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Housing Programs: Funding Approach for HUD's Section 8 Certificate Program Needs Changing

RCED-88-136 Published: Apr 18, 1988. Publicly Released: Apr 19, 1988.
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Highlights

In response to a congressional request, GAO provided information on the adequacy of the Department of Housing and Urban Development's (HUD) funding approach for its Section 8 Existing Rental Assistance Certificate Program, focusing on: (1) the potential shortfall in program funds; (2) whether HUD adequately compensated state and local public housing agencies (PHA) for their costs; and (3) how PHA charged administrative fees that exceeded their actual costs.

Recommendations

Recommendations for Executive Action

Agency Affected Recommendation Status
Department of Housing and Urban Development To provide Congress with more accurate total program cost information for the 15-year budget authority of the Section 8 Certificate Rental Assistance Program, the Secretary of Housing and Urban Development should develop budgeting procedures that compute and annually update costs for existing and new certificates, based on all factors that have an impact on total program costs, including certificate usage rates, tenant contributions, rental increases, and administrative fees.
Closed – Not Implemented
The certificate program budget authority is now made on a 5-year rather than 15-year basis. The recommendation was based on the prior 15-year period and is no longer applicable given the change in program fund reservations and HUD reported reconciliation of the new period with the old.
Department of Housing and Urban Development To provide a continuing basis for determining rates for section 8 rental certificate administrative reimbursements and for updating the amounts included for administrative fees in program cost estimates, the Secretary of Housing and Urban Development should periodically determine the actual costs being incurred by PHA throughout the country and provide this information to Congress as part of the annual HUD budget request.
Closed – Implemented
Congress has legislated a new fee that is consistent for incremental units of vouchers and certificates. HUD resistance to set fees based on actual costs and Congress' predisposition to have a standard fee make it impractical to expect any action on the recommendation. If Congress decides to consolidate the voucher and certificate programs, GAO will reexamine the merits of this recommendation.
Department of Housing and Urban Development The Secretary of Housing and Urban Development should issue more specific guidelines on the type of uses that are appropriate for surplus section 8 administrative fees.
Closed – Implemented
HUD revised its requirements to make certain that PHA are adequately administering their programs before excess fees can be used. Also, HUD initiated a requirement that the PHA Board of Commissioners set thresholds for amounts of fees which can be used without Board approval.

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Topics

Administrative costsBudget authoritystate relationsFunds managementHousing programsLow income housingProgram managementRental housingState-administered programsSupplemental appropriations