Governance and financial management

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Governance and financial management

• Board of Commissioner Training

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Training Objective
To provide the Board with an overview of
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Training context
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Fundamental Concepts of Oversight

• Governance and finance are the basis of any
  Public Housing Agencys (PHA) success.
• The Board of Commissioners has the ultimate
  responsibility for the PHAs 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 informed

• Boards should know and review
• Agencys 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

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Desirable qualities for Commissioners

• Recommended qualities/assets
• Skills to help the agencys administration
  (financial, reporting, legal)
• Skills to help the agencys outreach marketing
  (speakers, media contacts)
• Skills to help the agencys 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 authoritys 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
1937
1965
1998
Established permanent public housing funded by
the Federal government
Established the U.S. Department of HUD
Reformed public housing legislative requirements
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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 and
• remedies for breaches of contract
• Mechanism through which the
• PHA 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

• 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

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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 Policies

• Including 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
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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
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)
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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
  Peer to Peer Financial Review Peer to Peer Financial Review Peer to Peer Financial Review Peer to Peer Financial Review Peer to Peer Financial Review Peer to Peer Financial Review Peer to Peer Financial Review
  Anytown Housing Authority FYE 2011 Anytown Housing Authority FYE 2011 Anytown Housing Authority FYE 2011 Anytown Housing Authority FYE 2011 Anytown Housing Authority FYE 2011 Anytown Housing Authority FYE 2011 Anytown Housing Authority FYE 2011
               
    Anytown Housing Authority Anytown Housing Authority Anytown Housing Authority A DifferenttownHousing Authority A DifferenttownHousing Authority A DifferenttownHousing Authority
    Project Total Analysis Project Total Analysis Project Total Analysis Project Total Analysis Project Total Analysis Project Total Analysis
    430 PH Units 430 PH Units 430 PH Units 435 PH Units 435 PH Units  
               
FDS Description Project Project   Project Project  
Line Description Totals Totals Totals Totals
Number   FYE 2010 FYE 2011 Change FYE 2010 FYE 2011 Change
70300 Net Tenant Rental Revenue 885,223 560,571 -36.67 883,987 920,621 4.14
70400 Tenant Revenue - Other 54,381 44,068 -18.96 160,583 176,336 9.81
70500 Total Tenant Revenue 939,604 604,639 -35.65 1,044,570 1,096,957 5.02
       
70600 HUD PHA Operating Grants 1,129,741 1,117,725 -1.06 1,926,596 1,817,232 -5.68
70610 Capital Grants 0 0 0 0  
70710 Management Fee      
70720 Asset Management Fee      
70730 Book Keeping Fee      
70740 Front Line Service Fee      
70750 Other Fees      
70700 Total Fee Revenue      
       
70800 Other Government Grants 0 0    
71100 Investment Income - Unrestricted 2,731 1,955 -28.41 11,667 8,662 -25.76
71200 Mortgage Interest Income 0 0    
71300 Proceeds from Disposition of Assets Held for Sale 0 0    
71310 Cost of Sale of Assets 0 0    
71500 Other Revenue 24,471 24,165 -1.25 114,355 126,221 10.38
71600 Gain or Loss on Sale of Capital Assets 0 (15)    
72000 Investment Income - Restricted 0    
70000 Total Revenue 2,096,547 1,748,469 -16.60 3,097,188 3,049,072 -1.55
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Case Study- Budget and Trend Analysis
  Anytown HA Anytown HA Anytown HA Anytown HA Anytown HA Anytown HA
  Total HA Revenue vs. Expense Analysis Total HA Revenue vs. Expense Analysis Total HA Revenue vs. Expense Analysis Total HA Revenue vs. Expense Analysis Total HA Revenue vs. Expense Analysis Total HA Revenue vs. Expense Analysis
  430 PH Units 430 PH Units 430 PH Units 430 PH Units 430 PH Units 430 PH Units
             
  Expense HA HA HA HA HA
  Description FYE 2009 FYE 2010 FYE 2011 FYE 2012 Case Study
    Audited Audited Audited Budget  
70300 Net Tenant Rental Revenue 1,007,895 885,223 560,571 498,780  
70400 Tenant Revenue - Other 60,048 54,381 44,068 22,500  
70500 Total Tenant Revenue 1,067,943 939,604 604,639 521,280  
             
70600 HUD PHA Operating Grants 1,167,836 1,189,159 1,117,725 664,240  
70610 Capital Grants 0 0 0 0  
70710 Management Fee 216,012 296,810 350,213 272,866  
70720 Asset Management Fee 70,215 0 0 51,600  
70730 Book Keeping Fee 36,196 36,285 38,146 37,800  
  CFP Management Fee 0 0 0 0  
70740 Front Line Service Fee 0 0 0 0  
70750 Other Fees 0 0 0 0  
70700 Total Fee Revenue 1,490,259 333,095 388,359 362,266  
             
70800 Other Government Grants 0 0 0 0  
71100 Investment Income - Unrestricted 1,958 10,601 15,250 10,030  
71200 Mortgage Interest Income 0 0 0 0  
71300 Proceeds from Disposition of assets Held for Sale 0 0 0 0  
71310 Cost of Sale of Assets 0 0 0 0  
71400 Fraud Recovery 0 0 0 0  
71500 Other Revenue 5,079 24,471 95,854 165,107  
71600 Gain or Loss on Sale of Capital Assets 2,200 0 (15) 0  
72000 Investment Income - Restricted   0 0 0  
70000 Total Revenue 2,567,439 1,307,771 1,104,087 1,058,683  
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Case Study- Trend Analysis
Expense Anytown Housing Authority Anytown Housing Authority Anytown Housing Authority Anytown Housing Authority
Description Total HA Revenue vs. Expenditures Total HA Revenue vs. Expenditures Total HA Revenue vs. Expenditures 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)
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