family has received 30 days notice.
Any decreases in tenant rent will become effective the first of the month following the discovery of the error.
Whether the family is required to reimburse BHHC or BHHC is required to reimburse the family depends upon which party is responsible for the incorrect payment and whether the action taken was an error or program abuse. Policies regarding reimbursement are discussed in the three sections that follow.
15-II.B. FAMILY-CAUSED ERRORS AND PROGRAM ABUSE
General administrative requirements for participating in the program are discussed throughout the ACOP. This section deals specifically with errors and program abuse by family members.
An incorrect rent determination caused by a family generally would be the result of incorrect reporting of family composition, income, assets, or expenses, but also would include instances in which the family knowingly allows the PHA to use incorrect information provided by a third party.
Family Reimbursement to PHA
In the case of family-caused errors or program abuse, the family will be required to repay any amounts of rent underpaid. BHHC may, but is not required to, offer the family a repayment agreement in accordance with Chapter 16. If the family fails to repay the amount owed, BHHC will terminate the family’s lease in accordance with the policies in Chapter 13.
PHA Reimbursement to Family
BHHC will not reimburse the family for any overpayment of rent when the overpayment clearly is caused by the family.
An applicant or resident in the public housing program must not knowingly:
· Make a false statement to the PHA [Title 18 U.S.C. Section 1001].
· Provide incomplete or false information to the PHA [24 CFR 960.259(a)(4)].
· Commit fraud, or make false statements in connection with an application for assistance or with reexamination of income [24 CFR 966.4(l)(2)(iii)(C)].
Any of the following will be considered evidence of family program abuse:
Offering bribes or illegal gratuities to BHHC Board of Commissioners, employees, contractors, or other BHHC representatives
Offering payments or other incentives to a third party as an inducement for the third party to make false or misleading statements to BHHC on the family’s behalf
Use of a false name or the use of falsified, forged, or altered documents
Intentional misreporting of family information or circumstances (e.g., misreporting of income or family composition)
Omitted facts that were obviously known by a family member (e.g., not reporting employment income)
Admission of program abuse by an adult family member
BHHC may determine other actions to be program abuse based upon a preponderance of the evidence, as defined earlier in this chapter.
Penalties for Program Abuse
In the case of program abuse caused by a family the PHA may, at its discretion, impose any of the following remedies.
· The PHA may require the family to repay any amounts owed to the program (see 15-II.B., Family Reimbursement to PHA).
· The PHA may require, as a condition of receiving or continuing assistance, that a culpable family member not reside in the unit. See policies in Chapter 3 (for applicants) and Chapter 13 (for residents).
· The PHA may deny admission or terminate the family’s lease following the policies set forth in Chapter 3 and Chapter 13 respectively.
· The PHA may refer the family for state or federal criminal prosecution as described in section 15-II.D.
15-II.C. PHA-CAUSED ERRORS OR PROGRAM ABUSE
The responsibilities and expectations of PHA staff with respect to normal program administration are discussed throughout the ACOP. This section specifically addresses actions of a PHA staff member that are considered errors or program abuse related to the public housing program. Additional standards of conduct may be provided in the PHA personnel policy.
PHA-caused incorrect rental determinations include (1) failing to correctly apply public housing rules regarding family composition, income, assets, and expenses, and (2) errors in calculation.
Repayment to the PHA
The family is not required to repay an underpayment of rent if the error or program abuse is caused by PHA staff.
Notice PIH 2007-27, states that PHAs are required to reimburse residents for overpayment of tenant rent in accordance with PHA policy.
PHA Reimbursement to Family
BHHC will reimburse a family for any family overpayment of rent, regardless of whether the overpayment was the result of staff-caused error or staff program abuse.
Any of the following will be considered evidence of program abuse by BHHC staff:
Failing to comply with any public housing program requirements for personal gain
Failing to comply with any public housing program requirements as a result of a conflict of interest relationship with any applicant or resident
Seeking or accepting anything of material value from applicants, residents, vendors, contractors, or other persons who provide services or materials to BHHC
Disclosing confidential or proprietary information to outside parties
Gaining profit as a result of insider knowledge of BHHC activities, policies, or practices
Misappropriating or misusing public housing funds
Destroying, concealing, removing, or inappropriately using any records related to the public housing program
Committing any other corrupt or criminal act in connection with any federal housing program
15-II.D. CRIMINAL PROSECUTION
When BHHC determines that program abuse by a family or BHHC staff member has occurred and the amount of underpaid rent meets or exceeds the threshold for prosecution under local or state law, BHHC will refer the matter to the appropriate entity for prosecution. When the amount of underpaid rent meets or exceeds the federal threshold, the case will also be referred to the HUD Office of Inspector General (OIG).
Other criminal violations related to the public housing program will be referred to the appropriate local, state, or federal entity.
15-II.E. FRAUD AND PROGRAM ABUSE RECOVERIES
PHAs who enter into a repayment agreement with a family to collect rent owed, initiate litigation against the family to recover rent owed, or begin eviction proceedings against a family may retain 100 percent of program funds that the PHA recovers [Notice PIH 2007-27 (HA)].
If the PHA does none of the above, all amounts that constitute an underpayment of rent must be returned to HUD.
The family must be afforded the opportunity for a hearing through the PHA’s grievance process.