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Chapter 1 RIM Reviews. Chapter 1. Section 1. Overview. Learning Objective Achieve successful results in future RIM reviews by improving PHA’s understanding of the RIM process. What is a RIM Review?.

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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 PHA’s 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:

Pension, Public Assistance, and Other Income

Employment (Earned) income


Asset Income

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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 Process Two 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 1-23)

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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

    • Admission and Continued Occupancy Policy

    • 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 PHA’s 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 PHA’s 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

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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 PH program

      • Begins on Page C-33 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 and 3)

    • Unit size and location

    • Project name

    • Family responsibility for utilities and use of utility allowance schedule

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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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    E. Rent

    Reviewer will look at Calculation of Rent (cross referenced to HUD-50058, Sections 9 and 10)

    • Total Tenant Payment

    • Tenant Rent

    • Flat Rents

    • Utility Reimbursement

    • Pro-rated TTP (for “mixed” families)

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    Policies and Process(Part VI, Sections B-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 B-J of RIM Guide)

    Potential Areas for Further Evaluation:

    • Admission & Continued Occupancy Policy

    • Application and Reexamination Process and Materials

    • Process for Determining and Calculating Income and Rent

    • Verification Procedures

    • PIC and HUD-50058 (Reporting, data integrity)

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    The RIM Review Process

    • Learning Activity 1-1:

    • Analysis of Rent Calculation

    • Page 1-11

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    The RIM Review Process

    • Learning Activity 1-2:

    • Analysis of Asset and Asset Income Information

    • Page 1-16

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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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    Sanctions: Notice PIH 2003-34

    • If PHA does not respond to RIM Review Report within 45 days, or does not implement corrective actions within time frames approved by HUD field office:

      • HUD will withhold 5% of monthly operating subsidy

      • Until PHA complies

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    Learning Objective

    • Achieve successful results in future RIM reviews by improving PHA’s understanding of the RIM process

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    What’s Next?

    • Based on RIM Review 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