Governance and financial management Board of Commissioner Training 1

Governance and financial management Board of Commissioner Training

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To provide the Board with an overview of:

Training Objective

Training context

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Fundamental Concepts of Oversight

• Governance and finance are the basis of any Public Housing Agency’s (PHA) success.

• The Board of Commissioners has the ultimate responsibility for the PHA’s performance and is accountable to the community.

• The Board sets the operational norms, rules, and values of the PHA.

• The Board establishes policies and internal controls to implement programs and ensure integrity.

• Knowledge is Power

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PHA Governance Basics

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Overview of Board Role• Legally and financially responsible governing

body• Power of the Board is vested in all members as

a body, not individuals• In the accomplishment of its mission, the Board

has the functions of:

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Knowledge is power- be informedBoards should know and review:

• Agency’s history, mission, vision, values, programs, financials and current strategic plan

• Roles and responsibilities of the Board and individuals

• Key staff roles in the programs of the agency

• Agency-owned developments and properties

• Agency records and documents

• Board & committee meeting processes, including open meeting requirements and confidentiality

• Agency printed materials

Desirable qualities for CommissionersRecommended qualities/assets:• Skills to help the agency’s administration

(financial, reporting, legal)• Skills to help the agency’s outreach & marketing

(speakers, media contacts)• Skills to help the agency’s service provision

(service experts, training contacts)

Experience:• Past service to other agencies• Known reputation• Community connections• Knowledge/skills/abilities needed by agency

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Roles and Responsibilities

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Roles and Responsibilities

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Governance: Lines of responsibility

Commissioner Executive Director

• Select and hire an Executive Director

• Evaluate Executive Director performance

• Approve by-laws, resolutions, policies and procedures

• Approve the authority’s budget

• Set basic PHA policies

• Govern PHA

• Manage the day to day operations

of the PHA

• Hire, evaluate, train, and terminate

staff

• Prepare operating budgets

• Resident selection

• Manage facilities and maintenance

• Develop and manage resident

Programs

• Collect rents and enforce terms of

leases

• Procure annual audit

• Advise Board of regulatory changes

• Execute Board approved policies

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Fundamentals of Oversight

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Commissioners should know:

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Public housing historical context

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Established permanent public housing funded by the Federal government

Established the U.S. Department of HUD

Reformed public housing legislative requirements

1937 1965 1998

Statutes and Regulations• U.S. Housing Act of 1937 as amended

• Amendments to the Act include the Section 8 Housing Choice Voucher Program

• Quality Housing and Work Responsibility Act of 1998

• Fair Housing Act and subsequent civil rights and disability law

• Title 24 Code of Federal Regulations (CFR)

• Annual appropriations law

• State Laws and Local Ordinances

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Annual Contributions Contract (ACC)•A legal binding contract between HUD

and the PHA

•States PHA obligations andremedies for breaches of contract

•Mechanism through which thePHA receives funding

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Obligations under the ACC •Include but are not limited to:

• Cooperation agreements• Operating budgets• Depository Agreements and General Fund• Pooling of funds• Books of account, records, and government

access• Notices, defaults, remedies• Conflict of Interest

• ACC term extends each year funds are accepted

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Remedies under the ACC

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Include but are not limited to:• A reduction in the amount of the HUD payment for any

funding increment

• A reduction in the contract authority or budget authority for any funding increment

• Other available remedies include:• limited denial of

participation

• suspension or debarment of Board or staff

• taking of possession and control of project(s) by HUD

• receivership

• consolidation

• consortia/joint venture

• contracting of operational activities

• Cooperative Endeavor Agreement

PHA Policies and Procedures• Admissions &

Continued Occupancy Policy (ACOP)

• Section 8 Housing Choice Voucher Administrative Plan

• PHA Plan (Annual and 5 year)

• Others

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Public Housing PoliciesIncluding but not limited to:

• Capitalization• Drug Free Work Place• Financial Management and Internal Controls• Investments• Maintenance• Personnel• Procurement• Property Disposition• Records Retention• Travel• Vehicle

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Programs and Performance

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How PHAs Are Funded

Federal Sources of Revenue (Restricted)

•Operating Subsidy•Capital Fund•Housing Choice Voucher Housing

Assistance Payments•Housing Choice Voucher Administrative

Fees•Resident Program grants•Development grants

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Know your PHA

• PHA programs (Federal, State, Local)• Number of AMPs and units• Budget• Staff size • Major plans and projects underway• Program performance measures and

scores

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PHA Program Performance

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Section 8 Management Assessment System

Public Housing Assessment System

Measurement Performance in housing choice voucher program

Performance in operations: financial, physical, management, Capital Fund

Scoring High Performer - 90% or more

Standard Performer - 60-90%

Troubled Performer – less than 60%

High performer- 90% or more overall

Standard performer- 60-90%Substandard performer- at least 60% overall with less than 60 for 1+ indicators

Troubled- less than 60% overall

Capital Fund Troubled- less than 50% on Cap Fund indicator

*Emphasis on occupancy as measured by 2 indicators (CFP and MASS)

Board Oversight Reports*

• Monthly financial report• Summary of income statements for admin and

major programs• Latest bank reconciliation• Check vouchers issued• Tenant accounts receivable

• Monthly asset management report• Occupancy• Modernization schedule and units off-line

*Suggested--Board determines required reports

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Board Oversight Reports*

• Monthly contracting and procurement report▫Obligation and Expenditure deadlines▫Contract awards and progress

• Monthly compliance report▫Outstanding audit findings (financial audits,

HUD, OIG)▫Repayment agreements

*Suggested--Board determines required reports

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The Outcome

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Case Study-FASS Score

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Case Study- MASS Score

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Case Study- Occupancy

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Case Study- P2P

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  Peer to Peer Financial Review  Anytown Housing Authority FYE 2011

    Anytown Housing Authority  A DifferenttownHousing Authority    Project Total Analysis  Project Total Analysis                         430 PH Units                                      435 PH Units  

               FDS

DescriptionProject  Project    Project  Project   

Line Totals Totals % Totals Totals %Number   FYE 2010 FYE 2011 Change FYE 2010 FYE 2011 Change70300Net Tenant Rental Revenue $885,223 $560,571 -36.67% $883,987 $920,621 4.14%70400Tenant Revenue - Other $54,381 $44,068 -18.96% $160,583 $176,336 9.81%70500Total Tenant Revenue $939,604 $604,639 -35.65% $1,044,570 $1,096,957 5.02%

       70600HUD PHA Operating Grants $1,129,741 $1,117,725 -1.06% $1,926,596 $1,817,232 -5.68%70610Capital Grants $0 $0 $0 $0  70710Management Fee      70720Asset Management Fee      70730Book Keeping Fee      70740Front Line Service Fee      70750Other Fees      70700Total Fee Revenue      

       70800Other Government Grants $0 $0    71100Investment Income - Unrestricted $2,731 $1,955 -28.41% $11,667 $8,662 -25.76%71200Mortgage Interest Income $0 $0    71300Proceeds from Disposition of Assets Held for Sale $0 $0    71310Cost of Sale of Assets $0 $0    71500Other Revenue $24,471 $24,165 -1.25% $114,355 $126,221 10.38%71600Gain or Loss on Sale of Capital Assets $0 ($15)    72000Investment Income - Restricted $0    70000Total Revenue $2,096,547 $1,748,469 -16.60% $3,097,188 $3,049,072 -1.55%

Case Study- Budget and Trend Analysis

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  Anytown HA                                  Total HA Revenue vs. Expense Analysis    430 PH Units                         Expense HA HA HA HA HA  Description FYE 2009 FYE 2010 FYE 2011 FYE 2012 Case Study    Audited Audited Audited Budget  70300Net Tenant Rental Revenue $1,007,895  $885,223  $560,571  $498,780  70400Tenant Revenue - Other $60,048  $54,381  $44,068  $22,500  70500Total Tenant Revenue $1,067,943  $939,604  $604,639  $521,280  

             70600HUD PHA Operating Grants $1,167,836  $1,189,159  $1,117,725  $664,240  70610Capital Grants $0  $0  $0  $0  70710Management Fee $216,012  $296,810  $350,213  $272,866  70720Asset Management Fee $70,215  $0  $0  $51,600  70730Book Keeping Fee $36,196  $36,285  $38,146  $37,800  

  CFP Management Fee $0  $0  $0  $0  70740Front Line Service Fee $0  $0  $0  $0  70750Other Fees $0  $0  $0  $0  70700Total Fee Revenue $1,490,259  $333,095  $388,359  $362,266  

             70800Other Government Grants $0  $0  $0  $0  71100Investment Income - Unrestricted $1,958  $10,601  $15,250  $10,030  71200Mortgage Interest Income $0  $0  $0  $0  

71300Proceeds from Disposition of assets Held for Sale $0  $0  $0  $0  

71310Cost of Sale of Assets $0  $0  $0  $0  71400Fraud Recovery $0  $0  $0  $0  71500Other Revenue $5,079  $24,471  $95,854  $165,107  71600Gain or  Loss on Sale of Capital Assets $2,200  $0  ($15) $0  72000Investment Income - Restricted   $0  $0  $0  70000Total Revenue $2,567,439  $1,307,771  $1,104,087  $1,058,683   

Case Study- Trend Analysis

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Expense                     Anytown Housing Authority Description                                 Total HA Revenue vs. Expenditures 

  HA HA HA HA  FYE 2009 FYE 2010 FYE 2011 FYE 2012  Audited Audited Audited  Budget

70500 Total Tenant Revenue $1,067,943  $939,604  $604,639  $521,280          

70000 Total Revenue $2,738,166  $3,519,736  $2,746,327  $2,028,141          

91000 Total Operating - Admn $791,136  $958,623  $1,027,445  $1,099,911          

92000 Asset Mgt Fee $70,215  $0  $0  $51,600          

92100 Total Tenant Services $5,658  $0  $37,551  $75,900          

93000 Total Utilities $97,781  $105,855  $107,530  $101,360          

94000 Total Maintenance $536,462  $666,906  $861,566  $828,242          

95000 Total Protective Services $86,792  $95,291  $146,868  $130,000          

96100 Total Insurance Premiums $100,071  $101,843  $100,707  $117,644          

96200 Total Other General Expenses $114,416  $131,241  $55,482  $70,062          

96900 Total Operating Expenses $1,802,531  $2,059,759  2,337,149 2,474,719         

97000 Excess (Deficiency) of Revenue over Operating Expenses $935,635  $1,459,977  $409,178  ($446,578)

9000 Total Expenses $2,465,294  $2,706,380  $3,183,727  $2,474,719          Total Expenses Excluding Depreciation $1,834,185  $2,091,442  $2,498,293  $2,474,719          

Excess (Deficiency) of Total Revenue (Less Depreciation) $903,981  $1,428,294  $248,034  ($446,578)

HUD-PIH

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