Urban Poor

A computer match of Internal Revenue Service tax data with the income reported to local authorities by 175,000 households to establish their eligibility and rent payments for federally subsidized housing found 21 percent of the households may have underreported their incomes by as much as $138 million. The Department of Housing and Urban Development (HUD) provides more than $13 billion in housing subsidies to 4.6 million needy families, but millions of more needy families may be going without decent housing because HUD lacks an accurate, centralized system to verify eligibility and household income data for families living in subsidized units. The income underreporting uncovered by GAO resulted in excess federal subsidies of $41 million for 1989 alone. A centralized income and eligibility verification system could help HUD ensure that subsidized households are paying appropriate rents and that needy, very low-income families have access to subsidized housing.

GAO found that: (1) HUD lacks sufficient information to ensure that federally subsidized housing units are occupied by needy low-income families and the rent HUD charges is correct; (2) public housing and management agencies lack effective verification of subsidized households' income; (3) 21 percent of the 175,000 households that GAO matched by computer using 1989 federal tax data understated their income by $138 million, resulting in $41 million in excess rent subsidies; and (4) a centralized household income and eligibility verification system with access to federal tax information would ensure proper income verification, rents and access to subsidized housing.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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