The 2003 Congressional appropriations for HUD required an overhaul of the way the budget for the Section 8 voucher program was formulated and executed. In a July 2003 bill submitted by the House of Representatives, the Committee recommended that HUD verify HA monthly leasing rates and associated costs and reconcile these costs with approved funding levels.
To that end, the bill recommended that HUD establish a Quality Assurance Division to better monitor Section 8 spending and to be able to better control future budget requirements.
The FY 2005 HUD Congressional Appropriations allocated funding for the establishment of the Quality Assurance Division. In the appropriations, HUD was directed to provide a minimum of 75 Full Time staff.
By October 2004 (FY 2005) HUD had established the QAD with the hiring of Quality Assurance Specialists, Realty Specialists, Program analysts and Managerial staff. The functions of the QAD personnel are further discussed throughout this website.
At local housing agencies The QAD is or has conducted numerous Voucher Management System (VMS) reviews, Rent Reasonableness Reviews, and Disaster Voucher Program (DVP) reviews. The purpose of these reviews are as follows:
Financial Management Reviews - The Department of Housing and Urban Development (HUD), Office of Public and Indian Housing (OHVP), Quality Assurance Division (QAD) conducts Financial Management Reviews of Housing Authorities that participation in Housing Choice Voucher (HCV) program.
The primary purpose of the reviews are to ensure that HCV program funds have been expended appropriately and reported accurately, and to verify a previously identified debt owed to HUD and/or the HCV program.
The review objectives include:
HCV Debt Collection/Repayment Agreement:
The Department of Housing and Urban Development (HUD), Office of Public and Indian Housing (OHVP), Quality Assurance Division (QAD) conducts reviews of Housing Authorities who participate in the Housing Choice Voucher (HCV) program. QAD identifies debts and provides repayment agreements for misappropriated funds.
- Assessing the Housing Authority’s ability to repay funds previously identified as due to HUD Held Reserves and/or the HCV program.
- Reconciliation of the Unrestricted Net Position (UNP) balance ending with the most current closed accounting month.
- Reconciliation of the Restricted Net Position (RNP) balance.
- Validation and analysis of Administrative Expenses. Analysis of specific line items on the Financial Data Schedule (FDS) submission.
- Determination if appropriated funds have been expended for the purpose intended.
- Confirmation of the availability of cash and/or investments sufficient to support the UNP and RNP account balances calculated.
- QAD determines that funds are owed at HUD.
- QAD Assesses the Housing Authority's abiity to repay funds previously identified as due to HUD Held Reserves and/or the HCV program.
- QAD is responsible for sending and receiving all letters of correspondence (e.g., Demand, Delinquent, Default) to and from the Public Housing Authorities
- VMS Reviews - The Housing Choice Voucher Program (HVCP) provides low-income families with assistance that helps them lease units in the private market. PHAs enter into contracts with landlords to make housing assistance payments on behalf of eligible families. To cover the costs of the program, HUD provides funds for these housing assistance payments and for fees to cover the costs of administering the program. Nationwide, the HCV program receives annual funding exceeding $15 billion, making it HUD's single largest program.
Prior to VMS, PHAs provided estimates of the funds required to operate their programs to HUD at the beginning of their fiscal year, and were paid throughout the year on the basis of these estimates. At the end of the year, the PHAs prepared a reconciliation of the funds expended and/or earned with the funds received, and returned any excess payments to HUD. In May 2003, in response to Congressional concerns that HUD was recapturing more than $1 billion in excess funds from PHAs annually, and losing the use of the funds in the interim, HUD implemented VMS to assist in the HCV budgeting process, and to avoid HCV overpayments and recaptures.
The Voucher Management System is the financial reporting system that collects, on a quarterly basis, month-by-month reports on the PHAs' leasing and expense data. VMS provides HUD with a central system to monitor PHA leasing and program costs. VMS data is used to determine or modify the amount of HCV funds provided to individual PHAs. For this reason, it is critically important that the data submitted to the VMS are timely, accurate and complete. The overall objective of the VMS review is to determine the accuracy of all of the data currently in VMS. and reconcile these data and associated costs with approved funding levels giving HUD better control over future budget formulations and requirements. Technical support will be given to improve reporting accuracy.
- Rent Reasonableness Reviews - PHAs are required to certify that rents approved for units assisted under the housing choice voucher program are reasonable in relation to rents for comparable unassisted units whenever new units are leased, when owners request rent increases, when HUD-published Fair Market Rents for the PHA's jurisdiction are reduced by 5 percent or more, or if directed by HUD (24 CFR 982.507). This process is commonly referred to as "rent reasonableness." The Rent Reasonableness review is part of HUD's overall Housing Choice Voucher HCV Program initiative to better ensure that (1) the system adopted for determining the reasonableness of program rents is in accordance with HUD's guidelines, (2) the system is used correctly in approving program rents, and (3) participant files are properly documented.
Calculation of HAP, Adjusted Income and Rent Reviews (CHAIR) - The purpose of the CHAIR review is to:
Reduce income and rent errors in the administration of the Section 8 Voucher Program.
Provide guidance and technical assistance on strengthening income and rent policies/procedures and reduce future errors.
Continue to provide HUD and the OHVP with reasonable assurance that the PHA has calculated and reported tenant data accurately.
CHAIR reviews are limited solely to the calculation of HAP adjusted income and rent and involve the review of participant files as well as the applicable supporting documentation of income and adjustments. However, Income and rent determinations, are not simply a series of mathematical calculations. Income and rent determinations are part of the larger occupancy function at the PHA, whose overall objective is to deliver limited housing resources to qualified families. In that effort every PHA must design policies, procedures, and processes to manage this function. Accordingly, a large part of the CHAIR review includes a review of these procedures and processes to ensure they are being followed consistently.