Pursuant to a congressional request, GAO provided information on the Department of Housing and Urban Development's (HUD) internal controls to ensure proper reporting of subsidized households' income, focusing on: (1) a one-time computer match of subsidized household records with federal tax records to determine household income reporting accuracy; and (2) the extent of federal tax data used to verify household income.
Matter for Congressional Consideration
|After HUD fully implements its Multifamily Tenant Characteristics System for the Public Housing Program, Congress should amend the Internal Revenue Code to allow HUD temporary access to federal tax data so that it can validate the costs and benefits of using such data to identify household income reporting errors. If HUD subsequently demonstrates that its use of tax data is indeed cost-beneficial, Congress should further amend the Internal Revenue Code to broaden and make permanent HUD access to federal tax data, including its use in the Section 8 program when that program's centralized management information system becomes fully operational.|
Recommendations for Executive Action
|Department of Housing and Urban Development||1. To attain better reporting of household income information and facilitate future computer matching with federal tax databases, the Secretary of Housing and Urban Development should ensure that HUD-assisted housing information systems containing centralized household data, now under development, adequately meet Internal Revenue Service safeguards against unauthorized disclosure of federal tax data.|
|Department of Housing and Urban Development||2. To attain better reporting of household income information and facilitate future computer matching with federal tax databases, the Secretary of Housing and Urban Development should standardize the classification of income sources for all assisted housing programs to parallel sources of income derived from federal tax databases.|
|Department of Housing and Urban Development||3. The Secretary of Housing and Urban Development should conduct a cost-benefit analysis of using tax data to identify misreporting of income by subsidized households, and report the results to Congress.|