Countering Risks of Decentralization Part 1: Introduction (CRD101PS)

Transcription

1 Countering Risks of Decentralization Part 1: Introduction (CRD101PS) Julie McGovern Reno & Cavanaugh, PLLC

2 Goals of Session Introduce asset-based management concepts Identify crucial resources and HUD guidance Suggest strategies to counter noncompliance risks

3 Procurement and Contracting Future sessions Basic procurement requirements Preview new HUD handbook Strategies to minimize risk of transition to site manager purchasing HUD initiatives re: legal services Consortia, intergovernmental agreements, HOPE VI, and mixedfinance

4 Fair Housing and ACOP Future session Fair housing and non-discrimination issues Admission requirements Income and rent determinations Continued occupancy Implications of the shift to assetbased management

5 What is Asset Based Mgmt.? Emulate Private Sector Managers Beginnings of Decentralization Regulatory Basis Current Guidance Economic Basics Limited Funding of Central Office

6 Be Like Private Sector Managers PHAs currently centralize many functions Power and responsibility transferred to site managers Private property management used as a model Front line functions pushed from central office to site manager

7 Beginnings of Decentralization Final Report: Public Housing Operating Cost Study, Harvard University Graduate School of Design, June 6, 2003 Continuity: Project Manager of Cost Study now leading asset management transition at HUD

8 Regulatory Basis 24 CFR (a) Manage properties using asset management model consistent with the norms of broader multi-family management industry. Implement project-based management, budgeting, and accounting.

9 Current Guidance Constantly evolving HUD issuances & notices, including asset management web page [Point to resources handout] To date, the most important two are Stop Loss Notice - PIH , issued in March 2006 Financial Management Supplement - PIH , issued Sept. 2006

10 Title: Question: Asset Management Requirements Where would you find the most detailed articulation of asset management responsibilities? Correct? Answer A: N HUD Asset Management Web Page Answer B: N Operating Fund Regulation, Part 990 Answer C: Y Financial Management Supplement Answer D: N Stop Loss Notice Answer E: Y/N Answer text Correct Feedback: Incorrect Feedback: That s right, the 52-page Financial Management Supplement has the most detail on asset management. But, it is only open for comment and is not yet a requirement. Sorry, the 52-page Financial Management Supplement has the most detail on asset management. But, it is only open for comment and is not yet a requirement. *** Please edit all italics to build a question with 2-5 answer options.

11 Economic Basics Asset Management Projects (AMPs) retain most income Push tasks and costs to front line functions, found at See P.43 of Financial Management Supplement See Sections 6.38 and 6.39 of Management Agent Handbook [point to handout]

12 Limited Funding of Central Office $10 PUM of cash flow from AMPs Computer, bookkeeping and other add on fees Management fees paid by the AMPs Other front line functions performed on a fee for service basis Support central office staff in any task not targeted to a specific AMP

13 Title: Question: Role of the Central Office Under asset-based management, the central office determines how to allocate funds to itself and the various projects. Correct? Answer A: N True Answer B: Y False Answer C: Y/N Answer text Answer D: Y/N Answer text Answer E: Y/N Answer text Correct Feedback: Incorrect Feedback: You re right! The central office can retain only limited fee income. The rest is distributed to individual AMPs in accordance with formulas set out in 24 CFR part 990. NO! The central office can retain only limited fee income. The rest is distributed to individual AMPs in accordance with formulas set out in 24 CFR part 990. *** Please edit all italics to build a question with 2-5 answer options.

14 Central Office Tasks Centralized procurement Centralized maintenance or warehouse not charged out to AMPs Annual reporting such as the PHA Plan, consolidated audit, PHAS Supervision of front line functions such as application intake

15 Overview of Part II Site Manager Controls Non-Compliance Risks Potential Liabilities Mitigating Risks Example

16 Site Manager Controls Site managers develop their own budgets, manage to the budget, hire, fire, procure, lease, evict, etc. Accountable for the operations of the AMP - just as in the private sector

17 Which Leads to

18 Non-Compliance Risks Inadequate systems to provide support to decentralized staff Provision of inadequate property management Failure to comply with public housing and other regulatory requirements Insufficiently trained managers who are unprepared for expanded duties

19 Which Leads to

20 Title: Question: Non-Compliance Risks What are some likely non-compliance risks for your organization? Correct? Answer A: Y Property management falls by the wayside while property managers learn to manage new regulatory and financial responsibilities Answer B: Y Site managers need more training for their new responsibilities Answer C: Y Central office doesn t provide enough support to site managers Answer D: Y Other Answer E: Y/N Answer text Correct Feedback: Incorrect Feedback: They are all potential risks, but you know your organization best! Please enter the incorrect feedback here *** Please edit all italics to build a question with 2-5 answer options.

21 Potential Liability Sources HUD restrict funding, require enhanced reporting Inspector General - recapture of expended HUD funds Local advocacy groups litigation or damaging press

22 Mitigating Risks Effective oversight - but not micromanagement Communication Sufficient centralized systems to support site managers Training Clear standard practices and procedures

23 Example Tasks Send non-payment & default notices Determine when to evict Document files Provide grievance hearing Obtain, support and manage legal counsel Appear in court if necessary

24 Example Risks Non-compliance with HUD requirements Non-compliance with state laws Improperly documenting grounds for eviction

25 Example Training Formal training on eviction procedures Informal training, as needed

26 Example Communication Encourage communication between site manager and general counsel before beginning eviction Regular meetings of site managers and supervisors

27 Example Clear Practices Clear and comprehensible forms and guidance materials Update procedures manual for new responsibilities

28 Example Support Systems Centralized procurement and task orders Retain centralization of some functions, at least temporarily Especially waiting list and admissions

29 Title: Question: Mitigating Non-Compliance Risks Which of the following is not a good way to mitigate non-compliance risks of decentralization? Correct? Answer A: N Training for site managers Answer B: N Answer C: Y Answer D: N Open lines of communications between site managers and central offices Rigid processes that place a check on site managers at every step to make sure that the central office has ultimate control over program management. Clear standard practices and procedures Answer E: Y/N Answer text Correct Feedback: Incorrect Feedback: That s right, while effective oversight is necessary central offices should avoid micromanaging. Sorry, no. C is the correct answer. *** Please edit all italics to build a question with 2-5 answer options.