Chapter 1 RIM Reviews

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Chapter 1RIM Reviews
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Chapter 1. Section 1.Overview

• Learning Objective
• Achieve successful results in future RIM reviews
  by improving PHAs understanding of the RIM
  process

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What is a RIM Review?

• One strategy in a larger, HUD-wide effort, known
  as RHIIP, to reduce income and rent errors and
  improper payments in the administration of both
  the public housing and Housing Choice Voucher
  programs
• RHIIP Rental Housing Integrity Improvement
  Project

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What is a RIM Review?

• RIM reviews were designed to help HUD
• Identify the root causes of error and improper
  payments
• Meet its goal under the President's Management
  Agenda to reduce errors and subsidy overpayments
  by 50 percent by fiscal year 2005

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What is a RIM Review?

• Activities may include
• Reviewing sample tenant files identifying and
  recording income and rent errors (both systemic
  and isolated errors)
• Assessing PHA policies, procedures, and forms for
  systemic weaknesses
• Interviewing PHA staff regarding income and rent
  policies, procedures, practices
• Analyzing review results to establish root causes
  of systemic weaknesses and errors

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What is a RIM Review?

• Activities may include
• Providing technical assistance
• Identifying findings and concerns/observations,
  and requiring corrective actions as appropriate
• Follow-up to ensure corrective actions have been
  implemented within a reasonable period of time (6
  months unless approved by HUD Headquarters)

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Results of Initial RIM Reviews

• Initial reviews
• 722 PHAs reviewed between 6/02 and 9/03
• Based primarily on largest financial exposure and
  field office risk assessment
• Follow-up reviews
• For PHAs who received initial reviews,
  follow-up reviews will be conducted throughout FY
  04

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Results of Initial RIM Reviews

• Income/Expense Components where errors most
  commonly occurred
• Utility Allowance
• Pension, Public Assistance, and Other Income
• Earned income
• Deductions

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Results of Initial RIM Reviews

• Most common causes of errors
• Lack of appropriate 3rd party verification of
  income and/or deductions
• Lack of PHA quality control
• Consistency errors
• Calculation errors
• Transcription errors
• Improper transfer of data from file to PIC

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Results of Initial RIM Reviews

• Factors contributing to errors
• Outdated and inaccurate policies
• Insufficient policies and/or procedures
• Inconsistency between policies, procedures and
  practice
• Incomplete or inadequate tools/forms used to
  manage the income and rent determination process

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Chapter 1. Section 2.The RIM Review Process
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RIM Review ProcessTwo Phases

• Initial Reviews
• Pre-review preparation (Part V, RIM Guide)
• On-site review activities (Part VI, RIM Guide)
• Post-review activities
• Follow-up reviews
• Independent Auditor Role Asst Secretary Michael
  Liu (page 1-35)

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Initial ReviewsPre-review Preparation

• Select tenant file sample
• Utilize PIC and/or PHA records depending on PIC
  reporting rate
• Initial guidance suggested targeted sample,
  current guidance requires random sample
• Field office may pull larger sample to allow for
  both random and targeted sample
• Review in-office resources
• PHA Annual Plan
• Administrative Plan
• Prior reviews and audits

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Initial ReviewsOn-Site Review Activities

• Conduct entrance and exit meeting with
  appropriate PHA staff
• Review sample of tenant files
• Review PHAs Occupancy Function/Process, as it
  relates to Income and Rent Determinations
• Provide Technical Assistance

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Initial ReviewsOn-site Review Activities

• Combination of Big Picture and Little Picture
• Little Picture Tenant File Sample Review
• Critical source documentation for income and rent
  determinations
• Files represent results of PHAs income and rent
  determination process
• Big Picture PHA Occupancy Function
• Policies, Procedures, Processes and Systems
• Occupancy Function is the process that leads to
  the right results

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Tenant File Sample ReviewReviewer Questions

• Does the file contain all of the necessary
  documentation, data, forms, etc.?
• Complete picture of income and rent
  determination information supported by 3rd party
  verification internally consistent
• Did PHA draw correct conclusions from the data?
• Accurate Calculations PHA interpretation of
  information is clear PHA interpretation of
  information is consistent with regulations and
  PHA policy

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Tenant File Review Checklist (Appendix A of RIM
Guide Completed by Reviewer)

• Five Basic Sections
• A. Family Composition
• B. Annual Income and Assets
• C. Dwelling Unit/Utility Allowance
• D. Adjusted Income
• F. Rent and Housing Assistance Payment

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RIM Guide Combined Checklist

• More convenient to use
• Combined checklist
• Combines parts of Appendices A and C that only
  apply to the HCV program
• Begins on Page C-37 of Appendix C

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A. Family Composition

• Reviewer will look at Basic Family Information
  (cross referenced to HUD-50058, Section 3)
• Status of Head of Household or Spouse (e.g.
  elderly/disabled)
• Age/status of other family members (e.g.
  dependents, full-time student, disabled, etc.)
• Disclosure of Social Security Numbers
• Evidence of Citizenship/eligible immigration
  status

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B. Annual Income and Assets

• Reviewer will look at Basic Income Information
  (cross referenced to HUD-50058, Sections 6 and 7)
• Anticipated/Imputed income from assets
• Other income sources in four broad categories
• Wages and Earned Income (including earned income
  disallowance)
• Public Assistance
• SS/SSI or Pensions
• Other income
• Income Exclusions

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C. Dwelling Unit/Utility Allowance

• Reviewer will look at Basic Unit Information
  (cross referenced to HUD-50058, Sections 1, 4 and
  12)
• Utility Allowance Schedule
• Unit Size
• Unit Type (e.g. apartment, row-house, single
  family detached, etc.)
• Utility Category (e.g. heating, cooking, water
  heating, water, sewer, etc.)
• Utility Type (e.g. gas, electric, oil, etc.)

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D. Adjusted Income

• Reviewer will look at Deductions used in adjusted
  income calculation (cross referenced to
  HUD-50058, Section 8)
• Dependent Deduction
• Elderly/Disabled Family Deduction
• Medical Deduction
• Disability Assistance Expense Deduction
• Childcare Expenses Deduction

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F. Family Rent and HAP

• Reviewer will look at Calculation of Family
  Rent and HAP (cross referenced to HUD-50058,
  Sections 9 and 12)
• Total Tenant Payment
• Payment Standard
• Gross Rent
• Total HAP
• Family Share
• HAP to Owner and Rent to Owner
• Utility Reimbursement
• Pro-rated Rent and HAP (for mixed families)

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Policies and Process(Part VI, Sections
C,D,E,F,H,I,J of RIM Guide)

• Based on the number, types, and patterns of
  errors discovered during the tenant file sample
  review, field office staff may identify areas of
  PHA policies and process which need further
  evaluation in order to identify root causes of
  errors
• Field office staff may also routinely examine PHA
  policies and process as part of the RIM review

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Policies and Processes(Part VI, Sections
C,D,E,F,H,I,J of RIM Guide)

• Potential Areas for Further Evaluation
• Administrative Plan
• Application and Reexamination Process and
  Materials
• Process for Determining and Calculating Income
  and Rent
• Verification Procedures
• Schedules (Payment Standards, Utility Allowances)
• PIC and HUD-50058 (Reporting, data integrity)

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The RIM Review Process

• Learning Activity 1-1
• Analysis of Utility Allowance Information on
  Forms
• Page 1-11

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The RIM Review ProcessLA 1-1 Discussion

• Based on the errors identified in the learning
  activity, what areas within the PHAs occupancy
  function/process might you want to look at in
  more depth?
• Be sure Utility Allowance schedule matches what
  is on the 50058.
• Establish a key for staff to use to determine
  what to do if there is not consistency on HUD
  forms regarding items such as structure type (for
  example, if there isnt a garden apt structure
  type, use Low-Rise).
• Be sure staff quality control their own files to
  be sure documents match.
• Analyze whether problems found on files relate
  only to that file or to a general process.

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The RIM Review Process

• Learning Activity 1-2
• Analysis of Asset and Asset Income Information
• Page 1-27

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Discussion Items for LA 1-2

• What policies are needed for the correct
  determination of asset balances?
• What procedures are needed to correctly calculate
  income from assets?

- Which balance on savings and checking accounts
is to be considered
- How anticipated income will be considered
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Initial ReviewsPost-Review Activities

• HUD Field Offices will
• Issue Report to PHA
• Monitor PHAs progress in correcting findings and
  errors
• Provide ongoing technical assistance
• Close findings when required actions are complete
• Submit Error Reports to Headquarters

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Initial ReviewsPost-Review Activities

• The report to the PHA will
• Identify individual tenant file errors to be
  corrected
• Identify systemic findings and required
  corrective actions
• Identify concerns and observations and
  recommended actions
• Require response within 45 days

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Initial ReviewsPost-Review Activities

• Report to PHA - RIM Finding
• A condition not in compliance with handbook,
  regulatory, or statutory requirements, or other
  HUD requirements
• Finding must include the condition, criteria on
  which finding is based, cause of the condition,
  consequence (effect), and required corrective
  action to remove the finding

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Initial ReviewsPost-Review Activities

• Report to PHA - Concern or observation
• A deficiency in performance, which should be
  brought to the attention of the PHA, but is not
  based on a regulatory or statutory requirement
• Should include the condition, identify the cause
  and effect, and recommend a corrective action

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Initial ReviewsPost-Review Activities

• Corrective Action Plan
• If a finding is not resolved by the time the PHA
  responds to the RIM report (within 45 days after
  report is issued), a PHA must develop a
  Corrective Action Plan for all unresolved
  findings
• Corrective Action Plans that exceed 6 months in
  duration, cannot be approved by the field office
  without approval from HUD Headquarters

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Initial ReviewsPost-Review Activities

• Corrective Action Plan
• Field Office will monitor and provide on-going
  technical assistance to ensure a PHA
• Responds to report within 45 days
• Corrects individual tenant file errors
• Implements corrective actions to resolve
  systemic findings and prevent future errors

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Follow-up Reviews

• Who will receive a follow-up review?
• PHAs that received an initial RIM review
• When will they be conducted?
• Throughout FY 2004 (some conducted in late FY
  2003)
• Why are they being conducted?
• To monitor progress and to ensure corrective
  actions were implemented and resulted in error
  reduction

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Follow-up Reviews

• Field office will follow-up to ensure
• Individual tenant file errors and overall
  corrective actions identified in the initial
  baseline review have been corrected and completed
• New sample will be pulled
• Random sample for systemic deficiencies Targeted
  sample (if appropriate) to focus on specific
  deficiencies
• Only files with effective dates after the date by
  which corrective actions should have been
  implemented should be reviewed

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Impact on SEMAP

• Under the SEMAP rules, HUD has the right to
  conduct a "confirmatory" review at any time. If
  the RIM review results are contrary to what the
  PHA certified to as part of their SEMAP score,
  the SEMAP score will be lowered

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Learning Objective

• Achieve successful results in future RIM reviews
  by improving PHAs understanding of the RIM
  process

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Whats Next?

• Based on RIM Reviews results and concerns of PHAs
  in correcting errors, the rest of this course is
  developed as a how to to assist PHAs in
• Improving the rent calculation process by
  reducing errors, and
• Maintaining a low error rate over the long-term