Changes to the Public Housing Assessment System (PHAS): Management Operations Scoring Notice, 10050-10053 [2011-2658]
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10050
Federal Register / Vol. 76, No. 36 / Wednesday, February 23, 2011 / Notices
AUDIT FLAGS AND TIER CLASSIFICATIONS—Continued
Audit Flags
Tier classification
• Material weakness in internal controls over compliance with Low Rent program and Capital
Fund program requirements.
2. Material noncompliance with Low Rent program and
Capital Fund program requirements.
Other Consideration:
1. Significant change penalty deduction applies only if
the significant change(s) relate to the Low Rent or
Capital Fund programs.
2. Going concern ............................................................
3. Management Discussion and Analysis ......................
and other supplemental information omitted .................
4. Financial statements using basis other than GAAP ..
comments
Tier 3.
Tier 2.
Tier 1.
Tier 2.
Tier 1.
Each tier assesses point deductions of
varying severity. The following chart
illustrates the point schedule:
Tier
PHAS points deducted
Tier 1 ...............................................
Tier 2 ...............................................
Any Tier 1 finding assesses a 100 percent deduction of the PHA’s financial condition indicator score.
Any Tier 2 finding assesses a point deduction equal to 10 percent of the unadjusted financial condition indicator score.
Each Tier 3 finding assesses a 0.5 point deduction per occurrence, to a maximum of 4 points of the financial condition indicator score.
Tier 3 ...............................................
mstockstill on DSKH9S0YB1PROD with NOTICES
Review of Audited Versus Unaudited
Submission
The purposes of comparing the ratios
and scores from the unaudited FDS
submission to the ratios and scores from
the audited submission are to:
• Identify significant changes in ratio
calculation results and/or scores from
the unaudited submission to the audited
submission;
• Identify PHAs that consistently
provide significantly different data from
their unaudited submission in their
audited submission; and
• Assess or alleviate penalties
associated with the inability to provide
reasonably accurate unaudited data
within the required time frame.
This review process will be performed
only for the audited submissions.
Significant Change Penalty
HUD views the transmission of
significantly inaccurate unaudited
financial data as a serious condition.
Therefore, projects are encouraged to
assure that financial data is as reliable
as possible for their unaudited
submissions.
A significant change penalty will be
assessed for significant differences
between the unaudited and audited
submissions. A significant difference is
considered to be an overall financial
condition score decrease of three or
more points from the unaudited to the
audited submission. A significant
change penalty is considered a tier 2
VerDate Mar<15>2010
18:50 Feb 22, 2011
Jkt 223001
flag and will result in a reduction of 10
percent of the total audited financial
condition score.
The PHAS system automatically
deducts the significant change penalty
from the audited score, and this
reduction triggers the REAC analyst’s
review. REAC may waive the significant
change penalty if the project provides
reasonable documentation of the
significant difference in its submission.
Dated: February 1, 2011.
Sandra B. Henriquez,
Assistant Secretary for Public and Indian
Housing.
[FR Doc. 2011–2656 Filed 2–22–11; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–5094–N–05]
Changes to the Public Housing
Assessment System (PHAS):
Management Operations Scoring
Notice
This notice provides
additional information to public
housing agencies (PHAs) and members
of the public about HUD’s process for
issuing scores under the management
operations indicator of the Public
Housing Assessment System (PHAS).
DATES: Effective Date: March 25, 2011.
Comment Due Date: April 25, 2011.
SUMMARY:
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Sfmt 4703
Interested persons are
invited to submit comments on this
notice to the Regulations Division,
Office of General Counsel, Department
of Housing and Urban Development,
451 7th Street, SW., Room 10276,
Washington, DC 20410–0500.
Communications must refer to the above
docket number and title. There are two
methods for submitting public
comments. All submissions must refer
to the above docket number and title.
1. Submission of Comments by Mail.
Comments may be submitted by mail to
the Regulations Division, Office of
General Counsel, Department of
Housing and Urban Development, 451
7th Street, SW., Room 10276,
Washington, DC 20410–0500.
2. Electronic Submission of
Comments. Interested persons may
submit comments electronically through
the Federal eRulemaking Portal at
https://www.regulations.gov. HUD
strongly encourages commenters to
submit comments electronically.
Electronic submission of comments
allows the commenter maximum time to
prepare and submit a comment, ensures
timely receipt by HUD, and enables
HUD to make them immediately
available to the public. Comments
submitted electronically through the
https://www.regulations.gov Web site can
be viewed by other commenters and
interested members of the public.
Commenters should follow the
ADDRESSES:
E:\FR\FM\23FEN1.SGM
23FEN1
Federal Register / Vol. 76, No. 36 / Wednesday, February 23, 2011 / Notices
10051
II. Transition to Asset Management and
Frequency of Management Operations
Assessments
The number of units in a PHA’s LowRent program and the PHAS designation
for small PHAs will determine the
frequency of management operations
assessments during and after the
transition to asset management. PHAs
with less than 250 public housing units
will receive a PHAS assessment, based
on its PHAS designation, as follows:
(1) A small PHA that is a high
performer will receive a PHAS
assessment every 3 years;
(2) A small PHA that is a standard or
substandard performer will receive a
PHAS assessment every other year; and
(3) All other small PHAs will receive
a PHAS assessment every year,
including a PHA that is designated as
troubled or Capital Fund troubled in
accordance with § 902.75.
In baseline year, every PHA will
receive an overall PHAS score and in all
four of the PHAS indicators: physical
condition; financial condition;
management operations; and Capital
Fund program. This will allow a
baseline year for the small deregulated
PHAs.
Points
instructions provided on that site to
submit comments electronically.
Note: To receive consideration as public
comments, comments must be submitted
through one of the two methods specified
above. Again, all submissions must refer to
the docket number and title of the rule.
No Facsimile Comments. Facsimile
(FAX) comments are not acceptable.
Public Inspection of Public
Comments. All properly submitted
comments and communications
submitted to HUD will be available for
public inspection and copying between
8 a.m. and 5 p.m. weekdays at the above
address. Due to security measures at the
HUD Headquarters building, an advance
appointment to review the public
comments must be scheduled by calling
the Regulations Division at 202–402–
3055 (this is not a toll-free number).
Individuals with speech or hearing
impairments may access this number
via TTY by calling the Federal
Information Relay Service, toll-free, at
800–877–8339. Copies of all comments
submitted are available for inspection
and downloading at https://
www.regulations.gov.
FOR FURTHER INFORMATION CONTACT:
Claudia Yarus, Department of Housing
and Urban Development, Office of
Public and Indian Housing, Real Estate
Assessment Center (REAC), 550 12th
Street, SW., Suite 100, Washington, DC
20410 at 202–475–8830 (this is not a
toll-free number). Persons with hearing
or speech impairments may access this
number through TTY by calling the tollfree Federal Information Relay Service
at 800–877–8339. Additional
information is available from the REAC
Internet site at https://www.hud.gov/
offices/reac/.
SUPPLEMENTARY INFORMATION:
mstockstill on DSKH9S0YB1PROD with NOTICES
I. Purpose of This Notice
The purpose of this notice is to
provide additional information about
the scoring process for the PHAS
management operations indicator. The
purpose of the management operations
indicator is to assess the project’s and
PHA’s management operations
capabilities. All projects will be
assessed under the management
operations indicator, even if a PHA has
not converted to asset management.
This PHAS Management Operations
Scoring Notice has been revised to
reflect research HUD conducted through
informal meetings with representatives
of PHAs, residents, projects, and public
housing industry groups, and to provide
the basis for scoring projects on the
management operations.
VerDate Mar<15>2010
18:50 Feb 22, 2011
Jkt 223001
III. Subindicators
A. Subindicators of the Management
Operations Indicator. The three
subindicators of the management
operations indicator are:
• Occupancy;
• Tenant accounts receivable; and
• Accounts payable.
B. Points for the Management
Operations Indicator. This indicator
assesses the management operations of
projects and PHAs. The management
operations indicator score is based on a
maximum of 25 points.
Subindicator #1, Occupancy. This
subindicator measures the occupancy
for the project’s fiscal year, adjusted for
allowable vacancies pursuant to 24 CFR
990.145.
A PHA will achieve 16 points if it has
an adjusted occupancy rate equal to or
greater than 98 percent. It will receive
12 points if it has an adjusted
occupancy rate of less than 98 percent
but equal to or greater than 96 percent.
It will receive 8 points if it has an
adjusted occupancy rate of less than 96
percent but equal to or greater than 94
percent. It will receive 4 points if it has
an adjusted occupancy rate of less than
94 percent but equal to or greater than
92 percent. It will receive 1 point if it
has an adjusted occupancy rate of less
than 92 percent but equal to or greater
than 90 percent. It will receive 0 points
if it has an adjusted occupancy rate of
less than 90 percent.
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Occupancy value
≥98%
<98%
<96%
<94%
<92%
<90%
.................................................
but ≥96% ................................
but ≥94% ................................
but ≥92% ................................
but ≥90% ................................
................................................
16
12
8
4
1
0
Subindicator #2, Tenant accounts
receivable. This subindicator measures
the tenant accounts receivable of a
project against the tenant charges for the
project’s fiscal year. Charges include
rents and other charges to tenants, such
as court costs, maintenance costs, etc.
A PHA will receive 5 points if it has
a tenant accounts receivable ratio of less
than 1.5. It will receive 2 points if it has
a tenant accounts receivable ratio of
equal to or greater than 1.5 and less than
2.5. It will receive zero points if it has
a tenant accounts receivable ratio of
equal to or greater than 2.5.
Tenant accounts receivable value
<1.5 ...................................................
≥1.5 but <2.5 ....................................
≥2.5 ...................................................
Points
5
2
0
Subindicator #3, Accounts payable.
This subindicator measures the money
that a project owes to vendors at the end
of the project’s fiscal year for products
and services purchased on credit against
total operating expenses.
A PHA will receive 4 points if it has
an accounts payable ratio of less than
0.75. It will receive 2 points if it has an
accounts payable ratio of equal to or
greater than 0.75 but less than 1.5. It
will receive zero points if it has an
accounts payable ratio of equal to or
greater than 1.5.
Accounts payable value
<0.75 .................................................
≥0.75 but <1.5 ..................................
≥1.5 ...................................................
Points
4
2
0
IV. Elements of Scoring
A. Points and Threshold
The management operations indicator
score is based on a maximum of 25
points. In order to receive a passing
score under this indicator, a project
must achieve at least 15 points or 60
percent of the available points available
under this indicator.
B. Scoring Elements
The management operations indicator
score provides an assessment of a
project’s management effectiveness.
Under the PHAS management
operations indicator, HUD will calculate
a score for each project, as well as for
the overall management operations of a
E:\FR\FM\23FEN1.SGM
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Federal Register / Vol. 76, No. 36 / Wednesday, February 23, 2011 / Notices
the census data for the census tract
where the majority of units are located
shall be used. If there is no census tract
data available for a project, the census
data for that project will be based on the
county’s census data, and if county data
TABLE 2—EXAMPLE OF PROJECT
is not available, then the state census
SCORE
data will be used.
• Adjustment for physical condition
Subindicator
Points
and/or neighborhood environment.
Occupancy ........................................
16 HUD will adjust the overall
Tenant Accounts Receivable ............
2 management operations score of a
Accounts Payable .............................
4 project subject to one or both of the
Total Points ...............................
22 physical condition and/or neighborhood
environment conditions. The
adjustments will be made to the
D. Physical Condition and/or
individual project scores, and then to
Neighborhood Environment
the overall management operations
The overall management operations
score, so as to reflect the difficulty in
score for a project will be adjusted
managing the projects.
upward to the extent that negative
The adjustment for physical condition
conditions are caused by situations
and/or neighborhood environment will
outside the control of the project. These
be calculated by HUD and applied to all
situations are related to the poor
eligible projects. The data to determine
physical condition of the project or the
if a project is eligible for either
overall depressed condition of the major
adjustment will be derived from the
census tract in which a project is
Public and Indian Housing Information
located. The intent of this adjustment is
Center databases.
to avoid penalizing projects through
In each instance where the actual
appropriate application of the
adjustment. In addition, the overall PHA management operations score for a
Management Operations Indicator score project is rated below the maximum
score of 25 points, one unit-weighted
will be adjusted upward to reflect the
point each will be added for physical
individual project adjustments.
condition and/or neighborhood
Definitions and application of
physical condition and/or neighborhood environment, but not to exceed the
maximum number of 25 points available
TABLE 1—MANAGEMENT OPERATIONS environment factors are:
for the management operations indicator
(1) A physical condition adjustment
SUBINDICATORS
for a project. Table 3 shows an example
applicable to projects at least 28 years
old, based on the unit-weighted average of the calculation of physical condition
Point
Subindicator
and/or neighborhood environment
Date of Full Availability (DOFA) date.
value
(2) A neighborhood environment
points for a hypothetical PHA with four
projects. The adjustment for physical
Occupancy ........................................
16 adjustment applicable to projects in
condition and/or neighborhood
Tenant Accounts Receivable ............
5 census tracts in which at least 40
environment is a unit-weighted average
Accounts Payable .............................
4 percent of the families have an income
below the poverty rate, as documented
of a PHA’s individual project physical
Total Points ...............................
25 by the most recent census data. If a
condition and/or neighborhood
project is in more than one census tract, environment adjustments.
PHA, that reflects weights based on the
relative importance of the individual
management subindicators. The overall
management operations indicator score
for a PHA is a unit-weighted average of
the PHA’s individual project
management operations scores. In order
to compute the score, an individual
project management operations score is
multiplied by the number of units in
each project to determine a ‘‘weighted
value.’’ The sum of the weighted values
is then divided by the total number of
units in a PHA’s portfolio to derive the
overall PHAS management operations
indicator score.
The computation of the score under
this PHAS indicator utilizes data
obtained from the Financial Data
Schedule and requires three main
calculations for the subindicators,
which are:
• Scores are calculated for each
subindicator;
• A management operations score is
calculated for each project; and
• A score is calculated for the overall
indicator score, which is a unitweighted average of the individual
project management operations scores.
The point values of the subindicators
are listed in Table 1.
C. Example of Score Computations
The indicator score for each project
equals the sum of the subindicator
scores, as shown in Table 2.
TABLE 3—CALCULATION OF PHYSICAL CONDITION AND/OR NEIGHBORHOOD ENVIRONMENT (PCNE) POINTS
Line
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1
2
3
4
5
6
7
8
........
........
........
........
........
........
........
........
Proj.
#1
Project
Units ...............................................................................
Weight ............................................................................
Physical Condition Points ...............................................
Neighborhood Environment Points ................................
Total PCNE Points at Project Level ...............................
Weighted Physical Condition Points ..............................
Weighted Neighborhood Environment Points ................
Weighted PCNE Points ..................................................
This PHA has 312 total units in four
projects (see line 1). The weight of each
project is based on units and is
calculated by dividing the project units
into the total PHA units (see line 2).
Project #1 and project #2 qualify for
VerDate Mar<15>2010
18:50 Feb 22, 2011
Jkt 223001
133
42.6%
1
1
2
0.43
0.43
0.85
Proj.
#2
65
20.8%
1
1
2
0.21
0.21
0.42
both points; project #3 qualifies for only
physical condition; and project #4 does
not qualify for any points (see lines 3
through 5). Each project contributes its
physical condition and/or neighborhood
environment points to the overall PHA
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Proj.
#3
89
28.5%
1
0
1
0.29
0.00
0.29
Proj.
#4
25
8.0%
0
0
0
0.00
0.00
0.00
Total
PHA
312
100.0%
......................
......................
......................
0.92
0.63
1.55
management operations indicator score
based on its weight. For example, in
project #1, the weighted physical
condition and neighborhood
environment point is 0.85 and is
calculated by multiplying the project
E:\FR\FM\23FEN1.SGM
23FEN1
Federal Register / Vol. 76, No. 36 / Wednesday, February 23, 2011 / Notices
weight of 42.6 percent (line 2) by the
physical condition and neighborhood
environment point of 2 (see line 5). The
overall physical condition and
neighborhood environment adjustment
at the PHA level is calculated at 1.55
points by adding the individual project
weighted scores (see line 8 under the
Total PHA column).
Dated: February 1, 2011.
Sandra B. Henriquez,
Assistant Secretary for Public and Indian
Housing.
[FR Doc. 2011–2658 Filed 2–22–11; 8:45 am]
BILLING CODE 4210–67–P
DEPARTMENT OF HOUSING AND
URBAN DEVELOPMENT
[Docket No. FR–5094–N–06]
Changes to the Public Housing
Assessment System (PHAS): Capital
Fund Scoring Notice
This notice provides
additional information to public
housing agencies (PHAs) and members
of the public about HUD’s process for
issuing scores under the Capital Fund
program indicator of the Public Housing
Assessment System (PHAS).
DATES: Effective Date: March 25, 2011.
Comment Due Date: April 25, 2011.
ADDRESSES: Interested persons are
invited to submit comments on this
notice to the Regulations Division,
Office of General Counsel, Department
of Housing and Urban Development,
451 7th Street, SW., Room 10276,
Washington, DC 20410–0500.
Communications must refer to the above
docket number and title. There are two
methods for submitting public
comments. All submissions must refer
to the above docket number and title.
1. Submission of Comments by Mail.
Comments may be submitted by mail to
the Regulations Division, Office of
General Counsel, Department of
Housing and Urban Development, 451
7th Street, SW, Room 10276,
Washington, DC 20410–0500.
2. Electronic Submission of
Comments. Interested persons may
submit comments electronically through
the Federal eRulemaking Portal at
https://www.regulations.gov. HUD
strongly encourages commenters to
submit comments electronically.
Electronic submission of comments
allows the commenter maximum time to
prepare and submit a comment, ensures
timely receipt by HUD, and enables
HUD to make them immediately
available to the public. Comments
submitted electronically through the
https://www.regulations.gov Web site can
mstockstill on DSKH9S0YB1PROD with NOTICES
SUMMARY:
VerDate Mar<15>2010
18:50 Feb 22, 2011
Jkt 223001
be viewed by other commenters and
interested members of the public.
Commenters should follow the
instructions provided on that site to
submit comments electronically.
Note: To receive consideration as public
comments, comments must be submitted
through one of the two methods specified
above. Again, all submissions must refer to
the docket number and title of the rule.
No Facsimile Comments. Facsimile
(FAX) comments are not acceptable.
Public Inspection of Public
Comments. All properly submitted
comments and communications
submitted to HUD will be available for
public inspection and copying between
8 a.m. and 5 p.m. weekdays at the above
address. Due to security measures at the
HUD Headquarters building, an advance
appointment to review the public
comments must be scheduled by calling
the Regulations Division at 202–402–
3055 (this is not a toll-free number).
Individuals with speech or hearing
impairments may access this number
via TTY by calling the Federal
Information Relay Service, toll-free, at
800–877–8339. Copies of all comments
submitted are available for inspection
and downloading at https://
www.regulations.gov.
FOR FURTHER INFORMATION CONTACT:
Claudia Yarus, Department of Housing
and Urban Development, Office of
Public and Indian Housing, Real Estate
Assessment Center (REAC), 550 12th
Street, SW., Suite 100, Washington, DC
20410 at 202–475–8830 (this is not a
toll-free number). Persons with hearing
or speech impairments may access this
number through TTY by calling the tollfree Federal Information Relay Service
at 800–877–8339. Additional
information is available from the REAC
Internet site at https://www.hud.gov/
offices/reac/.
SUPPLEMENTARY INFORMATION:
I. Purpose of This Notice
The purpose of this notice is to
provide information about the scoring
process for PHAS indicator #4, Capital
Fund program. The purpose of the
Capital Fund program assessment is to
examine the period of time it takes a
PHA to obligate the funds provided to
a PHA from the Capital Fund program
under section 9(j) of the 1937 Act (42
U.S.C. 1437g(9)(j)), and to occupy units.
Funds from the Capital Fund program
under section 9(d) of the 1937 Act (42
U.S.C. 1437g(d)(2)) do not include
HOPE VI program funds.
This indicator is not applicable for
PHAs that choose not to participate in
the Capital Fund program under section
9(d) of the 1937 Act. This indicator is
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10053
applicable on a PHA-wide basis, and not
to individual projects. The Capital Fund
program indicator is based on a
maximum of 10 points.
The assessment required under the
PHAS Capital Fund program indicator
will be performed through analysis of:
(1) Obligated amounts in HUD’s
electronic Line of Credit Control System
(eLOCCS) (or its successor) for all
Capital Fund program grants that were
open during a PHA’s assessed fiscal
year; and (2) the PHA’s occupancy rate
as measured at the end of the PHA’s
fiscal year, which is calculated by
dividing the total occupied assisted,
special use, and non-assisted units by
the total ACC units less the total
uninhabitable units as reflected in the
Inventory Management System/Public
Housing Information Center (PIC) (or its
successor). Of the total 100 points
available for a PHAS score, a PHA may
receive up to 10 points based on the
Capital Fund program indicator. Scoring
for this indicator will be dependent on
the amount of time it takes a PHA to
obligate its Capital Fund grant(s), as
well as the PHA’s occupancy rate. If a
PHA has no obligation end dates in the
assessed fiscal year, and does not have
any § 9(j) of the 1937 Act sanctions
against it, the points for that
subindicator will be redistributed to the
remaining subindicator.
II. Transition to Asset Management and
Frequency of Capital Fund Program
Assessments
The number of units in a PHA’s LowRent program and the PHAS designation
for small PHAs will determine the
frequency of Capital Fund program
assessments during and after the
transition to asset management. PHAs
with less than 250 public housing units
will receive a PHAS assessment, based
on its PHAS designation, as follows:
(1) A small PHA that is a high
performer will receive a PHAS
assessment every 3 years;
(2) A small PHA that is a standard or
substandard performer will receive a
PHAS assessment every other year; and
(3) All other small PHAs will receive
a PHAS assessment every year,
including a PHA that is designated as
troubled or Capital Fund troubled in
accordance with § 902.75.
In the baseline year, every PHA will
receive an overall PHAS score and in all
four of the PHAS indicators: physical
condition; financial condition;
management operations; and Capital
Fund program. This will allow a
baseline year for the small deregulated
PHAs.
E:\FR\FM\23FEN1.SGM
23FEN1
]]>Agencies
[Federal Register Volume 76, Number 36 (Wednesday, February 23, 2011)]
[Notices]
[Pages 10050-10053]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-2658]
-----------------------------------------------------------------------
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
[Docket No. FR-5094-N-05]
Changes to the Public Housing Assessment System (PHAS):
Management Operations Scoring Notice
SUMMARY: This notice provides additional information to public housing
agencies (PHAs) and members of the public about HUD's process for
issuing scores under the management operations indicator of the Public
Housing Assessment System (PHAS).
DATES: Effective Date: March 25, 2011.
Comment Due Date: April 25, 2011.
ADDRESSES: Interested persons are invited to submit comments on this
notice to the Regulations Division, Office of General Counsel,
Department of Housing and Urban Development, 451 7th Street, SW., Room
10276, Washington, DC 20410-0500. Communications must refer to the
above docket number and title. There are two methods for submitting
public comments. All submissions must refer to the above docket number
and title.
1. Submission of Comments by Mail. Comments may be submitted by
mail to the Regulations Division, Office of General Counsel, Department
of Housing and Urban Development, 451 7th Street, SW., Room 10276,
Washington, DC 20410-0500.
2. Electronic Submission of Comments. Interested persons may submit
comments electronically through the Federal eRulemaking Portal at
https://www.regulations.gov. HUD strongly encourages commenters to
submit comments electronically. Electronic submission of comments
allows the commenter maximum time to prepare and submit a comment,
ensures timely receipt by HUD, and enables HUD to make them immediately
available to the public. Comments submitted electronically through the
https://www.regulations.gov Web site can be viewed by other commenters
and interested members of the public. Commenters should follow the
[[Page 10051]]
instructions provided on that site to submit comments electronically.
Note: To receive consideration as public comments, comments
must be submitted through one of the two methods specified above.
Again, all submissions must refer to the docket number and title of
the rule.
No Facsimile Comments. Facsimile (FAX) comments are not acceptable.
Public Inspection of Public Comments. All properly submitted
comments and communications submitted to HUD will be available for
public inspection and copying between 8 a.m. and 5 p.m. weekdays at the
above address. Due to security measures at the HUD Headquarters
building, an advance appointment to review the public comments must be
scheduled by calling the Regulations Division at 202-402-3055 (this is
not a toll-free number). Individuals with speech or hearing impairments
may access this number via TTY by calling the Federal Information Relay
Service, toll-free, at 800-877-8339. Copies of all comments submitted
are available for inspection and downloading at https://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Claudia Yarus, Department of Housing
and Urban Development, Office of Public and Indian Housing, Real Estate
Assessment Center (REAC), 550 12th Street, SW., Suite 100, Washington,
DC 20410 at 202-475-8830 (this is not a toll-free number). Persons with
hearing or speech impairments may access this number through TTY by
calling the toll-free Federal Information Relay Service at 800-877-
8339. Additional information is available from the REAC Internet site
at https://www.hud.gov/offices/reac/.
SUPPLEMENTARY INFORMATION:
I. Purpose of This Notice
The purpose of this notice is to provide additional information
about the scoring process for the PHAS management operations indicator.
The purpose of the management operations indicator is to assess the
project's and PHA's management operations capabilities. All projects
will be assessed under the management operations indicator, even if a
PHA has not converted to asset management.
This PHAS Management Operations Scoring Notice has been revised to
reflect research HUD conducted through informal meetings with
representatives of PHAs, residents, projects, and public housing
industry groups, and to provide the basis for scoring projects on the
management operations.
II. Transition to Asset Management and Frequency of Management
Operations Assessments
The number of units in a PHA's Low-Rent program and the PHAS
designation for small PHAs will determine the frequency of management
operations assessments during and after the transition to asset
management. PHAs with less than 250 public housing units will receive a
PHAS assessment, based on its PHAS designation, as follows:
(1) A small PHA that is a high performer will receive a PHAS
assessment every 3 years;
(2) A small PHA that is a standard or substandard performer will
receive a PHAS assessment every other year; and
(3) All other small PHAs will receive a PHAS assessment every year,
including a PHA that is designated as troubled or Capital Fund troubled
in accordance with Sec. 902.75.
In baseline year, every PHA will receive an overall PHAS score and
in all four of the PHAS indicators: physical condition; financial
condition; management operations; and Capital Fund program. This will
allow a baseline year for the small deregulated PHAs.
III. Subindicators
A. Subindicators of the Management Operations Indicator. The three
subindicators of the management operations indicator are:
Occupancy;
Tenant accounts receivable; and
Accounts payable.
B. Points for the Management Operations Indicator. This indicator
assesses the management operations of projects and PHAs. The management
operations indicator score is based on a maximum of 25 points.
Subindicator 1, Occupancy. This subindicator measures the
occupancy for the project's fiscal year, adjusted for allowable
vacancies pursuant to 24 CFR 990.145.
A PHA will achieve 16 points if it has an adjusted occupancy rate
equal to or greater than 98 percent. It will receive 12 points if it
has an adjusted occupancy rate of less than 98 percent but equal to or
greater than 96 percent. It will receive 8 points if it has an adjusted
occupancy rate of less than 96 percent but equal to or greater than 94
percent. It will receive 4 points if it has an adjusted occupancy rate
of less than 94 percent but equal to or greater than 92 percent. It
will receive 1 point if it has an adjusted occupancy rate of less than
92 percent but equal to or greater than 90 percent. It will receive 0
points if it has an adjusted occupancy rate of less than 90 percent.
------------------------------------------------------------------------
Occupancy value Points
------------------------------------------------------------------------
[gteqt]98%..................................................... 16
<98% but [gteqt]96%............................................ 12
<96% but [gteqt]94%............................................ 8
<94% but [gteqt]92%............................................ 4
<92% but [gteqt]90%............................................ 1
<90%........................................................... 0
------------------------------------------------------------------------
Subindicator 2, Tenant accounts receivable. This
subindicator measures the tenant accounts receivable of a project
against the tenant charges for the project's fiscal year. Charges
include rents and other charges to tenants, such as court costs,
maintenance costs, etc.
A PHA will receive 5 points if it has a tenant accounts receivable
ratio of less than 1.5. It will receive 2 points if it has a tenant
accounts receivable ratio of equal to or greater than 1.5 and less than
2.5. It will receive zero points if it has a tenant accounts receivable
ratio of equal to or greater than 2.5.
------------------------------------------------------------------------
Tenant accounts receivable value Points
------------------------------------------------------------------------
<1.5........................................................... 5
[gteqt]1.5 but <2.5............................................ 2
[gteqt]2.5..................................................... 0
------------------------------------------------------------------------
Subindicator 3, Accounts payable. This subindicator
measures the money that a project owes to vendors at the end of the
project's fiscal year for products and services purchased on credit
against total operating expenses.
A PHA will receive 4 points if it has an accounts payable ratio of
less than 0.75. It will receive 2 points if it has an accounts payable
ratio of equal to or greater than 0.75 but less than 1.5. It will
receive zero points if it has an accounts payable ratio of equal to or
greater than 1.5.
------------------------------------------------------------------------
Accounts payable value Points
------------------------------------------------------------------------
<0.75.......................................................... 4
[gteqt]0.75 but <1.5........................................... 2
[gteqt]1.5..................................................... 0
------------------------------------------------------------------------
IV. Elements of Scoring
A. Points and Threshold
The management operations indicator score is based on a maximum of
25 points. In order to receive a passing score under this indicator, a
project must achieve at least 15 points or 60 percent of the available
points available under this indicator.
B. Scoring Elements
The management operations indicator score provides an assessment of
a project's management effectiveness. Under the PHAS management
operations indicator, HUD will calculate a score for each project, as
well as for the overall management operations of a
[[Page 10052]]
PHA, that reflects weights based on the relative importance of the
individual management subindicators. The overall management operations
indicator score for a PHA is a unit-weighted average of the PHA's
individual project management operations scores. In order to compute
the score, an individual project management operations score is
multiplied by the number of units in each project to determine a
``weighted value.'' The sum of the weighted values is then divided by
the total number of units in a PHA's portfolio to derive the overall
PHAS management operations indicator score.
The computation of the score under this PHAS indicator utilizes
data obtained from the Financial Data Schedule and requires three main
calculations for the subindicators, which are:
Scores are calculated for each subindicator;
A management operations score is calculated for each
project; and
A score is calculated for the overall indicator score,
which is a unit-weighted average of the individual project management
operations scores.
The point values of the subindicators are listed in Table 1.
Table 1--Management Operations Subindicators
------------------------------------------------------------------------
Point
Subindicator value
------------------------------------------------------------------------
Occupancy...................................................... 16
Tenant Accounts Receivable..................................... 5
Accounts Payable............................................... 4
--------
Total Points............................................... 25
------------------------------------------------------------------------
C. Example of Score Computations
The indicator score for each project equals the sum of the
subindicator scores, as shown in Table 2.
Table 2--Example of Project Score
------------------------------------------------------------------------
Subindicator Points
------------------------------------------------------------------------
Occupancy...................................................... 16
Tenant Accounts Receivable..................................... 2
Accounts Payable............................................... 4
--------
Total Points............................................... 22
------------------------------------------------------------------------
D. Physical Condition and/or Neighborhood Environment
The overall management operations score for a project will be
adjusted upward to the extent that negative conditions are caused by
situations outside the control of the project. These situations are
related to the poor physical condition of the project or the overall
depressed condition of the major census tract in which a project is
located. The intent of this adjustment is to avoid penalizing projects
through appropriate application of the adjustment. In addition, the
overall PHA Management Operations Indicator score will be adjusted
upward to reflect the individual project adjustments.
Definitions and application of physical condition and/or
neighborhood environment factors are:
(1) A physical condition adjustment applicable to projects at least
28 years old, based on the unit-weighted average Date of Full
Availability (DOFA) date.
(2) A neighborhood environment adjustment applicable to projects in
census tracts in which at least 40 percent of the families have an
income below the poverty rate, as documented by the most recent census
data. If a project is in more than one census tract, the census data
for the census tract where the majority of units are located shall be
used. If there is no census tract data available for a project, the
census data for that project will be based on the county's census data,
and if county data is not available, then the state census data will be
used.
Adjustment for physical condition and/or neighborhood
environment. HUD will adjust the overall management operations score of
a project subject to one or both of the physical condition and/or
neighborhood environment conditions. The adjustments will be made to
the individual project scores, and then to the overall management
operations score, so as to reflect the difficulty in managing the
projects.
The adjustment for physical condition and/or neighborhood
environment will be calculated by HUD and applied to all eligible
projects. The data to determine if a project is eligible for either
adjustment will be derived from the Public and Indian Housing
Information Center databases.
In each instance where the actual management operations score for a
project is rated below the maximum score of 25 points, one unit-
weighted point each will be added for physical condition and/or
neighborhood environment, but not to exceed the maximum number of 25
points available for the management operations indicator for a project.
Table 3 shows an example of the calculation of physical condition and/
or neighborhood environment points for a hypothetical PHA with four
projects. The adjustment for physical condition and/or neighborhood
environment is a unit-weighted average of a PHA's individual project
physical condition and/or neighborhood environment adjustments.
Table 3--Calculation of Physical Condition and/or Neighborhood Environment (PCNE) Points
----------------------------------------------------------------------------------------------------------------
Proj. 1 i>2 i>3 i>4 Total PHA
----------------------------------------------------------------------------------------------------------------
1............. Units..................... 133 65 89 25 312
2............. Weight.................... 42.6% 20.8% 28.5% 8.0% 100.0%
3............. Physical Condition Points. 1 1 1 0 ............
4............. Neighborhood Environment 1 1 0 0 ............
Points.
5............. Total PCNE Points at 2 2 1 0 ............
Project Level.
6............. Weighted Physical 0.43 0.21 0.29 0.00 0.92
Condition Points.
7............. Weighted Neighborhood 0.43 0.21 0.00 0.00 0.63
Environment Points.
8............. Weighted PCNE Points...... 0.85 0.42 0.29 0.00 1.55
----------------------------------------------------------------------------------------------------------------
This PHA has 312 total units in four projects (see line 1). The
weight of each project is based on units and is calculated by dividing
the project units into the total PHA units (see line 2). Project
1 and project 2 qualify for both points; project
3 qualifies for only physical condition; and project
4 does not qualify for any points (see lines 3 through 5).
Each project contributes its physical condition and/or neighborhood
environment points to the overall PHA management operations indicator
score based on its weight. For example, in project 1, the
weighted physical condition and neighborhood environment point is 0.85
and is calculated by multiplying the project
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weight of 42.6 percent (line 2) by the physical condition and
neighborhood environment point of 2 (see line 5). The overall physical
condition and neighborhood environment adjustment at the PHA level is
calculated at 1.55 points by adding the individual project weighted
scores (see line 8 under the Total PHA column).
Dated: February 1, 2011.
Sandra B. Henriquez,
Assistant Secretary for Public and Indian Housing.
[FR Doc. 2011-2658 Filed 2-22-11; 8:45 am]
BILLING CODE 4210-67-P
