Board Oversight - Monitoring 4 Key Areas for Commissioners

Transcription

1 Board Oversight - Monitoring 4 Key Areas for Commissioners PHADA Monday, January 9, :00 4:30 Brian L. Nemeroff, CPA -Partner

2 Financial Oversight for Commissioners 1. Budget to Actual 2. Audit 3. PHAS 4. SEMAP

3 Overview of Learning Objectives Terms and Definitions Budget to Actual Annual Audit Role of the Auditor (external) PHAS (Public Housing Assessment) SEMAP (Section 8 Assessment) 3

4 Jokes only an Accountant would find funny What do you call an accountant with an opinion? An auditor. What's the difference between an accountant and a lawyer? The accountant knows he's boring. How many accountants does it take to change a light bulb? We didn t budget to change that particular bulb until next year What was the useful life of that particular bulb anyway?

5 Acronyms/Terms REAC Real Estate Assessment Center (HUD) GAAP - U.S. generally accepted accounting principles. GASB -Gov t Accounting Standards Board AICPA American Institute of CPAs audit standards GAAP Flyers (& accounting briefs, REAC website) AMP - asset management project COCC - Central Office Cost Center UFRS - uniform reporting financial standards FDS - financial data schedule OMB (Office of Management and Budget) Circulars: A-87 Cost Principles for State, Local, and Indian Tribal Governments A-133 Single Audit Act (now called Uniform Guidance) GAO Gov t Accountability Office GAGAS Generally Accepted Gov t Auditing Standards aka - The Yellow Book Government Auditing Standards 5

6 Acronyms/Terms (Cont.) PHAS - Public Housing Assessment System 4 Subcomponents MASS Management Assessment Subsystem FASS Financial Assessment Subsystem CFP Capital Fund Program PASS - Physical SEMAP Section Eight Management Assessment Program 6

7 GAAP Hierarchy 1. Level 1 pronouncements include the following: GASB Statements GASB Interpretations and implementation guides. FASB pronouncements if made applicable by the GASB AICPA pronouncements if made applicable by the GASB 2. Level 2 pronouncements are followed when Level 1 provides no guidance. They include: GASB Technical Bulletins AICPA Audit and Accounting Guides if they apply to state and local governments and have been cleared by the GASB AICPA Statements of Position if they apply to state and local governments and have been cleared by the GASB 3. Level 3 pronouncements are followed when Levels 1 and 2 provide no guidance. Currently there are no Level 3 pronouncements in effect. Future guidance would include the following: GASB Emerging Issues Task Force consensus positions AICPA Practice Bulletins if they apply to state and local governments and have been cleared by the GASB 4. Level 4 guidance applies when Levels 1, 2 and 3 provide no guidance. Level 4 currently includes: GASB Implementation guides, which are generally in a question and answer format Widely recognized and prevalent practices, consistent with GAAP 5. Other accounting literature provides the lowest level of guidance. This includes: GASB Concepts Statements Pronouncements of the FASB that have not been made applicable to state and local governmental accounting by the GASB Accounting textbooks or articles 7

8 UFRS (Uniform Financial Reporting System) The Department (HUD) continues to take the position that it is not an accounting standard -setting body and, as such, has relinquished its role over establishing standards over financial reporting. However, the Uniform Financial Reporting Standards (UFRS), 24 CFR Part 5, subpart H, mandates that PHAs report financial data in accordance with GAAP for governmental entities as set by the GASB. Under asset management, this situation does not change. The reporting requirements of OMB Circular A-133, Audits of States, Local Governments, and Nonprofit Organization, issued by the Office of Management and Budget, continue to apply. 8

9 Budgeting 2 Aspects Approving the Budget for the year. Monitoring the Variances from Budget to Actual, monthly/quarterly. 9

10 Budgeting Understanding the Budget you approve at the beginning of the year can greatly assist in monitoring and oversight during the year. measure twice and cut once 10

11 Budgeting Utilize prior year funding formulas & other HUD information going forward for best estimates. Focus should be on latest average rents and occupancy expectations. For PHAs under asset management, management fees should be based on expected occupancy. (COCC fee for service) 11

12 Budgeting Continued Expenses should be based on the most current facts and figures, and future plans. Annual Plan. Review existing contracts for inclusion/adjustment. Contract register Procurement Log Call local utility companies and research to estimate increases by utility type. 12

13 Budgeting Continued Housing assistance payments Payment Standards (% of FMR) Normally within 90%-110% of FMR Minimum rents Strategic Plan New developments New software New goals and objectives Is Additional Training Needed? Staff Turnover and Career Development 13

14 Budgeting Continued Expenses should be based on and within the funding parameters of the following: Current Revenues and Prior Years Unrestricted Reserves (bottom line, can t go over) Insurance should be based on latest quotes. Employee benefits should be based on historical rates along with future health insurance adjustments along with staffing changes. (GASB 68?) Salaries should be based on anticipated staffing levels and rates. (consider the 5 year plan or other strategic initiatives) 14

15 Budgeting Continued Historical data for other expenses should be reviewed and projected (sundry, collection costs - including bad debt expense, maintenance cost, etc.). Revenue should be budgeted to cover debt service and capital outlay. (or at least reduce other expenses) Each federal program should be individually sustainable. (HUD monitors transfers and borrowings) Monitor intercompany borrowings and transfers. Transfers VS borrowings (is it allowed?) 15

16 Budgeting Side Note Keep in mind allowability, i.e., matching the funding source with the applicable use., e.g., Capital funding is for capital related items HUD funding and tenant revenue for public housing is for a particular site, (AMP) HUD funding for Section 8 landlords is restricted for housing assistance payments 16

17 Budget Monitoring Budget to actual reports at monthly Board Meetings. Internally prepared by staff. May be part of the consent agenda. In sufficient detail for the Board to understand. Should be Topside approach by key program by major category not necessarily GL detail and minutiae 17

18 Budget Monitoring Budgeting just remember Measure twice and cut once Spending some extra time on preparing and approving the budget at the beginning would help reduce time monitoring through the year. (less variances, discussions and clarifications) As an example, travel and training approved at the beginning of the year, the Board doesn t need to approve each and every conference and training throughout the year. (unless off track and there are large variances) 18

19 Questions on Budget? 19

20 Auditing Process (After the Fact Post year end) Auditors are concerned with only certain items Financial Report per AICPA/GASB Financial Data Schedule (FDS For REAC) Supplemental Data (for the field Office) Communication with Auditors (AICPA audit standards) Understand that the Auditor is External 20

21 Audit Consider the Audit in two main sections The Basic FS (the numbers/$$) Controls and Compliance (Rules and Regs) Direct and Material HUD (CFR, PIH notices) Government auditing standards (yellow book) A-133 Single Audit (uniform guidance) Compliance supplement 21

22 Audit Process Auditors obtain reasonable assurance that the basic financial statements are free of material misstatements. An audit includes assessing accounting principles used and significant estimates made by management to evaluate the overall financial statement presentation. These are your Financial Statements, but the opinion is the auditors. 22

23 Financial Statements MDA Management discussion and analysis Balance Sheet (Statement of Net Position) Statement of Revenues, Expenses and Changes in Net Position Statement of Cash Flows The Notes ( Footnotes, i.e. Disclosures) Supplemental Information (required by REAC or the field office) FDS- Financial Data Schedule Grant reconciliations Compliance or Single audit section (items required under the single audit act) Yellow Book Report A-133 Report Schedule of findings Corrective Action Plan 23

24 Financial Statements Statement of Net Position (formerly known as the Balance Sheet) Assets Liabilities Net Position No longer called the balance sheet Statement of Revenues, Expenses and Changes in Net Position This statement presents how the PHA s net position increased or decreased during the current fiscal year. Includes non-cash items such as depreciation, amortization, gain/loss from sale of assets, etc. GAAP basis. Capital Grants positive impact on net position Depreciation non cash flow expense. 24

25 Financial Statements Statement of Cash Flows Cash basis easier to follow. This statement shows the net change in total cash and shows receipts and disbursements of the Authority during the current fiscal year. Direct and indirect Note - the other statements are presented on the full accrual, the Cash flows is on the Cash Basis. The direct method has no depreciation, estimates, allowances, accruals, etc. 25

26 Audit Items generally tested for controls and compliance (Direct and Material): Procurement files, Disbursements AP, Payroll and HAP ( allowability ) Employee files, (wages, not drug tests or background checks) Housing choice voucher Tenant files, Waitlist, SEMAP, inspections Intercompany borrowings/transfers VMS (voucher management system) = FDS Restricted reserves - allowability Public housing files, Waitlist, etc Different for other Major Programs, per A

27 Audit Items Auditors have to consider: Overstatement of Revenues and Assets Understatement of Expenses and Liabilities Bias in the MDA (Management Discussion and Analysis) Fraud, Theft, Abuse Litigation Subsequent Events FDS (REAC Financial Data Schedule) Information is by Program/Project Unaudited and Audited version Grant Reconciliations Closeout and status for HUD CFP mostly 27

28 Auditors They provide a level of Assurance However, They are external, and not part of the normal internal controls They come in after the fact They test on a sample basis, looking for reasonable assurance, and There is a chance they may not test the areas that are a concern of the Board 28

29 Question on the Audited Statements or the Audit? 29

30 2 Key Indicators PHAS General Overview MASS Management Assessment FASS Financial Assessment SEMAP SEMAP 101 Management Tool Indicators Defined and Common Errors 30

31 But first Another Joke There are Three kinds of people in this World The ones that know how to count The ones that don t know how to count 31

32 Scoring Summary of PHAS 32

33 Interim PHAS Data Sources 33

34 The Real Estate Assessment Center (REAC) The Unaudited Process- PHA Draft HUD - REAC Review Final Score* Approved Rejected Invalidated *If audit is not required 34

35 The Real Estate Assessment Center (REAC) The Audited process: 35

36 GAAP Flyers 36

37 GAAP Flyer 1 37

38 Accounting Briefs 38

39 GAAP Accounting Briefs 39

40 Purpose PHAS PHAS helps the delivery of services in public housing and enhances trust in public housing system among PHAs, public housing residents, HUD and the general public by providing a management tool for effectively and fairly measuring the performance of a PHA in essential housing operations, including rewards for high performers and consequences for poor performers. 40

41 PHAS Background United States Housing Act of 1937 Section 6(j) (1) The Secretary shall develop and publish in the Federal Register indicators to assess the management performance of public housing agencies...such indicators shall enable the Secretary to evaluate the performance of public housing agencies and resident management corporations in all major areas of management operations. 41

42 PHAS Background - History Decontrol Indicators Public Housing Management Assessment Program (PHMAP) 24CFR Part Present - Public Housing Assessment System (PHAS) 24CFR Part

43 PHAS Background - History October 1, 1998 PHAS Final Rule February 10, 2000 PHAS Amendments, Final Rule June 6, 2000 Transition Assistance for Certain PHAs Technical Correction, Final Rule July 24, 2003 Deregulation for Small PHAs, Final Rule 43

44 PHAS Background - History February 23, 2011 Interim PHAS Rule November 25, 2013 Capital Fund Program, Final Rule (I call it Interim PHAS 4 since it is the 4 th version, but still interim since 2011) 44

45 PHAS Scoring 45

46 Improving PHAS Scores Monitor the status and accuracy of submissions frequently in eloccs, PIC, and Secure Systems. Utilize prior year PHAS score results to set annual goals. Plan Plan ahead: be proactive in determining problem areas and fixing them in advance of PHAS due dates. 46

47 Ratios/formulas FASS 47

48 FASS 48

49 FDS Sample FINANCIAL DATA SCHEDULE PHA: FYED: 3/31/14 Line Item No. Account Description Total AMPS Section 8 Housing Choice Voucher Program Cost Center Operating Fund Business Activities - Elimination 111 Cash - Unrestricted 1,823,090 67, ,462 17,476-2,333, Cash - Restricted - Modernization and Developm Cash - other restricted 96,655 49, , Cash - Tenant Security Deposits 68, ,402-83, Cash - Restricted for payment of current liability Total Cash, 1,988, , ,462 31,878-2,562, Accounts Receivable - PHA Projects Accounts Receivable - HUD 18, ,445 Accounts Receivable - other 124 government 164,282-4, , , Accounts Receivable - Miscellaneous ,100-19, Accounts Receivable - Tenants Dwelling Rents 15, , Allowance for Doubtful Accounts - Dwelling Rent (13,244) - - (289) - (13,533) Allowance for Doubtful Accounts - Other Notes, Loans, & Mortgages Receivable - current 10, ,102-12, Fraud recovery Allowance for doubtful accounts - fraud Accrued interest receivable Total Receivables, net of allowances for doubtfu 195, , , , Investments - Unrestricted Investments - restricted Investments - restricted for payment of current lia Prepaid Expenses and Other Assets 81,212 1,335 7,388 5,867-95, Inventories 33, ,833-37, Allowance for Obsolete Inventories (1,346) - - (115) - (1,461) 144 Interprogram due from ,281 - (247,281) Assets held for sale ,500-14, Amounts to be provided Total Current Assets 2,297, , , ,069 (247,281) 3,059,286 Total

50 Memo Accounts PHA: FYED: 3/31/14 Line Item No. Account Description Total AMPS Section 8 Housing Choice Voucher Program Cost Center Operating Fund Business Activities - Elimination Excess (deficiency) of total revenue over (under) total expenses (76,967) (34,625) 150, , , Required annual debt principal payment - 98, , Beginning Equity 8,898, , , ,116-9,867,489 Prior Period Adjustments, Equity transfer and correction of errors Unit Months Available 4,995 3, , Number of Unit Months Leased 4,995 3, , Administrative Fee Equity - 59, , Housing Assistance Payments Equity - 42, , Excess Cash 1,594, ,594, Land Purchases Building Purchases Furniture & Equipment - Dwelling Purchases Furniture & Equipment - Administrative 18, ,231 Total 50

51 FASS 51

52 MENAR 52

53 Debt Service Coverage Ratio 53

54 Summary Guide 54 54

55 FASS - Score Adjustments 55

56 Score Adjustments 56

57 Score Adjustments 57

58 Score Adjustments 58

59 MASS Summary 59

60 MASS 60

61 MASS - Occupancy 61

62 MASS - Occupancy 62

63 MASS TARS 63

64 MASS TARS 64

65 MASS Accounts Payable 65

66 MASS Accounts Payable 66

67 Questions on MASS or FASS 67

68 SEMAP The Section Eight Management Assessment Program (SEMAP) measures the performance of PHAs that administer the housing choice voucher program in 14 key areas. SEMAP is completed annually by each PHA that administers a Section 8 tenant-based assistance program. The SEMAP certification is required to be submitted within 60 days after the end of the fiscal year. 68

69 SEMAP 101 SEMAP will help HUD target monitoring and assistance efforts to PHA programs that need the most improvement. The 14 indicators of performance show how well PHAs help eligible families afford decent rental units at a reasonable subsidy cost as intended by Federal housing legislation. 69

70 SEMAP - 14 requirements 1. Wait list 2. Reasonable Rent 3. Adjusted income 4. Utility allowance 5. HQS Quality Control 6. HQS Enforcement 7. Expanding housing assistance 8. Payment standards 9. Annual exams 10. Correct Tenant rent 11. Pre-contract HQS inspections 12. Annual HQS Inspections 13. Family Self Sufficiency 14. Bonus De-concentration Bonus indicator 70

71 How does SEMAP work? Remotely measures a PHAs performance and administration of the Housing Choice Voucher Program HUD annually assigns a score for each indicator and an overall performance rating: > 90% - high performer 60 89% - standard < 60% - troubled A few instances create an automatic rating of troubled Late submission Auditor unable to issue an opinion on the financial statements or the Schedule of Expenditures of Federal Awards Inadequate performance on any indicator and/or a troubled rating results in the need for remedial action 71

72 What does remedial action entail? HUD will conduct an on-site review of PHAs that are rated as troubled The PHA must implement a corrective action plan that HUD will monitor, to ensure improvement in program management 72

73 So who verifies a PHA s compliance with the 14 self assessed SEMAP indicators? Your Independent Auditor! 73

74 So who verifies a PHA s compliance with the 14 self assessed SEMAP indicators? Your Independent Auditor! 74

75 What do Auditors use to test compliance? The Code of Federal Regulations, Title 24- Housing and Urban Development, Chapter 9 Office of Assistance Secretary for Public and Indian Housing OMB Circular A-133 Compliance Supplement 75

76 #1 Requirement for a successful audit DOCUMENTATION! Auditors must have a paper trail to follow Per CFR Per audit standards Most common SEMAP error HINT: all items organized, documented and available for your auditor to review keeps them out of your way! 76

77 77

78 78

79 UNIVERSE AND SAMPLE SIZE 79

80 80

81 Indicator 1: Selection from the Waiting List Definition a) The PHA has written policies in its administrative plan for selecting applicants from the waiting list. b) Applicants reaching the top of the waiting list and applicants admitted were properly selected from the waiting list for admission and met the selection criteria that determined their place on the waiting list and their order of selection. 81

82 Indicator 1: Selection from the Waiting List - Purpose This indicator shows whether the PHA has written policies in its administrative plan for selecting applicants from the waiting list and whether the PHA follows these policies when admitting new tenants. Ensures that all eligible citizens are given a fair and equal chance to receive assistance. 82

83 Indicator 1: Selection from the Waiting List - Score Based on the quality control samples selected, documentation shows that 98% of the families in both samples were properly selected from the waiting list Yes 15 points No 0 Points 83

84 Indicator 1: Selection from the Waiting List - Sample Quality Control (QC) sample is an annual sample of files/records drawn in an unbiased manner and reviewed by the PHA supervisor Per 24 CFR 985.2(b): 84

85 Indicator 1: Selection from the Waiting List - Sample Per 24 CFR 985.3(a)(3)(i)(B) Note you must draw 2 separate samples to properly test this indicator Applicants reaching the top of the waiting list Applicants admitted to the program 85

86 Indicator 1: Selection from the Waiting List Common Errors and Mistakes Improper samples Inadequate documentation to verify proper procedures Incorrect use of preferences Management override of admission policies Improper scoring If you do not meet the 98% threshold for both samples you must check No in the PHA response (All or nothing) 86

87 Indicator 2: Reasonable Rent Definition The PHA has and implements a reasonable written method to determine and document that the rent to owner is reasonable based on current rents for comparable unassisted units: At the time of initial leasing Before any increase in rent to owner At the HAP contract anniversary if there is a 5% decrease in published FMR in effect 60 days before the anniversary date 87

88 Indicator 2: Reasonable Rent Definition The PHA s method should also take into consideration the location, size, type, quality, and age of the program unit and similar unassisted units, and any amenities, housing services or utilities provided by owners 88

89 Indicator 2: Reasonable Rent Purpose To ensure that landlords are not inflating their rent thresholds due to the fact that the unit is being subsidized by the government To ensure that tenant rent payments are adjusted for any decreases in the FMR if applicable 89

90 Indicator 2: Reasonable Rent Score The PHA follows its written policy for determining rent reasonableness and has documented that rent is reasonable for: 98% of the units sampled 20 points 80 97% of the units sampled 15 points < 80% of the units sampled 0 points 90

91 Indicator 2: Reasonable Rent Sample Per 24 CFR 985.2(b) 91

92 Indicator 2: Reasonable Rent Common Errors and Mistakes Lack of documentation Comparing dissimilar units Using outdated information Side note this is different than payment standards/fmr. 92

93 Indicator 3: Determination of Adjusted Income - Definition The PHA s quality control sample of tenant files shows that at the time of admission and reexamination, the PHA properly obtained a third party verification of adjusted income or documented why third party verification was not available. 93

94 Indicator 3: Determination of Adjusted Income - Definition The PHA must also show that they used verified information in determining adjusted income; properly attributed allowances for expenses; and, when the family is responsible for utilities under a lease, the PHA used the appropriate utility allowances for the unit leased in determining the gross rent. 94

95 Indicator 3: Determination of Adjusted Income - Purpose To ensure that the tenant rent payment is being calculated based on current and accurate information Remember the other side of the tenant payment is your HAP!! 95

96 Indicator 3: Determination of Adjusted Income - Score The PHA uses independent verification of income, properly attributes allowances and uses the appropriate utility allowances for: 90% or more of the families sampled 20 points 80 89% of the families sampled 15 points < 80% of the families sampled 0 points 96

97 Indicator 3: Determination of Adjusted Income - Sample Per 24 CFR 985.2(b) 97

98 Indicator 3: Determination of Adjusted Income Common Errors and Mistakes Lack of proper documentation Use of outdated information Incorrect annualization of third party information Incorrect calculation of medical expenses (pay attention to detail) Lack of support for a student > 18 years old Use of incorrect utility allowances Zero income tenants 98

99 Indicator 4: Utility Allowance Schedule Definition The PHA maintains an up-to-date utility allowance schedule The PHA reviews utility data once every 12 months and adjusts its utility allowance schedule if there is a change of 10% or more in the rates 99

100 Indicator 4: Utility Allowance Schedule Purpose To ensure that the tenant rent payment is being calculated based on current and accurate information 100

101 Indicator 4: Utility Allowance Schedule Score Documentation shows that the PHA reviewed utility rate data and properly adjusted the utility allowances if necessary Yes 5 points No 0 Points 101

102 Indicator 4: Utility Allowance Schedule Sample No sample for this indicator, you either did it or you didn t 102

103 Indicator 4: Utility Allowance Schedule Common Errors and Mistakes Not obtaining utility rate data every 12 months Not obtaining reliable data Not updating the allowances when required Not updating the information in the system when a change is made 103

104 Indicator 5: HQS Quality Control Inspections - Definition A PHA supervisor (or other qualified person) re-inspected a sample of units during the PHA fiscal year, for quality control of HQS inspections 104

105 Indicator 5: HQS Quality Control Inspections - Purpose To verify that HQS inspections are being performed timely and accurately and are properly tracked by the PHA HQS inspections are performed in order to ensure that the subsidized units are an adequate living environment for the tenants 105

106 Indicator 5: HQS Quality Control Inspections - Score Documentation shows that the PHA reperformed HQS inspections over a cross section of neighborhoods and inspectors Yes 5 points No 0 Points 106

107 Indicator 5: HQS Quality Control Inspections - Sample Per 24 CFR 985.2(b) The PHA s reinspected sample must be drawn from recently completed HQS inspections and represents a cross section of neighborhoods and the work of a cross section of inspectors. 107

108 Indicator 5: HQS Quality Control Inspections Common Errors and Mistakes Annual inspections are not performed Lack of documentation Recently Completed is within 90 days Re - inspections were not performed, or not performed by a supervisor or other qualified individual Sample was not representative of a cross section of neighborhoods and/or inspectors The intent of the reinspection is a QC on the initial inspection. Not an inspection because we need an inspection. ( Quality Control of the Initial Inspection) 108

109 Indicator 6: HQS Enforcement Definition The PHA s quality control sample of case files with failed HQS inspections shows that for all cases sampled: any cited life-threatening deficiencies were corrected within 24 hours from the inspections all other cited HQS deficiencies were corrected within no more than 30 calendar days (or less per admin plan could be 14 days) from the inspection or any PHA approved extensions 109

110 Indicator 6: HQS Enforcement Definition If the HQS deficiencies were not corrected within the required time frame the PHA must: Stop housing assistance payments beginning no later than the first of the month following the specified correction period (abatement) or Take prompt and vigorous action to enforce the family obligations 110

111 Indicator 6: HQS Enforcement Purpose To ensure that HCVP tenants are living in acceptable conditions To ensure that the landlord is properly maintaining the property 111

112 Indicator 6: HQS Enforcement Score Documentation shows that the PHA s QC sample of failed inspections were properly corrected or abated within the appropriate time frame > 98% - 10 points < 98% - 0 points 112

113 Indicator 6: HQS Enforcement Sample Per 24 CFR 985.2(b) 113

114 Indicator 6: HQS Enforcement Common Errors and Mistakes Annual inspections are not performed Incorrect universe used in selecting the sample Follow up of failed inspections not performed timely HAP not abated timely 114

115 SEMAP - 14 requirements 1. Wait list 2. Reasonable Rent 3. Adjusted income 4. Utility allowance 5. HQS Quality Control 6. HQS Enforcement 7. Expanding housing assistance 8. Payment standards 9. Annual exams 10. Correct Tenant rent 11. Pre-contract HQS inspections 12. Annual HQS Inspections 13. Family Self Sufficiency 14. Bonus Deconcentration Bonus indicator 115

116 RECAP Board Oversight Be involved in the budget, monitor and understand variances with actual Understand the audit, what it covers and what it doesn t. PHAS MASS and FASS Occupancy, collection of tenant revenue, etc SEMAP Consider a monthly scorecard (dashboard) 116

117 SEMAP Indicator Maximum Points/ SEMAP Goal Jan Feb Mar 1Waiting List 15 2 Rent Reasonableness 20 3 Adjusted Income 20 4 Utility Allowance Schedule 5 5 Quality Control Inspections 5 6HQS Enforcement 10 7 Expanding Housing Opportunities 5 8 Payment Standards 5 9 Annual Re-examinations -PIC Correct Tenant Rent - PIC 5 11 Pre-contract HQS Inspections - PIC 5 12 Annual HQS Inspections - PIC Lease-Up FSS 10 Total Points 145 Deconcentration Bonus 5 Score 100% Rating: High, Standard, or Troubled High 90% or above = High Performer 60%-89% = Standard Performer Less Than 60% = Troubled Performer 117

118 PHAS improvement mark FASS total points allowed January February March April QR 12 MENAR 11 DSCR 2 FASS total 25 MASS Occupancy 16 TARs 5 AP 4 MASS total

119 Questions or Comments? 119

120 One More Joke What happens to an accountant when they retire? They lose their internal controls. 120

121 Contact Us Brian Nemeroff, CPA - Partner Phone (321) Nemeroff@bermanhopkins.com Visit our website at 121