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Home My WebLink About20090871HOUSING AUTHORITIES ip4 NiiP.O. Box 130 Greeley, Colorado 80632-0130 (970) 353-7437 (97O) 353-7463 Fax (800) 659-2656 TTY Relay William F. Garcia Chair And Board of Commissioners Weld County Hou ,ing Authority 915 10th Street Greeley, CO 80631 Dear Board of Commissioners: April 3, 2009 I have been requested by U.S. Department of Housing and Urban Development to provide you with the attached letter and E-mail (end 1). I have reported in the past that we have been receiving funding in excess of our monthly cost of client rents, termed Housing Assistance Payments (HAPS). This surplus occurs when HUD allocates more funds per voucher than we actually need for fie rent payment. In past years we did an annual settlement of accounts. The policy for the last few years has been that the Housing Authority would retain any surplus funds in a HAP Nut Restrictive Assets account. The Housing Authority is allowed to retain up to 7% of its' annual budget as a local emergency reserve and any funds in excess of 7% are subtracted from the next year's funding allocation. In 2008 our authorized budget was $2,513,299; however the actual funding was reduced by $173,199 due to a surplus in the account. The intent was to reduce our local Net Restrictive Assets (reserve) by $173,199. Even with this reduction in funding we had a surplus of funds in 2008 and added to the Net Restrictive Assets account. It seems some Housing Authorities have been dipping into this account to fund other costs, which is a violation of regulations. At the end of 2007 we had on hand, according to HUD, $374,694 (end 2) line 22. At the end of 2008 this account, due to the surplus funding, had increased to $557,643 (encl 3) line 2806.1. We do restrict these funds as required by regulations. If you have any questions please contact me at (970) 353-7437 ext 103. Sincerely, Thomas Teixeira Executive Director Enclosures W CHA09-0I Oor4S&J*t coda* 0431q l I -f ooh Housing Authority of the City of Greeley • Weld County Housing Authority 903 6th Street • Greeley, Colorado 2009-0871 0PP0R UNITY GREELEY/ WELD .01 YEN, r b,%'�) y 6,„. oe OFFICE OF P1' B1.IC AND INDIAN IiOUSINO U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT WASHINGTON. DC 20410.50i0) APR - 2 2009 Letter to the Chair of the Public Housing Authority Board of Commissioners Dear Sir or Madam: Subject: Inappropriate Use of Housing Assistance Payments (HAP) Funds and HAP Net Restricted Assets (HAP NRA) Accounts — Housing Choice Voucher (HCV) Program The purpose of this letter is to remind you of your obligations with respect to use of the Housing Choice Voucher (HCV) Housing Assistance Payments (HAP) and the Housing Assistance Payments Net Restricted Assets (NRA) Account (formerly known as Program Reserve Account). HUD has become aware that some public housing agencies (PHAs) have used HAP and/or NRA funds for ineligible purposes, such as to support administrative costs or public housing expenses. Due to the importance of this issue, a similar letter is being sent to the Executive Director of your agency. Each year the Department allocates and distributes HAP funds to each PHA participating in the HCV Prog:am in accordance with the requirements of the Appropriations Act. These HAP funds are used by each PHA to provide HAP assistance on behalf of eligible families in its HCV Program. Eligible HAP assistance expenses include subsidy payments to owners or for homeownership, utility reimbursements to participants where appropriate, and deposits to Family Self -Sufficiency escrow accounts. By law, these HAP funds may not be used for any other purpose. Furthermore, since Calendar Year 2005 these HAP funds may not be used to support vouchers in excess of the number of vouchers provided in the PHA's Annual Contributions Contract (ACC), which are known as the PHA's baseline units. Over the ::ourse of the year, the PHA may find it does not expend the full amount of HAP funds that HUD has provided. Starting in Calendar Year 2005, HUD no longer exercised its option to establi.9 and maintain an ACC Reserve Account for the HCV Program for this unexpended HAP funding. Instead, each PHA was required to establish and maintain its own HAP NRA Account as of January 1, 2005. Any HAP funds from the year that were not used for the eligible program purposes noted above must he deposited by the PHA into its HAP NRA account. For example, assume a PHA received $1,500,000 from HUD for its HAP costs for Calendar Year 2008. If the PHA had HAP expenses of $1,400,000 for 2008, the remaining $100.000 would be deposited by the PHA into its HAP NRA account. www.hud.gov espanol.hud.gov This HAP NRA account is restricted and the balance reflects the difference between HAP funding provided to the PHA since January 2005 and the PHA's validated HAP expenses as reported in the Voucher Management System (VMS) for each month. PHAs have been advised in annual HUD Notices regarding Appropriations Act requirements and in annual HCV Program renewal funding letters that funds in the NRA account generated from Calendar Year (CY) 2005 and later appropriations may only be used for HAP needs in that year and future CY HAP needs of the HCV program, and only for units that are within the PHA's authorized baseline. PHAs may only use NRA funds for these purposes. PHAs may not use the funds for other purposes such as Section 8 administrative expenses, public housing program expenses or development costs, or any other costs of the PHA. The use of HAP and/or the NRA Account for any other purpose than those stated above may constitute a default under the ACC. Please see Section 15 of the ACC for HUD's Remedies in the event of a PHA default. HUD is reviewing data submitted by PHAs in the Financial Assessment Subsystem and VMS, and information from on -site quality assurance and other reviews, to identify those PHAs that may have used their HAP funds and/or NRA account for non -HAP purposes. HUD can take action against any parties that have engaged in the use of HAP funds and/or the NRA account for non -HAP purposes. These actions include, but are not limited to, debarment, administrative fee sanctions, and/or civil money penalties against the appropriate parties. In those instances where a PHA has misappropriated HAP and/or NRA funds by using the funds for any purpose other than valid HAP expenses for units up to the baseline, HUD requires an immediate return of the funds to the HAP or NRA account. Please also be advised that when HUD.calculates the NRA balance for PHAs as of December 31, 2008, any HAP funds provided since January 1, 2005, butnot reported as used for eligible HAP purposes are assumed to be available to the PHA in the NRA account. In calculating the off -set of NRA funds as required under the Omnibus Appropriations Act, 2009, HUD will assume that the total NRA balance is available to the PHA, regardless of whether the PHA failed to comply with the requirements concerning use of the NRA and actually spent the funds for other purposes. Inquiries about this letter should be directed to Miguel A. Fontanez, Director, Financial Management Division, Office of Housing Voucher Programs, at 202-402-4212. Sincerely, Danielle L. Bastarache Director Office of Housing Voucher Programs Page 1 of Tom Teixeira From: Financial Management Center [FinancialManagementCenter@hud.gov] Sent: Friday, April 03, 2009 12:04 PM Subject: USE OF NRA ACCOUNTS Attachments: PHA Letter on Uses of NRA - Board Chair.pdf; PHA Letter on Uses of NRA - Exec Dir.pdf Dear Executive Director: Subject: Housing Voucher Program - Use of NRA Account Funds Please find attached two letters issued April 2, 2009, from Danielle L. Bastarache, Director, Office of Housing Vouchei Programs. One letter is directed to you, the Executive Director; the other letter is intended for your agency's board chairperson. Please kindly ensure that the chairperson's letter is promptly forwarded to him or her, along with a copy of this email message. The letters are essentially identical in content. They were issued to serve as a reminder to PHAs that funds in their Net Restricted Asset (NRA) accounts may only be used for eligible HAP expenses, as detailed in the letter, and may not be used to support units above the PHA's baseline. Note that HUD is currently reviewing acquired information to assess PHAs' compliance with the statutory and other requirements governing the use of the NRA accounts. We ask that you review the letter carefully and assure that your data reporting is accurate and your NRA account is ii order. Thank you for giving this matter your attention. 4/6/2009 Enclosure B Calculation of Net Restricted Assets (NRA) and Usable / Unusable Portions 12/31/2007 HA Number: HA Name: 1 NRA Balance 1/1/2005 2 HAP BA CY 2005 3 HAP Expenses CY 2005 4 Difference 5 NRA Balance 12/31/2005 6 HAP BA CY 2006 7 HAP Expenses CY 2006 8 Cumulative Difference 9 NRA Balance 12/31/2006 10 HAP BA CY 2007 11 HAP Expenses CY 2007 12 Cumulative Difference 13 NRA Balance 12/31/2007 14 NRA Applied to Tenant Protection Costs 15 Remaining NRA 12/31/2007 16 CY 2007 UMAs 17 CY 2007 UMLs 18 Unleased Unit Months 19 Average PUC 20 Unleased Expenses 21 NRA Usable 22 NRA Unusable 23 CY 2007 Renewal Funding 24 7% of CY 2007 Renewal Funding 25 Unusable NRA in Excess of 7% Funding CO090 HOUSING AUTHORITY OF WELD COUNTY $0 $2,616,444 $2,599,340 $17,104 $17,104 $2,593,392 $2,573,429 $37,067 $37,067 $2,783,616 $2,407,323 $413,360 $413,360 $0 $413,360 5,124 5,043 81 $477.36 $38,666 $38,666 $374,694 $2,783,612 $194,853 $179,841 Run By: JA Account Number Description HOUSING AUTHORITY OF WELD COUNTY Trial Balance Listing WELD S8 VOUCHERS For the period February 2009 Project Debit Balance Credit Balance Adjustments Adjusted Balanc 1111.01 1122.03 1122.04 1129 1129.21 1162 1400.05 1475 01 2119 2119.ADM 2135.02 2180 2180.01 2805 2806 2806.01 2810 3401 3401.01 3450 3450.01 3600.01 3610 4110 4130 4180 4180.01 4180.02 4190 4190.01 4190.03 4190.04 4190.05 4190.07 4190.08 4540 4540.01 4540 02 4540.07 4540.09 4715 4715.02 4715.04 4715.06 4715.07 4715.08 471509 4715.15 4825 7520 CASH A/R FRAUD RECOVERY ALLOWANACE FOR DOUBTFUL ACCOUNTS AIR OTHER NR ADMINISTRATIVE ACCOUNT SAVINGS ACCUMULATED DEPRECIATION NONDWELLING OFFICE FURN & EQUIP A/P OTHER ACCOUNT 2119. ADM ACCRUED COMPENSATED ABSENSES FSS ESCROW FSS ESCROW INTEREST RETAINED EARNINGS ADMIN FEE EQUITY HAP EQUITY UNRESERVED SURPLUS REVENUES HUD HAP GRANTS REVENUES HUD ADMIN FEE GRANTS FRAUD RECOVERY HA FRAUD RECOVERY HAP ADMIN FEES EARNED TRANSFERS INTEREST EARNED ADMINISTRATIVE SALARIES LEGAL EXPENSE OFFICE RENT OFFICE ELECTRICITY OFFICE GAS SUNDRY ADMINISTRATIVE OFFICE SUPPLIES TELEPHONE POSTAGE MEMBERSHIPS DATA PROCESSING MILEAGE SS FICA ADMIN MED FICA ADMIN IRA ADMIN EMPLOYER PORTION HEALTH ADMIN CO UNPLMNT ADMIN HAP PAYMENT - OCCUPIED UNITS FSS PAYMENTS UTILITY ALLOWANCES UA REFUNDS FROM OTHER PHA'S UTILITY ALLOWANCE TRANSFERS HAP PAYMENTS TRANSFERS HAP PAYMENT REFUNDS FROM OTHER PH HAP PAYMENTS OUTGOING PORTABLE ADMIN FEE PAYMENT REPLACEMENT / NONEXPENDABLE EQUIP 845,661.13 29 904.63 70,000.00 17,558 18 39,866 51 19.83 21,503.51 145.00 1,820.00 114.79 115.53 1,149.37 1,238 99 411.08 908.63 755.56 1,687.60 647.49 1,333.23 311.84 281.49 4,885.32 23.54 363,227.00 548.00 5,346.00 424.00 1,756.00 10,624.00 571.82 1,352.00 29,904.63 157,547.83 26,323.04 39,324.01 7405.00 33.76 382,040.21 557,643.44 198,358.70 21,243.30 484.17 484.17 50.98 47.83 31.00 3,270.00 Date: 04/03/2009 12:44 37 Page 1 Using transactions posted as of 04/02/2009 11:54'. 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