Project-Based Voucher Program. Recent HUD OIG Audit Findings and Other Potential issues
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1 Project-Based Voucher Program Recent HUD OIG Audit Findings and Other Potential issues 1
2 HUD OIG Audit Findings 2009 Audit of a large mid-western PHA Administration of PBV program inadequate Agency lacked documentation Agency lacked adequate procedures and controls Units sampled did not meet HQS 2
3 Audit Recommendations Recommendations: Reimburse HCVP $212,000 from non-federal funds for admin fee and $24,000 for inspections Reimburse HCVP more than $2M from nonfederal funds for unsupported HAP payments 3
4 Error Prone Program Requirements Administrative Plan PHA Plan Proposal and Selection 25% Units per project cap AHAP Rent Reasonableness HQS Inspections PHA-Owned units HUD System Reporting 4
5 Administrative Plan 1. Describe procedures for owner submission of proposals (983.51) 2. Describe PHA selection criteria (983.51) 3. Identify the type of supporting services offered for a project to qualify for exception units and extent to which they will be provided (983.56) 5
6 Administrative Plan 4. Identify the form and frequency of PHA monitoring of receipt of services (983.56) 5. Establish PHA policy for the selection of PBV sites (983.57) 6. Identify waiting list selection policies ( ) 7. Describe policies for tenant screening( ) 8. Describe PHA policy for continued assistance ( ) 6
7 5 Year and Annual Plan Qualified PHAs total PH units and vouchers or less and not SEMAP or PHAS troubled - no annual plan requirement For 5 year Plan, in Section 5.2, Goals and Objectives, identify quantifiable goals and objectives that will enable the PHA to serve the needs of low income, very low-income, and extremely low-income families 7
8 5 Year and Annual Plan Non-qualified PHAs more than 550 total PH units and vouchers or troubled SEMAP or PHAS within last 12 months - must submit annual plan which describes PHA s desire to implement PBV program in Section 7 of Plan template 8
9 Selection of Proposal Procedures must be in Admin Plan Selection must be made in accordance with PHA selection criteria Two methods: RFP process - Must be open and fair competition - may not limit proposals to a single site or impose restrictions that explicitly or practically preclude other sites 9
10 Selection of Proposal RFP process - Upon selection of a proposal, PHA must give public notice of selection Prior Competition Process - Proposal must have been selected under the prior competition within 3 years of the PBV selection date and prior selection did not consider PBVs 10
11 25% Unit Project Cap Cap applies to the number of PBV units in a project with 2 exceptions Exception 1: Units in a single family building - 1 to 4 unit building Exception 2: Excepted units in a multifamily building - units made available for qualifying families 11
12 25% Unit Project Cap Qualifying families are elderly or disabled families, or families receiving supportive services Supportive services must be defined in your Admin Plan 12
13 Agreement to enter into HAP (AHAP) Used only for new and rehab units Pre-requisites: Subsidy layering review, if necessary Environmental - in every case AHAP must be signed prior to the start of construction 13
14 Rent Reasonableness Initial Contract rent may not exceed reasonable rent determined by PHA Redetermination: 5% or greater decrease in FMR Change in responsibility for utility Change in specific contract unit Other change affecting rent 14
15 Rent Reasonableness Comparability Analysis must include at least 3 comps in private unassisted market PHA must retain analysis for audit trail Person or entity performing analysis must have no direct or indirect interest 15
16 HQS Inspections Pre-selection inspection- inspection of site and of existing units prior to selection - substantial compliance Pre-HAP inspection- complete initial inspection before execution of HAP - full compliance Annually, 20% sample in each building, at turnover, and as necessary thereafter 16
17 PHA-Owned Units Special procedures: Selection of PHA-owned units requires HUD review of process and award HUD must approve an Independent Entity (IE) to perform both the determination of rent and inspection of units 17
18 PHA-Owned Units The IE must establish initial contract rents based on an appraisal by a state licensed appraiser The IE may only be compensated from admin fee income The family may not be charged any fee for services performed by the IE 18
19 HUD System Reporting PIC - All project-based voucher activity should be reported in Section 11 of the Family Report Form, HUD VMS All project-based vouchers should be reported in Other Activities on Form B 19
20 References OIG Audit report 2009-CH-1002 HUD Project-Based Voucher Program Regulations at 24 CFR 983 Qualified PHA related Notices and Admin Guidelines for SLR - FR 5417 N 01 The Housing and Economic Recovery Act (HERA), FR N-01 Reno & Cavanaugh, PLLC memo from Sarah Molseed, Esq., May 7, 2010 ( 20
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