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Management Agent Orientation

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Via the Internet website (Nikki Miller); and. Electronically via e-mail (Jan ... Nikki Miller will provide you with the Internet Website instructions after you ... – PowerPoint PPT presentation

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Title: Management Agent Orientation


1
Management Agent Orientation
  • September 24, 2007
  • MSHDA Conf Room 235

2
Email Addresses/Contact Information Handout
  • Nikki Miller

3
Contact Information
4
Contact Information
  • Asset Management Website Address
    http//www.michigan.gov/mshda/0,1607,7-141-8002_28
    177---,00.html
  • Used for Property Managers to obtain current
    Asset Management Guidelines and forms.
  • MSHDAs Property Management Admin System
    http//www.michigan.gov/mshda/0,1607,7-141-8002_34
    213---,00.html (click production)
  • Used to submit MSHDA Financial data tenant data
    over the internet.
  • Corporate Account needs to be established.
  • Specific instructions will be emailed upon
    receipt of Corporate Account Set up form.
  • Email Addresses to remember
  • Nikki Miller - millern_at_michigan.gov
  • Create a corporate account for MSHDAs property
    management admin system
  • MSHDA property management admin system questions
    and written instructions,
  • To be placed on Asset Managements email contact
    list.
  • Kathy Feldpausch feldpauschk_at_michigan.gov
    policy related questions
  • mshdaassetmgt_at_michigan.gov email address used
    for submission of
  • Monthly Income and Expense Reports
  • Audited Financials
  • Budgets
  • Maggie Droste drostem_at_michigan.gov
  • Premium Management Fees

5
Premium Management Fee ProcessEmployee
Dishonesty Insurance Fair Housing
  • Maggie Droste

6
Premium Management Fee
  • The Premium Management Fee process was created to
    provide a monetary incentive to Management Agents
    for successfully meeting their obligations
    throughout each year. By meeting all of the
    required factors, Management Agents may negotiate
    a fee with the Owners for a per unit per year fee
    in addition to the maximum management fee
    allowed. The Authority applies the consumer
    pricing index to the PMF.
  • Mandatory Factors
  • Mortgage Payments
  • Material Default
  • Delinquent Water/Sewer Bills
  • Employee Dishonesty/Crime Coverage Liability
    Coverage Property Umbrella Insurance Coverage
  • Annual Certified Audit/Audit Fees
  • Real Estate Tax and Property Insurance Escrows

7
Employee Dishonesty
  • Insurance required to protect MSHDAs mortgage
    loan payment. These policies provide coverage
    for all employees of a development without
    exception (including Owners) against theft of the
    collected rent money each month.
  • The required amount of coverage is one months
    gross rent potential (for Section 8
    developments), and two months gross rent
    potential for all other MSHDA programs. The
    gross rent potential is taken from the current
    budget.
  • The cost of the policy premium is an eligible
    development expense and must be prorated among
    developments based on the amount of required
    coverage.
  • Proof of renewal/continuation of existing
    coverage must be submitted each year prior to the
    anniversary date of the policy.

8
Affirmative Fair Housing Marketing Plans
  • Initial Plans - must be submitted in narrative
    form and approved by Carl Bryson of MSHDAs Legal
    Division.
  • Updated Plans - For existing developments or
    Management Agent Changes must be submitted on
    MSHDAs Affirmative Fair Housing Marketing Plan
    form to my attention for review and approval.
  • Plans must be updated every 5 years.

9
Budgets
  • Kathy Feldpausch/Lisa Fox

10
Budget Information
  • Purpose The budgets are a projection of the
    years anticipated expenses and income and are
    submitted to MSHDA on an annual basis.
  • First Budget Due Year after cutoff occurred.
    MSHDAs Finance Division usually notifies the
    owner and the management agent of the mortgage
    cutoff date one to two years prior to the cutoff
    date.
  • Annual Budget Due Dates The due dates for the
    annual budget package submissions are
  • October 1 Section 236 developments, including
    Section 236 Decoupled developments
  • November 1 Section 8, Moderate,80/20, 70/30,
    Taxable Bond, 1 Tax-Exempt, TEAM and
    Neighborhood Preservation Program developments.
  • Acceptable budget packages must be received by
    due date to qualify for the Premium Management
    Fee.

11
Budget Information (cont.)
  • MSHDA Website The 2008 Budget Guidelines are now
    available on the MSHDA Website. Notification of
    availability was e-mailed to each management
    agent to the e-mail address provided to the
    Office of Asset Management.
  • Changes from the previous year are in Comic Sans
    type but it is important to read these guidelines
    carefully, especially if you are a new management
    agent.

12
Budget Information (cont.)
  • Customized Budget Templates - MSHDA 450 (upload
    into MITAS) Management agents must use this
    template to submit the 2008 budget information.
    The Proposed 2008 Budget amounts from the 450
    must be uploaded into the MSHDA Property
    Management Admin System posted on the MSHDA
    Website (MITAS). These templates were also
    e-mailed to each management agent by Lisa Fox.
    Each management agents template contains
    specific information for each of the developments
    managed by each agent. This template
    automatically fills in the following
    information
  • 2008 Property Liability Insurance amount
  • 2008 Real Estate Tax Escrow amount
  • 2007 Budget and
  • Previous 12-Month Expenses (August 2006-July
    2007, adjusted to reflect prior year payables and
    current year payables).
  • This template also automatically flags any
    columns where there is a 2000 and 20 variance
    between the proposed budgeted amounts and the
    12-month expenses. Any flagged columns must
    include current contracts, if applicable, and
    detailed notes for the proposed budgeted amount.

13
Budget Information (cont.)
  • 2008 Fees
  • - Management Fees 415 PUPY
  • - Premium Management Fees 66 PUPY and
  • - Audit Fees 10,362 for Section 236/8
    developments

14
Utility Allowance/Rent Schedule Template
  • Utility Allowances/Rent Schedule Template (e-mail
    and hard copies)
  • Start collecting resident utility information
    approximately 120 days prior to budget submission
    due date
  • Use utility rates provided in Budget Guidelines
  • Enter utility allowance information into the
    MSHDA Utility Allowance/Rent Schedule template.
    Template automatically fills most of the
    information for the Owner Utility Certification
    and the applicable rent schedule for each
    development.
  • E-mail the Budget Form 450 and Utility and Rent
    Schedule spreadsheets to MSHDA when completed.
    The correct address and subject line are listed
    on page 2 of the Budget Guidelines.

15
Budget Submission Requirements
  • Budget Package Requirements (hard copies)
  • Individual exhibits list the budget attachments
    that are required for each development type. All
    budget attachments are included with the Budget
    Guidelines or are available on the MSHDA
    Website
  • Certain budget line items must include detailed
    notes, including mathematical computations and
    supportive documents (see page 3 of Budget
    Guidelines).
  • Instructions for Completing the MSHDA Budget
    Form Descriptions are given for items to be
    recorded in each budget line item. Read these
    instructions carefully and budget items
    accordingly. The budget line items match the MIE
    line items.

16
Monthly Income and Expenditure Process
  • Kathy Feldpausch/Lisa Fox

17
Monthly Income and Expenditure (MIE)
  • Purpose The MIE report provides financial
    information to MSHDA in order to monitor
    development performance, ensure compliance with
    state and federal regulations and detect
    potential financial problems.
  • MIE Report MSHDAs MIE Report consists of the
    following
  • Monthly Income Expenditure Report, MSHDA Form
    109
  • Schedule A Aging of Accounts Receivable
  • Schedule B Aging of Trade Accounts Payable
  • Schedule C Security Deposit Reconciliation
  • MIE Line Item Explanation Worksheet, if
    necessary and
  • Other financial documentation/schedules, as
    requested

18
MIE Information (cont.)
  • MSHDAs MIE Report is a hybrid blend of cash
    and accrual accounting. The top half of the MIE
    (Line 1 through 1f) is accrual accounting. The
    Net Rent Collected line item starts the cash
    basis accounting. This is necessary because many
    of MSHDAs decisions are made on a cash basis
    i.e. draws, escrow releases, etc.
  • It is our intent to create a template that
    will allow management agents to submit MIEs
    using accrual accounting and will allow MSHDA to
    convert the information into the format that we
    need to make our decisions

19
MIE Submission Dates
  • First MIE Due The initial MIE is due on the
    15th of the month following the month any income
    or expenses occurred. The initial MIE for
    occupied rehabilitated developments must be
    submitted by the 15th of the month following the
    month in which initial closing occurred.
  • Monthly Due Dates Acceptable MIEs, including
    Schedules A, B and C are due no later than
    midnight on the 15th of the month following the
    reporting month i.e. January report would be due
    no later than February 15th. There are no
    exceptions to the 15th of the month due date,
    even if the 15th is on a weekend or a holiday.
    Internet or computer problems are not a reason
    for late submissions. Be sure to allow ample
    time to submit the MIE reports.

20
MIE Submission
  • MIE Submissions The MIEs must be submitted in
    two ways
  • Via the Internet website (Nikki Miller) and
  • Electronically via e-mail (Jan Stevenson)
  • Internet Website Submission
  • Nikki Miller will provide you with the Internet
    Website instructions after you have provided her
    with your e-mail profile information.
  • Electronically via E-Mail
  • It is imperative that the MIE Reports be
    electronically e-mailed to the correct address
    and that the correct subject line is included on
    each MIE Report (page 5 of MIE Guidelines).

21
MIE Submission Info (cont.)
  • NOTE You will receive one of two messages when
    you send your MIEs electronically. If you do not
    receive one of these messages, do not assume
    that MSHDA received your MIE submission. Contact
    the MSHDA contact person listed above for
    assistance.
  • Your electronic submission has been received by
    MSHDA. This message does not mean that your MIE
    is acceptable because it has not yet been
    reviewed for completeness or discrepancies.
    Problems will be brought to you attention by a
    return e-mail message. If there are no problems
    with your MIE, no further message will be
    transmitted or
  • Your MIE transmission is incorrect and is being
    returned for correction. The MIE will not be
    logged as received at MSHDA until it is
    corrected.

22
MIE Instructions
  • MIE Template Instructions The instructions for
    completing the MIE template are shown on page 9
    of the MIE Guidelines.
  • Enter all amounts in whole numbers. If you enter
    cents in any amounts, you will receive an ERROR
    message at the end of the MIE
  • Complete Schedules A, B and C before completing
    the MIE Form 109 because much of the information
    from the schedules automatically transfers to the
    MIE Form (net change in receivables, net change
    in payables, payables, etc). and
  • Do not submit the MIE information if you have
    received a NO at the end of the MIE. You need
    to make corrections before submitting the MIE.
  • MIE Instructions Descriptions are given for
    items to be recorded in each of the MIE line
    items. Read these instructions carefully and
    record the expenses on the appropriate line
    items.

23
Audits
  • Kathy Feldpausch/Lisa Fox

24
Audits
  • Purpose MSHDA uses the financial statements to
    assess the financial condition and the operations
    of each of its developments as the HUD subsidy
    programs administrator and a lender of
    significant amounts of money.
  • The audits are prepared by an independent
    Certified Public Accountant selected by the
    owner.

25
Audit Due Dates
  • First Audit Due The initial audit is due in the
    first year in which there was occupancy for 60
    days.
  • Annual Due Date The annual audits must be
    submitted by the auditor within 120 days
    following the developments year-end to qualify
    for the Premium Management Fee.

26
Audits Submission Requirements
  • Audit Submission Requirements The following
    audit data must be submitted by the due date
  • Input Page approved by the auditor and the owner
    (uploaded and approved through MITAS system
  • Excel Input Worksheet (e-mailed to MSHDA) and
  • Financial Statements as an image document, i.e.
    PDF.
  • These two documents must be e-mailed to MSHDA
    at the same time at the correct address and
    subject line (page 1 of the Audit Guidelines).

27
Audit Required Financial Statements
  • Required Financial Statement Documents The
    financial statements submitted to MSHDA must
    include the following documents
  • Audited Financial Statements (Balance Sheet,
    Income Statement, Owners Equity, Cashflow
    Statement, Notes)
  • Schedules I II (MSHDA forms)
  • Report on Compliance and Internal Controls and
  • Agreed Upon Procedures

28
Management Fee Policy Including Central Office
Employees
  • Kathy Feldpausch

29
Management Fee Policy
  • Purpose MSHDA-approved management fees are paid
    to compensate management agents for services
    performed under the MSHDA-approved Management
    Agreement.
  • Calculation of Management Fee MSHDA adjusts the
    management fee annually by applying the Consumers
    Price Index to the previous years management
    fee. The new management fee is listed in the
    annual Budget Guidelines.
  • Effective Date The new management fee is
    effective with the first month of the new budget
    year after it has been approved by the owner and
    MSHDA through the yearly budget process.

30
Central Office Employees (COE)
  • Violations of Management Fee Policy The steps
    that will be taken if disallowed expenses are
    paid from the developments operating account on
    described in the Management Fee Policy.
  • Central Office Employees (COE) A COE is defined
    as an employee who receives a portion of their
    wages and/or benefits from the management fee.
    All COE functions must be paid from the
    management fee. However, sometimes central office
    employee costs can be charged to the
    developments operating account, if it results in
    a cost savings to the development. The following
    conditions must be met to ensure MSHDA approval
    of COE expenses charged to the developments
    operating account
  • All COE expenses must meet the Management Fee
    Policy requirements

31
Central Office Employee (COE)
  • The billing rate for COE services cannot exceed
    the actual compensation rate paid to the COE
    employees for central office duties. The billing
    rate can only include the following items
    Salary, fringe benefits (i.e health insurance,
    pension plans, etc.), employer payroll taxes and
    Workers Compensation
  • Reimbursement for travel expenses for COE
    employees must be based on the actual mileage
    from the central office/home base to the
    development and return. Mileage rates cannot
    exceed the standard mileage rate published by the
    IRS.
  • NOTE All COE expenses must be recorded in MIE
    Line Item 4b Premium Management Fee.

32
Central Office Employees (COE) Cont.
  • Year-End Statement If a management agent
    charges COE costs to a developments operating
    account, the management agent must submit a
    year-end statement to MSHDA that summarizes the
    COE expenses. This summary is due to MSHDA
    February 1 of the following calendar year.
  • Costs Paid from Management Fees vs Developments
    Operating Account The costs that must be paid
    from the management fee and the costs that may be
    paid from the developments operating account are
    described in the Management Fee Policy. Please
    read these carefully.

33
Management Agreement Items
  • MSHDA previously required that new management
    agreements/addendums be submitted on an annual
    basis. The management agreements dated 11/06 or
    after automatically renew and no longer need to
    be resubmitted each year. Changes to the
    following items that are included in the
    management agreement are now approved in the
    budget submission
  • Management Fee
  • Premium Management Fee and
  • Staff assigned to the development, including
    employee names, position description, number of
    hours, hourly rate and total salary (including
    COE positions).
  • It is imperative that these items be budgeted
    accurately as they are now the MSHDA-approved
    amounts/items.

34
Housing Locator
  • Paul Bursley

35
Michigan Housing Locator
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