1. © Copyright 2008 Nan McKay & Associates December 20081 Managing SEMAP Gail Gillispie © Copyright 2008 Nan McKay & Associates

2. December 20082 Steps to Success 1. Establish desired outcomes What will be quality controlled? What outcomes are acceptable? Goals must be: Attainable Measurable Clearly defined

3. © Copyright 2008 Nan McKay & Associates December 20083 Steps to Success 2. Educate all staff on how their daily work impacts the PHA SEMAP score Hold a series of workshops to discuss and train: SEMAP indictors SEMAP requirements Related policies Application of requirements

4. © Copyright 2008 Nan McKay & Associates December 20084 Educate Workshop discussion example: Determination of adjusted income requires staff to follow verification requirements Discuss Regulatory requirement PHA verification policies How staff applies these policies daily How staff documents verification attempts

5. © Copyright 2008 Nan McKay & Associates December 20085 Educate Hold the workshops ongoing – and don’t be afraid to repeat a topic Provides emphasis, additional clarity, and clears misunderstandings

6. © Copyright 2008 Nan McKay & Associates December 20086 Steps to Success 3. Assign SEMAP QC role to one or more key staff Large PHA: QC department conducts SEMAP and non-SEMAP QC activities Ongoing file reviews Ongoing financial reviews Ongoing HQS reviews

7. © Copyright 2008 Nan McKay & Associates December 20087 Assigning SEMAP QC Role Midsize PHA: QC supervisor – but fewer support staff Rely more on supervisor review efforts Small PHA: Assign to staff supervisors – but avoid assigning indicators for which the supervisor is responsible Work with neighboring PHAs to QC each other

8. © Copyright 2008 Nan McKay & Associates December 20088 Steps to Success 4. Establish a review schedule for each indicator: What are the program requirements? What will be reviewed? How will it be reviewed? How often reviewed? Who will review? How will results be communicated to staff and management?

9. © Copyright 2008 Nan McKay & Associates December 20089 Establish an Indicator Review Schedule Example: SEMAP indicator: Lease-up What are program requirements? The percent of units leased or the percent of allocated budget authority expended during the PHA fiscal year was 98% or more

10. © Copyright 2008 Nan McKay & Associates December 200810 Example: SEMAP indicator: Lease-up What will be reviewed? Internal financial records will be reviewed to determine year-to-date lease up (units and budget authority) VMS and software lease-up data will be compared Establish an Indicator Review Schedule

11. © Copyright 2008 Nan McKay & Associates December 200811 Example: SEMAP indicator: Lease-up How will it be reviewed? What internal tracking document will be used to capture: Unit months leased, year-to-date? Expended budget authority, year-to- date? Establish an Indicator Review Schedule

12. © Copyright 2008 Nan McKay & Associates December 200812 Example: SEMAP indicator: Lease-up How often reviewed? By the 15th of each month: year to date status is to be reviewed through previous month Who will review? Name specific staff Establish an Indicator Review Schedule

13. © Copyright 2008 Nan McKay & Associates December 200813 Example: SEMAP indicator: Lease-up How will results be communicated to staff and management? Options: Paper/electronic reports Establish an Indicator Review Schedule

14. © Copyright 2008 Nan McKay & Associates December 200814 Communicating results: Make sure all Key Performance Indicators (KPIs) are addressed Make sure all KPIs are reported on timely, as scheduled Establish an Indicator Review Schedule

15. © Copyright 2008 Nan McKay & Associates December 200815 Steps to Success 5. Establish a record keeping system Where will records be maintained? How will records be maintained?

16. © Copyright 2008 Nan McKay & Associates December 200816 Establish Record Keeping System One approach: Make up 15 (plus bonus if applicable) file folders 1 general file folder Random methodology 1 file folder for each indicator Remember, you want PROOF

17. © Copyright 2008 Nan McKay & Associates December 200817 Internal Audit Files Description of indicator and performance standard Place data from audit for each indicator reviewed Any other “proof” of certification score Use auditor minimum file sample and increase sample if needed

18. © Copyright 2008 Nan McKay & Associates December 200818 Steps to Success 6. Conduct preliminary and ongoing audits PHA supervisory audits

19. © Copyright 2008 Nan McKay & Associates December 200819 Supervisory QC Reviews Periodic samples of files Drawn in unbiased manner (leave clear audit trail) Reviewed by supervisor or other qualified person other than the one who did the work Objective: determine compliance with indicator

20. © Copyright 2008 Nan McKay & Associates December 200820 Supervisory Audit Indicators Selection from Waiting List15 Reasonable Rent 20 Determination of Adjusted Income20 HQS Quality Control Inspections 5 HQS Enforcement10

21. © Copyright 2008 Nan McKay & Associates December 200821 Size of Universe Determines file sample size Different for each indicator e.g., # number of admissions vs. number of families assisted

22. © Copyright 2008 Nan McKay & Associates December 200822 Audit Sample Selection 50 or less 51-600 601-2000 Over 2000 5 5 + 1 for each 50 (or part of 50) over 50 16 + 1 for each 100 (or part) over 600 30 + 1 for each 200 (or part) over 2000

23. © Copyright 2008 Nan McKay & Associates December 200823 File Sampling Determine the universe Determine number of files to be selected for review Determine “nth” file this represents Include all staff in sample FY is period for analysis

24. © Copyright 2008 Nan McKay & Associates December 200824 Minimum Files Example Waiting List Selection: Based on # of new admissions per FY Example: PHA has admitted 260 families minimum # of files to audit? # of files which must meet criteria to receive 15 points? Note: 98% 10 98.8 (10) files 51-600 = 5 + 1 for each 50 (or part of 50) over 50

25. © Copyright 2008 Nan McKay & Associates December 200825 Random Sampling Example Universe requirement 260 files File sample 10 files Files to be pulled Every 26th file If all staff are not represented, select closest file below 26th file

26. © Copyright 2008 Nan McKay & Associates December 200826 HUD SEMAP Indicators

27. © Copyright 2008 Nan McKay & Associates December 200827 1.Selection from Waiting List (15/0 points) Universe Number of families admitted to program during audit period Two separate samples drawn from: Applicant names that reached the top of the waiting list during the audit period Families admitted to the program during the audit period

28. © Copyright 2008 Nan McKay & Associates December 200828 1. Selection from Waiting List (Supervisory Audit) PHAs must have written selection policies in administrative plan At least 98% of families must be selected from the waiting list in accordance with the PHA’s policies Page 2-1

29. © Copyright 2008 Nan McKay & Associates December 200829 1. Selection from Waiting List PHA follows policies in selecting families from waiting list Families met selection criteria that determined their place on waiting list and order of selection

30. © Copyright 2008 Nan McKay & Associates December 200830 Most Likely Error Points Get up to date on preferences in 982.207 Income targeting 982.201(b)(2) Special admissions 982.203 Special program (targeted) admissions 982.204(e)

31. © Copyright 2008 Nan McKay & Associates December 200831 Policies for Audit File Document policy charges during PHA FY Example: October FY PHA 10/1/XX10/1/XX-2/28/XX 3/1/XX3/1/XX-6/30/XX 7/1/XX7/1/XX-9/30/XX

32. © Copyright 2008 Nan McKay & Associates December 200832 2. Reasonable Rent (20/15/0 points) Universe Number of families assisted for PHA FY Sample drawn from Number of families assisted for PHA FY

33. © Copyright 2008 Nan McKay & Associates December 200833 2. Reasonable Rent (Supervisory Audit) The PHA must have a reasonable written method to determine Rent to owner is reasonable based on current rents charged for comparable unassisted units Page 2-16

34. © Copyright 2008 Nan McKay & Associates December 200834 2. Reasonable Rent The method may take into consideration Location Size Type Quality Age Amenities Housing services Maintenance Utilities

35. © Copyright 2008 Nan McKay & Associates December 200835 2. Reasonable Rent PHA must follow its written method Document determination that the rent to owner is reasonable at required times Initial leasing of a unit Any increase in rent to owner 5% decrease in the FMR in effect 60 days before HAPC anniversary date

36. © Copyright 2008 Nan McKay & Associates December 200836 3. Determination of Adjusted Income (20/15/0 points) Universe Number of families assisted for PHA FY Sample drawn from Number of families assisted for PHA FY Page 2-44

37. © Copyright 2008 Nan McKay & Associates December 200837 3. Determination of Adjusted Income (Supervisory Audit) At admission and reexamination, the PHA must properly: Obtain third-party verification of income or document why impossible to obtain Use the verified information Properly attribute allowances for expenses Use the appropriate utility allowances Page 2-44

38. © Copyright 2008 Nan McKay & Associates December 200838 Most Likely Error Points Market/cash value of assets Asset income Training program income EID for persons with disabilities Disability assistance & medical expenses Conflict between utilities in lease and worksheet

39. © Copyright 2008 Nan McKay & Associates December 200839 Recommended Levels of Verification Highest – Up-front income verification (UIV) High – Written 3rd party Medium – Third party oral Medium-low – Document review Low – Tenant declaration

40. © Copyright 2008 Nan McKay & Associates December 200840 Use of UIV for Verification UIV is third-party verification Most preferred form Meets regulatory requirements UIV is intended to streamline the verification process Eliminates the need for written third-party verification in many cases

41. © Copyright 2008 Nan McKay & Associates December 200841 NEW! HUD Guidance on EIV HUD webcasts 1/16/08 and 8/26/08 contained revised guidance on use of EIV Previous guidance is obsolete and has been removed from EIV website Both webcasts available at http://www.hud.gov/webcasts/archives/iv.cfm http://www.hud.gov/webcasts/archives/iv.cfm Training materials available at http://www.hud.gov/offices/pih/programs/ph/ http://www.hud.gov/offices/pih/programs/ph/ rhiip/training.cfm

42. © Copyright 2008 Nan McKay & Associates December 200842 4.Utility Allowance Schedule (5/0 points) PHA has reviewed utility rate data within prior 12 months PHA has adjusted schedule if 10%+ change in rate since last utility allowance schedule revision Page 2-54

43. © Copyright 2008 Nan McKay & Associates December 200843 5. HQS Quality Control Inspections (5/0 points) Universe Units under HAPC during last completed FY Page 2-61

44. © Copyright 2008 Nan McKay & Associates December 200844 5. HQS Quality Control Inspections (Supervisory Audit) PHA performs QC inspection of units under contract Sampling drawn from: Recently completed inspections Cross section of neighborhoods Work of cross section of inspectors Page 2-61

45. © Copyright 2008 Nan McKay & Associates December 200845 6. HQS Enforcement (10/0 points) Universe Number of failed HQS inspections in last FY Sample drawn from Number of failed HQS inspections in last FY Page 2-68

46. © Copyright 2008 Nan McKay & Associates December 200846 HQS Enforcement (Supervisory Audit) All life threatening fails corrected within 24 hours, and 98% of other fails corrected within 30 days or PHA approved extension or PHA took action Owner fails: abated HAP Family fails: enforced family obligations

47. © Copyright 2008 Nan McKay & Associates December 200847 7. Expanding Housing Opportunities (5/0 points) A. Written policy to encourage owner participation outside areas of poverty or minority concentration B. Documentation shows PHA followed policy C. PHA has created a briefing packet (e.g. maps, job opportunities, schools and other services in the areas) to encourage voucher holders to seek these opportunities

48. © Copyright 2008 Nan McKay & Associates December 200848 Expanding Housing Opportunities D. Information packet has List of owners willing to lease Other organizations (housing counseling, advocacy groups, service providers) which assist families in finding units E. Information packet explains portability and provides list of contacts at neighboring PHAs

49. © Copyright 2008 Nan McKay & Associates December 200849 Expanding Housing Opportunities F. PHAs have analyzed: Difficulties of voucher holders finding units in these areas If so, has analyzed Whether to seek approval of exception payment standards Sought approval for exception payment standards if needed

50. © Copyright 2008 Nan McKay & Associates December 200850 8.Payment Standards (5/0 points) The PHA must adopt payment standards By unit size For each FMR area in the PHA jurisdiction Between 90-110% of the HUD-published FMR If applicable, for each PHA-designated part of an FMR area Page 2-85

51. © Copyright 2008 Nan McKay & Associates December 200851 8. Payment Standards If any PS schedule contains a PS that is out of range from the appropriate FMR Field office will assign 0 points for the indicator

52. © Copyright 2008 Nan McKay & Associates December 200852 8. Payment Standards Example: FMR for 2 bedroom unit $756 $756 x 1.10 = $831.60 (round down) $756 x.90 = $680.40 (round up) To be within range PS can be between: $681 - $831

53. © Copyright 2008 Nan McKay & Associates December 200853 HUD Indicators Verified by PIC Page 2-91

54. © Copyright 2008 Nan McKay & Associates December 200854 PIC Reporting If a PHA has not reported at least 95% of its program participants to PIC Any indicator for which HUD verifies performance using PIC data will be rated zero!!

55. © Copyright 2008 Nan McKay & Associates December 200855 PIC Factors Factors affected by the 95% reporting rate: Annual reexaminations 10 pts Correct tenant rent calculations 5 pts Pre-contract HQS inspections 5 pts Family self-sufficiency 10 pts Annual HQS inspections 10 pts Zero pts for each if 95% not achieved

56. © Copyright 2008 Nan McKay & Associates December 200856 9. Annual Reexaminations (10/5/0 points) PHA must complete a reexamination for each participating family at least every 12 months Remember PIC reporting End participation (#6) Other change of unit (#7) vs. annual reexam (#2) Annual reexam searching (#9) Page 2-93

57. © Copyright 2008 Nan McKay & Associates December 200857 10. Correct Tenant Rent Calculations (5/0 points) The PHA must correctly calculate family’s share of rent to owner Inaccurate or missing data from indictor 3 (adjusted income) will affect the accuracy of this indicator Page 2-100

58. © Copyright 2008 Nan McKay & Associates December 200858 11. Pre-Contract HQS Inspections (5/0 points) Newly leased units must pass HQS inspection before HAP contract effective date Page 2-105

59. © Copyright 2008 Nan McKay & Associates December 200859 12.Annual HQS Inspections (10/5/0) The PHA inspects each unit under contract at least annually At least annually means within 12 months from date inspector conducted full HQS inspection Page 2-111

60. © Copyright 2008 Nan McKay & Associates December 200860 12. Annual HQS Inspections HUD-50058 form has an action code to allow reporting of the annual HQS inspection at the time it occurs PIC extract will list % of inspections more than 2 months overdue The 2 month allowance is to accommodate a possible lag in electronic reporting

61. © Copyright 2008 Nan McKay & Associates December 200861 Annual HQS Inspection Only If a 50058 is submitted within 2 months from annual HQS effective date Put HQS effective date on line 5i If more than 2 months, annual HQS must have its own 50058

62. © Copyright 2008 Nan McKay & Associates December 200862 13. Lease-Up (20/15/0 points) The PHA enters into HAP contracts for the number of units under ACC for at least one year PHA has leased at least 98% or 95% of the units under ACC, or PHA has used at least 98% or 95% of its allocated budget authority

63. © Copyright 2008 Nan McKay & Associates December 200863 14. FSS (10/8/5/3/0) Applies only to PHAs required to administer an FSS program PHA checks off on the certification form if the indicator does not apply to them If checked, HUD field office will verify that the PHA is not required to administer an FSS program Page 2-124

64. © Copyright 2008 Nan McKay & Associates December 200864 14a. FSS Enrollment PHA Certifies: A. # of mandatory slots or # slots with HUD-approved exception B. # of FSS families currently enrolled

65. © Copyright 2008 Nan McKay & Associates December 200865 14a. FSS Enrollment PHA Certifies: C. Portability: If you are the initial PHA, enter # families currently enrolled but who have moved under portability and whose S8 assistance is administered by another PHA D. % of FSS slots filled (b + c divided by a)

66. © Copyright 2008 Nan McKay & Associates December 200866 Rating FSS Enrollment The HUD field office will verify the # of mandatory FSS slots (or with exception) reported on the PHA’s certification PIC supplies the number of FSS families currently enrolled

67. © Copyright 2008 Nan McKay & Associates December 200867 14b. % of FSS Participants with Escrow Balances The PHA has made progress in supporting family self-sufficiency as measured by the % of currently enrolled FSS families with escrow account balances (need 30% for full points) Yes___No___ $

68. © Copyright 2008 Nan McKay & Associates December 200868 14 b. % of FSS Participants with Escrow Balances Portability: If you are the initial PHA Enter the number of families with FSS escrow accounts currently enrolled in your FSS program, but who have moved under portability and whose Section 8 assistance is administered by another PHA

69. © Copyright 2008 Nan McKay & Associates December 200869 Rating FSS Escrow Account Balances The percent of FSS families with escrow account balances comes directly from PIC # of FSS families with positive escrow balance or with a positive amount of escrow disbursed # of families in PIC w/progress reports = % with escrow accounts balance Page 2-124

70. © Copyright 2008 Nan McKay & Associates December 200870 Deconcentration BONUS Mandatory for PHA using PS amount(s) that exceed 100% of FMR set at 50th percentile Optional for all other PHAs Criterion 1 50% or more of all S8 families with children resided in low poverty census tracts last FY Page 2-136

71. © Copyright 2008 Nan McKay & Associates December 200871 Deconcentration BONUS Criterion 2 and 3 2. % of S8 families with children who have moved to low poverty census tracts last FY At least 2% higher than % of All S8 families with children living in low poverty census tracts last FY 3. Same as (2), except over past two FY 5 points Page 2-136

72. © Copyright 2008 Nan McKay & Associates December 200872 Deconcentration Bonus Criterion 4 State and regional PHAs Must complete data for each metro area or portion of a metro area where the PHA has assisted 20 or more S8 families with children last FY 5 Points

73. © Copyright 2008 Nan McKay & Associates December 200873 Success Rate of Voucher Holders Applies only to PHAs with HUD approval to establish success rate PS amounts Initially effective for 2nd full PHA FY following date of HUD approval of success rate PS amounts >>>>>>>>> Page 2-140

74. © Copyright 2008 Nan McKay & Associates December 200874 Success Rate of Voucher Holders Measures whether voucher holders were successful in leasing units HUD verification method: PIC 5 Points

75. © Copyright 2008 Nan McKay & Associates December 200875 Additional Information A PHA may include with its SEMAP certification any information bearing on the accuracy or completeness of the information used by the PHA in completing its certification (comments) A PHA may also send paper documentation to the HUD field office Page 2-141

76. © Copyright 2008 Nan McKay & Associates December 200876 So what’s a PHA to do???

77. © Copyright 2008 Nan McKay & Associates December 200877 Review Steps to Success 1. Establish desired outcomes 2. Educate all staff on how their daily work impacts the PHA SEMAP score 3. Assign SEMAP QC role to one or more key staff 4. Establish an indicator review schedule 5. Establish record keeping system 6. Conduct preliminary and ongoing audits

78. © Copyright 2008 Nan McKay & Associates December 200878 January 16 – Earned Income Disallowance January 23 – Rent Reasonableness January 30 – Managing the Maintenance Function February 13 – EIV Security and Update March 6 - Income Exclusions (not including Earned Income Disallowance) UPCOMING LUNCH ‘N’ LEARNS