© 2007 Nan McKay & Associates
What’s New
in Public Housing?
Cara Gillette
Slide Number #1
© 2007 Nan McKay & Associates
Today’s Update Topics
© 2007 Nan McKay & Associates
Asset Management
The New PHAS – What We Know
New HUD Procurement Handbook
HUD’s Administrative Reform Initiative and
Refinement of Income and Rent
Civil Rights Monitoring
Slide Number #2
© 2007 Nan McKay & Associates
Asset Management
Slide Number #3
© 2007 Nan McKay & Associates
How the New Model Works
 We’ll walk through
the model to help
you understand
why this is a
fundamental shift
for public housing
programs
Slide Number #4
© 2007 Nan McKay & Associates
Overview
 The new formula:
• Requires PHAs with 250 or more PH units to
transition to PBM
• Is based on HUD’s multifamily industry
• Will force the PH program to become more
property-based to ensure the viability of each
property
Slide Number #5
© 2007 Nan McKay & Associates
HUD’s Timetable
2007
All PHAs with 250 or more PH units must
be using project-based accounting
2009
HUD will consider revising the system to
use actual costs
2011
All PHAs with 250 or more units must be
asset-management compliant
Slide Number #6
© 2007 Nan McKay & Associates
How the New Model Works
 Historically, operating subsidy was
calculated on an aggregate level
• Op sub was allocated to the central
office, which decided where the subsidy
went
Slide Number #7
© 2007 Nan McKay & Associates
The New Model
 Subsidy now is calculated for and
allocated to each project
• All other activities are supported by fees paid
by the projects
• In other words, all the money goes to the
projects, and projects pay for everything else
Slide Number #8
© 2007 Nan McKay & Associates
The New Model
 Any service to the project not at the
project will come from a cost center
• A cost center is a cluster of activities that
indirectly or directly support a project but
aren’t under the control of a property mgr
• Every PHA will have a central office cost
center (COCC)
• Direct services will charge the project
Slide Number #9
© 2007 Nan McKay & Associates
Compliance with Asset
Management
 Best definition of
compliance so far is
in Notice 2006-14(HA)
• Guidance on
successful
conversion for stoploss agencies
Slide Number #10
© 2007 Nan McKay & Associates
The Deal with Stop-Loss
 PHAs who are
losing operating
subsidy in the
new formula can
stop the loss by
early conversion
to asset
management
Slide Number #11
© 2007 Nan McKay & Associates
Stop-Loss Provision
 The deadline is October 15, 2007
 If PHA demonstrates conversion by that date,
the reduction of subsidy will be stopped at 5%
of the difference for CY 2007
 That means that 95% of the PUM difference will
be added to the lower op sub level under the
final rule
Slide Number #12
© 2007 Nan McKay & Associates
Stop-Loss Provision
 The added subsidy will continue to be
received by the PHA each calendar year
that the PHA remains in compliance with
the asset management requirements
• This means that the PHA must be in
compliance each year or go back to the
original loss
Slide Number #13
© 2007 Nan McKay & Associates
Stop-Loss Notice PIH 2007-16
 Attachment 1
• Attachment B of this document adds some
requirements for year two deadline
• We’ll weave these in when we discuss the
stop-loss kit
Slide Number #14
Stop-Loss Provision
 The stop-loss kit is an
important document
because it’s a template
for stop-loss agencies
• And a roadmap for all
other agencies
• HUD to issue 2nd year
stop-loss kit soon
© 2007 Nan McKay & Associates
Seven Criteria for Compliance
with Asset Management
1. Project-based accounting
Monthly operating statements for each
project – revenues and expenses vs. budget
levels, including all fees from COCC and CFG
Must reasonably reflect the financial
performance of each project
•
•

Sum of operating statements = total PH
Slide Number #16
© 2007 Nan McKay & Associates
Seven Criteria for Compliance
with Asset Management
1. Project-based accounting second year:
 Project-specific balance sheets not required
Slide Number #17
© 2007 Nan McKay & Associates
Seven Criteria for Compliance
with Asset Management
2. Project-based management
•
Property management services are
arranged or provided in the best interest of
the property considering needs, cost, and
responsiveness, relative to local market
standards
Slide Number #18
© 2007 Nan McKay & Associates
Seven Criteria for Compliance
with Asset Management
3. Central office cost center (COCC)
•
•
•
All central office fees must be reasonable
COCC must operate on the allowable fees
and other permitted reimbursements from
its PH and S8 programs
In other words, the COCC must support
itself
Slide Number #19
© 2007 Nan McKay & Associates
Seven Criteria for Compliance
with Asset Management
3. Central office (COCC) second year:
PHA may not fund the COCC with:
•

Sale of assets acquired with PH funds

Amounts from Capital Fund other than
permitted (e.g., can’t use “Management
Improvement” funds to pay for general
accounting staff)

Funds from state or local governments
Slide Number #20
© 2007 Nan McKay & Associates
Seven Criteria for Compliance
with Asset Management
4. Centralized services
•
•
•
Centralized services that directly support
projects are funded using a fee-for-service
approach or through other allowable chargebacks
Each project is charged for actual services
received
Must be reasonable compared to local market
Slide Number #21
© 2007 Nan McKay & Associates
Seven Criteria for Compliance
with Asset Management
5. Review of project performance
•
PHA systematically reviews financial,
physical, and management performance of
each project, and identifies non-performing
properties
Slide Number #22
© 2007 Nan McKay & Associates
Seven Criteria for Compliance
with Asset Management
5. Review of project performance – a nonperforming property has:
PHAS physical score below 70
Significant crime and drug problems
Below 95% occupancy
TARS that exceed 7% of monthly rent roll
•
•
•
•

FAQ clarifies this means rent…
Slide Number #23
© 2007 Nan McKay & Associates
Seven Criteria for Compliance
with Asset Management
5. Review of project performance – a nonperforming property has:
•
•
•
PHAS grade of “D” or below for vacant unit
turnaround and work orders
Utility consumption more than 120% of
agency average
Other major management problems
Turnaround = D more than 30 days
WOs = D more than 40 days
Slide Number #24
© 2007 Nan McKay & Associates
Seven Criteria for Compliance
with Asset Management
5. Non-performing property second year:
•
•
Significant drug and crime as defined by
Uniform Crime Reporting = exceeds the
surrounding community by 120%
For any projects identified as non-performing,
PHA has management plan with set of
recommendations and measurable goals
Slide Number #25
© 2007 Nan McKay & Associates
Seven Criteria for Compliance
with Asset Management
6. Capital planning
Physical needs assessment and a five-year
plan for each project
•

•
Five-year plan needs to consider revenue
sources, market, tenancy, and project needs
PHA demonstrates commitment to long-range
energy consumption reduction
Slide Number #26
© 2007 Nan McKay & Associates
Seven Criteria for Compliance
with Asset Management
7. Risk management responsibilities related
to regulatory compliance
PHA not carrying out responsibilities if:
•


Designated troubled under PHAS
Any outstanding FHEO findings or voluntary
compliance agreement not implemented…
Slide Number #27
© 2007 Nan McKay & Associates
Seven Criteria for Compliance
with Asset Management
7. Regulatory noncompliance if:
•
•
No current energy audit…
Outstanding IG audit findings w/no progress
•
Not in compliance with ACOP
Unsatisfactory progress under RHIIP/RIM
PIC (50058) reporting rate under 95%
•
Any other major compliance deficiency
•
•
Slide Number #28
© 2007 Nan McKay & Associates
Seven Criteria for Compliance
with Asset Management
7. Regulatory noncompliance:
Stop-Loss FAQs, published 9/1/06 clarifies:
•

Regulatory compliance is agency-wide for
now
•
But at some point it will be analyzed by
project
Slide Number #29
© 2007 Nan McKay & Associates
Seven Criteria for Compliance
with Asset Management
7. Regulatory noncompliance second year:



Designated troubled under PHAS physical,
financial, management, or CFG
Outstanding IG audit findings greater than 6
months old without progress
Not in compliance with ACOP and other related
occupancy directives…
Slide Number #30
© 2007 Nan McKay & Associates
Seven Criteria for Compliance
with Asset Management
7. Regulatory noncompliance second year:

Not meeting statutory Capital Fund obligation
and expenditure deadlines
Slide Number #31
© 2007 Nan McKay & Associates
Follow the Money
 How the op sub is
calculated and
allocated is driving
these fundamental
changes
Slide Number #32
© 2007 Nan McKay & Associates
How the Money Works
 The old op sub was aggregate - AEL
 Under the new formula, subsidy is
calculated and allocated by project - PEL
• The op sub will go directly to the projects,
and all other activities will be supported by
fees paid by the projects
• We see these in PUM (per unit month) figures
Slide Number #33
© 2007 Nan McKay & Associates
The New Operating Subsidy
 Operating subsidy formula:
Project expense level (PEL)
+ Utility expense level
- Formula income frozen at 2004 level
+ Applicable add-ons
= Operating subsidy
Slide Number #34
© 2007 Nan McKay & Associates
Operating Fund Formula

PEL uses 10 cost drivers or variables:
1.
2.
3.
4.
5.
Geographic variable
Location variable
Clientele (occupancy) variable
Property size
Building type
Slide Number #35
© 2007 Nan McKay & Associates
Operating Fund Formula

PEL uses 10 cost drivers or variables:
6.
7.
8.
9.
10.
Bedroom mix (unit size)
Percent assisted
Property age
Neighborhood poverty
Ownership type
Slide Number #36
© 2007 Nan McKay & Associates
The New Operating Subsidy
Add-ons – PHA determines as applicable:

•
•
•
•
•
Self-sufficiency
Energy loan amortization
PILOT
Audit cost – actual most recent
Resident participation - $25 per unit per yr
Slide Number #37
© 2007 Nan McKay & Associates
The New Operating Subsidy
Add-ons – the PHA determines:

•
•
Asset management fee

$4 PUM for PHAs with 250 or more

$2 PUM for smaller PHAS who transition to
PBM who have a COCC
Information technology fee

$2 PUM
Slide Number #38
© 2007 Nan McKay & Associates
The New Operating Subsidy
Add-ons – the PHA determines:

•
•
Asset repositioning fee – demo and dispo
Costs attributable to changes in federal
law, regulation, or economy
Slide Number #39
© 2007 Nan McKay & Associates
The New Operating Subsidy
Approved vacancies – still get op sub:

•
•
•
•
•
Units undergoing mod (if on schedule)
Units approved for resident services
Units in court litigation
Units undergoing casualty loss settlement
Units vacant due to disaster (federal or
state)…
Slide Number #40
© 2007 Nan McKay & Associates
The New Operating Subsidy
Approved vacancies – still get op sub:

•
•

Units vacant due to changing market
conditions
Limited vacancies, up to 3%
The PHA will enter types of vacancies
into PIC
Slide Number #41
© 2007 Nan McKay & Associates
Costs
Slide Number #42
© 2007 Nan McKay & Associates
Costs

All budgeted costs and expenses will fall
into one of three general categories:
Direct or frontline cost (at the project)
Central office cost center (COCC)


•

Indirect services and allocated services
Other cost centers (optional)
Slide Number #43
© 2007 Nan McKay & Associates
AMP
 Frontline, or direct, costs of the AMP:
• Personnel costs of staff assigned to project
• Repair and maintenance costs including
supplies, contracted repairs, make-readies,
preventive maintenance, etc.
• Utility costs
• Costs related to the site office – phones,
office supplies, computers, postage, etc…
Slide Number #44
© 2007 Nan McKay & Associates
AMP Frontline (Direct) Costs
 These are expenses of the project:
• Advertising including procurement and
employment notices
• Costs of employee recruiting and screening
• PILOT
• Insurance (allocated)
• Legal fees
Slide Number #45
© 2007 Nan McKay & Associates
AMP Frontline (Direct) Costs
 These are expenses of the project:
• Fees paid to the central office
• Audit costs (allocated)
 PHA should allocate a reasonable share of the
audit cost to each AMP, COCC, and program
• Vehicle expense for site-based vehicles
Slide Number #46
© 2007 Nan McKay & Associates
Cost Centers
Any service provided to the project that
doesn’t reside at the project will need to
come from a cost center

•
The projects will pay for the direct services
that don’t reside at the project
Slide Number #47
© 2007 Nan McKay & Associates
Cost Centers
 A cost center is a cluster of activities that
indirectly or directly support an AMP but
aren’t under the direct control of a property
manager
• Every PHA will have at least one cost center, the
central office cost center (COCC)
• Centralized maintenance may also probably be
a cost center
Slide Number #48
© 2007 Nan McKay & Associates
Central Office Cost Center
(COCC)
 The COCC is the PHA’s collection of
indirect costs of operation - all
programs
 COCC will have its own column on FDS
 We’ll talk about the fees the COCC
charges to the projects a bit later
Slide Number #49
© 2007 Nan McKay & Associates
COCC Activities
•
•
•
•
•
•
•
Executive director
Human resources
Regional PH mgmt
Corporate legal
Finance
IT
Risk management
Slide Number #50
• Centralized (if not an
optional service
center)
 Procurement
 Maintenance
 Work orders
 Inspections
© 2007 Nan McKay & Associates
Other Cost (Service) Centers
 Maintenance is an example of services that
may need to be provided directly to
projects that are centrally located and
charged based on time spent or actual work
performed
Slide Number #51
© 2007 Nan McKay & Associates
Other Cost (Service) Centers
 How to organize maintenance is an
important PBM decision
• A PHA can decide to organize maintenance:
 Decentralized – front line
• Supervised by the property manager
 Centrally
 A mix
Slide Number #52
© 2007 Nan McKay & Associates
Other Cost (Service) Centers
 If the PHA uses centralized maintenance,
will be required to use fee-for-service
method when charging the project
• Project can only be charged for actual
services provided
 Could be a single blended hourly rate, separate
hourly rates for various activities, or flat fee –
must be reasonable
Slide Number #53
© 2007 Nan McKay & Associates
Centralized Maintenance
 For all centralized
maintenance staff providing
direct services, the PHA can
charge up to the market rate
• Even if it’s above what the
technician is actually paid
 May charge for actual
materials used as well as labor
Slide Number #54
© 2007 Nan McKay & Associates
Centralized Maintenance
How Much Can the PHA Charge?
 Sally is a maintenance worker
$62.26
Wages
$17.50
Benefits (45%)
$79.76
Hourly rate
 If the market rate is $100, the hourly charge
could be $100, regardless of what Sally is paid
Slide Number #55
© 2007 Nan McKay & Associates
Other Functions
 Charging back to the
project
• Where it’s cost-effective,
PHA can prorate across
projects the cost of
centralized staff who
perform frontline functions
Slide Number #56
© 2007 Nan McKay & Associates
Charging Back to the Project
 These are called front line allocated costs
• For example, collecting rent centrally,
employee handing rent collection, as well as
direct costs, could be charged back to
applicable projects on any reasonable basis
Slide Number #57
© 2007 Nan McKay & Associates
Charging Back to the Project
 Two exceptions to charging projects for
centralized staff performing frontline
functions:
• Can’t charge projects for cost of a centralized
supervisor
• Can’t charge projects cost of centralized staff
handling procurement
Slide Number #58
© 2007 Nan McKay & Associates
Update – Centralized
Warehouse
 FAQ December 1, 2006
 If a warehouse at the COCC is for
“storerooms” of scattered sites, with HUD
approval, this can be an eligible frontline cost
Slide Number #59
© 2007 Nan McKay & Associates
Charging Back to the Project
 HUD will allow charging back to project:
• Central waiting lists, screening, leasing and
occupancy – PHAs can prorate costs direct
costs of these functions to the AMPs, including
supervisory personnel
 The proration can be based on the number of units
leased at a project, average turnover at a project, or
other reasonable allocation method
Slide Number #60
© 2007 Nan McKay & Associates
Charging Back to the Project
 HUD will allow charging back to project:
• Resident programs – PHA can prorate
centralized resident programs across projects
on a reasonable basis, including supervisory
staff
Slide Number #61
© 2007 Nan McKay & Associates
Charging Back to the Project
 HUD will allow charging back to project:
• Protective services – PHAs can charge
centralized protective services, either in-house
or through local law enforcement, including
supervisory staff
• HUD eventually wants these tracked by project
Slide Number #62
© 2007 Nan McKay & Associates
Charging Back to the Project
 HUD will allow charging back to project:
• Work order processing
 Although it is the norm in multifamily housing
to handle work order processing on site, a PHA
may charge the cost of centralized work order
processing only if the PHA can
document/justify that the cost pro rated is
reasonable and necessary
Slide Number #63
© 2007 Nan McKay & Associates
Shared Resource Costs
- What if there is PHA personnel who provide
services both to the projects and the central
office cost center?
Slide Number #64
© 2007 Nan McKay & Associates
Shared Resource Costs
 HUD recognizes it may not make
economic sense to have full-time staff
dedicated to a specific project
• In this case the PHA may establish a
reasonable method to spread these
personnel costs to the AMPS that receive
the service
Slide Number #65
© 2007 Nan McKay & Associates
Shared Resource Costs
 Shared resource costs are distinguished
from front line prorated costs in that the
services being shared are limited to a few
projects as opposed to being pro rated
across all projects
• An example of a shared resource cost might
be a maintenance person assigned to and
paid for by two projects
Slide Number #66
© 2007 Nan McKay & Associates
Shared Resource Costs
- For PHA staff who provide services both to
the projects and the central office cost
center, the PHA must separate the amount
of time spent on providing services to the
projects and the central office cost center,
based on a reasonable methodology
Slide Number #67
© 2007 Nan McKay & Associates
Shared Resource Costs
- The time spent by the
staff on projects must
be at an hourly rate that
does not exceed the
reasonable hourly fee
for the service
Slide Number #68
© 2007 Nan McKay & Associates
Fees Allowed under PBM
Slide Number #69
© 2007 Nan McKay & Associates
Fees Allowed under PBM
 Fees the projects will pay to the COCC:
•
•
•
•
Property management fees
Bookkeeping fees
Asset management fees
Capital fund management fees
Slide Number #70
© 2007 Nan McKay & Associates
Fees Allowed under PBM
 Property management fee
• Is “reasonable fee” paid by project to COCC
for project oversight
• HUD has established some “reasonability”
guidelines
 Notice: Guidance on Implementation of Asset
Management, issued Sept 6, 2006
Slide Number #71
© 2007 Nan McKay & Associates
Fees Allowed under PBM
 Management fee – “reasonable”
• Based on multifamily fee (annual letter from
field office); or
• 80th percentile as established by HUD; or
• Other compelling data of local market
 Might include fees paid pay the PHA for private
management of other properties
Slide Number #72
Updated April 10, 2007
© 2007 Nan McKay & Associates
Fees Allowed under PBM
 Management fee
• Based on units leased (occupied units and
approved vacancies, but not the 3% limited
vacancies) using average monthly lease-up
rate
 Stop-loss FAQs (question 12) says that the
PHA can use either the first day or last day of
the month (but must be consistent)
Slide Number #74
© 2007 Nan McKay & Associates
Fees Allowed under PBM
 Bookkeeping fee
• An extension of the management fee
• For accounting for project funds, charged to
the project from the COCC
• Based on occupied units and allowable
vacancies
• HUD will consider $7.50 PUM reasonable
Slide Number #75
© 2007 Nan McKay & Associates
Fees Allowed under PBM
 Asset management fee
• Fee paid by project to COCC for oversight of
portfolio
• Based on total ACC
• Must be reasonable, not to exceed $10 PUM
• Only paid if the project has excess cash flow
(no limit first year)
Slide Number #76
© 2007 Nan McKay & Associates
Update – Asset Mgmt Fee
 Per PIH Notice 2007-9(HA), issued 4/10/07
• In the 1st year of PBM, there is no excess cash
requirement for the payment of the fee
• In the 2nd year, each project must have excess
cash to pay the asset management fee
• In the 3rd and subsequent years, excess cash
must equal one month of operating expenses
to pay the asset management fee
Slide Number #77
© 2007 Nan McKay & Associates
Capital Fund Management
Fee
 Fee may be up to 10% of the CFG including
replacement housing funds
• The fee is paid by each AMP from CFG
proceeds
 HUD is still defining the way the fee will be
earned
Slide Number #78
© 2007 Nan McKay & Associates
The New PHAS – What We Know
 Per notice published
Sept 6, 2006:
• Under the first year of
project-based
management, PHAs
will receive a
transitional score
under the new PHAS
Slide Number #79
© 2007 Nan McKay & Associates
The New PHAS
 Changes being considered:
• Inspections under project-based PHAS
may be scheduled in the last three months
of an agency’s fiscal year
• Projects that receive a score of 80 or
higher will only be inspected every two
years
Slide Number #80
© 2007 Nan McKay & Associates
The New PHAS
 HUD is expected to issue a new physical
inspection scoring notice specific to
project-based PHAS
 The central office or non-public housing
projects will not be included in the
financial assessment
Slide Number #81
© 2007 Nan McKay & Associates
The New PHAS
 PHAs will be required to submit financial
statements at the project level so that the
financial condition of each AMP can be
measured
• Two of the indicators, Current Ratio and Months
Expendable Fund Balance, will be used to
determine if a property/AMP is fiscally healthy
Slide Number #82
© 2007 Nan McKay & Associates
The New PHAS
 The Management Operations Indicator is
expected to be significantly changed
under project based PHAS
• Form HUD 9834, which is used by HUD for
on site multifamily management reviews,
may be used a guide
Slide Number #83
© 2007 Nan McKay & Associates
The New PHAS
 Management Operations Indicator
• Will cover the area of tenant selection,
assignments, lease and grievance and
tenant participation
Slide Number #84
© 2007 Nan McKay & Associates
The New PHAS Components
 PH Asset Management: Key Components,
issued April 10, 2007:
• HUD “contemplates” four indicators:
 Physical condition of each project
 Financial condition of each project
 Management operation of each project
 Capital Fund obligation/expenditure rates
Slide Number #85
© 2007 Nan McKay & Associates
The New PHAS Assessment
• Physical condition – Independent inspector
(current practice)
• Financial condition – Principally, the AMP’s
financial liquidity
• Management operations – Onsite management
reviews will eliminate self-certifications and
submissions
• Capital Fund – obligation and expenditure rates
Slide Number #86
© 2007 Nan McKay & Associates
Measuring Performance
 Accountability and responsibility
• Clear articulation of responsibilities is needed
• Performance of properties will need to be
more closely tied to performance evaluation
of staff
• Effective supervision and quality control is a
must in making this work
Slide Number #87
© 2007 Nan McKay & Associates
HUD’s New Procurement Handbook
 Transmittal is
Attachment 2
Slide Number #88
© 2007 Nan McKay & Associates
HUD Handbook 7460.8 REV 2
 Applies specifically to public housing
agencies for the operation of public
housing
 Is not applicable to Indian Housing
Authorities or the operation of the Section
8 Housing Choice Voucher Program
Slide Number #89
© 2007 Nan McKay & Associates
HUD Handbook 7460.8 REV 2
 Also, does not apply to income generated by the
Central Office Cost Center (COCC) – not
considered Federal program income
• Management fees
• Bookkeeping fees
• Asset management fees
 Governed by local & State requirements, if
applicable
Slide Number #90
© 2007 Nan McKay & Associates
Delegation of Authority
 Under PBM, more decentralization of
procurement function is expected
 Policy required for delegation of procurement
authority
• Limits of authority in terms of dollar value each PHA
classification may make
• Other limitations, e.g., types of contracts an
individual may award
Slide Number #91
© 2007 Nan McKay & Associates
Delegation of Authority
 Delegation policy should also be clear if
individual staff may further re-delegate any
of his/her authority – and how much!
 Training for site staff is important
• Individual staff will be binding the PHA legally
Slide Number #92
© 2007 Nan McKay & Associates
What Has Been Streamlined
 Increase in the small purchase threshold from
$25,000 to $100,000
 The establishment of a micro-purchase
threshold of $2,000, requiring only one
reasonable quote
 The use of “incorporation by reference” of
mandatory contract clauses into bid
specifications and contracts…
Slide Number #93
© 2007 Nan McKay & Associates
What Has Been Streamlined
 Elimination of any required forms for small
purchases, with the exception of applicable
maintenance and construction contracts
exceeding $2,000
 The use of a simplified contract for construction
work that does not exceed $100,000…
Slide Number #94
© 2007 Nan McKay & Associates
What Has Been Streamlined
 Elimination of requirement to conduct a
separate cost/price analysis when obtaining
products or services of a commercial nature
 Ability of PHAs to “self-certify” that their
procurement systems satisfy the requirements
of 24 CFR 85.36, thereby eliminating the need
for prior HUD approval for most change orders
and non-competitive purchases
Slide Number #95
© 2007 Nan McKay & Associates
Developing a Procurement Policy
 New handbook
includes
language PHA’s
procurement
policy should
include
Slide Number #96
© 2007 Nan McKay & Associates
Procurement Policy Should
Include
 Statement on access by public to certain
information
 Clear wording on ethical behavior
Slide Number #97
© 2007 Nan McKay & Associates
Procurement Policy Should
Include
 Procurement methods used by PHA
•
•
•
•
•
•
Petty cash
Small purchase (include dollar level)
Sealed bids
Competitive proposals
Noncompetitive proposals
Cooperative purchasing agreements
Slide Number #98
© 2007 Nan McKay & Associates
Procurement Policy Should
Include
 Conditions for cost & price analysis
 Methods of solicitation to be used for various
levels of procurement
 Bonding requirements for construction
contracts over $100,000
 Contractor qualifications & duties
 Different types of contracts the PHA will use
Slide Number #99
© 2007 Nan McKay & Associates
Procurement Policy Should
Include
Identification of required contract clauses
Types of specifications the PHA will use
Process for filing an appeal
Assistance available for small and other types
of businesses
 Required Board approval of policy
 Delegation of contracting authority
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
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Slide Number #100
© 2007 Nan McKay & Associates
Procurement Policy Should
Include
 Disposition policy (may also be a stand
alone policy)
 Self-certification (if applicable)
Slide Number #101
© 2007 Nan McKay & Associates
Ethics in Public Contracting
 New handbook emphasizes ethics
 PHA must have a written code of
standards that governs performance of
employees who engage in award &
administration of contracts
 Included in the PHA’s procurement policy
Slide Number #102
© 2007 Nan McKay & Associates
Ethics in Public Procurement
 PHA’s procurement policy should prohibit
any employee from participating in the
selection of a vendor or award of a contract
if a conflict – real or perceived – would be
involved
Page 7-25
Slide Number #103
© 2007 Nan McKay & Associates
Ethics in Public Procurement
 Also recommended that policy prohibit
employees who participate in the
procurement process from accepting gifts,
gratuities, favors or kickbacks from current
or potential vendors or contracts
Page 7-25
Slide Number #104
© 2007 Nan McKay & Associates
Ethics in Public Procurement
 Penalties should be established &
included in policy for those employees
who breach ethical standards
•
•
•
•
Oral or written warnings/reprimands
Suspension with/without pay
Termination of employment
Dismissal from the office or agency position
Slide Number #105
© 2007 Nan McKay & Associates
HUD Administrative Reform
Initiative
Slide Number #106
© 2007 Nan McKay & Associates
HUD’s Administrative Reform
Initiative
 On July 12, HUD will launch first meeting
to focus on non-statutory administrative
requirements that might be streamlined to
• Better support transition to asset mgmt
• Ensure consistency with norms in multifamily
Slide Number #107
© 2007 Nan McKay & Associates
Administrative Reform – 10 Areas
 Occupancy
 Capital Fund and
Agency Plans
 Resident involvement
and self-sufficiency
 General monitoring
Slide Number #108
 Development and asset
repositioning
 Homeownership
 General management
 Financial management
 Systems
 Structure
© 2007 Nan McKay & Associates
Proposed Rule – Rent Refinement
 Attachment 3
 Issued June 19, 2007
• Applies to public
housing and HCV
• Purpose is to make
EIV mandatory and
more functional
Slide Number #109
© 2007 Nan McKay & Associates
Proposed Rule Would:
 Require all family members, regardless of
age, to disclose and document SSNs
 Require PHAs to get proof of citizenship
or legal status
 Change definition of annual income from
anticipated future income to actual
income received
Slide Number #110
© 2007 Nan McKay & Associates
Civil Rights Monitoring
Slide Number #111
© 2007 Nan McKay & Associates
Civil Rights-Related Reviews
 11/9/2006 & 3/1/2007 – Federal Register
Notices
 6/13/2007 – Final civil rights review
documents posted on www.hudclips.org
• Joint effort by PIH and FHEO to increase
oversight of fair housing issues
 Two checklists – attachment A & B
Slide Number #112
© 2007 Nan McKay & Associates
Attachments A & B
• PIH is planning to conduct civil rights
monitoring reviews of 20 PHAs in fiscal year
2007 (i.e., before September 30, 2007)
• Focus is on reasonable accommodation and
LEP issues
• Data collected helps HUD evaluate PHA
compliance with civil rights and fair housing
laws and regulations
Slide Number #113
© 2007 Nan McKay & Associates
Attachment A
 Attachment A – will be completed by a PIH
reviewer
• Will be completed as part of on-site
comprehensive/consolidated reviews
• PIH reviewer completes form and sends it to
FHEO for review
Slide Number #114
© 2007 Nan McKay & Associates
Attachment A
 The PIH reviewer does not analyze the
answers to the checklist
• However, FHEO “will…take appropriate
action, if necessary” depending on the
responses of the PIH reviewer
• This form leaves some discretion to the
reviewer and FHEO as to what is reported
Slide Number #115
© 2007 Nan McKay & Associates
Attachment A
 Three main fair housing topics covered:
• Notice of fair housing rights to participants
• General fair housing and civil rights
violations and compliance issues
• LEP
Slide Number #116
© 2007 Nan McKay & Associates
Attachment A - Notice
 Questions 1-5:
• FH poster must be displayed
• PHA Agency Plans, policies, regulations and
rules need to be posted and available to the
public as well as participants
• Notice to participants regarding how to file a
fair housing complaint
Slide Number #117
© 2007 Nan McKay & Associates
Attachment A – General FH
 Very broad criteria that is being examine:
• (Part II) “Is there anything else that is related
to civil rights or fair housing that should be
noted…?”
• Form suggests for PIH reviewers to gather
information from “media reports” and
“racial/ethnic tensions” complaints at
developments
Slide Number #118
© 2007 Nan McKay & Associates
Attachment A - LEP
 Asks about LEP four-factor test and asks
PIH reviewer to send in a copy of the
analysis
• Requests copy of LAP
• Inquires into bi-lingual staff
• Inquires into contracts for language services
Slide Number #119
© 2007 Nan McKay & Associates
Attachment B
 Checklist purpose “serves as an alert to
PIH and FHEO to certain PHA practices
regarding Section 504”
• Unlike A, this form is completed by the PHA
and is collected by PIH during its on-site
review
• Results are referred to FHEO for follow-up
Slide Number #120
© 2007 Nan McKay & Associates
Attachment B
 Specific questions regarding:
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•
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Section 504 coordinator
Units meeting UFAS-accessibility standards
Distribution of accessible units
Reasonable accommodation policy/process
 Including how/when RA policy is given to
applicants and residents
Slide Number #121
© 2007 Nan McKay & Associates
Attachment B
 Final question is very broad:
• “What other rules or policies has the PHA
implemented that affect persons with
disabilities?”
• Be prepared to show affirmative steps the
PHA has taken to market to and support
people with disabilities in the community
Slide Number #122
© 2007 Nan McKay & Associates
Attachments A & B
 These forms have expiration date of 2010
 LEP and disability support are issues
HUD/FHEO is taking very seriously
 Show good faith efforts and take
affirmative action – make a plan to deal
with these issues!
Slide Number #123
© 2007 Nan McKay & Associates
Attachment B
 Additional inquiry into:
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•
•
•
•
Service animals
Deposits
TTY
Alternative forms of communication
Mobility support, voucher exts, FMR
exceptions for HCV applicants/participants
Slide Number #124
© 2007 Nan McKay & Associates
Summary
 Q &A
Slide Number #125