CARH'S BROADCAST E-MAIL - Regulatory Alert - April 12, 2013

Rural Development (RD) Centralized Servicing Center (CSC) conducted audits of Rental Assistance (RA) payments as required by the Improper Payment Information Payment Act of 2002 (IPIA). The audit letters were mailed in January and properties were required to submit the requested documents to CSC for review no later than February 25, 2013.

RD informed CARH yesterday, that there were still some properties that have not submitted the required documentation, even after two requests were sent to the borrower/management agent.  If you have not already done so, CARH urges management companies that, if a letter was received 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 submitted to CSC ASAP.  Click here for a copy of the sample letter/cover sheet that was included as part of the audit request. It is also recommended that before returning requested information to CSC, someone in senior management review the response for accuracy and completeness prior to submission to CSC to ensure compliance.

Please keep in mind that if the information is not received, RD will be forced to consider the whole payment as improper, which will greatly increase the error rate for the audits.  A high error rate has been used by RD for not increasing management fees.  Therefore, it is extremely important that all audit requests be completed immediately!

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

*  Tenant Certification, Form RD 3560-8 (submit the tenant certification based upon the requested effective date).

*  Verification of Income

*  Verification of Assets

*  Medical Expense

*  Verification of Disability

*  Verification of Citizenship (Farm Labor Only)

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

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 or 703-837-9001 should you have further questions.



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