Section 1 Short title
This Act may be cited as the “HUD Payment Integrity and Accountability Act of 2026”.
HUD Payment Integrity and Accountability Act of 2026
A BILL
To require the Secretary of Housing and Urban Development to conduct an improper payment assessment for project-based and tenant-based assistance, and for other purposes.
Sec. 2 Definitions
In this Act:
Department— The term Department means the Department of Housing and Urban Development.
Project-based assistance; tenant-based assistance— The terms project-based assistance and tenant-based assistance have the meanings given those terms in section 8(f) of the United States Housing Act of 1937 (42 U.S.C. 1437f(f)).
Public housing agency— The term public housing agency has the meaning given the term in section 3(b) of the United States Housing Act of 1937 (42 U.S.C. 1437a(b)).
Secretary— The term Secretary means the Secretary of Housing and Urban Development.
Sec. 3 Mandatory compliance date
In general— Not later than December 1, 2027, the Secretary shall include, as part of the agency financial report for fiscal year 2027 required under OMB Circular No. A–36, a compliant improper payment assessment for project-based assistance and tenant-based assistance.
Detailed plan and timeline— The Secretary shall develop and execute a detailed plan and timeline for testing and reporting improper payment estimates in the Office of Public and Indian Housing’s Tenant-Based Rental Assistance program and the Office of Multifamily Housing's Project-Based Rental Assistance program, in full compliance with Federal law and applicable guidance issued by the Office of Management and Budget.
Sec. 4 Identifying fraud in housing and rental assistance
Public and section 8 housing—
In general— Not later than 60 days after making a determination described in paragraph (2), the Secretary shall notify the Inspector General of the Department of the determination.
Determination— A determination described in this paragraph is a determination that—
the aggregate amount of housing assistance payments or grants paid under the United States Housing Act of 1937 (42 U.S.C. 1437 et seq.) for a ZIP Code and county or county equivalent increased by more than 100 percent in a single year; or
the number of owners, landlords, or public housing agencies receiving Federal rental assistance or operating subsidies increased in a ZIP Code and county or county equivalent by more than 100 percent in a single year.
Community development and disaster recovery grants—
In general— Not later than 60 days after making a determination described in paragraph (2), the Secretary shall notify the Inspector General of the Department of the determination.
Determination— A determination described in this paragraph is a determination that—
the aggregate amount paid under the Community Development Block Grant program under title I of the Housing and Community Development Act of 1974 (42 U.S.C. 3601 et seq.) or funds paid under the Community Development Block Grant program for Disaster Recovery for a specific project or within a ZIP Code and county equivalent increased by more than 100 percent in a single year; or
the number of sub-recipients or contractors receiving payments under the programs described in subparagraph (A) in a specific jurisdiction increased by more than 100 percent in a single year.
Audit by the Inspector General of HUD— Not later than 2 years after the date of enactment of this Act, and annually thereafter, the Inspector General of the Department shall—
identify, based on the results of notifications received under subsection (a)(1) or (b)(1), any program or geographic area in which the aggregate amount paid or the number of participating housing providers increased by not less than 400 percent during the preceding 5-year period; and
audit any such program, agency, or recipient to ensure compliance with improper payment testing requirements and to detect potential fraudulent activity.
Sec. 5 Inspector General oversight
Pre-Validation— Not later than 180 days before the deadline described in section 3(a), the Inspector General of the Department shall certify whether or not—
the methodology chosen by the Secretary for the assessment described in that section is statistically sound and addresses all material findings from financial statement audits and program audits conducted by the Inspector General related to improper payment testing, eligibility tier verification, and validation of payments to property owners; and
the Secretary made a serious effort to conduct a data draw and receive supporting documents needed to conduct the assessment described in section 3(a).
Fraud risk assessment—
In general— The Inspector General of the Department shall conduct, and submit to the Committee on Banking, Housing, and Urban Affairs and the Committee on Homeland Security and Governmental Affairs of the Senate a report on, a separate fraud risk assessment specifically for the approximately $50,000,000,000 expended annually for rental assistance, including tenant-based ad project-based assistance under section 8(o) of the United States Housing Act of 1937 (42 U.S.C. 1437f(o)), to identify high-risk nodes in the payment chain.
Data draw and analytics— In conducting the assessment under paragraph (1), the Inspector General shall of the Department shall—
execute a comprehensive data draw from all relevant departmental and third-party contract administrator systems to reconcile payments at the eligibility tier;
identify specific barriers preventing the Department from reestablishing computer matching agreements with the “Do Not Pay” database of the Department of the Treasury; and
include in the report an analysis on how system enhancement funding provided in previous fiscal years has been utilized to specifically address noncompliance with subchapter IV of chapter 33 of title 31, United States Code, and other provisions of law related to improper payments.