CARH’S BROADCAST E-MAIL –
Regulatory Alert

December 20, 2011

Rural Development (RD) Centralized Servicing Center (CSC) will again be conducting audits of Rental Assistance (RA) payments as required by the Improper Payment Information Payment Act of 2002 (IPIA). The audit letters were recently sent out and properties are required to submit the requested documents to CSC for review no later than January 23, 2012.

CARH urges management companies to inform your staff that, if they receive a letter from CSC indicating that an audit is being done on an RA payment, that all requested information should be completed in a thorough manner and within the time frames allotted by the CSC request. In addition, before returning requested information to CSC, it is highly recommended that someone in senior management review the response for accuracy and completeness prior to submission to CSC to ensure compliance.

These audits are used as the agency moves forward on budget requests for Rental Assistance. The first audit conducted by CSC for FY 2007 RA payments had an initial error rate of 8.42% which was then brought down to 3.95% due in large part to CARH’s efforts to draw attention to the error rates and the need for management companies and their employees to provide accurate information. In FY 2008 the error rate was 2.06%, in FY 2009 it was down to 1.39%, and in FY 2010 it raised slightly to 1.48%. The CSC reports that “income calculation errors” were the most common source of all errors, accounting for 40% of the total number of errors. With your assistance, we hope the error rate on the FY 2011 RA payments becomes even lower!

If your property receives a letter from CSC, you are required to submit the following documentation by January 23, 2012:

• Tenant Certification, Form RD 3560-8 (submit the tenant certification based upon the requested effective date).
  
  Also submit any supporting documentation. Supporting documents include all calculation tapes, internal worksheets and third-party verification used to complete the Tenant Certification. Examples of supporting document include:
  
• Verification of Employment
• Zero Income Persons
• Unemployment and Unemployment Benefits
• Regular, Unearned Income (e.g., Social Security, pensions, workers compensation)
• Public Assistance
• Alimony or Child Support Payments
• Support for Foster Children or Adults
• Income Tax Return
• Verification of Assets and Income from Assets
• Medical Expense
• Verification of Disability
• Verification of Citizenship (Farm Labor Only)
  
  Before submitting your response to CSC, review carefully your documentation regarding the following top five causes of improper payments:
  
•  Income Documentation/Calculation
• Medical Deductions
• Tenant Certification Dated
• Tenant Certification Current
• Award Letter Included
  
  To assist on-site and property managers, in 2008 CARH created a Training Manual in response to past IPIA audits whose high error rates pose a threat to RD’s RA budget. The Training Manual includes a checklist of common errors and proposes solutions. It also references regulations made in Handbook 3560. The manual is a live document, so any questions or comments to improve the Training Manual are welcome.
  
  Please contact the CARH national office at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it or 703-837-9001 should you have further questions.