Updates to the MOR Process Updates to the MOR Process HUD Notices 10-08 & 10-10 (EIV) Providing Social Security Numbers Applicants currently on or applying to waiting list Applicants do not need to disclose or provide verification of a SSN for all non-exempt household members at the time of application and for placement on the waiting list. However, applicants must disclose and provide verification of a SSN for all non- exempt household members before they can be housed. Providing Social Security Numbers If all non-exempt household members have not disclosed and/or provided verification of their SSNs at the time a unit becomes available, the next eligible applicant must be offered the available unit. Providing Social Security Numbers The applicant who has not disclosed and/or provided verification of SSNs for all non- exempt household members has 90 days from the date they are first offered an available unit to disclose and/or verify the SSNs. After 90 days, if the applicant is unable to disclose and/or verify the SSNs of all non- exempt household members, the applicant should be determined ineligible and removed from the waiting list. Actions Once SSN is Verified Once the individual’s SSN has been verified through EIV, the O/A should remove and destroy the copy of the documentation by no later than the next recertification of family income or composition. Penalties for Non-disclosure of SSN Termination of Tenancy – O/As must terminate the tenancy of a tenant and the tenant’s household if the tenant does not meet the SSN disclosure, documentation and verification requirements in the specified timeframe as the household is in non- compliance with its lease. Notification of Regulation Changes Change in the SSN Disclosure and Verification Requirements Applicants O/As must contact applicants currently on the waiting list notifying them of the change in SSN requirements and that they will have to disclose and provide verification of SSNs for all non-exempt household members before they can be admitted. Notification of Regulation Changes Change in the SSN Disclosure and Verification Requirements Tenants Notice must be given to the head of household indicating SSN documentation must be brought to the recertification meeting for all household members. who have: 1. Not disclosed their SSN; 2. Previously disclosed a SSN that HUD or the SSA determined was invalid; or 3. Been issued a new SSN. Notification of Regulation Changes Change in the SSN Disclosure and Verification Requirements Tenants Notice must be given to all tenants indicating the change in SSN requirements when adding a new household member Ensure that these requirements are provided in a translated form to individuals with limited English proficiency. Penalties For Not Having Access Submitted Hard copy CAAF before Dec 15, 2009 Electronic copy and property assignment prior to Jan 15, 2010 No Penalty if…… OA is able to provide to Reviewers: o Initial Hardcopy CAAF o Online CAAF o Show follow up with Multifamily help desk o Begin implementing EIV immediately upon receiving access. Not Having Access Penalties for not having access will be discussed by Paul later in this workshop. HUD Notices 10-08 & 10-10 (EIV) Updating O/A Requirements 1. Tenant Selection Plan O/As must use the Existing Tenant Search in EIV as part of their screening criteria for new tenants and must include written policies for using the search in their Tenant Selection Plan. 2. Policies and Procedures O/As must have written policies and procedures for staff to follow for using the EIV Income Report as third party verification of employment and income and for using the other EIV reports, e.g., Income Discrepancy Report and the EIV Verification Reports. Updating O/A Requirements O/A Policies and Procedures should include: When and How information will be used - reports Gaining/Terminating access to EIV Document Retention Policy Security of EIV information Access to files, computers, location of information Security Awareness Training Question?? What will CAHI do when reviewing an OA’s written Policies and Procedures and TSP? Verify information contained in Policies and Procedures match HUD notice 10-10 TSP contains use of Existing Tenant Search Social Security Number Requirement Question?? What is the process if the reviewer determines the TSP or the OA’s Policies and Procedures are not compliant with HUD guidance? Recommended by T&C: Note on MOR report Certify information will be updated to meet most recent HUD guidance (HUD Notice 10-10) to be reviewed at next MOR. What is your actual/current practice? Consent for the Release of Information Applicants The form HUD-9887 signed by the applicant and each applicant family member 18 years of age and older does not need to be on file in order to use the Existing Tenant Search in EIV at the time of application processing and tenant screening. Consent for the Release of Information Tenants A current form HUD-9887 must be on file before accessing the employment or income data contained in EIV for a tenant. The form must be signed and dated by: Each adult member of a household regardless of whether he or she has income. A family member when he/she turns 18. Consent for the Release of Information Tenants EIV data of an adult household member may not be shared (or a copy provided or displayed) with another adult household member or to a person assisting the tenant with the recertification process, unless the individual has provided written consent to disclose such information. Consent for the Release of Information Tenants However, the O/A is not prohibited from discussing with the head of household and showing the head of household how the household’s income and rent were determined based on the total income reported and verified. Consent for the Release of Information Tenants & Applicants New with HUD Notice 10-10: O/A does not need to have a signed 9887 when accessing ANY of the verification reports in EIV Multiple Subsidy EIV Pre-screening Failed Verification Existing Tenant Search Deceased Tenant Report Tenant Notification of Recertification Having the necessary documentation available at the time of the recertification interview will save time in completing the recertification process. In addition, asking the right questions at the time of the interview will ensure that the correct information has been provided and will assist in reducing errors in income and rent determinations. HUD Notices 10-08 & 10-10 (EIV) EIV Reports USING EIV REPORTS O/As must use the: EIV Income Report as a third party source to verify a tenant’s employment and income during mandatory recertifications (annual and interim) of family composition and income USING EIV REPORTS O/As must use the: Other EIV income reports (Income Discrepancy Report, New Hires Report and No Income Report) to identify issues or discrepancies which may impact a family’s assistance USING EIV REPORTS O/As must use the: EIV Verification Reports (Existing Tenant Search, Multiple Subsidy Report, Identity Verification Reports, and Deceased Tenants Report) that further assist in reducing subsidy payment errors. Income Reports When selecting the Income Report for an individual tenant, either from the list of tenants for a particular project and/or contract or by querying by the head of household’s SSN, the Owner/Agent has three reports that must be used at the time of recertification (annual and interim). Income Reports When selecting the Income Report for an individual tenant, either from the list of tenants for a particular project and/or contract or by querying by the head of household’s SSN, there are three reports that must be used at the time of recertification (annual and interim). Summary Income Report Income Discrepancy Report Summary Report This report provides a summary of information taken from the current, active certifications contained in the TRACS file at the time of the income match. It also provides the Identity Verification Status for each household member. Summary Report There are four verification statuses identified: 1. Verified – personal identifiers (last name, DOB, SSN) match the SSA database. 2. Failed – personal identifiers do not match the SSA database. 3. Not Verified – personal identifiers have not yet been sent by HUD to SSA for validation or the validation is in process by SSA. 4. Deceased – SSA’s records indicate the person is deceased. Summary Report Summary Report O/As must use this report: At the time of recertification to review and resolve the status of any household member(s) with a ―failed‖ or ―deceased‖ status. As verification that a tenant’s SSN has been ―Verified‖ by SSA as being a valid SSN. Summary Report O/As must retain in the tenant file: The Summary Report(s) as verification of the SSN for all household members whose Identity Verification Status is ―Verified‖. If the Summary Report in the tenant file shows an Identity Verification Status of ―Verified‖ for all household members required to have a SSN, the O/A is not required to continually print at recertification Summary Report O/As must retain in the tenant file: Any correspondence or documentation received to resolve the ―Failed‖ or ―Deceased‖ status. Documentation for household members not required to disclose and provide verification of a SSN: No follow up is required at the time of recertification when the status is “Not Verified” Summary Report To minimize the risk of exposing a tenant’s SSN, O/As may remove and destroy, at the time of recertification, copies of verification documentation received from the tenant at the time of disclosure of their SSN once the Identity Verification Status shows ―Verified‖. O/As are encouraged to minimize the number of tenant records that contain documents that display the full nine- digit SSN. O/As must not include the full nine-digit SSN for a tenant in emails or other electronic communications. Income Report There have been few substantial changes from HUD notice 09-20. HUD has listed a clarification of the document retention requirements to demonstrate the O/A’s compliance with mandated use of EIV. HUD has provided new guidance on new applicants. Income Report—Documents Retained No Dispute of EIV Information: EIV Income Report, current acceptable tenant-provided documentation, and, if necessary (as determined by the O/A), third party verification from the source. Disputed EIV Information: EIV Income Report and third party verification from the source for the disputed information. Tenant-reported income not verified through the EIV System: EIV Income Report, current acceptable tenant- provided documents and/or third party verification from the source. New Admissions For all new admissions, the O/A must: Review the Income Report within 90 days after transmission of the move-in certification to TRACS to confirm/validate the income reported by the household. New Admissions For all new admissions, the O/A must: Resolve any income discrepancies with the household within 30 days of the Income Report date. Print and retain the Income Report in the tenant file along with any documentation received to resolve income discrepancies, if applicable. Income Discrepancy Report O/As must: Print the Income Discrepancy Report at the same time as the Income Report, at annual and interim recertification or at other times as indicated in their policies and procedures. It is important that the Income Discrepancy Report be printed at the same time as the Income Report as each week a completely new report is generated based on the current information in the system for a tenant. Income Discrepancy Report O/As must: Review and resolve any discrepancies in income reported on the Income Discrepancy Report with the household at the time of recertification or within 30 days of the EIV Income Report date. Any unreporting, underreporting or over-reporting of income by the tenant and reported on current or historical form HUD-50059s must be identified. Income Discrepancy Report O/As must: Retain the Income Discrepancy Report along with detailed information on the resolution of the reported discrepancy in the tenant file. This includes information on resolution of the discrepancy regardless of whether the discrepancy was found to be valid or invalid. Income Discrepancy Report O/As must: Make sure that the information in TRACS agrees with the information on the form HUD-50059 in the tenant’s file. Any discrepant information must be corrected in the TRACS database. Other EIV Reports O/As must retain a “Master” file that contains a copy of the report and documentation and/or notations as indicated in the report discussions below. Any detail reports retained in a tenant’s file must contain information for members of that tenant’s household only. Many of the reports do not have page breaks between households, therefore, O/As will need to separate the reports by household by cutting the reports apart until page breaks are inserted in the EIV system. No Income Report No changes from HUD notice 09-20 O/As must use this report only as identified and described in their policies and procedures. O/As are not required to retain copies of this report. It is recommended that O/As have a policy to re-verify the status of tenants reporting zero income at least quarterly. New Hires Report O/As must use this report at least quarterly to determine if any of their tenants have started new employment whereby the tenant has not reported a change in income to the O/A between recertifications and/or the new employment was not reported at the time of recertification. New Hires Report O/As must reach out to their tenants to report the income changes so that rent adjustments can be made in a timely manner, thus eliminating/reducing the amount of retroactive rent repayments. New Hires Report O/As must: Contact the tenant regarding his/her new employment. Confirm with the tenant that they have a new job and that the employment information in EIV is correct. New Hires Report O/As must: If the tenant agrees that the employment information in EIV is correct, request the tenant provide documents, to determine the tenant’s income or, if necessary, request third party verification from the employer. If the tenant disputes the employment information in EIV, the O/A must obtain third party verification from the employer. New Hires Report O/As must: Retain the New Hires Summary Report in a master “New Hires Report” file along with notations as to the outcome of the contact with the tenant. A copy of the New Hires Detail Report for the tenant along with any correspondence with the tenant, third party verifications, etc. must be retained in the tenant file. Existing Tenant Search O/As must: Use this report at the time they are processing an applicant for admission. Discuss with the applicant if the report identifies that the applicant or a member of the applicant’s household is residing at another location, giving the applicant the opportunity to explain any circumstances relative to his/her being assisted at another location. Existing Tenant Search O/As must: Follow up with the respective PHA or O/A to confirm the individual’s program participation status before admission, if necessary. Retain the search results with the application along with any documentation obtained as a result of contacts with the applicant and the PHA and/or O/A at the other location. Multiple Subsidy Report O/As must: Use the Multiple Subsidy Report at least quarterly to identify any tenants who are being assisted at another location. O/As must follow up with tenants identified on the report where the discrepancy was not identified and resolved at the time of recertification. Multiple Subsidy Report O/As must: Perform both of the search options shown below to determine if possible multiple subsidies exist: Search within MF Search within PIH Multiple Subsidy Report O/As must: Discuss with the tenant if the results of either of the searches shows that a tenant is being assisted at another location. The tenant must be given the opportunity to explain any circumstances relative to his/her being assisted at another location. Multiple Subsidy Report O/As must: Follow up with the respective PHA or O/A, if necessary, to confirm that the tenant is being assisted at the other location. Depending on the results of this investigation, the O/A may need to take action to terminate the tenant’s assistance or tenancy. Multiple Subsidy Report O/As must: Print out and retain a copy of the Multiple Subsidy Summary Report in a master “Multiple Subsidy Report” file along with notations as to the outcome of contacts with the tenant and/or PHA or owner Multiple Subsidy Report O/As must: A copy of the Multiple Subsidy Detail Report for the tenant plus any documentation supporting any contacts made or information obtained to determine if a household and/or household member is receiving multiple subsidies as well as documentation to support any action taken if a household and/or a household member is receiving multiple subsidies must be retained in the tenant file. Failed EIV Pre-Screening Report O/As must: Use this report monthly to identify tenants that did not pass the pre-screening test and the reason(s) they did not pass so that the errors can be corrected. Print and retain a copy of the report in a master “Failed EIV Pre-screening Report” file. The report must be documented with action taken to resolve invalid or discrepant personal identifiers. Failed Verification Report O/As must: Use this report monthly to identify tenants that did not pass the pre-screening test and the reason(s) they did not pass so that the errors can be corrected. Print and retain a copy of the report in a master “Failed the SSA Identity Test” file. The report must be documented with action taken to resolve invalid or discrepant personal identifiers. Deceased Tenants Report O/As must: Use this report at least quarterly to identify those tenants reported by SSA as being deceased. Confirm, in writing, with the head-of-household, next of kin or emergency contact person or entity provided by the tenant whether or not the person is deceased. Deceased Tenants Report O/As must: Print and retain a copy of the report in a master “Deceased Tenants Report” file. The report must be documented with action taken to resolve any discrepancies. All correspondence or action taken for a particular tenant must be retained in the tenant file. HUD Notices 10-08 & 10-10 (EIV) Repayment Agreement Monthly Payment The tenant’s monthly payment must be what the tenant can afford to pay based on the family’s income. The monthly payment plus the amount of the tenant’s total tenant payment (TTP) at the time the repayment agreement is executed should not exceed 40 percent of the family’s monthly adjusted income. Repayment Agreement New repayment agreements must: Include the total retroactive rent amount owed, the amount of lump sum paid at time of execution of the agreement, if applicable, and the monthly payment amount. Reference the paragraphs in the lease whereby the tenant is in non-compliance and may be subject to termination of their lease. Repayment Agreement New repayment agreements must: Contain a clause whereby the terms of the agreement will be renegotiated if there is a decrease or increase in the family’s income of $200 or more per month. Include a statement that the monthly retroactive rent repayment amount is in addition to the family’s monthly rent payment and is payable to the O/A. Repayment Agreement New repayment agreements must: Indicate that late and missed payments constitute default of the repayment agreement and may result in termination of assistance and/or tenancy. Be signed and dated by the tenant and the O/A. HUD Notices 10-08 & 10-10 (EIV) RETENTION OF EIV REPORTS O/As must retain: The Income Report, the Summary Report(s) showing Identity Verification Status as ―Verified‖ and the Income Discrepancy Report(s) and supporting documentation must be retained in the tenant file for the term of tenancy plus three years. RETENTION OF EIV REPORTS O/As must retain: Any tenant provided documentation, or other third party verification of income, received to supplement the SSA or NDNH data must be retained in the tenant file for the term of tenancy plus three years. RETENTION OF EIV REPORTS O/As must retain: Results of the Existing Tenant Search must be retained with the application: If applicant is not admitted, the application and search results must be retained for three years. If applicant is admitted, the application and search results must be retained in the tenant file for the term of tenancy plus three years. Quiz How many Master File Folders is an owner required to keep and make available to reviewers at an MOR? True or False: If the tenant agrees with the numbers on the Income report, the O/A can use these numbers to calculate income/TTP. True or False: The effective date of 10-10 is August 1, 2010. An owner can/cannot use the Income Report when processing an IC for a former market renter. True or False: Only use of Income reports must be included in the TSP. RETENTION OF EIV REPORTS O/As must retain: The master files for the New Hires Report, Identity Verification Reports, Multiple Subsidy Report and Deceased Tenants Report must be retained for three years. The files must be available for review at the time of the MOR HUD Notices 10-08 & 10-10 (EIV) SECURITY OF EIV DATA Disclosure to Persons Assisting Tenants with the Recertification Process With the written consent of the tenant, EIV data may be shared with persons assisting the tenant with the recertification process. Tenants who require assistance during the recertification process may have someone present to assist them in the recertification process; this includes review and explanation of the written third party income verifications. SECURITY OF EIV DATA Disclosure to Persons Assisting Tenants with the Recertification Process Disclosure of EIV information to these parties must be employment or income information pertaining only to the tenant who has provided his/her consent. These parties must not have access to EIV information for any other household members. SECURITY OF EIV DATA Parties to whom the tenant can provide written consent include: Service coordinators (only if they are present at and assisting the tenant with the recertification process) Translators/Interpreters Individuals assisting an elderly individual or a person with a disability Guardians Powers of Attorney Other Family Members Security Training EIV users are required to have security training annually. EIV users authorized by owners to have access to EIV on their behalf must complete the applicable online Security Awareness Training Questionnaire for Multifamily Housing Programs upon initial access to the system and annually thereafter. Security Training EIV users should: Review Section 4 on Security contained in the Multifamily EIV User Manual for Multifamily Housing Program Users Review the EIV Security Administration Manual View the Security training provided during the most recent EIV webcast Security Training O/A staff who do not have access to EIV but who use EIV reports to perform their job function must have security training annually. Security training as part of HUD’s most recent EIV webcast will satisfy the annual security training requirements. HUD will not provide certificates for completing the training. O/As and CAs must keep a file of who took the training and when for auditing purposes. Physical Safeguards EIV data stored electronically must be in a restricted access directory or, if placed on portable media, labeled appropriately and encrypted using a NIST compliant vendor. Similarly, all emails containing EIV data must be encrypted using a NIST compliant vendor. The full nine-digit SSN for a tenant must not be included in emails or other electronic communications. Physical Safeguards Hardcopy EIV Data: EIV data that is printed out must not be left unattended. The documents should be retrieved as soon as they are printed and, if possible, use a restricted printer, copier, or facsimile machine. When faxing EIV data, ensure there is someone waiting and ready to retrieve the fax as soon as it is received (printed). Physical Safeguards Computer Security: The EIV system is set up to time out after 30 minutes of inactivity. This automatic safeguard should not be the only security measure taken. Individuals who use the EIV system should use a password protected screensaver and lock their computer when leaving their workspace. A user should not leave a computer unattended with EIV data displayed on the screen. It is also recommended that the EIV system be exited using the ―X‖ at the top right of the screen which will remove the user from the entire WASS system. Questions or Open Issues? Documents in Your Folder First: Summary of Additions/Updates in HUD Notice 10-10….these may be used as criteria for conditions identified at an MOR. Second: Use of EIV Reports. Let’s review. Use this at an MOR to determine IF the O/A is using EIV in its entirety. It was taken directly from 10-10. Proposed MOR Procedures for EIV Use and On-Site Monitoring. (actually, this is a final document, but I am not sure CAHI has officially adopted it). Let’s review. Topics • Overview of Changes • MOR Process • Scoring Understanding NEW requirements for conducting and scoring Management and Occupancy Reviews Overview of Changes Provides consistency with the HUD-9834, Management Review for Multifamily Housing Projects, which was revised in 2005; Clarifies the applicability section for the various programs covered under the chapter; Adds a new section to identify the reviewing officials (HUD staff, Contract Administrators, and Mortgagees) Overview of Changes Removes outdated requirements (i.e., conducting a physical inspection as part of the on-site management review process.) The revised version requires the reviewer to only perform follow-up activities for REAC inspection reports; Adds a section that discusses the Contract Administrator’s role and interrelationship with HUD staff; Clarifies the processes prior to the on-site review for notifying owners/agents; Overview of Changes Requires follow up and monitoring of inspections if deficiencies are noted in report issued within last 12 months and/or if information is available requiring corrective action Review a sampling of EH&S if report was released within six months prior to on-site review******** Reviewing a sampling of units and common areas to verify that significant REAC physical inspection report deficiencies have been corrected Reviewing and obtaining copy of lead – based paint certification, if applicable Overview of Changes Incorporates a discussion on the Desk Review process currently used in the revised HUD-9834, which occurs prior to the on-site review, prepares the reviewer for the on-site review, and reduces the burden on the owner/agent to provide information already available in HUD systems and file; Acknowledging that the REAC physical inspection process and Annual Financial Submission processes have been automated since the last publication and includes procedures based on the automated processes; Overview of Changes Incorporates lead-based paint follow-up activities; Outlines the frequency of reviews based on set timeframes and/or project actions; Provides guidance for communicating the on-site management review results to the owner/agent for consistency with the HUD Desk Monitoring Guide. (You have a copy of this document in your folders. Recommend you read it carefully.) Overview of Changes Provides a more detailed set of standards/rating descriptions to apply when assigning the performance indicators (Superior, Above Average, Satisfactory, Below Average, and Unsatisfactory) for each of the seven rated categories; Adds a section outlining the considerations when selecting properties for review; Incorporating actions that should be taken for owner/agent noncompliance issues; Overview of Changes Removes the requirement that the lowest categorical rating assigned to high-impact review areas serve as the overall rating. Provides a consistent overall rating calculation intended to eliminate major inconsistencies and variances in HUD field office ratings, which were previously discovered during national portfolio reviews; Places emphasis on limited reviews that should be performed by HUD staff for the insured/subsidized portfolio for projects that are also assisted by HAP contracts and monitored by HUD’s Contract Administrator; Topics • Overview of Changes • MOR Process • Scoring Understanding NEW requirements for conducting and scoring Management and Occupancy Reviews Role of Reviewers Identifies the responsibilities of Reviewers and specifically indicates that PBCAs review properties for HAP compliance ONLY Also, the chapter discusses how HUD reviews of properties should not overlap or duplicate what the PBCA does. Interrelationships The on-site management review is designed to work in conjunction with other HUD reviews (REAC) inspections, Annual financial statement reviews, Monthly accounting report monitoring, Fair Housing Civil Rights Front-End and Limited Monitoring Reviews, Departmental Enforcement Center (DEC). Troubled Properties For projects that have been designated as ―troubled‖ based on REAC physical inspection issues all reviewing officials should attempt to schedule the on-site review within three months of the REAC inspection report release date.***** How does this IMPACT our processes? Troubled Properties DEC Status and Troubled Properties Per 4350.1 Chapter 6 Effective 8/1/2010: “PBCA’s should verify DEC status to determine whether to conduct the review and contact the local HUD Office for scheduling guidance.” Owner Notification The reviewing official is responsible for contacting the owner/agent to schedule a date for the on-site review. Once the on-site review is scheduled, the reviewing official must confirm the scheduled review with the owner/agent in writing at least two weeks in advance. The reviewing official must also notify the owner/agent of the documents that must be available the day of the review, as indicated on Addendum C of form HUD-9834, Owner Responsibilities The reviewing official forwards Part A, Sections I, II, and III of the checklist for On-Site Limited Monitoring and Section 504 Reviews (Addendum B) of HUD- 9834 to the owner/agent for completion prior to the on-site management review. Owners are required to have these documents completed and available to reviewers when they arrive. Desk Review The Desk Review section of form HUD-9834 consists of questions used to prepare the reviewing official for the on-site review and must be completed prior to conducting the on-site review. Desk Review Although the questions in Part I, Desk Review, are not rated, they are used to assist the reviewing official in preparing for the on-site review and can impact the rating if ongoing non-compliance items are identified. It is important that the reviewer fully complete Part 1, Desk Review prior to going on site as this will provide the appropriate background needed to do a thorough review of the site. Desk Review To complete the Desk Review section, the reviewing official will need to review: The project files System reports, and other documents and data that pertain to the project under review Reviewing the last REAC physical inspection (iREMS) screens to verify the accuracy of the Ownership and Management information Researching the iREMS Problem Statement screens to obtain additional background information On-Site The reviewer must complete the appropriate sections of Part II, On-site Review, of form HUD- 9834. Completing this section requires an interview approach with the owner/agent; therefore, the form should not be provided to the owner/agent for completion prior to or during the on-site review. On-Site For subsidized projects, reviewers must complete: Addendum A -Tenant File Review Worksheet; Addendum B - Checklist for On-Site Limited Monitoring and Section 504 Reviews All reviewing officials should notate “N/A” for questions that are not relevant to the program under review. Addendum C - Documents To Be Made Available By Owner/Agent. Follow-Up on Inspections The on-site review also requires follow-up and monitoring of inspections if deficiencies are noted on the physical inspection report released within the last twelve months and/or if information is available requiring corrective action. If inspection of record is more than 1 year old, does CAHI just note that last Physical Inspection was reviewed at previous MOR? Reviewers Should…. Review a sampling of Exigent, Health, and Safety (EH&S) problems identified in the REAC physical inspection if the report was released within six months prior to the on-site review. The reviewing official should consider these items a priority and the sampling process should assure that all EH&S deficiencies have been corrected; Reviewing a sampling of units and common areas to verify that significant REAC physical inspection report deficiencies (other than EH&S).…have been corrected On-Site Review and obtain a copy of the lead-based paint certification (if applicable) and noting deficiencies and/or environmental hazards if information is made available requiring corrective action. Once this is complete, only updates to plan need to be copied. Communicating Monitoring Results/Follow Up For PBCA reviews rated ―Below Average‖ or ―Unsatisfactory,‖ a copy must be provided to HUD staff. Indicates that the HUD Monitoring Guide is to be referred to when performing monitoring activities. The guide was designed to incorporate HUD’s guidelines for consistency. However, it is directed primarily at HUD staff, not PBCAs. Owner/Agent Responses If report contains deficiencies, TCD may not exceed 30 calendar days. This is new. GAO considers the monitoring process to be completed only after identified deficiencies have been corrected, the corrective action produces improvements, and it is determined that no further action is required. Owner/Agent Responses Effective August 1 with the implementation of the new 4350.1 Chapter 6 – Potential issue: Should this change the date CAHI uses to close out an MOR in iREMS? CAHI must decide WHEN to close the MOR in iREMS until all follow-up actions are completed. New Appeals Guidance If an owner/agent receives a ―Below Average‖ or ―Unsatisfactory‖ overall rating as indicated on the form HUD-9834, Summary Report, the owner/agent may appeal the rating… Note..this EXCLUDES appealing any one CATEGORY Rating. This is different than current policy in some states. CAHI may wish to review their policy on this issue. Appeal process/timelines have not changed. References A listing by 9834 Category of references that may be cited in the on-site review report. Note: these include Code of Federal Regulation citations. Topics • Overview of Changes • MOR Process • Scoring Understanding NEW requirements for conducting and scoring Management and Occupancy Reviews Category and Overall Rating New performance indicators based on a numeric construct Expanded/new descriptions of category ratings Defining Adverse Findings/Major Adverse Findings Note: All of the information that follows is new and substantively changes our process going forward. Performance Indicators The performance indicators are as follows: Superior (90-100) Above Average (80-89) Satisfactory (70-79) Below Average (60-69) Unsatisfactory (59 and Below) Performance indicators (or ratings) are assigned to each category and are used to determine and monitor owner/agent compliance with HUD requirements. Superior Performance should be rated superior if actions consistently exceed statutory, regulatory, and Handbook requirements for an above-average rating. Consistent policies and procedures which are highly successful in carrying out the objectives of HUD housing programs Owner/agent strictly adheres to procedures, resulting in compliance with the regulatory agreement, subsidy and mortgage contracts, and management certifications; Superior The owner/agent is in compliance with HUD’s lead- based paint requirements (if applicable); The property is in exceptional condition and there are no observable Exigent, Health & Safety (EH&S) or other deficiencies; and, There are few incidences of errors disclosed in the review and no major adverse findings. Superior There is ample documentation that the owner/agent periodically updates the affirmative fair housing marketing plan (AFHMP) marketing strategies, to address changing local demographics, including persons with limited English proficiency (LEP), person with a variety of disabilities, and large families. The owner/agent also engages in active outreach efforts to community groups and other organizations to attract individuals to existing available housing opportunities. Above Average Performance should be rated above average if actions occasionally exceed statutory, regulatory, and Handbook requirements and: Owner/agent has established policies and procedures which are successful in carrying out the objectives of HUD housing programs Owner/agent adheres to procedures, with very few exceptions, resulting in compliance with the Regulatory Agreement, subsidy and mortgage contracts, and management certifications Above Average The owner/agent is in compliance with HUD’s lead- based paint requirements (if applicable); The property is in good condition and there are no observable Exigent, Health & Safety (EH&S) or major deficiencies, but a minimal number of minor deficiencies are observable; and, Incidences of errors disclosed in the review are minimal and there are no major adverse findings. Above Average The HUD approved AFHMP is available on site, project staff have been trained on implementing the plan and it serves as the primary basis for marketing outreach to the various demographics groups that are lest likely to apply. Records are maintained on the demographics of applicants and tenants along with data that analyzes the effectiveness of the affirmative marketing efforts. Satisfactory Performance should be rated Satisfactory if actions meet statutory, regulatory, and Handbook requirements and: Owner/agent is successfully carrying out the objectives of HUD programs; Policies and procedures have been established but are not always adequate to prevent errors from occurring; The owner/agent submitted a lead hazard control plan within the prescribed HUD timeframe and is awaiting HUD approval (if applicable); Satisfactory There are some observable Exigent, Health & Safety (EH&S)/major deficiencies but there is evidence that the owner has already corrected many of the deficiencies noted on the last inspection report; The owner/agent or their employees have deviated from established policies resulting in deficiencies or there are findings that, with minor adjustments to existing policies or procedures or additional training, the owner/agent should be able to cure the deficiencies. Satisfactory In such cases, a satisfactory rating should be given only if the owner/agent is willing to make the necessary adjustments and complete the necessary training. The HUD approved AFHMP is available in the rental office and affirmative marketing to those least likely to apply occurs based on the Plan, including outreach in other languages to individuals who are limited English proficient (LEP). Below Average Performance should be rated Below Average if actions rarely meet statutory, regulatory, and Handbook requirements and: Owners/agents policies and procedures are ineffective or inappropriate for the project; The policies and procedures do not meet the requirements of the regulatory agreement, management certification, or subsidy contracts; Weaknesses in policies and procedures result in frequent failures to comply with published HUD instructions; There are repeat major adverse findings; Below Average There are open findings from prior year’s management reviews; The owner/agent submitted a lead hazard control plan and has failed to comply with the HUD approved plan (if applicable); There are a substantial number of observable Exigent, Health & Safety (EH&S)/major deficiencies and there is evidence that the owner has corrected very few of the deficiencies noted on the last inspection report; and, Below Average The owner/agent would need significant changes to its existing policies and procedures or the owner/agent or on-site employees would need significant amounts of training to cure the deficiencies. The HUD approved AFHMP is available in the rental office but the AFHMP is not utilized to reach those individuals least likely to apply for housing in the project and the project’s employees are unfamiliar with the AFHMP provisions. Unsatisfactory Performance should be rated Unsatisfactory if actions did not meet statutory, regulatory, and Handbook requirements and: Owners/agents actions or failure to act have placed the Secretary’s interest in jeopardy or frustrated achievement of the Secretary’s housing objectives; There are major adverse findings in the financial management/procurement processes (HUD would determine this) Unsatisfactory There are repeat major adverse findings; There are open findings from prior year’s management reviews; The owner/agent has failed to submit a lead hazard control plan to HUD (if applicable); There are many observable Exigent, Health & Safety (EH&S)/major deficiencies and there is evidence that the owner has not corrected any of the deficiencies noted on the last inspection report; Unsatisfactory The owner/agents actions have failed to meet state and local housing code requirements (regardless of REAC score); and, The owners/agents policies and procedures are ineffective or lacking to the extent that the owner/agent frequently, and often seriously, fails to comply with HUD’s regulations and published instructions. There is no HUD approved AFHMP available in the rental office. Major Adverse Findings Mortgage default, Election to assign/assignment of the mortgage, Diversion of project funds, Unauthorized distribution of funds, Failure to fund the reserves for replacements account, Failure to submit monthly accounting reports (new projects), Failure to file an annual financial statement (if required); Major Adverse Findings Willful failure to maintain the property in an acceptable physical condition; Willful failure to remit payments to the note holder; Implementation of unauthorized rent increases; Failure to recertify tenants; Systematic errors in the areas of data collection, data verification, data recording, or rent calculation was discovered during the tenant file review, Fraudulent recertifications by the owner/agent; and Failure to comply with fair housing laws. Determining Category Ratings All categories are assigned a weighted percentage of the overall rating value based on the level of risk for deficiencies. See next slide and handout titled: Scoring Process. Percentage of Overall Rating A. General Appearance and Security 10% B. Follow-up and Monitoring of Project Inspections 10% C. Maintenance and Standard Operating Procedures 10% D. Financial Management/Procurement 25% E. Leasing and Occupancy 25% F. Tenant/Management Relations 10% G. General Management Practices 10% 100% Note: Financial Management/Procurement NOT Rated by PBCA Calculating Ratings Once the reviewing official rates each category (as applicable to the reviewing official) based on the rating descriptions above, the reviewing official must use the following performance indicator values: Performance Indicator Performance Indicator Value Superior 90-100 Above Average 80-89 Satisfactory 70-79 Below Average 60-69 Unsatisfactory 0-59 NOTE: Performance indicator values can be manually entered by the reviewer. Determining Overall Ratings Calculation methods included….. To determine the overall rating, the reviewing official must first multiply the performance indicator value by the assigned percentage of the overall rating for each category, rounding up to the nearest whole number. Once all categories have been calculated based on the performance indicator and performance indicator values, the total is divided by the total percentage points Example of Overall Rating For limited reviews where only certain categories are rated, the reviewing official would follow the same process illustrated above to derive the category weight. For example, if the reviewing official reviews all categories excluding Financial Management/ Procurement, the calculation for the Financial Management/Procurement category will be omitted when dividing by the number of categories. Example of Overall Rating See Automated Scoring Sheet in your folder. I will demonstrate the sheet. CAHI should consider whether adopting the scoring sheet will assist you in the MOR process. On the Horizon The new ACC makes compliance with the RHIIP monitoring guide part of the elements of Acceptable Quality work for the Management and Occupancy Reviews we conduct under the new contract. What is the RHIIP Monitoring Guide? Purpose? This document provides guidance to contract administrators (CAs) in conducting on-site management and occupancy reviews of HUD’s assisted multifamily (MF) housing. A CA may be HUD staff, a performance-based contract administrator (PBCA), or a traditional contract administrator (TCA). Goals of the Guide To detect and reduce errors in income and rent determinations To reduce rent underpayments and/or overpayments by residents To maximize HUD’s housing resources, thereby assuring maximum participation in HUD’s housing programs by as many eligible families as possible Purpose of the Guide The purpose of this Guide, is to provide technical assistance to the CA to ensure that quality control monitoring of income and rent determinations during management and occupancy reviews (MORs) is adequate and effective. This Guide provides technical guidance and tools designed to provide the reviewer with a systematic approach to monitoring income and rent determinations and ensuring that errors are corrected. This approach will allow HUD to assess the errors on a national basis and track the reduction in errors to ensure that HUD’s goal to significantly reduce errors is accomplished. What Does It Contain? Conducting Desk Reviews: How to use TRACS How to use EIV Reports Conducting the On-Site: Tenant File Sample Guidance Applicant Intake Wait List Management Tenant Selection Plan Verification and Calculation of Income/Rent Certification and Recertification Activities Tenant File Reviews What Does It Contain? Post-Review Activities and Follow-Up Preparing and Issuing the Report Documenting Income and Rent Determination Errors Identifying conditions Identifying criteria Specifying corrective actions Follow-Ups and Resolutions Tracking Errors NOTE: Before the new ACC term starts, T&C will provide detailed training on RHIIP Monitoring Guide Requirements during MORs.