For nine years the Department of Housing and Urban Development did not produce the improper-payment estimates federal law requires for its two largest rental-assistance programs. In September, its own inspector general produced them: at least $1.29 billion a year in one program and $1.43 billion in the other. HUD disputes part of the finding. The dispute, and the nine-year silence, are the story.
A Number the Law Required and Nobody Produced
On September 17, 2026, the HUD Office of Inspector General issued two audit reports on the department’s largest rental-assistance programs. Report 2026-BO-0002 examined Multifamily Project-Based Rental Assistance (MF-PBRA). Report 2026-FO-0006 examined the Public and Indian Housing Tenant-Based Rental Assistance program (PIH-TBRA), which includes Housing Choice Vouchers. Together, the auditors projected more than $2.7 billion in improper payments annually: $1.291 billion in the first program and $1.430 billion in the second.
The dollar total is the headline. The more revealing detail is who produced it. The Payment Integrity Information Act of 2019 (S. 375) requires agencies to estimate improper payments in programs susceptible to them. According to both reports, HUD has not produced such an estimate for either program in nine years; it discontinued its estimating contract in 2017, and its contractor’s work ended in 2016. The inspector general’s highlights for the multifamily report add that HUD has been out of compliance with improper-payment laws for 13 consecutive years. Two programs that, according to a 2025 HousingWire report on an earlier audit, paid about $50 billion in fiscal 2024 and make up roughly two-thirds of the department’s expenditures were, in effect, uncounted. The department did not do the counting. Its auditors did.
What the Auditors Actually Did
Both audits are statistical samples of a single month’s payments, and the method matters for reading the results. For MF-PBRA, the auditors drew 230 payments from a June 2025 universe of 1,338,780 payments totaling $1,441,825,779. For PIH-TBRA, they drew 300 payments from a March 2025 universe of 2,300,130 payments totaling $2,612,283,994. Each was a stratified sample, and each annual figure is the lower bound of a one-sided 95 percent confidence interval. In plain terms, the inspector general is saying it is 95 percent confident the true figure is at least that large. Both reports state that the actual amount “may be higher.”
In the multifamily sample, 42 of 230 payments (18 percent) were exceptions: 31 improper and 11 “technically improper.” In the voucher sample, 74 of 300 (about 25 percent) were exceptions: 61 improper and 13 technically improper. RSN’s own arithmetic, dividing each monthly lower-bound projection by the monthly universe, puts the floor at roughly 7.5 percent of multifamily payments and 4.6 percent of voucher payments. Those percentages are RSN’s calculation, not figures stated in the reports.
Two Programs, Two Error Profiles
The causes differ. In the multifamily program, the auditors’ appendix counts 19 improper payments tied to income, 11 to eligibility, and one to program compliance, with the remaining 11 exceptions classed as technically improper compliance lapses. Measured by dollars in the sample rather than by count, eligibility errors made up about 48 percent of the $27,218 in flagged payments and technically improper payments about 37 percent (RSN calculation from the report’s Appendix C totals).
In the voucher program, income calculation was the leading cause of improper payments (24 of 61), followed by utility-allowance calculation (17), program-compliance issues (12), and other errors (8). Among the technically improper payments, income calculation accounted for seven of 13 and utility allowances for five. The voucher report adds a scale figure worth keeping in view: HUD spent $38.4 billion on the program in fiscal year 2025, 43 percent of its total spending, and Congress appropriated $32.04 billion for housing assistance payments.
The oversight findings are as significant as the error rates. The voucher report states that HUD completed 19 CHAIR reviews in fiscal year 2023 and none since, and 14 Compliance Monitoring Reviews in fiscal year 2025, a level of monitoring that one of the report’s finding headings describes as “Not Adequate for the Size of the Program.” The multifamily report likewise finds that HUD’s guidance and systems for owners and its oversight of contract administrators have limitations.
What HUD Says
HUD’s responses are on the record, and they differ by program. On the multifamily audit, HUD’s written response, dated August 12, 2026, states that it “did not agree with our determination of improper payments and the associated projected dollar amount.” It argued that “the preponderance of improper payments was a result of missing file documentation unrelated to eligibility or rent,” and that correcting them would not change the housing assistance payment amount. By HUD’s own calculation, as the audit summarizes it, correcting all 42 sample exceptions would amount to less than $300, which HUD extrapolated to about $32.47 million across 1.46 million units. It also said it “is unable to alter PBCA duties or increase monitoring without statutory change.”
The inspector general rejected the characterization. It wrote that it disagreed “with the assertion that most deficiencies cited in the report relate to missing documentation,” stating that the missing records were tied to eligibility: consent forms, identification, Social Security information, and proof of citizenship. It also noted that under the Payment Integrity Information Act, a payment the agency cannot verify as proper because of missing or insufficient documentation must be treated as improper. The auditors held to the $1.291 billion floor, though they revised two recommendations to give HUD more flexibility.
The Office of Public and Indian Housing took a different posture. Its informal comments, submitted August 14, 2026 (the report says formal comments were not submitted), acknowledged its obligations under the Act and agreed with many of the findings, while stating it “cannot concur on the exact amounts.” PIH attributed errors to program complexity and administration by more than 2,000 public housing agencies, and said it has “little discretion to simplify these requirements except through legislative proposals.” It agreed with the recommendation to work with housing agencies on calculation challenges, agreed in principle to a monitoring protocol, and did not agree to the second recommendation as drafted, a quality-control checklist embedded in its data system, citing technical impracticality while offering alternatives.
Reading the Number Correctly
Intellectual honesty requires stating what the figures are not. An “improper payment” in federal accounting is not a finding of fraud, and the reports do not allege any. It is a payment made in an incorrect amount, to an ineligible recipient, or without sufficient documentation to establish that it was correct. The headline estimates also combine two categories, since the annual projections are drawn from total sample dollars that include technically improper payments. Some of the $2.7 billion may therefore not be money that went to the wrong place; it is money HUD cannot demonstrate went to the right one. HUD’s argument that documentation gaps differ from overpayments has force on that point. The inspector general’s reply has equal force: under the statute, the inability to prove a payment proper is itself the problem.
That is also why the dispute over categories matters less than the underlying fact. A department that had been producing the required estimates would have had its own numbers, and its own account of what share was documentation and what share was error, to put on the table. Instead the first public figures arrive from an auditor, and the department is left arguing with a sample.
A Failure That Crosses Administrations
It would be easy to assign this to one party, and the record resists it. In May 2025, HUD’s chief financial officer, responding to an earlier inspector general review, said (as reported by HousingWire) that efforts on the two programs “were not prioritized during the Biden-Harris administration.” That may describe part of the period. But both 2026 reports date the end of the estimating contract to 2017, in the first Trump administration, and the inspector general’s May 2024 report attributed the missing estimates to “the lack of proper planning and coordination from leadership in HUD’s program and support offices,” citing delays in implementing a secure data platform and limited staff with technical knowledge of the payment cycles. A nine-year gap spans administrations of both parties. What it reflects is an institution that did not treat measuring its own error as part of its job.
Implications
The pattern is one RSN has documented across federal agencies this year. The Department of Homeland Security’s own audit found a forty percent vetting failure in Afghan evacuee files. CMS’s guidance produced $380 million in Medicare payments for transplants that never happened, and the agency was slow to act on proven marketplace enrollment fraud. The EPA’s Clean School Bus Program delivered a fraction of what it funded. In each case, the problem was documented by an inspector general, a court, or a budget office rather than surfaced by the agency itself. More of RSN’s coverage of oversight findings is collected under the Inspector General tag.
For taxpayers, the practical question is narrow. A housing program that cannot say how much of its spending is wrong cannot credibly promise to reduce it. Kilah S. White, the inspector general’s Assistant Inspector General for Audit, said improper payments at this scale “are not just accounting issues” and that “they are missed opportunities to support American families.”
What Remains Unanswered
Several questions are not resolved by the public record. How much of the $2.7 billion floor is overpayment to recipients, how much is underpayment, and how much is documentation HUD can still produce? The reports provide sample-level categories, not a program-wide split, and HUD’s documentation-based argument cannot be tested without it. Will HUD begin publishing its own estimates in the next reporting cycle, or continue to rely on its inspector general to do so? The recommendations require HUD to work with owners and housing agencies, issue quality-control notices, and strengthen monitoring of contract administrators and agencies; whether and when HUD will act on them is not stated in the reports. And HUD’s position that it cannot expand oversight “without statutory change” raises a question for Congress, which funds programs of that size: whether it intends to supply that change, or whether the reporting requirement it has already enacted should simply be enforced.
Sources: HUD OIG reports 2026-BO-0002 and 2026-FO-0006 (both issued September 17, 2026); HUD OIG press release of September 22, 2026; HUD OIG report 2024-FO-0006; HousingWire, May 15, 2025; Payment Integrity Information Act of 2019, S. 375. Figures labeled as RSN calculations are derived from numbers stated in the reports.