Transcription
Presentation to the Audit Committeeon October 25, 2019Agenda Item AU4.5Safeguarding Rent-Geared-to-Income Assistance:Ensuring Only Eligible People BenefitBeverly Romeo-Beehler, FCPA, FCMA, B.B.A., JD, ICD.D, CFFAuditor GeneralIna Chan, CPA, CA, CISAAssistant Auditor General
Presentation Overview1. Background, Audit Objectives and Scope2. Key Themes from the Audit3. Key Audit Findings and Recommendations4. Recap and Conclusion2
Why This Audit is Important3
Background: Decentralized RGI Administration200 housing providers received nearly 385 million in funding in 20184
Audit Objectives and Scope1. Are households receiving RGI eligible?2. Are providers exercising due diligence in reviewingRGI eligibility?3. Is SSHA exercising sufficient oversight of itsproviders to make sure they are carrying out theirresponsibilities?5
Key ThemesThe City needs to:1Detect and investigateindicators of RGI ineligibility2Centralize key aspects of RGIadministration to providestronger oversight3Expand integration ofincome-based programs 6
1. Detecting and Investigating Indicators of RGIIneligibility Unreported property ownership Unreported income or assets Unauthorized occupants or sub-letting Irregular, altered, or falsified documents7
Unreported Property Ownership Over 500 RGI households linked to propertieso In a sample of 60 we reviewed, 15% owned propertyo In many cases, properties were not disclosed toproviders Our search was limited to properties in Torontoo People may own property outside Toronto or foreignproperty Do people who own residential properties or benefit fromproceeds of their sale need subsidized housing?8
Unreported Income or Assets 18% of files we reviewed with potential unreportedsources of income and/or assets Bank statements not available in over 30% of fileso Used for detecting unreported income and assetso Important when City implements asset limits9
Potentialsource ofunreportedincomeBasic Questions the ProviderShould Have Asked:What is the nature of the largedeposits from Uber? Have youreported all your income?Significantbank draftsout ofaccountSignificantdeposits andtransfers intoaccountWhat is the origin and source ofthe transfers and deposits intothe account? Are they sources ofincome that should be includedin the RGI calculation?What is the destination of thetransfers out of the account?Have you reported all assets,including property ownership?10
Unauthorized Occupants or Sub-letting Example: provider suspected an unreported occupant buthousehold denied the allegationo Current driver’s licence shows RGI unit address Income from unreported occupants is not included in RGIrent determination – households may be underchargedfor rent Some households may be sub-letting11
Irregular, Altered, or Falsified Documents 5% of files we reviewed:o Information was inconsistent with other documentso NOA, pay stubs, employment letters appeared alteredor falsified Impacts:o Eligibilityo RGI rent payable / amount of assistance12
Datesappear tobe manuallyalteredAmountsdon’t match13
Numbers arenot stentfontDoes not equalline 420 428Does not equalline 435 - 48214
Does notmatch line 437on NOA15
1. Detecting and Investigating Indicators of RGIIneligibilityCity can better support housing providers by:1. Enhancing training2. Strengthening guidance3. Sharing internal and external data4. Establishing Eligibility Review Officer role16
1. Detecting and Investigating Indicators of RGIIneligibilityOther Key Actions Complete eligibility reviews and track results – addressissues identified by Auditor General Develop a strategy for comprehensive reviews usingavailable data, based on risk Direct providers to obtain bank statements and recentNotices of Assessment17
1. Detecting and Investigating Indicators of RGIIneligibilityKey Legislative Changes to Eligibility Rules A household is ineligible if it:oRefuses an offer while on wait list (previously 3 offers)oDoes not file an income tax return (new)oPays market rent for 24 months (previously 12 months)– other RGI eligibility criteria and local rules remain unchanged – Providers still need to review eligibility and verify that all incomeand assets are reported18
2. Centralize Key Aspects of RGI Administration toProvide Stronger OversightGaps in Oversight3rdService Manager(i.e. City)2ndSecondary ReviewsLimitedsecondaryreviewHousing ProviderEligibility ReviewNot alwaysidentifying oraddressingissues(e.g. Internal Audit)1stCity oversightneedsimprovement19
2. Centralize Key Aspects of RGI Administration toProvide Stronger Oversight 385 million in funding provided for subsidized housingo No centralized database of all RGI recipientso Providers use a variety of systems and mostly manual,paper-based processes Centralized data supports more effective and efficientoversight of RGI eligibility20
City Should Take a More Central Role to Verify EligibilityHousehold: Provides documentsand informationCity: Performs eligibilityreviews incl. incomeand asset verificationfor waitinghouseholds and attime of housing Shares informationwith providers Centralizeddatabase of waitingand existing RGIhouseholdsIncomeData fromCRAData fromothersourcesStrongclientconsentformsProvider: Uses informationfor ongoingeligibility reviews Refers potentialconcerns to ERO Collects rentHuman Services Integration(HSI)City: Conducts risk based, quality assurance reviews ERO conducts investigation of eligibility concerns referred by providers21
2. Centralize Key Aspects of RGI Administration toProvide Stronger Oversight Data is key to effective and efficient reviewsoInternal: TESS, CS, MLSoExternal: CRA, MTO, credit bureaus Collect and share information for eligibility verificationpurposesoooReview privacy considerationsEstablish protocols and agreements for informationsharingDevelop appropriate declaration and consent forms22
2. Centralize Key Aspects of RGI Administration toProvide Stronger OversightKey Actions City directly performs reviews of new / waitinghouseholds Develop an integrated database of RGI households Implement risk-based approach to SSHA qualityassurance reviews of RGI files Enhance operational reviews and review of RGI files23
3. Expand Integration Amongst Income-BasedSubsidy Programs Increased information sharing helps:o Identify inconsistent informationo Prevent subsidy overpaymentso Effectively investigate potential fraud Key Actionso Information sharing protocolo Common fraud investigations24
ConclusionIt is important that those receiving limited RGI funding arein fact eligible Effective eligibility reviews ensures funding helps peoplewho genuinely need RGI City needs to take a greater role in administering RGICity management have agreed to all 13 recommendationsand are taking action25
Report fraud, waste or wrongdoingCall our 24/7 hotline416-397-STOP (7867)AuditorGeneral@toronto.ca Email us Fill out a secure form Mail a letter26
Beverly Romeo -Beehler, FCPA, FCMA, B.B.A., JD, ICD.D, CFF. Auditor General . . Enhancing training 2. Strengthening guidance 3. Sharing internal and external data . Presentation Slides - Safeguarding Rent-Geared-to-Income Assistance: Ensuring Only Eligible People Benefit Keywords: Audit Committee - Presentation slides .
