1. Governance and financial management Board of Commissioner Training 1

2. 2 Historical Context Board Roles and Responsibilities Fundamentals of Oversight Programs and Performance PHA Governance To provide the Board with an overview of: Training Objective

3. Training context 3 Strong Governance Sound Financial Oversight Long Term Sustainable Performance

4. Fundamental Concepts of Oversight Governance and finance are the basis of any Public Housing Agency’s (PHA) success. The Board of Commissioners has the ultimate responsibility for the PHA’s performance and is accountable to the community. The Board sets the operational norms, rules, and values of the PHA. The Board establishes policies and internal controls to implement programs and ensure integrity. Knowledge is Power 4

5. PHA Governance Basics 5

6. Overview of Board Role Legally and financially responsible governing body Power of the Board is vested in all members as a body, not individuals In the accomplishment of its mission, the Board has the functions of: 6 Leadership Compliance Oversight Operational Oversight Board Proceedings Financial Oversight

7. Knowledge is power- be informed Boards should know and review: Agency’s history, mission, vision, values, programs, financials and current strategic plan Roles and responsibilities of the Board and individuals Key staff roles in the programs of the agency Agency-owned developments and properties Agency records and documents Board & committee meeting processes, including open meeting requirements and confidentiality Agency printed materials

8. Desirable qualities for Commissioners Recommended qualities/assets: Skills to help the agency’s administration (financial, reporting, legal) Skills to help the agency’s outreach & marketing (speakers, media contacts) Skills to help the agency’s service provision (service experts, training contacts) Experience: Past service to other agencies Known reputation Community connections Knowledge/skills/abilities needed by agency 8

9. Roles and Responsibilities 9

10. 10 Local Government Creates PHA/Appoints Board members Provides services through Cooperation Agreement May provide funding or other support to PHA PHA/Board Builds or acquires housing Owns and operates housing in accordance with laws Maintains properties Assists low income families HUD Provides funding May provides training and technical assistance Monitors PHA operations and governance Initiates corrective actions

11. Governance: Lines of responsibility Commissioner Executive Director Select and hire an Executive Director Evaluate Executive Director performance Approve by-laws, resolutions, policies and procedures Approve the authority’s budget Set basic PHA policies Govern PHA Manage the day to day operations of the PHA Hire, evaluate, train, and terminate staff Prepare operating budgets Resident selection Manage facilities and maintenance Develop and manage resident Programs Collect rents and enforce terms of leases Procure annual audit Advise Board of regulatory changes Execute Board approved policies 11

12. Fundamentals of Oversight 12

13. Commissioners should know: 13 Federal and State Laws Federal Regulations Annual Contributions Contract (ACC) PHA Policies Programs and Performance Oversight Responsibilities

14. Public housing historical context U.S. Housing Act Housing and Urban Development Act Quality Housing and Work Responsibility Act 14 Established permanent public housing funded by the Federal government Established the U.S. Department of HUD Reformed public housing legislative requirements 193719651998

15. Statutes and Regulations U.S. Housing Act of 1937 as amended Amendments to the Act include the Section 8 Housing Choice Voucher Program Quality Housing and Work Responsibility Act of 1998 Fair Housing Act and subsequent civil rights and disability law Title 24 Code of Federal Regulations (CFR) Annual appropriations law State Laws and Local Ordinances 15

16. Annual Contributions Contract (ACC) A legal binding contract between HUD and the PHA States PHA obligations and remedies for breaches of contract Mechanism through which the PHA receives funding 16

17. Obligations under the ACC Include but are not limited to: Cooperation agreements Operating budgets Depository Agreements and General Fund Pooling of funds Books of account, records, and government access Notices, defaults, remedies Conflict of Interest ACC term extends each year funds are accepted 17

18. Remedies under the ACC 18 Include but are not limited to: A reduction in the amount of the HUD payment for any funding increment A reduction in the contract authority or budget authority for any funding increment Other available remedies include: limited denial of participation suspension or debarment of Board or staff taking of possession and control of project(s) by HUD receivership consolidation consortia/joint venture contracting of operational activities Cooperative Endeavor Agreement

19. PHA Policies and Procedures Admissions & Continued Occupancy Policy (ACOP) Section 8 Housing Choice Voucher Administrative Plan PHA Plan (Annual and 5 year) Others 19

20. Public Housing Policies Including but not limited to: Capitalization Drug Free Work Place Financial Management and Internal Controls Investments Maintenance Personnel Procurement Property Disposition Records Retention Travel Vehicle 20

21. Programs and Performance 21

22. How PHAs Are Funded Congress Legislation authorizes programs Federal BudgetHUD Budget HUD allocates funds to PHAs (formula) PHAs compete for program funding (competition)

23. Federal Sources of Revenue (Restricted) Operating Subsidy Capital Fund Housing Choice Voucher Housing Assistance Payments Housing Choice Voucher Administrative Fees Resident Program grants Development grants 23

24. Know your PHA PHA programs (Federal, State, Local) Number of AMPs and units Budget Staff size Major plans and projects underway Program performance measures and scores 24

25. PHA Program Performance 25 Section 8 Management Assessment System Public Housing Assessment System Measurement Performance in housing choice voucher program Performance in operations: financial, physical, management, Capital Fund Scoring High Performer - 90% or more Standard Performer - 60-90% Troubled Performer – less than 60% High performer- 90% or more overall Standard performer- 60-90% Substandard performer- at least 60% overall with less than 60 for 1+ indicators Troubled- less than 60% overall Capital Fund Troubled- less than 50% on Cap Fund indicator *Emphasis on occupancy as measured by 2 indicators (CFP and MASS)

26. Board Oversight Reports* Monthly financial report Summary of income statements for admin and major programs Latest bank reconciliation Check vouchers issued Tenant accounts receivable Monthly asset management report Occupancy Modernization schedule and units off-line *Suggested--Board determines required reports 26

27. Board Oversight Reports* Monthly contracting and procurement report ▫Obligation and Expenditure deadlines ▫Contract awards and progress Monthly compliance report ▫Outstanding audit findings (financial audits, HUD, OIG) ▫Repayment agreements *Suggested--Board determines required reports 27

28. The Outcome 28 Strong Governance Sound Financial Oversight Long Term Sustainable Performance More Families Served

29. Case Study-FASS Score 29

30. Case Study- MASS Score 30

31. Case Study- Occupancy 31

32. Case Study- P2P 32 Peer to Peer Financial Review Anytown Housing Authority FYE 2011 Anytown Housing AuthorityA DifferenttownHousing Authority Project Total Analysis 430 PH Units 435 PH Units FDS Description Project Line Totals % % Number FYE 2010FYE 2011ChangeFYE 2010FYE 2011Change 70300 Net Tenant Rental Revenue$885,223$560,571-36.67%$883,987$920,6214.14% 70400 Tenant Revenue - Other$54,381$44,068-18.96%$160,583$176,3369.81% 70500 Total Tenant Revenue$939,604$604,639-35.65%$1,044,570$1,096,9575.02% 70600 HUD PHA Operating Grants$1,129,741$1,117,725-1.06%$1,926,596$1,817,232-5.68% 70610 Capital Grants$0 70710 Management Fee 70720 Asset Management Fee 70730 Book Keeping Fee 70740 Front Line Service Fee 70750 Other Fees 70700 Total Fee Revenue 70800 Other Government Grants$0 71100 Investment Income - Unrestricted$2,731$1,955-28.41%$11,667$8,662-25.76% 71200 Mortgage Interest Income$0 71300 Proceeds from Disposition of Assets Held for Sale$0 71310 Cost of Sale of Assets$0 71500 Other Revenue$24,471$24,165-1.25%$114,355$126,22110.38% 71600 Gain or Loss on Sale of Capital Assets$0($15) 72000 Investment Income - Restricted$0 70000 Total Revenue$2,096,547$1,748,469-16.60%$3,097,188$3,049,072-1.55%

33. Case Study- Budget and Trend Analysis 33 Anytown HA Total HA Revenue vs. Expense Analysis 430 PH Units ExpenseHA DescriptionFYE 2009FYE 2010FYE 2011FYE 2012Case Study Audited Budget 70300Net Tenant Rental Revenue$1,007,895$885,223$560,571$498,780 70400Tenant Revenue - Other$60,048$54,381$44,068$22,500 70500Total Tenant Revenue$1,067,943$939,604$604,639$521,280 70600HUD PHA Operating Grants$1,167,836$1,189,159$1,117,725$664,240 70610Capital Grants$0 70710Management Fee$216,012$296,810$350,213$272,866 70720Asset Management Fee$70,215$0 $51,600 70730Book Keeping Fee$36,196$36,285$38,146$37,800 CFP Management Fee$0 70740Front Line Service Fee$0 70750Other Fees$0 70700Total Fee Revenue$1,490,259$333,095$388,359$362,266 70800Other Government Grants$0 71100Investment Income - Unrestricted$1,958$10,601$15,250$10,030 71200Mortgage Interest Income$0 71300 Proceeds from Disposition of assets Held for Sale$0 71310Cost of Sale of Assets$0 71400Fraud Recovery$0 71500Other Revenue$5,079$24,471$95,854$165,107 71600Gain or Loss on Sale of Capital Assets$2,200$0($15)$0 72000Investment Income - Restricted $0 70000Total Revenue$2,567,439$1,307,771$1,104,087$1,058,683

34. Case Study- Trend Analysis 34 Expense Anytown Housing Authority Description Total HA Revenue vs. Expenditures HA FYE 2009FYE 2010FYE 2011FYE 2012 Audited Budget 70500Total Tenant Revenue$1,067,943$939,604$604,639$521,280 70000Total Revenue$2,738,166$3,519,736$2,746,327$2,028,141 91000Total Operating - Admn$791,136$958,623$1,027,445$1,099,911 92000Asset Mgt Fee$70,215$0 $51,600 92100Total Tenant Services$5,658$0$37,551$75,900 93000Total Utilities$97,781$105,855$107,530$101,360 94000Total Maintenance$536,462$666,906$861,566$828,242 95000Total Protective Services$86,792$95,291$146,868$130,000 96100Total Insurance Premiums$100,071$101,843$100,707$117,644 96200Total Other General Expenses$114,416$131,241$55,482$70,062 96900Total Operating Expenses$1,802,531$2,059,7592,337,1492,474,719 97000Excess (Deficiency) of Revenue over Operating Expenses$935,635$1,459,977$409,178($446,578) 9000Total Expenses$2,465,294$2,706,380$3,183,727$2,474,719 Total Expenses Excluding Depreciation$1,834,185$2,091,442$2,498,293$2,474,719 Excess (Deficiency) of Total Revenue (Less Depreciation)$903,981$1,428,294$248,034($446,578)

42. HUD-PIH 42