hud webcast washington d.c. november 3, 2009 2 p.m. - 5 p.m. hud webcast washington d.c. november 3,...

HUD WebcastHUD Webcast

Washington D.C.Washington D.C.

November 3, 2009November 3, 2009

2 p.m. - 5 p.m.2 p.m. - 5 p.m.

HUD WebcastHUD Webcast

Washington D.C.Washington D.C.

November 3, 2009November 3, 2009

2 p.m. - 5 p.m.2 p.m. - 5 p.m.

HCV Program FinancialHCV Program FinancialManagement & ReportingManagement & Reporting


Opening RemarksOpening Remarks

David VargasDavid Vargas, , CPACPA

Associate Deputy Assistant Associate Deputy Assistant SecretarySecretary

Opening RemarksOpening Remarks

David VargasDavid Vargas, , CPACPA

Associate Deputy Assistant Associate Deputy Assistant SecretarySecretary



PresenterPresenter

Ray AdairRay Adair, , MBA, CGFMMBA, CGFM

Vice President & Senior AssociateVice President & Senior Associate

Nan McKay and Associates, Inc.Nan McKay and Associates, Inc.

PresenterPresenter

Ray AdairRay Adair, , MBA, CGFMMBA, CGFM

Vice President & Senior AssociateVice President & Senior Associate

Nan McKay and Associates, Inc.Nan McKay and Associates, Inc.



• Today's topics:Today's topics:– How the Program is FundedHow the Program is Funded– Basic Elements of Financial Basic Elements of Financial

ManagementManagement– Year-end Financial Reporting Year-end Financial Reporting

BasicsBasics

• Today's topics:Today's topics:– How the Program is FundedHow the Program is Funded– Basic Elements of Financial Basic Elements of Financial

ManagementManagement– Year-end Financial Reporting Year-end Financial Reporting

BasicsBasics



• Topic One:Topic One:– How the Program How the Program

is Fundedis Funded

• Topic One:Topic One:– How the Program How the Program

is Fundedis Funded



Renewal HAP FundingRenewal HAP Funding• The Congress:The Congress:

– Appropriates a set $ amountAppropriates a set $ amount– Requires funding for PHAs be Requires funding for PHAs be

based on VMS leasing & cost based on VMS leasing & cost datadata

– Specifies FFY be used for VMS Specifies FFY be used for VMS leasing & costs dataleasing & costs data

– Requires the cost data be Requires the cost data be inflated by the AAFinflated by the AAF

Renewal HAP FundingRenewal HAP Funding• The Congress:The Congress:

– Appropriates a set $ amountAppropriates a set $ amount– Requires funding for PHAs be Requires funding for PHAs be

based on VMS leasing & cost based on VMS leasing & cost datadata

– Specifies FFY be used for VMS Specifies FFY be used for VMS leasing & costs dataleasing & costs data

– Requires the cost data be Requires the cost data be inflated by the AAFinflated by the AAF

How The Program Is FundedHow The Program Is FundedHow The Program Is FundedHow The Program Is Funded

Renewal HAP FundingRenewal HAP Funding• In addition, the Congress In addition, the Congress

allows for certain allows for certain adjustments to the cost adjustments to the cost base):base):– First time renewalsFirst time renewals– FSS escrow depositsFSS escrow deposits

Renewal HAP FundingRenewal HAP Funding• In addition, the Congress In addition, the Congress

allows for certain allows for certain adjustments to the cost adjustments to the cost base):base):– First time renewalsFirst time renewals– FSS escrow depositsFSS escrow deposits


HAP Renewal Funding FormulaHAP Renewal Funding Formula

Total HAP Costs From VMSTotal HAP Costs From VMS(12 Month Period - FFY)(12 Month Period - FFY)

New UnitsNew Units

FSS Escrow ContributionsFSS Escrow Contributions

Total HAP Cost BaseTotal HAP Cost Base

++

++

=


Total HAP Cost BaseTotal HAP Cost Base

Annual Adjustment FactorAnnual Adjustment Factor(AAF)(AAF)

CY Budget AuthorityCY Budget Authority

xx

=


Total CY Budget AuthorityTotal CY Budget Authority

NRA Offset NRA Offset (as applicable)(as applicable)

Net CY Budget AuthorityNet CY Budget Authority=

-

Primary HAP Funding SourcesPrimary HAP Funding Sources

CY Budget AuthorityCY Budget Authority

NRA Balance NRA Balance

Total Funds Available for HAPTotal Funds Available for HAP=

+

Administrative Fee FundingAdministrative Fee Funding• The Congress:The Congress:

– Appropriates a set $ amountAppropriates a set $ amount– Requires HAs be paid based Requires HAs be paid based

on lease-up, times a fee rateon lease-up, times a fee rate– Allows the Department to set Allows the Department to set

the fee ratethe fee rate

Administrative Fee FundingAdministrative Fee Funding• The Congress:The Congress:

– Appropriates a set $ amountAppropriates a set $ amount– Requires HAs be paid based Requires HAs be paid based

on lease-up, times a fee rateon lease-up, times a fee rate– Allows the Department to set Allows the Department to set

the fee ratethe fee rate


Administrative Fee FormulaAdministrative Fee Formula

Units Leased on 1st of MonthUnits Leased on 1st of Month

Applicable Fee RateApplicable Fee Rate(A, B, or C)(A, B, or C)

Administrative Fees EarnedAdministrative Fees Earned

xx

=

Excess Administrative FeesExcess Administrative Fees

YearlyAdministrativeFees Earned

Amount used to cover programadministration

Amounts not usedAmounts not usedbecome part ofbecome part of

Unrestricted Net Assets Unrestricted Net Assets and continue to be boundand continue to be boundby program restrictions. by program restrictions.

• Same formula as last yearSame formula as last year– FFY leasing & cost data as FFY leasing & cost data as

reported in VMS moved reported in VMS moved forward to FFY 2009.forward to FFY 2009.

– Same types of adjustments Same types of adjustments to the HAP cost baseto the HAP cost base

– NoNo offset to NRA offset to NRA

• Same formula as last yearSame formula as last year– FFY leasing & cost data as FFY leasing & cost data as

reported in VMS moved reported in VMS moved forward to FFY 2009.forward to FFY 2009.

– Same types of adjustments Same types of adjustments to the HAP cost baseto the HAP cost base

– NoNo offset to NRA offset to NRA

Outlook for 2010Outlook for 2010Outlook for 2010Outlook for 2010

• Topic Two:Topic Two:– Basic elements of Basic elements of

good HCV good HCV program financial program financial managementmanagement

• Topic Two:Topic Two:– Basic elements of Basic elements of

good HCV good HCV program financial program financial managementmanagement



• Good financial Good financial management involves:management involves:– Preparing a program budgetPreparing a program budget– Monitoring actual to budget Monitoring actual to budget

performanceperformance– Maintaining adequate cashMaintaining adequate cash– Investing excess cashInvesting excess cash

• Good financial Good financial management involves:management involves:– Preparing a program budgetPreparing a program budget– Monitoring actual to budget Monitoring actual to budget

performanceperformance– Maintaining adequate cashMaintaining adequate cash– Investing excess cashInvesting excess cash

Financial ManagementFinancial ManagementFinancial ManagementFinancial Management

• Importance of having a Importance of having a HCV program budget:HCV program budget:– The program is budget basedThe program is budget based– Funds have prescribed usesFunds have prescribed uses– Funds are cappedFunds are capped– How equity can be used is How equity can be used is

controlled by statutecontrolled by statute

• Importance of having a Importance of having a HCV program budget:HCV program budget:– The program is budget basedThe program is budget based– Funds have prescribed usesFunds have prescribed uses– Funds are cappedFunds are capped– How equity can be used is How equity can be used is

controlled by statutecontrolled by statute


• Importance of PUC in Importance of PUC in monitoring HAP expense:monitoring HAP expense:– Determine trend in HAP costs Determine trend in HAP costs

(is it going up or down)(is it going up or down)– Set a target for the number of Set a target for the number of

vouchers to leasevouchers to lease– Set a target for monthly Set a target for monthly

spendingspending

• Importance of PUC in Importance of PUC in monitoring HAP expense:monitoring HAP expense:– Determine trend in HAP costs Determine trend in HAP costs

(is it going up or down)(is it going up or down)– Set a target for the number of Set a target for the number of

vouchers to leasevouchers to lease– Set a target for monthly Set a target for monthly

spendingspending


• How the PUC is calculatedHow the PUC is calculated• How the PUC is calculatedHow the PUC is calculated


TotalTotalUMLsUMLs

TotalTotalHAPHAP

CostsCosts

DividedDividedbyby = PUC= PUC

• PUC calculation example:PUC calculation example:• PUC calculation example:PUC calculation example:


10001000UMLsUMLs

$500,000$500,000In HAPIn HAP

DividedDividedbyby

PUC then equals $500PUC then equals $500

• Another PUC example:Another PUC example:• Another PUC example:Another PUC example:


$500 PUC$500 PUCXX1212

$6,000,000$6,000,000In ABAIn ABA

DividedDividedbyby

Units supported equals 1,000Units supported equals 1,000

• Yet another PUC example:Yet another PUC example:• Yet another PUC example:Yet another PUC example:


$500 PUC$500 PUCXX1212

$500,000$500,000In NRAIn NRA

DividedDividedbyby

Units supported equals 83Units supported equals 83

• Importance of maintaining Importance of maintaining cash flow:cash flow:– Budgets help to projectBudgets help to project– Monitoring revenue and Monitoring revenue and

expense helps to controlexpense helps to control– Deficit spending will depleteDeficit spending will deplete– NRA can't be used to cover NRA can't be used to cover

admin expensesadmin expenses

• Importance of maintaining Importance of maintaining cash flow:cash flow:– Budgets help to projectBudgets help to project– Monitoring revenue and Monitoring revenue and

expense helps to controlexpense helps to control– Deficit spending will depleteDeficit spending will deplete– NRA can't be used to cover NRA can't be used to cover

admin expensesadmin expenses


• Investing excess cash:Investing excess cash:– Maintain liquidity & preserve Maintain liquidity & preserve

principleprinciple– Limit investments to Limit investments to

approved typesapproved types– Secure form HUD-51999, Secure form HUD-51999,

General Depository General Depository Agreement before depositingAgreement before depositing

– Maintain required collateralMaintain required collateral

• Investing excess cash:Investing excess cash:– Maintain liquidity & preserve Maintain liquidity & preserve

principleprinciple– Limit investments to Limit investments to

approved typesapproved types– Secure form HUD-51999, Secure form HUD-51999,

General Depository General Depository Agreement before depositingAgreement before depositing

– Maintain required collateralMaintain required collateral


• Interest earned on Interest earned on investments:investments:– Interest earned on excess Interest earned on excess

HAP funds is restricted and HAP funds is restricted and becomes part of NRAbecomes part of NRA

– Interest earned on excess Interest earned on excess admin fees is unrestricted and admin fees is unrestricted and becomes part of unrestricted becomes part of unrestricted net assetsnet assets

• Interest earned on Interest earned on investments:investments:– Interest earned on excess Interest earned on excess

HAP funds is restricted and HAP funds is restricted and becomes part of NRAbecomes part of NRA

– Interest earned on excess Interest earned on excess admin fees is unrestricted and admin fees is unrestricted and becomes part of unrestricted becomes part of unrestricted net assetsnet assets


• VMS Overview Basics:VMS Overview Basics:– Web based reporting templateWeb based reporting template– Used to monitor HA leasing & Used to monitor HA leasing &

spending utilizationspending utilization– Replaces old paper HUD-52681Replaces old paper HUD-52681– Used to determine HAP Used to determine HAP

renewal fundingrenewal funding– Used to determine admin feesUsed to determine admin fees

• VMS Overview Basics:VMS Overview Basics:– Web based reporting templateWeb based reporting template– Used to monitor HA leasing & Used to monitor HA leasing &

spending utilizationspending utilization– Replaces old paper HUD-52681Replaces old paper HUD-52681– Used to determine HAP Used to determine HAP

renewal fundingrenewal funding– Used to determine admin feesUsed to determine admin fees


• VMS data gathered:VMS data gathered:– Leasing & HAP expense for Leasing & HAP expense for

regular & special use vouchersregular & special use vouchers– Certain types of administrative Certain types of administrative

expensesexpenses– Certain types of revenue items Certain types of revenue items

that ultimately impact the NRAthat ultimately impact the NRA

• VMS data gathered:VMS data gathered:– Leasing & HAP expense for Leasing & HAP expense for

regular & special use vouchersregular & special use vouchers– Certain types of administrative Certain types of administrative

expensesexpenses– Certain types of revenue items Certain types of revenue items

that ultimately impact the NRAthat ultimately impact the NRA


• VMS Common Reporting VMS Common Reporting Errors:Errors:

1)1) Lease-up & HAP expense Lease-up & HAP expense reported in month paid reported in month paid instead of month it appliesinstead of month it applies

2)2) Special use vouchers not Special use vouchers not reported or in wrong categoryreported or in wrong category

• VMS Common Reporting VMS Common Reporting Errors:Errors:

1)1) Lease-up & HAP expense Lease-up & HAP expense reported in month paid reported in month paid instead of month it appliesinstead of month it applies

2)2) Special use vouchers not Special use vouchers not reported or in wrong categoryreported or in wrong category


• VMS Common Reporting VMS Common Reporting Errors (continued):Errors (continued):

3)3) "Number of vouchers leased "Number of vouchers leased on the last day of the month" on the last day of the month" reported with 1st of month reported with 1st of month lease-uplease-up

4)4) "HA owned units" not "HA owned units" not reported but HA has owned reported but HA has owned unitsunits


3)3) "Number of vouchers leased "Number of vouchers leased on the last day of the month" on the last day of the month" reported with 1st of month reported with 1st of month lease-uplease-up

4)4) "HA owned units" not "HA owned units" not reported but HA has owned reported but HA has owned unitsunits



5)5) "All voucher HAP expense "All voucher HAP expense after the first of the month" after the first of the month" reported with more than the reported with more than the pro-rate first time HAPpro-rate first time HAP

6)6) Interest earned on HAP funds Interest earned on HAP funds not reported or in wrong not reported or in wrong monthmonth


5)5) "All voucher HAP expense "All voucher HAP expense after the first of the month" after the first of the month" reported with more than the reported with more than the pro-rate first time HAPpro-rate first time HAP

6)6) Interest earned on HAP funds Interest earned on HAP funds not reported or in wrong not reported or in wrong monthmonth



7)7) Fraud recovery recorded at:Fraud recovery recorded at:

a)a) 100% instead of 50%100% instead of 50%

b)b) full amount of repayment full amount of repayment agreement when it is agreement when it is booked to the balance booked to the balance sheet when it should be sheet when it should be amount actually collectedamount actually collected


7)7) Fraud recovery recorded at:Fraud recovery recorded at:

a)a) 100% instead of 50%100% instead of 50%

b)b) full amount of repayment full amount of repayment agreement when it is agreement when it is booked to the balance booked to the balance sheet when it should be sheet when it should be amount actually collectedamount actually collected



8)8) Total administrative fees Total administrative fees earned is reported instead of earned is reported instead of expenseexpense

9)9) FSS Coordinator grant is FSS Coordinator grant is recorded instead of actual recorded instead of actual expense incurredexpense incurred


8)8) Total administrative fees Total administrative fees earned is reported instead of earned is reported instead of expenseexpense

9)9) FSS Coordinator grant is FSS Coordinator grant is recorded instead of actual recorded instead of actual expense incurredexpense incurred


• Charging indirect costs to Charging indirect costs to the HCV program:the HCV program:− Two methods available, indirect Two methods available, indirect

cost plan or fee-for-servicecost plan or fee-for-service− Authority for found in OMB Cir Authority for found in OMB Cir

A-87A-87− Guidance for fee-for-service Guidance for fee-for-service

found in Supplement to HB found in Supplement to HB 7475.17475.1

• Charging indirect costs to Charging indirect costs to the HCV program:the HCV program:− Two methods available, indirect Two methods available, indirect

cost plan or fee-for-servicecost plan or fee-for-service− Authority for found in OMB Cir Authority for found in OMB Cir

A-87A-87− Guidance for fee-for-service Guidance for fee-for-service

found in Supplement to HB found in Supplement to HB 7475.17475.1


• Traditional indirect cost Traditional indirect cost plans:plans:− A plan document is normally A plan document is normally

preparedprepared− Indirect costs are collected in Indirect costs are collected in

a cost poola cost pool− Costs in the indirect cost pool Costs in the indirect cost pool

are allocated to programs via are allocated to programs via a cost driver a cost driver

• Traditional indirect cost Traditional indirect cost plans:plans:− A plan document is normally A plan document is normally

preparedprepared− Indirect costs are collected in Indirect costs are collected in

a cost poola cost pool− Costs in the indirect cost pool Costs in the indirect cost pool

are allocated to programs via are allocated to programs via a cost driver a cost driver


Indirect Cost Plan Indirect Cost Plan Concept DiagramConcept DiagramIndirect Cost Plan Indirect Cost Plan Concept DiagramConcept Diagram

Cost PoolCost Pool

SalarySalaryBenefitsBenefitsSuppliesSuppliesTelephoneTelephoneTravelTravelRentRentUtilitiesUtilitiesEtc.Etc.

HCV ProgramHCV ProgramLine 91810Line 91810

PH ProgramPH ProgramLine 91810Line 91810

Other ProgramOther ProgramLine 91810Line 91810

• Traditional indirect cost Traditional indirect cost plans (continued):plans (continued):− New FDS line 91810, New FDS line 91810,

Allocated Overhead used to Allocated Overhead used to record indirect costsrecord indirect costs• Used by HAs covered by the Used by HAs covered by the

operating fund rule who don't operating fund rule who don't adopt fee-for-serviceadopt fee-for-service

• Optional for HCV only HAsOptional for HCV only HAs

• Traditional indirect cost Traditional indirect cost plans (continued):plans (continued):− New FDS line 91810, New FDS line 91810,

Allocated Overhead used to Allocated Overhead used to record indirect costsrecord indirect costs• Used by HAs covered by the Used by HAs covered by the

operating fund rule who don't operating fund rule who don't adopt fee-for-serviceadopt fee-for-service

• Optional for HCV only HAsOptional for HCV only HAs


• Traditional indirect cost Traditional indirect cost plans (continued):plans (continued):− A good reference source for A good reference source for

guidance in developing guidance in developing indirect cost plans is:indirect cost plans is:• "Cost Principles & Procedures "Cost Principles & Procedures

for Developing Cost Allocation for Developing Cost Allocation Plans" - publication of HHSPlans" - publication of HHS

• Traditional indirect cost Traditional indirect cost plans (continued):plans (continued):− A good reference source for A good reference source for

guidance in developing guidance in developing indirect cost plans is:indirect cost plans is:• "Cost Principles & Procedures "Cost Principles & Procedures

for Developing Cost Allocation for Developing Cost Allocation Plans" - publication of HHSPlans" - publication of HHS


• Fee-for-ServiceFee-for-Service− Indirect cost are collected in a Indirect cost are collected in a

pool called the COCCpool called the COCC− Indirect costs are not allocated Indirect costs are not allocated

out of the poolout of the pool− The COCC charges programs a The COCC charges programs a

fee as allowed by the fee as allowed by the DepartmentDepartment

− Fee income is de-federalizedFee income is de-federalized

• Fee-for-ServiceFee-for-Service− Indirect cost are collected in a Indirect cost are collected in a

pool called the COCCpool called the COCC− Indirect costs are not allocated Indirect costs are not allocated

out of the poolout of the pool− The COCC charges programs a The COCC charges programs a

fee as allowed by the fee as allowed by the DepartmentDepartment

− Fee income is de-federalizedFee income is de-federalized


Fee-For-Service Fee-For-Service Concept DiagramConcept DiagramFee-For-Service Fee-For-Service Concept DiagramConcept Diagram

CentralCentralOffice Office CostCost

Center Center (COCC)(COCC)

CentralCentralOffice Office CostCost

Center Center (COCC)(COCC)

PHA AMP APHA AMP APHA AMP APHA AMP A

PHA AMP BPHA AMP BPHA AMP BPHA AMP B

HCV ProgramHCV ProgramHCV ProgramHCV Program

Other HUD Other HUD ProgramProgram

Other HUD Other HUD ProgramProgram

• Fee-for-Service (continued)Fee-for-Service (continued)− The Department allows a HCV The Department allows a HCV

program management fee equal program management fee equal to the higher of:to the higher of:• 20% of available admin funding 20% of available admin funding

oror• $12 per leased unit per month$12 per leased unit per month

− In addition a bookkeeping fee of In addition a bookkeeping fee of $7.50 per leased unit may be $7.50 per leased unit may be chargedcharged

• Fee-for-Service (continued)Fee-for-Service (continued)− The Department allows a HCV The Department allows a HCV

program management fee equal program management fee equal to the higher of:to the higher of:• 20% of available admin funding 20% of available admin funding

oror• $12 per leased unit per month$12 per leased unit per month

− In addition a bookkeeping fee of In addition a bookkeeping fee of $7.50 per leased unit may be $7.50 per leased unit may be chargedcharged


Fee-for-ServiceFee-for-Service Flow of Funds Flow of FundsFee-for-ServiceFee-for-Service Flow of Funds Flow of Funds

Direct programDirect programadministrationadministration

Unused adminUnused adminfeesfees

UnrestrictedUnrestrictedNet AssetsNet Assets

Management Management Fee Fee

COCCCOCC

Admin FeesAdmin FeesEarnedEarned

• Fee-for-Service (continued)Fee-for-Service (continued)− HAs began using fee-for-HAs began using fee-for-

service last yearservice last year− Most adopted it entity wide Most adopted it entity wide

because of conversion to asset because of conversion to asset management in public housingmanagement in public housing

− If used, there should be If used, there should be nono indirect costs charged to the indirect costs charged to the HCV programHCV program

• Fee-for-Service (continued)Fee-for-Service (continued)− HAs began using fee-for-HAs began using fee-for-

service last yearservice last year− Most adopted it entity wide Most adopted it entity wide

because of conversion to asset because of conversion to asset management in public housingmanagement in public housing

− If used, there should be If used, there should be nono indirect costs charged to the indirect costs charged to the HCV programHCV program


• Fee-for-Service (continued)Fee-for-Service (continued)− We have provided examples We have provided examples

you can print out of:you can print out of:• Typical cost pool showing Typical cost pool showing

allocated overhead to allocated overhead to programsprograms

• Typical COCC showing fees Typical COCC showing fees earned from programsearned from programs

• Fee-for-Service (continued)Fee-for-Service (continued)− We have provided examples We have provided examples

you can print out of:you can print out of:• Typical cost pool showing Typical cost pool showing

allocated overhead to allocated overhead to programsprograms

• Typical COCC showing fees Typical COCC showing fees earned from programsearned from programs


• Topic Three:Topic Three:– Year-end Year-end

Financial Financial Reporting BasicsReporting Basics

• Topic Three:Topic Three:– Year-end Year-end

Financial Financial Reporting BasicsReporting Basics



Reporting Requirements:Reporting Requirements:− HAs must submit year-end HAs must submit year-end

financial information in financial information in accordance with GAAPaccordance with GAAP

− Authority to require is at 24 Authority to require is at 24 CFR 5.801 (UFRS)CFR 5.801 (UFRS)

− Also applies to HCV only HAsAlso applies to HCV only HAs− Data submitted electronically Data submitted electronically

over the web using FDSover the web using FDS

Reporting Requirements:Reporting Requirements:− HAs must submit year-end HAs must submit year-end

financial information in financial information in accordance with GAAPaccordance with GAAP

− Authority to require is at 24 Authority to require is at 24 CFR 5.801 (UFRS)CFR 5.801 (UFRS)

− Also applies to HCV only HAsAlso applies to HCV only HAs− Data submitted electronically Data submitted electronically

over the web using FDSover the web using FDS

Year-end Financial Year-end Financial ReportingReporting


Reporting Requirements:Reporting Requirements:− REAC has responsibility to REAC has responsibility to

collect and reviewcollect and review− Generally two submissions Generally two submissions

required:required:• Un-audited 60 days after year-Un-audited 60 days after year-

endend• Audited 9 months after year-Audited 9 months after year-

endend

Reporting Requirements:Reporting Requirements:− REAC has responsibility to REAC has responsibility to

collect and reviewcollect and review− Generally two submissions Generally two submissions

required:required:• Un-audited 60 days after year-Un-audited 60 days after year-

endend• Audited 9 months after year-Audited 9 months after year-

endend



• Differences Between VMS & Differences Between VMS & FDS:FDS:− Financial data is "locked" Financial data is "locked"

after a reporting period, after a reporting period, VMS is notVMS is not

− Data collected not always Data collected not always the samethe same

− Timing of accrued expensesTiming of accrued expenses

• Differences Between VMS & Differences Between VMS & FDS:FDS:− Financial data is "locked" Financial data is "locked"

after a reporting period, after a reporting period, VMS is notVMS is not

− Data collected not always Data collected not always the samethe same

− Timing of accrued expensesTiming of accrued expenses



• Understanding the HCV Understanding the HCV Equity Accounts:Equity Accounts:− Equity means "ownership"Equity means "ownership"− HCV equity is reported in HCV equity is reported in

three separate accounts:three separate accounts:− Invested in Capital Assets, Invested in Capital Assets,

Net of Related DebtNet of Related Debt− Restricted Net AssetsRestricted Net Assets− Unrestricted Net AssetsUnrestricted Net Assets

• Understanding the HCV Understanding the HCV Equity Accounts:Equity Accounts:− Equity means "ownership"Equity means "ownership"− HCV equity is reported in HCV equity is reported in

three separate accounts:three separate accounts:− Invested in Capital Assets, Invested in Capital Assets,

Net of Related DebtNet of Related Debt− Restricted Net AssetsRestricted Net Assets− Unrestricted Net AssetsUnrestricted Net Assets



• Invested in Capital Assets Invested in Capital Assets Net of Related Debt:Net of Related Debt:− Represents the "equity" in the Represents the "equity" in the

HAs fixed assetsHAs fixed assets− Represents assets at cost less Represents assets at cost less

accumulated depreciation and accumulated depreciation and associated debtassociated debt

− Depends on HA's Depends on HA's capitalization thresholdcapitalization threshold

• Invested in Capital Assets Invested in Capital Assets Net of Related Debt:Net of Related Debt:− Represents the "equity" in the Represents the "equity" in the

HAs fixed assetsHAs fixed assets− Represents assets at cost less Represents assets at cost less

accumulated depreciation and accumulated depreciation and associated debtassociated debt

− Depends on HA's Depends on HA's capitalization thresholdcapitalization threshold



• Restricted Net Assets:Restricted Net Assets:− Equity that has use Equity that has use

restrictions place on it by an restrictions place on it by an outside entityoutside entity

− Outside entity (Congress) has Outside entity (Congress) has placed use restrictions on placed use restrictions on HAP fundingHAP funding

• Restricted Net Assets:Restricted Net Assets:− Equity that has use Equity that has use

restrictions place on it by an restrictions place on it by an outside entityoutside entity

− Outside entity (Congress) has Outside entity (Congress) has placed use restrictions on placed use restrictions on HAP fundingHAP funding



• Restricted Net Assets:Restricted Net Assets:− In the HCV program this In the HCV program this

account represents:account represents:• Unused HAPUnused HAP• Interest earned on invested Interest earned on invested

HAP proceedsHAP proceeds• Fifty percent of fraud Fifty percent of fraud

recoveriesrecoveries• Forfeited FSS escrow amountsForfeited FSS escrow amounts

• Restricted Net Assets:Restricted Net Assets:− In the HCV program this In the HCV program this

account represents:account represents:• Unused HAPUnused HAP• Interest earned on invested Interest earned on invested

HAP proceedsHAP proceeds• Fifty percent of fraud Fifty percent of fraud

recoveriesrecoveries• Forfeited FSS escrow amountsForfeited FSS escrow amounts



• Unrestricted Net Assets:Unrestricted Net Assets:− Represents the accumulation Represents the accumulation

of excess admin fees and:of excess admin fees and:• Interest earned on invested Interest earned on invested

excess admin feesexcess admin fees• Fifty percent of fraud Fifty percent of fraud

recoveriesrecoveries• Admin fees received under Admin fees received under

portabilityportability

• Unrestricted Net Assets:Unrestricted Net Assets:− Represents the accumulation Represents the accumulation

of excess admin fees and:of excess admin fees and:• Interest earned on invested Interest earned on invested

excess admin feesexcess admin fees• Fifty percent of fraud Fifty percent of fraud

recoveriesrecoveries• Admin fees received under Admin fees received under

portabilityportability



• Issues to be aware of with Issues to be aware of with FDS reported data for HCV FDS reported data for HCV program - ground rules:program - ground rules:− Assumed the learner is Assumed the learner is

familiar with the FDSfamiliar with the FDS− Majority of learners are not Majority of learners are not

experts in reviewing FDS experts in reviewing FDS financial datafinancial data

• Issues to be aware of with Issues to be aware of with FDS reported data for HCV FDS reported data for HCV program - ground rules:program - ground rules:− Assumed the learner is Assumed the learner is

familiar with the FDSfamiliar with the FDS− Majority of learners are not Majority of learners are not

experts in reviewing FDS experts in reviewing FDS financial datafinancial data



• HCV Program Balance Sheet HCV Program Balance Sheet issues - example:issues - example:− 508.1, Invested in capital 508.1, Invested in capital

assets net of related debt - assets net of related debt - $17,139$17,139

− 511.2, Restricted Net Assets - 511.2, Restricted Net Assets - $277,967$277,967

− 512.1, Unrestricted Net 512.1, Unrestricted Net Assets - $442,945Assets - $442,945

• HCV Program Balance Sheet HCV Program Balance Sheet issues - example:issues - example:− 508.1, Invested in capital 508.1, Invested in capital

assets net of related debt - assets net of related debt - $17,139$17,139

− 511.2, Restricted Net Assets - 511.2, Restricted Net Assets - $277,967$277,967

− 512.1, Unrestricted Net 512.1, Unrestricted Net Assets - $442,945Assets - $442,945



• HCV Program Balance HCV Program Balance Sheet reporting issues:Sheet reporting issues:− Running deficits on the Running deficits on the

admin side without a admin side without a balance in the Unrestricted balance in the Unrestricted Net Asset Account can Net Asset Account can mean HAP funds are being mean HAP funds are being used for admin expenses.used for admin expenses.

• HCV Program Balance HCV Program Balance Sheet reporting issues:Sheet reporting issues:− Running deficits on the Running deficits on the

admin side without a admin side without a balance in the Unrestricted balance in the Unrestricted Net Asset Account can Net Asset Account can mean HAP funds are being mean HAP funds are being used for admin expenses.used for admin expenses.



• HCV Program Balance HCV Program Balance Sheet reporting issues:Sheet reporting issues:− Using inter-funds to make Using inter-funds to make

inappropriate transfers of inappropriate transfers of HCV funds to other HCV funds to other programsprograms

• HCV Program Balance HCV Program Balance Sheet reporting issues:Sheet reporting issues:− Using inter-funds to make Using inter-funds to make

inappropriate transfers of inappropriate transfers of HCV funds to other HCV funds to other programsprograms



• HCV Program Balance HCV Program Balance Sheet reporting issues:Sheet reporting issues:− Reporting an accounts Reporting an accounts

receivable or payable from receivable or payable from HUD for HAP fundingHUD for HAP funding• Could be accounts receivable Could be accounts receivable

from HUD for admin fees or from HUD for admin fees or deferred revenue, but not deferred revenue, but not payablepayable

• HCV Program Balance HCV Program Balance Sheet reporting issues:Sheet reporting issues:− Reporting an accounts Reporting an accounts

receivable or payable from receivable or payable from HUD for HAP fundingHUD for HAP funding• Could be accounts receivable Could be accounts receivable

from HUD for admin fees or from HUD for admin fees or deferred revenue, but not deferred revenue, but not payablepayable



• HCV Program Income HCV Program Income Statement reporting Statement reporting issues:issues:− If using fee-for-service, If using fee-for-service,

there will be management there will be management fee and bookkeeping fee fee and bookkeeping fee expense, but there should expense, but there should not be any allocated not be any allocated overhead.overhead.

• HCV Program Income HCV Program Income Statement reporting Statement reporting issues:issues:− If using fee-for-service, If using fee-for-service,

there will be management there will be management fee and bookkeeping fee fee and bookkeeping fee expense, but there should expense, but there should not be any allocated not be any allocated overhead.overhead.



• HCV Program Income HCV Program Income Statement reporting Statement reporting issues:issues:− If using a cost allocation If using a cost allocation

plan, there will be allocated plan, there will be allocated overhead but no overhead but no management fee and or management fee and or bookkeeping fee expense.bookkeeping fee expense.

• HCV Program Income HCV Program Income Statement reporting Statement reporting issues:issues:− If using a cost allocation If using a cost allocation

plan, there will be allocated plan, there will be allocated overhead but no overhead but no management fee and or management fee and or bookkeeping fee expense.bookkeeping fee expense.



• HCV Program Income HCV Program Income Statement reporting Statement reporting issues:issues:− Failure to report restricted Failure to report restricted

interest income when there interest income when there is significant excess HAP is significant excess HAP funds available.funds available.

• HCV Program Income HCV Program Income Statement reporting Statement reporting issues:issues:− Failure to report restricted Failure to report restricted

interest income when there interest income when there is significant excess HAP is significant excess HAP funds available.funds available.



• HCV Program Income HCV Program Income Statement reporting Statement reporting issues:issues:− Recording allocated Recording allocated

overhead to line 96200, overhead to line 96200, Other General Expense Other General Expense instead of line 91810, instead of line 91810, Allocated Overhead.Allocated Overhead.

• HCV Program Income HCV Program Income Statement reporting Statement reporting issues:issues:− Recording allocated Recording allocated

overhead to line 96200, overhead to line 96200, Other General Expense Other General Expense instead of line 91810, instead of line 91810, Allocated Overhead.Allocated Overhead.



− We now have We now have some time to some time to take your take your questions.questions.

− We now have We now have some time to some time to take your take your questions.questions.

QuestionsQuestionsQuestionsQuestions

hud webcast washington d.c. november 3, 2009 2 p.m. - 5 p.m. hud webcast washington d.c. november 3,...

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