Review Processes And Common Errors Found (Excerpts) USED WITH PERMISSION BY: CASTERLINE ASSOCIATES PC VALLEY FORGE, PA (800)

Review Selection Process PHAs are select for review based on a developed risk list from the following: FMC recommended FMD recommended Field Office recommended Sh0rtfall Prevention Team recommended Unresolved issues from prior QAD reviews Risk list provided to OFO and FO Issues already identified by all of the above sources through their involvement with the PHA and VMS data entry.

Documentation Requirements § Program accounts and records (a) The PHA must maintain complete and accurate accounts and other records for the program in accordance with HUD requirements, in a manner that permits a speedy and effective audit. The records must be in the form required by HUD, including requirements governing computerized or electronic forms of record- keeping. The PHA must comply with the financial reporting requirements in 24 CFR part 5, subpart H. (b) The PHA must furnish to HUD accounts and other records, reports, documents andinformation, as required by HUD. For provisions on electronic transmission of required familydata, see 24 CFR part 908. (c) HUD and the Comptroller General of the United States shall have full and free access to all PHA offices and facilities, and to all accounts and other records of the PHA that are pertinent to administration of the program, including the right to examine or audit the records, and to make copies. The PHA must grant such access to computerized or other electronic records, and to any computers, equipment or facilities containing such records, and shall provide any information or assistance needed to access the records

Documentation Requirements (continued) All information must be by ‘voucher type’ Utilization reports for UML verification HAP contracts HAP contracts on hold HAP termination listing Portability reports FSS reports Any other reports used to capture UML on the VMS reporting Hope VI Tenant Protection

Documentation Requirements (continued) Financial Records – for validation of HAP and other reported line items (i.e. fraud recovery) HAP registers Check registers General ledgers Trial balances Reconciled bank statements Voided check registers Chart of Accounts FSS Escrow reports Fraud recovery records Any other documents off-line or system generated used to enter VMS data

VMS Review – What to Expect QAD compares the data reported in VMS to the source documents the PHA used to calculate the data QAD usually examines summary data from the PHA’s information system and check it against detailed records For UML detail, we will need to see HAP registers, tenant listings or other system reports that sort participants by voucher type For HAP detail, we most often rely on the general ledger, which should also be sorted by voucher type (and check these against bank records) A reasonable assurance that summary data are accurate will be made to determine which source documentation will be used

VMS Reviews – What to Expect (continued) Mainly focused on uncovering any significant over or under-reporting Any variance of 3% between the reported and validated Total UML or 3% or $100,000 of the Total HAP or a reporting error that is a clear violation of regulation or statute is an automatic finding Over-reporting identified in the current funding year may lead to a funding recapture or offset of future disbursements Under-reporting identified in the current funding year most likely will not result in recalculation of renewal funding, but corrections to VMS will help ensure accurate future funding

VMS Reviews – What to Expect (continued) Reviewers will also check to ensure that: UML and HAP are reported in the correct category according to the definitions in the VMS Users Manual Expenses and units are applied to the correct month Reported in the month cost incurred, but not until paid Port-out admin fees are not included in HAP These are administrative expenses not HAP Unabsorbed Port-Ins are not included in regular UML and HAP totals These are administrative expenses not HAP Voids are properly accounted for

VMS Reviews – What to Expect (continued) Reviewers will validate Fraud Recovery Ensure appropriate allocation between NRA and UNA Reviewers will validate FSS Escrow Forfeitures Ensure funds are returned to the program (HAP account) if not used for other FSS participants Reviewers will ensure the PHA has sufficient cash to back the PHA reported NRA and UNA balances Will compare the reconciled bank statements for the last month reviewed to the PHA VMS reported cash and investments balances Will also ensure that sufficient cash is available to back reported NRA and UNA balances

VMS Reviews – What to Expect (continued) Reviewers will validate Portability Administered (port- in) Generally the PHA management system will produce a port-in report A limited file review will be conducted Reviewer will develop a sample from PIC On-site will compare PIC data to HAP register or check register to ensure HAP amount actually paid was accurate No physical files will be requested – unless discrepancy is noted

Common Reporting Errors UML Errors (remember UML is reported as of first day of the month) Including port-in UML as ‘all other vouchers” Reporting vouchers under more than one category Reporting under incorrect voucher type VASH vouchers are reported as VASH regardless of whether tenant ports out Once tenant protected – always tenant protected Including vouchers leased after first of the month as being under lease on first of month Including vouchers on hold Issued but not under HAP contract Note that HAP vouchers in abatement are included

Common Reporting Errors (continued) UML (continued) Incorrect remaining under lease at end of month Should include all vouchers remaining under lease on the last day of the month HAP Errors Including port-in voucher HAP as all other HAP expense Including port-out administrative fees as HAP expense Reporting on the ‘after first of the month HAP’ line item all HAP paid with mid-month check run Rather than just for those vouchers leased after the first of the month

Common Reporting Errors (continued) HAP (continued) Reducing HAP expenses by fraud recovery and FSS escrow forfeitures Reporting on a Cash vs. Accrual basis Multiple-months of returned portability payments recorded in one month Retro-active vouchers Reporting HAP under more than one category Duplicate HAP reported

Common Reporting Errors (continued) Other errors noted Reporting 100% of fraud recovery collected Reporting total FR receivables as fraud recovery collected Total amount of repayment agreement Reporting $0 fraud recovery Keeping 100% of the amount collected as UNA without justification Incorrectly reporting cash and investments Failing to report NRA and UNA

Tips for Accurate Reporting REITERATES FMC INSTRUCTIONS Know the proper definitions of VMS categories Have detailed, written procedures to govern VMS data collection and reporting Use procedures consistently from month to month Involve program, Finance, and IT staff in VMS reporting Have summary reports that tie directly to detailed reports

Tips for Accurate Reporting (continued) Document adjustments for retroactive payments, etc. Make notes on any uncommon occurrences that affect VMS data Clear audit trail Audit yourself regularly to insure participants are coded correctly and procedures are being followed Encourage your software provider to update software to make VMS reporting easier