Enterprise Income Verification (EIV) - AHACPA · 2019. 2. 22. · HUD Reinstates MORs Letter issued...

PREPARE YOUR CLIENTS FOR MOR BYFOLLOWING AUDIT GUIDELINES

Session Agenda

Reinstatement of MORs Chapter 6 – Project Monitoring (new) Comparisons to HUD Audit Guide Possibly Complete Checklist for

Client…? Chapter 8 – Enforcing Requirements

3

HUD Reinstates MORs

Letter issued to contract administrators indicating HUD’s willingness to initiate MORs on higher-risk projects

Many expected to begin summer of 2016 Most states have not had MORs since 2011 Clients are very concerned about the return of the MOR In many cases 100% of the portfolio was approved for

MOR Properly conducted HUD audits should already have given

some assurance on compliance

4

Conduct of MOR - Handbook 4350.1

Primary handbook used by the field office to monitor and maintain projects

Focus on the HUD/Owner/Management Agent relationship

Goals Maintain housing for target population Protect FHA Insurance funds Ensure satisfactory management Project is in good physical and financial condition Assure compliance with HUD rules Administer subsidy contract

Establish guidelines for MOR

5

HUD Asset Management Activities

Authorizing R4R & residual receipts releases Approving physical changes in the facility Reviewing MIO plans Administer subsidy Intercede for mortgagor Conduct management reviews Ensure fair housing Protect physical security

6

HUD Asset Management Activities, continued

Mortgagor must: Ensure mortgage is paid Insurance is maintained Financial statements are submitted May not discriminate

Mortgagor must: Conduct physical inspections Furnish confirmations to mortgagee Provide evidence of mortgage satisfaction

7


Field office activities: Development of projects Approve transfers of physical assets Property management

Review proposed capital improvements Conduct management reviews Conduct physical inspections Establish rental rates Analyze insurance coverage Other

8


Field office performance monitoring Analyze financial statements Analyze project’s overall performance Analyze subsidy & capital needs

Additional requirements for HUD-held mortgages Escrow analysis Analyze causes of defaults Collect all debt Initiate foreclosure

9

Chapter 6 – Conducting Management Reviews

Monitoring is an integral asset management function

Ensure that project administers HUD programs Applicable for the following programs:

Section 207 Rental Housing Section 213 Coop Housing Section 221(d)(3) and (4) Section 223 and 236 Housing Section 202 & 811 Housing Section 8 Rental Assistance

10

Frequency of Reviews

Within 6 months of initial occupancy Within 6 months of TPA or management When desk reviews indicate risk Identified deficiencies in project operations at

other managed projects Before approval of TPA As necessary to monitor project operations

11

Levels of On-site Reviews

Two categories of reviewsComprehensive, andLimitedComprehensive reviews are a

detailed look at systems and procedures at the project (all sections of Form HUD-9834)Limited reviews are intended to

focus on specific issues

12

Types of On-site Visits

Grouped into 3 categories Management Reviews

Big picture look Policies, procedures and internal control

File Reviews On subsidized projects only Detailed audits of occupancy paperwork Compliance with Handbook 4350.3

Inspections Unit inspections Primarily performed by REAC inspectors

13

Details on File Reviews ROUTINE PROCEDURES SPECIAL PROCEDURES

Application Intake & ScreeningVerification ProceduresApplication of Preferences/Wait ListEligibility & Income CalculationsCalculation of Tenant Rent & SubsidyMove-in ProceduresLeasesCharges Other than RentChange in Contract Rent/Utility AllowanceFile MaintenanceEIV Application

Interim RecertificationsTerminationsMove-out ProceduresSpecial Claims Owner Follow-up on HUD FindingsIncome MixOccupancy Reporting Voucher and 50059 submissionsStaff Training

14

Other File Review Items

Annual financial statement reviews – now primarily performed by REAC with detailed reporting back to the HUB for follow-up on issues noted. May be compliance or score related.

Police Reports, if obtainable. Owners are strongly encouraged to maintain all police reports concerning their project. Issue to be noted include: Physical security issues Arrests and observation of drug use Arrests of illegal aliens

15

Other File Review Items , continued

Tenant complaint files (either in tenant files or separately)

Issues to be noted include: Physical Security Maintenance (decent, safe, sanitary housing) Presence of lead paint Fair Housing Issues 504 Discrimination Mobility issues Drug use

16

Determining Scope of Review

Reviews should be tailored for: Physical and financial conditions Past performance of the agent in place Any other purpose for conducting the review

Other conditions for adapting the review Unfamiliar/new agent – all tasks on a comprehensive review Familiar agent – limited management review – sample of

more important management tasks (internal controls, budgets, preventative maintenance, tenant issues

Cash flow issues – operating expenses, costs controls, review of cancelled checks

Vacancy rate Turnover Unusually high accounts receivable Excessive capital replacement costs

17

Management Review Form HUD 9834

Three parts Desk review, On-site review & Summary

report Assess adequacy of owner agent

operations in seven categories General appearance & security Follow-up and monitoring of inspection Maintenance & SOPs Financial management & procurement Leasing & Occupancy Tenant/management relations General management practices

18

Management Review Process

Notification to owner (Addendum C of Form 9834)

Desk Review (submitted forms and IREMS) On-site Review (targeted items from desk review)

Complete sections of 9834 May include: Addendum A – Tenant File Review Checklist Addendum B – Checklist for On-site Limited

Monitoring and Section 504 Review Addendum C – Documents to be available Addendum D – State Lifetime Sex Offender Statistics

Follow-up on physical inspections

19

Steps in the Review

Each review consists of 3 steps Desk Review On-site review with Addenda Summary Report

Reviewers of subsidized projects must complete Addenda (A, B, C & D)

Unsubsidized projects must complete B & C only

20

Notification and Request for Information

Notify Project of pending review Submit request to documents to be

delivered

21

Assess Seven Categories

Assess adequacy of owner/agent operations as follows:1. General appearance & security2. Follow-up and monitoring of project

inspection3. Maintenance & SOPs4. Financial management & procurement5. Leasing & Occupancy6. Tenant/management relations7. General management practicesTime for Question #2

22

COMPARISON OF FORM HUD-9834 TOHUD AUDIT GUIDE PROCEDURES

Part I – Desk Review HUD-9834 AUDIT GUIDE PROCEDURES

Recent PASS ScoreAny EH&S issues noted?Lead-based paint (Sec 8 or elderly only)Financial statement required (FASS score)Timely report submission Audited statements Monthly accounting reports Excess Income Annual operating budget, if requiredAudit findings and OIG auditsReasonable operating expenses

Included in management functionsIncluded in management functionsGenerally not mentioned

Clearly included, score unavailable

All included in the HUD Audit Guide

Included in the GuideAlthough not technically included in Guide, it is implied that costs are reasonable

24

Part I – Desk Review, continued

HUD-9834 AUDIT GUIDE PROCEDURES

Other indicated financial issuesDo project operating expenses appear reasonable compared to similar project?Does annual financial analysis or FASS printouts indicate that project is free of actual or potential financial problems?If the owner/agent has taken unauthorized distributions, reimbursements, or supervision fees, have these been repaid?If applicable, have all deposits due to the residual receipts fund been made?

Not In Audit GuideNot in Audit Guide

Not in Audit Guide

Part of Equity Skimming

In Audit Guide

25



Based on the last FASS submission, are accounts payable reasonably current?Does the balance in the security deposit trust account equal or exceed the project’s liability account?If security deposits are invested in an interest-bearing account, is interest passed through to tenants or transferred to project account?Have the owner and managing agent executed and submitted an appropriate Management Certification (Form HUD-9839A, B, or C) to HUD?

Not really covered but in SCC

In Audit Guide

In Audit Guide

In Audit Guide

26



Is the management fee paid to the agent in accordance with the Management Certification?Has the owner and management agent executed a management agreement in accordance with the management certification?Does the management agreement reflect HUD’s regulations and guidelines?Has a management entity profile been submitted to HUD?Do the Management Entity Profile and Management Certifications clearly describe the relationships and responsibilities of the owner and agent?

In Guide

Not really in Guide, but implied (should have abstracts)

Not really in Guide, but impliedIn Audit Guide

Not really in Guide, but implied

27



Have the principals and board members listed received HUD-2530 approval?Is the agent charging the project for expenses which the agreement requires the agent to pay?Has the project’s mortgage been restructured?Is the owner eligible for incentives?Does the HUD billing statement (HUD-92771) indicate timely and accurate payments toward the Mortgage Restructuring Note?

Not in Audit Guide

Not in the Guide (implied)

Not in Audit GuideNot in Audit Guide

In Audit Guide, but only M2M

28



If an owner is in non-compliance with HUD business agreements, has the owner been notified by HUD within the required timeframes?Are rent increase requests submitted to HUD promptly when needed?If approval is required, are rent increase requests submitted promptly?Do balances in replacement or general operating reserve accounts appear adequate to meet future needs?

Required by Audit Guide chapter 2

Not in Audit Guide (is in Single Audit)

Not in Audit Guide (is in Single Audit)

Not really addressed

29



Are repairs consistently paid from the appropriate operating expense account, and eligible items reimbursed from the reserves?Has the owner/agent performed an analysis to determine future Reserve for Replacement needs when submitting a budget based rent increase?If there is a utility allowance, what is the effective date of last utility allowance adjustment?What is the effective date of the last rent adjustment?

Not really in Audit Guide

Not in Audit Guide

Not in Audit Guide (Is in Single Audit)

Not in Audit Guide

30



Is the current approved rent schedule sufficient to meet project needs?Has a special rent increase been approved?Are monthly rental subsidy vouchers submitted on time?Is the owner/agent submitting tenant certification data to TRACS to support the voucher billings?Is the owner/agent transmitting data for Section 236 and Section 221(d)(3) BMIR tenants to TRACS as required by the automation rule?

In Audit Guide

Not in Audit Guide

In Tenant File Testing

Not really addressed, voucher is

Not really mentioned

31



What is the term of the subsidy contract?List vacancy activity for the past twelve months, and indicate the number for each month.Does review of the EIV reports listed below include information that needs a resolution or explanation by the owner/agent?Are there any unresolved findings from previous management review?Review complaints, congressional inquiries, etc. received within the last 12 months regarding the overall management practices.

Not specific, but required

Not required by Audit Guide

Not in Guide due to age, but CPAs are testing

Audit Guide chapter 2 requires these questions

32

Part II – On-site ReviewHUD-9834 AUDIT GUIDE PROCEDURES

Indicate below to confirm that there is a schedule for preventative maintenance/servicing for the items listed that are applicable.Is there a satisfactory inventory system to account for tools, equipment, supplies, and keys (serial numbers, bar codes, etc.)?Has the owner/agent secured inventory items, such as appliances and tools, to prevent theft?Does the owner/agent have a written procedure that explains the process for inspecting units?

Not really in Audit Guide – work orders are required

Not required by Audit Guide

Not really required

Required in tenant file testing

33

Part II – On-site Review, continued


How often are units inspected?If deficiencies are noted during a unit inspection, what is the procedure for correction?What is the average number of days from move-out until the unit is ready for occupancy?Is there a written procedure for completing work orders?Is there a procedure in place to handle emergency work orders?Is there a backlog of work orders?


Not required in Audit Guide

Management functions

Not specific in Audit Guide

Good question

34



Who is provided copies of completed work orders?Is there documentation by unit that indicates the date of purchase, manufacturer, model, and serial number for appliance purchases (i.e., ranges, refrigerators, furnaces, air conditioners, hot water heaters, etc.)How many units were vacant on the date on the on-site visit?Walk through at least two vacant units that are ready for occupancy. Assess and document unit readiness.

Not in Audit Guide, but good control

Not in Audit Guide

Not in Audit Guide

Good Question

35



Based on the interview with on-site staff, are any of the factors listed below contributing to vacancy problems?Based on the responses from the three previous questions, what actions are being taken by the owner/agent to resolve the issue(s)?Has management attempted to reduce energy consumption?Does the owner/agent’s staff have access to the current operating budget in order to monitor and control expenses?

Good question, not in Audit Guide

Good Question

Not really a concern

Not in Audit Guide, but a key control

36



Is an operating budget prepared annually and approved by the owner?Are monthly or quarterly reports prepared by the owner/agent indicating variances between actual income and expenses versus budgeted income and expenses?If this is a 202 or 811 project, does the owner/agent maintain a current annual budget?Are collections deposited on the day received or, pending deposit, are they secured and properly controlled?



Not mentioned in Compliance SupplementSee Audit Guide cash receipts testing

37



Are adequate controls in place when cash is accepted?Do different persons handle bank deposits and accounts receivable, or is an alternative safeguard used?Are all disbursement checks prenumbered, properly identified with account numbers and supported by vouchers or invoices?Is the supply of unused checks adequately safeguarded, or under the custody of persons who do not sign checks manually, control the use of facsimile signature plates, or operate the facsimile signature machine?

Required by Audit Guide

Control required by Handbook 4370.2



38



Are funds (receipts, disbursements, petty cash, etc.) periodically checked on a surprise basis by a responsible official, other than site employees?Are bank statements reconciled promptly upon receipt by someone other than a check signer, and by one who has no cash receipt or disbursement function?Are bills including the mortgage payment, paid in sufficient time to avoid late penalties?Are operating expenses, including taxes and utilities, periodically reviewed to assure that project is paying the lowest possible rate?

Control, not in Audit Guide

Not in Guide, but good control

In Audit Guide, cash disbursements testing

Not in Audit Guide

39



What is the procedure used to obtain and award contracts?Are bids obtained prior to awarding contracts?Is there a written procedure for checking the quality of work performed by a contractor prior to authorizing payment?Is there a procedure to assure that the individual authorizing contracted work or services is not the same individual authorizing payment?Does the project maintain a list of outside contractors?

Not really in audit Guide. Is part of Uniform GuidanceNot really in audit Guide. Is part of Uniform Guidance

Not really in audit Guide. Is part of Uniform Guidance

Not really in audit Guide. Is part of Uniform Guidance

Not in Audit Guide (key may be IOIs)

40



Are vendor bills paid in time to obtain maximum trade discounts?Is there any indication that real or personal property has been subtracted from the mortgaged premises without the permission of the Department?Below, check services currently contracted with outside contractors and provide the name of the contractor and the annual amount of the contract.Does the procedure for write-off of bad debts appear reasonable?


Is in Audit Guide (Unauthorized Loans of Project Funds & Equity Skimming)

Not really in Audit Guide, but may be implied


41



Has annual “write-off of tenants” accounts receivable for the last two fiscal years been less than 1% of gross rent potential?Are accounts payable reasonably current?Are books and records maintained as required by HUD Handbook 4370.2 (Chapter 4) and 24 CFR part 5?Are all required project accounts in the name of the project in a federally insured institution?

Is in Audit Guide, but at different percentages


Required as a part of the audit

Required by Audit Guide and Single Audit

42



Are operating funds, security deposits, reserve funds, and flexible subsidy funds maintained in separate accounts and properly secured for authorized use?Does the mortgagor make frequent postings (at least monthly) to the ledger accounts?If applicable is the owner adhering to HUD-approved repayment Plan?Is centralized accounting used for disbursements?If centralized accounting is used, has it been approved by HUD?

In Audit Guide and Single Audit

Not really in Audit Guide, but required by Regulatory Agreement

Not in Audit GuideNot really mentioned specifically, but implied in cash disbursement


43



If centralized account is used, is it being administered in accordance with HUD’s approval?If the trust account is part of a centralized disbursement account, are only HUD-insured projects in that account?If there are automobiles and/or debit or credit cards charged to the project, are the titles kept in the name of the project?Does the application form contain sufficient information to determine applicant eligibility?

Not really mentioned in Audit Guide, but is in Regulatory Agreement

Not really mentioned, but is required in documents

Not really mentioned, but is required in documents

Is in tenant file tesitng

44



Does the application ask whether the applicant or any member of the applicant’s household is subject to a lifetime of state sex offender registration program in any state?Does the application ask for a listing of states where the applicant and members of the applicant’s household have resided?Is form HUD-92006 “Supplement to Application for Federally Assisted Housing”, an attachment to the application or part of the application package?

Not specifically mentioned in the Audit Guide

Not specifically mentioned

Not in Audit Guide

45



Is there an arms length procedure between the person who denies an application and the application appeal reviewer?Has the owner/agent leased a Section 8 unit to a police officer or security personnel who is over the income limits for the project?Does the owner/agent have a written tenant selection plan?Does the project maintain a waiting list of prospective tenants?Enter the number of applicants on the waiting list for each type of unit

Not in Audit Guide

Is not specifically mentioned, but is generally understood

In Audit GuideIn Audit Guide

46



Were the applicants selected from the waiting list in the proper order, recognizing applicable preferences?When preferences were applied, were they properly documented?Is documentation available to show that the owner/agent has leased not less than 40% of the Section 8 units that became available for occupancy in the previous fiscal year to extremely low-income families?What marketing steps has the owner/agent taken to attract extremely low-income families?

In Audit Guide

In Audit Guide

In Audit Guide – Extremely Low Income

Was in Fair Housing

47



Does the advertising program comply with the existing Affirmative Fair Housing Marketing Plan?Is the fair housing sign posted in the rental office?Is the fair housing logo included in published advertising materials?Have modifications been made to the HUD model lease?Aside from rents and security deposits, what other charges are assessed (replacement keys, lockouts, etc.)?

Was in Fair Housing – Now Removed



Lease is in Audit Guide, no specifically mentioned

Not specifically mentioned (See 4350.3 Q&A)

48



If other charges aside from rents and security deposits are assessed, have they been approved by HUD?Are rents collected in accordance with provisions of the lease?Is the policy for late fee assessment in compliance with the Handbook 4350.3 REV-1 or with state/local requirements?Are damages caused by tenants properly identified and charged to tenants?

Not specifically mentioned, but implied

In Audit Guide – tenant file testing


Mentioned in move-out and security deposits

49



Are tenants notified of termination of tenancy or assistance in accordance with HUD requirements?Has the owner/agent pursued eviction or termination of assistance for all individuals subject to a lifetime sex offender registration requirement who were erroneously admitted after June 25, 2001?Are eviction procedures initiated timely, when warranted?Is the termination of assistance initiated timely when warranted?

In Audit Guide

In Audit Guide

Not really mentioned in the Guide

Implied in termination testing

50



Does the owner/agent have access to EIV?Does the EIV Coordinator(s) have an owner approval letter(s) authorizing access to EIV?Does the owner/agent and/or EIV Coordinator have:Is there evidence that staff with access to the EIV system or to EIV reports take annual security awareness training?

Not in Audit Guide

Not in Audit Guide

Not in Audit Guide

Not in Audit Guide

51



Does the owner/agent have security measures in place to limit access to EIV information and reports to only those persons who have proper authorization?Does the owner/agent have a procedure to review all EIV User IDs to periodically determine if the users still have a valid need to access EIV data?Does the owner/agent terminate access promptly (within 30 days) of all users who no longer have a valid need to access EIV data?

Not in Audit Guide

Not in Audit Guide

Not in Audit Guide

52



Does the owner/agent have a procedure to document and report the occurrence of all improper disclosures of EIV data?Does the owner/agent have a procedure to report any occurrence of unauthorized EIV access or security breach to the HUD National Help Desk?Is there evidence that the owner/agent or any of their employees are sharing IDs and passwords?

Not in Audit Guide (Consent, Consent, Consent)

Not in Audit Guide

Not in Audit Guide

53



Is EIV data being improperly shared with other entities (e.g., state officials monitoring LIHTC projects, RHS staff, or Service Coordinators not participating in the re-certification process)?Does the owner/agent keep in the tenant file the Tenant Consent for Disclosure of EIV information, signed by the tenant and a third party when a third party assists in the re-certification process?

Not in Audit Guide

In Audit Guide – sort of

54



Does the owner/agent have policies and procedures describing the use of EIV employment and income information and the EIV reports?Is the owner/agent using the following EIV reports, and taking appropriate action to correct discrepant data in TRACS, and/or to reduce improper subsidy payments and where applicable, retaining documentation to support the action(s)?Is the owner/agent using TRACS queries to review and monitor their transmission?

Not in Audit Guide

Not in Audit Guide

Not in Audit Guide

55



Is the owner/agent following up and correcting deficiencies identified in TRACS data?Is the owner’s/agent’s “Rules of Behavior for TRACS” current (within last 12 months) and on file?Is the owner’s/agent’s completed annual TRACS “Security Training Certificate” current, on file and dated within 30 days of the date of the “Rules of Behavior”?Are the tenant files, as well as other files that contain EIV reports, if applicable, locked and secured in a confidential manner?

Not in Audit Guide

Not in Audit Guide

Not in Audit Guide

Not in Audit Guide

56



Is documentation relating to an individual’s domestic violence, dating violence, or stalking, kept in a separate file in a secure location from other tenant files?Is access to tenant file information limited to only authorized staff?Who is authorized to have access to the tenant files?Is the owner/agent maintaining tenant files according to HUD’s document retention requirements?

Not in Audit Guide

Not in Audit Guide (Single Audit PPI)

Not in Audit Guide

Not in Audit Guide

57



Is the owner/agent properly disposing of tenant records (shred, burn, pulverize etc.)?Are the tenant files organized and properly maintained?Do the files contain all documentation as required in Handbook 4350.3 REV-1, applicable HUD Notices, and any changes to the CFR?Are the applications in the files signed and dated by applicant?Is screening conducted in accordance with the Tenant Selection Plan?

Not in Audit Guide

Not in Audit Guide, but implied


In Tenant File Testing

In Fair Housing

58



Are the unit sizes appropriate for household composition at the time of this tenant file review?If a household was ineligible at move in, were exceptions granted?Are the correct model leases used?Are the leases signed and dated by all required parties?Are HUD issued lease addenda properly signed and in the file?Are the applicable addenda attached to the lease?Are security deposits collected in the correct amount for the program?

Not in Audit Guide


In Audit Guide

Not Specific

In Audit Guide

59



Are pet deposits within acceptable range and payment installments allowed?Do the tenant files contain signed acknowledgement(s) and/or copies as required of the following documents indicating receipt by the tenant?Are re-certification notices issued in accordance with HUD requirements?Are certifications completed on time?Are all necessary verifications completed and properly documented?


Not mentioned

In Audit Guide

In Audit Guide

In Audit Guide

60



Are EIV Income Reports used for third party verification of employment and income?If the tenant disputed the EIV employment and/or income reported in EIV, was a third party verification obtained from the source?Are appropriate actions being taken for income discrepancies reported on the EIV Income Discrepancy Report, and is the action documented?

Not in Audit Guide

Not in Audit Guide

Not in Audit Guide

61



Are income and deductions calculated correctly prior to data entry?Does income information on the tenant certification agree with verified file information?If tenants were granted a hardship exemption as part of the minimum rent, was the exemption applied correctly?Are Repayment Agreements in accordance with HUD requirements?

In Audit Guide

In Audit Guide, but not spcefically



62



Are notices provided to tenants in accordance with HUD tenant notification requirements when their portion of rent has increased?Are the correct contract rents used when determining the subsidy to be paid on behalf of tenants?If tenants are paying their own utilities, are the current certifications reflecting the correct utility allowances?Are utility reimbursement checks distributed within 5 business days of receipt of the housing assistance payments?

In Audit Guide

In Audit Guide

Not in Audit Guide

Not in Audit Guide

63



Are there any deficiencies noted in the tenant file review that results in over payment or under payment of the subsidy?For the move-in/move-out tenant file review, does the owner/agent make appropriate voucher adjustments?Are proper income limits used for determining eligibility at move-in?Doe the files contain move-in inspections?

This is mentioned at least by reference


Included in the Audit Guide

Included in Audit Guide

64



If the files contain move-in inspections, have the owner/agent and the tenant signed and dated the inspection?Do the move-in files created after January 31, 2010 indicate that the owner/agent utilizes the EIV Existing Tenant Search for all household members and applicants?Do tenants provide written notice of intent to vacate in accordance with the HUD model lease?Are move-out inspections conducted?

In Audit Guide

Not in Audit Guide

Not in Audit Guide

Included in Audit Guide

65



Are security deposits refunded in 30 days or less if required by state law?Are tenants provided an itemized list of charges against the security deposits?If charges exceed the security deposit, are the tenants billed for the balance due?Are applicants denied admittance in accordance with the Tenant Selection Plan?Do rejection letters provide applicants the right to appeal?

In Audit Guide

In Audit Guide

In Audit Guide, but not directly

Included in the Audit Guide

No specifically mentioned

66



If applicant appealed an application rejection, was the appeal reviewed by someone other than the person who made the original decision to reject?Were appeals processed and applicants notified of the appeal decision within 5 days of the meeting?Is there a written procedure for resolving tenant complaints or concerns?Does the procedure adequately cover appeals?

No specifically mentioned




67



Is there an active tenant organization at this project?Is tenant involvement in project operations encouraged?What social services are provided by the project, or the neighborhood, which meet the tenants’ needs?Is there a Service Coordinator for the project?Is the Service Coordinator’s office clearly identifiable and private?Are the Service Coordinator’s files kept secure and confidential?

Not specifically mentioned, nor generally that materialNot specifically mentioned, nor generally that material

Not specifically mentioned, nor generally that materialNot specifically mentioned, nor generally that materialNot specifically mentioned, nor generally that materialNot specifically mentioned, nor generally that material

68



Does the Service Coordinator maintain a directory of service agencies and contacts, and make the information available to all parties?If there is a Neighborhood Networks Center as indicated on the Desk Review, what is the status of operations?What programs are offered at the Neighborhood Networks Center?The Department allows owners and their agents to provide services related to renter’s insurance products. Does the owner/agent offer such services?

Not specifically mentioned, nor generally that material


Not specifically mentioned, nor generally that materialNot specifically mentioned, nor generally that material

69



HUD policy prohibits an owner/agent from evicting tenants for delinquent renter’s insurance payments. How does the owner/agent deal with unpaid renter’s insurance?Review the renter’s insurance information provided to tenants. Does the information provided to tenants clearly indicate that purchasing insurance is optional, and not required as a condition of occupancy?Have the complaints, as noted on the Desk Review, been satisfactorily resolved?




70



Is the project staff able to adequately perform management and maintenance functions?How does the owner/agent implement HUD changes in policies and procedures?Does the owner/agent have a formal ongoing training program for its staff?Are reports submitted to the owner form the management agent?Are there signs enabling persons to locate the office?






71



Are after hours and emergency telephone numbers posted?List the current insurance coverages(property, liability, Directors and Officers, workman’s compensation, automobile).Does the owner/agent have a fidelity bond?If the project is owned by a cooperative or a nonprofit entity, does the Board of Directors meet regularly and record minutes?


Included in the Audit Guide –management functions

Included in the Audit Guide –management functions

Not in the Audit Guide

72



Review copies of the minutes. Does a review of the minutes indicate compliance with HUD’s business agreements?Does the owner/agent have a system or procedure for providing field supervision of on-site personnel?Has management made an effort to employ tenants in accordance with Section 3 of the Housing and Community Development Act of 1968?List all on-site staff charged to the project. (Use additional sheets if necessary).

Included in the Audit Guide, but only in distributions

Not in Audit Guide

Not in Audit Guide

Not in Audit Guide

73



Does the staffing chart above match Part D of the Rent Schedule, form HUD-92458 as it relates to non-income producing units?

Not being reviewed

74

Notification to Owners/Agents

Conduct close-out session Written report to owners & management agent Completed within 30 days

75

Communicating Results

Must follow Yellowbook finding reporting (condition, criteria, cause, effect, CAP)

Performance indicators Superior (90-100) – consistent policies, highly

successful, strict adherence to policies, compliant w/ lead-based paint, exceptional condition, few errors, up-to-date AFHMP and active outreach

Above average (80-89) – successful policies, adheres to procedures, lead-based paint, good condition, minimal errors, AFHMP available, demographic records

76


Performance indicators Satisfactory (70-79) – Carrying out HUD

objectives Policies exist, but not always adequate Submitted lead hazard plan Observable EH&S errors, but owner is

addressing Some deviation from policies, but willing to

correct AFHMP is available

77


Below average (60-69) Ineffective policies and procedures, do not meet

requirements Frequent delays to comply with HUD requirements Repeat majors adverse findings Open findings from prior year reviews Failed to comply with lead hazard Substantial EH&S major deficiencies Requires significant changes AFHMP available, but not used

78


Unsatisfactory (50-59) Failure to act places HUD’s interest in danger Major adverse findings in financial management,

including mortgage default, diversion of project funds, unauthorized distributions, underfunded reserves, failure to file AFS

Repeat major findings or open findings No lead hazard control plan MANY EH&S findings Failure to meet code requirements No approved AFHMP

79

Rating Categories

General appearance & security 10% Follow-up and monitoring of inspection 10% Maintenance & SOPs 10% Financial management & procurement 25% Leasing & Occupancy 25% Tenant/management relations 10% General management practices 10%

80

Limited Review Ratings

Reviews used to supplement contract administrator reviews

Usually includes financial management / procurement

Combined with REAC filing (local HUD office is responsible to review statements)

81

Selecting Properties to Review

Factors to consider Cost of review Risk assessments from OPIIS Financial performance and compliance New property Change in control Change in ownership Physical condition & related compliance Knowledge of operations Tenant feedback Subsidy type

82

Actions to be Taken After Review

No deficiencies, no action Deficiencies must have responses Provide documentation to support corrections Appeals process

Must be in writing and explain factual basis Field office and CA responsible to evaluate Decision in writing Final appeal to HUB director within 15 days of initial

appeal decision

83

Actions to be Taken for Failure to Respond

Replace management agent Flags in APPs Refer owner/agent to DEC May also refer to troubled status

84

85

BACK TO YOUR REGULARLY SCHEDULEDPROGRAM

87

RETURN TO PRESENTATION

89

RETURN TO PRESENTATION

Chapter 8 – Enforcement of Requirements

Use all tools to detect violations (financial, inspections, CA reviews, etc.

Notify in writing Review all explanations When violation has been established

Notify owner that explanations were inadequate Notice to correct (usually 10 days) Third party verification of compliance Impose civil money penalties Double the income or assets used in violation May impose criminal penalties

91

Chapter 9 Monitoring Civil Rights

On-Site Monitoring Review FHEO Field Office Multifamily Housing Contract Administrator

Front-end Review Use AFHMP checklist Review for completeness and forward to FHEO Final review and communicate to owner

92

Chapter 9 Monitoring Civil Rights Monitoring tools

AFHMP (HUD 935.2A) in book Update every 5 years Onsite monitoring – Section 504 checklist

Section 3 Monitoring Section 202 and 811 – requires owners to try to employ low and very low

income persons Applies to owners with assistance > $200,000 Used for construction, rehab Applies to contractors and subcontractors Must hire 30% of new hires. 10% of contracts GP or agent with 500 units or more should hire 30% of new hires File HUD Form 60002

93

Date post:	25-Feb-2021
Category:	Documents
Upload:	others
View:	5 times
Download:	0 times