Rules and regulations - PowerPoint Presentation_1_ by liwenting

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									• Section 8   • Public Housing
        Conflicts of Interest in:
                 Section 8
               Public Housing

ALERT: Will discuss applicable Federal
law, Federal regulations and Federal
contract provisions...State and local conflict
provisions not subject of this presentation
                                                 2
  • Two Types
  Procurement
Non-procurement



                  3
 Procurement of:
   Property
   Service
 Governed by:
   24 CFR 85.36(b)(3)
   and HUD handbook 7460.8 REV-2 (3/07)


This presentation will cover non-
procurement conflicts only….with two
exceptions!
                                           4
   24 CFR 85.36(b)(3):
     No PHA employee, officer or agent shall
      participate in the selection, award or
      administration of a contract supported by
      Federal funds if:
         The employee, officer or agent,
         Any member of his immediate family
         His partner;
         Or an organization which employs him
      Has a financial interest or other interest in
       the firm selected for the award.             5
 What Regulations and Rules apply?
  Section 8
   24 CFR 982.161
  Public Housing
   Section 19 of Part A of CACC


  ALERT: Check State and Local laws
  and regs!
                                      6
 24 CFR 982.161
 PHA, its contractors and subs may
  not enter into a contract in
  connection with tenant-based
  programs if the following persons
  have an interest in the contract:


                                      7
1. Present or former members or
   officers of a PHA (except participant
   commissioners).
2. Employees of a PHA or contractors,
   subs or agents of a PHA who:
    formulate policy or who influence
     decisions regarding the programs.

                                           8
3.   Public Officials, members of
     governmental bodies, or state or
     local legislators, who:
      Exercise functions or responsibilities
       regarding programs.
4.   Member of U.S. Congress.

      ALERT: Reg applies during the person’s tenure
      and for one year thereafter.
                                                      9
 Any conflicts must be disclosed
to PHA and HUD.
 Conflicts of interest may be
waived by HUD for good cause.



                                    10
 Section 19 of Part A of CACC
  HA, its contractors and subs may not
   enter into a contract in connection with a
   project under the ACC if the following
   persons have an interest in the contract:

                                                11
1. Present or former members or officers of
   the HA or their immediate families.
2. Employees of the HA, their immediate
   families or partners who:
          Formulate policy or who influence decisions
           regarding the project(s).


         ALERT: Rule does not apply to tenant
         commissioners in certain cases.
                                                         12
3. Public officials, members of the local
   government body, or state or local
   legislators, or their immediate families
   who:
     Exercise functions or responsibilities
      regarding the project(s) or the HA.


  ALERT: Section 19 applies during the person’s
  tenure and for one year thereafter.
                                                  13
 Conflicts must be disclosed to the HA and
   HUD.
 HUD may waive conflicts for good cause; IF
   permitted under State and Local law.
     Person requiring waiver cannot exercise
      responsibilities or functions regarding
      the contract to which the waiver pertains.



                                               14
   Section 19 of Part B of CACC
     HA may not hire a person in connection with project if
      prospective employee is immediate family member of:
       Present or former member or officer of
        governing body of HA (former tenant
        commissioner – some exceptions).
       Employee of HA who makes policy or
        influences decisions with respect to projects.
       Public official, member of local governing
        body, or State or local legislator, who
        exercises functions or responsibilities with
        respect to projects or HA.                       15
Section 19 of Part B of CACC continued:
 Alert: Prohibition applies during class member’s
        term and for one year thereafter!
 Alert: Class member shall disclose family ties to
        HA and HUD!
The requirements of Section 19 of Part B of CACC may be waived
by HA Board of Commissioners for good cause, provided such
waiver permitted by State and local law.

HA Board’s determination of good cause should be well
documented.                                               16
 Conflicts of interest not applicable
  to General Depository Agreements
  or to utility services.
 Conflict of interest policy under
  Section 19 of the ACC does not
  prohibit tenants of an HA from
  serving on the HA Board.
                                         17
 You may:
  Be a candidate in non-partisan election
  Attend political meetings/conventions
  Contribute money
  Campaign in partisan elections
  Hold office in political parties




                                             18
 You may not:
  Use official influence to interfere in
   election
  Coerce political contributions from
   subordinates in support of political party
   or candidate
  Be a candidate in partisan election


                                                19
 Other important points:
  Section 19 conflict of interest provisions do not
   apply to Indian HAs.
  An “Immediate family member” is:
      Spouse
      Children
      Mother or Father
      Brothers or Sisters
      “half” or “step” relatives included



                                                       20
 Contact your HUD Public
Housing Specialist to resolve a
question or conflict.



                                  21
   Beware:
Contest Coming!


                  22
Conflicts of Interest
 Some Illustrations
           Illustration #1
Judge Judy is the District Judge of Parker
County, Texas. She rents property to tenants
with Section 8 vouchers. The Judge has no
other dealings with the Section 8 Program.
You “judge” the Judge….is this a conflict of
interest?




                                               24
                   Answer #1
 NO.
 Judge Judy may continue to rent her property to
  Section 8 voucher holders.
 There is no conflict of interest because she does not
  exercise any functions or responsibilities with respect
  to HUD’s Section 8 voucher program: 24 CFR §982.161
  (a)(3)
 Should Judge Judy’s properties or tenants come before
  her in her capacity as District Judge, she would need
  to seek further advice from HUD.

                                                            25
              Illustration #2

Citizen Kane was recently appointed a Commissioner
of the Elysian Fields HA.
   Mr. Kane is the Community Affairs Director of Reliance
   Hospital and serves in an unnamed capacity with the Rio
   Grande Recovery Program, an affiliate of the Hospital.
   The Recovery Program leases office space from the HA.
   Mr. Kane is a salaried employee of the Hospital, with no
   stock and/or other ownership interest in the Rio Grande or
   Reliance Hospital
Can Mr. Kane remain on the HA Board?

                                                            26
                 Answer #2
 YES.
 Mr. Kane’s appointment as a Commissioner of the
  Elysian Fields HA does not constitute a conflict of
  interest with his employment at Reliance Hospital
  under Section 19 of the ACC.
 Mr. Kane has no interest in the lease which
  Reliance has with the HA, he is merely a salaried
  employee of the Hospital, and has no ownership
  in either the Hospital or its affiliate, the Rio
  Grande.


                                                    27
   Bay County HA sought a contractor to complete a parking lot
   by sealed competitive bids.
       The project will be funded with Capital Grant funds.
       Eric Smith and Associates is the engineering firm which will
       oversee the project.
       Jones Constructors, Inc. was the low bidder for the job and
       has been selected for the award of this contract.
       The principles of both the engineering firm and the
       construction company are step-brothers.

* Is this a procurement or non-procurement issue?

 This is a procurement of construction services
 covered by 24 CFR §85.36.

                                                                      28
                                                                       M
 Can Bay County HA award the contract to
 Constructors?

A.   Yes, because although Eric Smith and the principle of
     Jones Constructors, Inc. are step-brothers, Bay County
     HA secured the bid by sealed competitive bid.
B.   Yes, because they are not immediate family members.
C.   No, a conflict of interest exists because they are
     immediate family members.
D.   No, as long as Eric does not physically handle the money
     being paid to Jones Constructor’s Inc.


                                                                29
C. No, a conflict of interest exists because they are
    immediate family members.

• Conflict of interest exists for an agent of the HA to administer a
  contract supported by Federal funds if a member of his
  “immediate family” has a financial interest in the company
  selected for the award.

•    Conflict of Interest for Eric Smith & Associates to administer a
    construction contract funded with Capital Grant money, since
    Eric Smith’s step-brother is the President of Jones Constructors,
    Inc.
                                                                        30
The San Antonio HA just lifted its hiring
freeze. The HA would like to hire Mona Lisa
as a receptionist.
   Mona is the step-sister of Leonardo da Vinci,
   the HA’s Chief of Maintenance and Painting.
   Mona’s salary will be paid with Recovery Act
   Stimulus funds.

Is there a conflict of interest?

                                                   31N
                                                    Y
                       Answer #4
 Probably Not.
Section 19(B)(1)(ii) of the ACC provides in part:
   “The HA may not hire an employee in connection with a project
    under this ACC if the prospective employee is an immediate
    family member of any person belonging to one of the following
    classes:
     (ii) Any employee of the HA who formulates policy or who
       influences decisions with respect to the project(s). “

The HA’s Chief of Maintenance and Painting would not normally
  formulate policy or influence decisions with respect to the
  project(s).
                                                                    32
            Illustration #5
Anxious Annie, the Reagan County, Texas HA
Executive Director, is worried that if her
brother wins election to the Board of County
Commissioners there will be an actual or
perceived conflict of interest.
The HA has over 200 units of Public Housing
under ACC with HUD.
Should Annie be worried?


                                               33
               Answer #5

YES.
If Annie’s brother is elected to the Board of County
Commissioners, this will constitute an immediate
conflict of interest under Section 19 (A)(1)(iii) of the
ACC, since County Commissioners must exercise
functions and responsibilities with respect to HAs
under State law: V.T.C.A., Local Government Code
§§392.012; 392.032 and 392.041.



                                                           34
                       Illustration #6
 “Thrifty” Waters is the Executive Director of the
  Seadrift, Texas HA.
   His wife, Alice, builds web sites as a sideline when she is not
    running her restaurant.
   “Thrifty” would like his wife to build the HA a web site since
    she can do the job “cheaper” than her competitors.
   You advise “Thrifty” that this “looks like” a conflict under
    Section 19 of the ACC, Part A, and he would need to request a
    wavier from HUD.
 Should “Thrifty” have “smooth sailing” with a waiver
  request to HUD?                    Alice’s


                                                                  35
                          Answer #6
 Probably Not.
 Section 19(A)(3) provides:
   HUD may waive a conflict of interest for good cause, “if permitted under
    State and local law”.
   And that “no person for whom a waiver is requested may exercise
    responsibilities or functions with respect to the contract to which the
    waiver pertains…”
 As part of the waiver request, the HA must submit an
  attorney’s opinion that a waiver of Section 19(A)(1) is
  permitted by State and local law.
 Moreover, “Thrifty” could not “administer” his wife’s contract.
  The HA Board of Commissioners would have to make other
  arrangements, acceptable to HUD, for the contract
  administration.

                                                                               36
                  Illustration #7

“River” Banks would like to lease property he owns in
Gunbarrel City, Texas to a family which has a Section 8
housing voucher.
   Mr. Banks is Executive Director of the Cedar Creek Lake HA.
   The Section 8 program for Gunbarrel City is administered
   by the Trinity River HA.
Can Mr. Banks lease his property in Gunbarrel City to
the family with the Section 8 voucher?



                                                            37
                  Answer #7
YES.
Mr. Banks may do so because the Section 8 voucher
program for Gunbarrel City is administered by the
Trinity River HA.
As ED of the Cedar Creek Lake HA, Mr. Banks would
have no functions or responsibilities with respect to
the administration of the Trinity River HA Section 8
program: 24 CFR §982.161



                                                        38
               Illustration #8
The HA of Tennessee City, Texas would like to hire
Davey Crockett Company to provide technical
assistance (TA) for the Section 8 program.
    The company is already under contract to the
    Recovery and Prevention Corps to provide TA for
    the HA’s public housing program.
Can the HA hire the Crockett Company to do TA for its
Section 8 program?



                                                        39
                 Answer #8
 YES.
 This is a procurement of services.
 Under 24 CFR §85.36(b)(3), HUD’s regulation provides
  that a conflict of interest arises when an employee,
  officer or agent of the HA, who participates in the
  selection, award or administration of a contract
  supported by Federal funds, has a financial or other
  interest in the firm selected for the award.
 Since no employee, officer or agent of the HA has a
  financial or other interest in the Davy Crockett
  Company, the HA may hire the company as its TA
  provider for the Section 8 program.
                                                         40
           Illustration
         and Answers #9


Marshall and Associates (M&A) manages HAs
and also does Fee Accounting for them.
M&A comes to you with several “conflict of
interest” concerns.
What advice would you give in these
situations?


                                             41
                      Illustration
                    and Answers #9
1.   Could M&A manage a HA that has not been under
     contract for Fee Accounting for a period of one
     year or more?
     YES.
2.   Can M&A manage a HA if M&A is under contract
     for Fee Accounting?

     NO. If HUD were to permit this, then the HA would
     have a contract with M&A as it Fee Accountant in
     which M&A, as the HA’s managing “employee” would
     have an interest: Section 19 (A)(1)(ii) of the ACC, Part
                                                                42
             Illustration and Answers #9
3. Could the accounting contract be terminated and a
   management agreement be executed that includes
   the accounting?
    No, because the conflicts prohibited by Section 19 would
    continue for one year after the termination of M&A’s Fee
    Accounting contract with the HA.

4. Could Janet Marshall, not as part of M&A, manage a HA
    that is under contract with M&A for Fee Accounting?

    No, Janet Marshall is an owner of M&A and also a member of the
    “immediate family” of her spouse, the other owner of M&A. The
    answer for #2 on the previous slide would also apply to any
    member of an owner’s immediate family, or an owner’s partner.
                                                                     43
              Illustration #10
Tou Minney Ironsinthefire was recently elected to
Marathon, Texas, City Council.
   The Chairperson of the Marathon
   Neighborhood Association wrote HUD
   asserting that it is a conflict of interest for Tou
   Minney to serve on the Marathon City
   Council, and at the same time, participate in
   HUD’s Section 8 voucher program as a Section
   8 landlord.
Do you agree?
                                                    44
             Answer #10
NO.
The Marathon City Council has no functions or
responsibilities with respect to the
administration of the Section 8 housing
voucher program under HUD regulations: 24
CFR Part 982.
Consequently, it is not a conflict of interest for
Tou Minney to continue with his civic duties to
Marathon and also rent his property to eligible
Section 8 voucher holders.
                                                     45
                   Illustration #11
                     ALERT: Not TEXAS!

 Mr. Clean is the head of maintenance for the Napoleonville,
  LA, HA’s LaFourche Village Homes (Homes).
   The HA has asked HUD for a conflict of interest waiver
    under Section 19(A)(3) of the ACC, Part A, to permit Mr.
    Clean’s sister and her three children to lease a unit at the
    Homes.
   The LA Board of Ethics has issued an advisory opinion that
    this situation would be a conflict of interest under the State
    Ethics Code.
 Should HUD grant the HA a waiver of the conflict?
                                                                 46
                 Answer #11
 NO.
 Section 19(A)(3) permits conflicts of interest to be
  waived for good cause, if permitted under State and
  local law.
 The LA Board of Ethics has determined that the State
  Ethics Code prohibits an immediate family member of
  a public servant from leasing a public housing unit at
  the public servant's agency.
 Accordingly, HUD will not grant the requested waiver
  because such a waiver is not permitted under State
  law.
                                                           47
            Illustration #12

Marvin Manager is the administrator of two
apartment projects in El Niño, Texas, that
participate in HUD’s Section 8 voucher program
through the El Niño HA.
    Marvin is also a HA Commissioner.
Is there a problem here?



                                             48
               Answer #12

YES.
HUD’s Section 8 Housing Choice Voucher regulations
provide that the HA may not enter into any contract in
connection with tenant-based programs in which any
present member of the HA has an interest: 24 CFR
§982.161(a)(1).
Marvin must resign from the HA Board or the HA must
seek a waiver of the conflict of interest from HUD.

                                                    49
                 Illustration #13
1.     As a HA employee, can I help sponsor a candidate for the
       Democratic party for a State Senator?
     • Yes, but you cannot coerce contributions from subordinates in
       attendance in support of your candidate. However, you can make a
       personal contribution to his campaign.

2.    Can a HA employee be a delegate to the Republican National
      Convention?
     • Yes. You are permitted to run for election and hold office in
       a political party.
3. Is it okay for HA employee to run for school board?

     • Yes, but only if the election is nonpartisan. An election is partisan
       if any candidate is running as a representative of a party whose
       presidential candidate received electoral votes in the last
       presidential election.                                                  50
      “The Final Exam Question”

Letter from consultant asking whether contractual
arrangement among the Muleshoe Housing Finance
Corp (MHFC), Brown & Brown Consultants, Inc.
(B&BCI) and John Brown as President of B&BCI
creates a conflict of interest, because of MHFC’s
ownership of the Village of Coyote Lake (Village).
    Conflict of Interest under procurement regs?
    Conflict of Interest under Section 8 regs?



                                                     51
            “The Facts of the Case”

Some of the tenants of the Village participate in HUD’s
Section 8 Housing Choice Voucher Program administered
by the City of Muleshoe PHA.
MHFC contracted with B&BCI to perform all MHFC’s daily
and project management requirements.
John Brown is not a member of MHFC’s Board, not an
employee of MHFC or the City, and is not under contract
with the City.
The Village is not a recipient of any Federal or private
grants.
John Brown, as part of B&BCI’s consulting service, serves
without compensation as MHFC’s Executive Director.

                                                            52
                “The Answer Sheet”

 Two conflict of interest provisions which might apply:
   24 CFR §85.36(b)(3) – Procurement conflict of interest
    regulations
   24 CFR §982.161 – Section 8 Housing Voucher conflicts of
    interest regulations
  No conflict under procurement regs because there is no
   “contract supported by Fed funds” being awarded and/or
   administered by MHFC: 24 CFR §85.36(b)(3).
  No conflict under Section 8 regulations because MHFC is
 neither the PHA nor a contractor of the PHA administering
 the Section 8 voucher program for the City: 24 CFR
 §982.161(a).                                                  53
Thanks for Your Attention!

								
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