Program Finance, Audits

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Program Finance, Audits Internal Controls
Julie Miles, Financial Analyst HUD-Kansas City,
KS 913-551-5529
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Program Finance

• Low-Rent Public Housing
• Section 8 Housing Choice Vouchers

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Public Housing Operations

• Annual Submission of Operating Subsidy
  Calculation
• Operating Subsidy Funded on Calendar Year Basis
• PHA Draws Funds from the Line of Credit Control
  System (LOCCS)Monthly Limit
• Eligible for Costs to Operate Public Housing
• Operating Funds Can Only Pay for Low-Rent Program
  CostsCannot Transfer or Loan Funds to Any Other
  Program, Including Section 8 Housing Choice
  Voucher Program

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Operating Subsidy Formula

• Funding Period 1/1 to 12/31
• Reporting Period 7/1 to 6/30 before Funding
  Period
• CY 2007 PHA Level1 Calculation
• CY 2008 Future Project/AMP LevelMultiple
  Calculations
• Expense Level Based on Project Characteristics
• Less Project Rent (Frozen at 04 Level CY07 to
  CY09)
• Plus Project-Share of Add-ons
• Equals Subsidy Eligibility
• Less Proration

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Section 8 Housing Choice Voucher (HCV) Program
Operations

• 2-Part HCV Grant
• Administrative Fee
• Housing Assistance Payment (HAP)
• Must Track Admin HAP Separately
• Funded on Calendar Year Basis
• Leasing Expense Data Reported to the Voucher
  Management System (VMS)

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HCV Admin Fee

• Eligible for Admin Costs HAP Costs in Excess of
  HAP Grant (up to Baseline)
• CY 2009 Funding To Be Announced
• CY 2008 Funding Based on Vouchers Under HAP as of
  the First Day of the Month
• Calculated Quarterly Based on VMS Subject to
  Proration
• Cannot Use for Over-Leasing (Vouchers Exceeding
  Annual Baseline)

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HCV HAP

• Eligible for HAP Costs Only
• CY 2009 Funding To Be Announced
• CY 2008 Funding Based on VMS Data for October 06
  to September 2007 Plus Inflation
• Cannot Use for Over-Leasing (Vouchers Exceeding
  Annual Baseline)
• 2004 PriorHAP Funding Adjusted at Year-End to
  Actual Cost (Year-End Settlement)
• 2005First Year HAP Budget-Based, No Adjustment
  to Actual Cost

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Reserves/Net Assets

• Must Track Admin (Unrestricted) HAP
  (Restricted) Separately
• 2003 Prior ReservesUse For Other Housing
  Purposes Permitted By State Local Law
• 2004 AfterHAP Reserves Only for Provision of
  Section 8 Tenant-Based Rental Assistance,
  Including Related Development

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Audits Internal Controls

• Audit Requirements
• Financial Assessment
• Internal Controls

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Requirements

• OMB Circular A-133 Requires Single Audit if PHA
  Expends 500K or More in Federal Funds
• Optional Non-A-133 Audit if Expends Less Than
  500K (Unless Audit Required by State Law)
• Within 9 Months of FYE
• Submit Electronic Copy of Audit to Real Estate
  Assessment Center (REAC)
• Submit Paper Copy of Audit and Management Letter,
  if Noted, to Field Office

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Requirements (continued)

• Audit May Include
• Specific Issues
• Earlier Submission Date
• GAAP Flyer 6 Procuring An Audit
• http//www.hud.gov/offices/reac/pdf/gaapflyer6.pdf

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Assessment

• FASS Score Based on Unaudited Financial
  Submission to REAC
• FASS Score Adjusted Based on Audited Financial
  Submission to REAC
• Account Balance Changes
• Audit Opinion Penalties
• Audit Finding Penalties

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Internal Controls

• Document Expectations of Staff
• Track Safeguard Assets
• Checks Balances
• Board Oversight