oversight

The Compton Housing Authority, Compton, CA, Was Not Fully Reimbursed for Housing Assistance Payments for Portability Tenants

Published by the Department of Housing and Urban Development, Office of Inspector General on 2010-09-28.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                                                    Issue Date
                                                                          September 28, 2010
                                                                    Audit Report Number
                                                                             2010-LA-1016




TO:         K.J. Brockington, Director, Los Angeles Office of Public Housing, 9DPH



FROM:       Tanya E. Schulze, Regional Inspector General for Audit, Region IX, 9DGA

SUBJECT: The Compton Housing Authority, Compton, CA, Was Not Fully Reimbursed for
         Housing Assistance Payments for Portability Tenants

                                      HIGHLIGHTS

 What We Audited and Why

      We audited the Compton Housing Authority’s (Authority) Section 8 program as the result
      of the Los Angeles Office of Public Housing’s concerns regarding its program
      administration. Our objective was to determine whether the Authority used Section 8
      program funds in accordance with U.S. Department of Housing and Urban Development
      (HUD) rules and regulations.


 What We Found

      The Authority did not use Section 8 program funds in accordance with HUD rules and
      regulations as it did not fully comply with portability procedures and responsibilities. It was
      not fully reimbursed for housing assistance payments made for its portability tenants. We
      attribute these deficiencies to the Authority’s lack of procedures and controls for portability
      accounting. Additionally, there was a lack of tracking and reconciliation between what was
      paid and what was received. As a result, over the years, the Authority used more than $2.2
      million from its net restricted assets account to pay for the shortfall, operated in a deficit
      situation, and did not have sufficient funds to pay for its portability tenants. Ultimately,
      these deficiencies put tenants at risk of losing their housing assistance.
What We Recommend

     We recommend that the Director of the Los Angeles Office of Public Housing require the
     Authority to (1) implement procedures and controls to track and reconcile portability
     tenants’ housing assistance paid and received from the respective initial public housing
     authorities, (2) seek reimbursement of $189,800 from initial housing authorities for
     unreimbursed housing assistance payments for portability tenants, (3) reimburse $55,854
     in overpaid housing assistance to the respective initial housing authorities, (4) and
     evaluate and reconcile its portability tenant billings and payments for calendar year 2010
     after implementation of the procedures and controls.

     For each recommendation without a management decision, please respond and provide
     status reports in accordance with HUD Handbook 2000.06, REV-3. Please furnish us
     copies of any correspondence or directives issued because of the audit.

Auditee’s Response


     We provided the Authority a draft report on September 14, 2010, and held an exit
     conference with the Authority’s officials on September 22, 2010. The Authority also
     provided written comments on September 22, 2010. It generally agreed with our report
     and had already started implementing the recommendations.

     The complete text of the auditee’s response, along with our evaluation of that response, is
     in appendix B of this report.




                                              2
                            TABLE OF CONTENTS

Background and Objective                                                             4

Results of Audit
   Finding: The Authority Was Not Fully Reimbursed for Housing Assistance Payments   6
             Made for Its Portability Tenants

Scope and Methodology                                                                11

Internal Controls                                                                    12

Appendixes

   A. Schedule of Funds To Be Put to Better use                                      14
   B. Auditee Comments and OIG’s Evaluation                                          15
   C. Schedule of Under/Overreimbursed Housing Assistance Payments for               19
      Portability Tenants
   D. Schedule of Net Restricted Asset Account Balances for 2005-2009
                                                                                     24
   E. Criteria
                                                                                     25




                                            3
                      BACKGROUND AND OBJECTIVE

The City of Compton (City) has a local housing authority (Authority), located at 600 North
Alameda, Compton, CA. The purpose of the Authority is to administer the United States Housing
Choice Voucher, Family Self-Sufficiency, Homeownership, Security Deposit, and Portability
programs, which provide rental subsidy/mortgage assistance and move-in expenses to very low- and
low-income families, the elderly, and the disabled and handicapped.




The Housing Choice Voucher program was created under the Housing and Urban Rural
Recovery Act of 1983 to enable eligible lower income families to obtain modest housing in the
private sector that is decent, safe, and sanitary. The U.S. Department of Housing and Urbaqn
Development (HUD) provides the rental subsidy to the landlords through the public housing
agencies. An eligible family may use a tenant-based voucher to lease a unit anywhere in the
United States, leaving the first (initial) public housing agency that issued the voucher for the
second (receiving) public housing agency. As of December 31, 2009, the Authority had 161
tenants that had ported from other cities into Compton. The receiving public housing agency has
the option to administer the subsidy for the initial public housing agency or to absorb the
portable family into its own Housing Choice Voucher program. If the receiving public housing
agency decides to administer the initial public housing agency’s Housing Choice Voucher



                                               4
program’s assistance, the housing assistance for the portable family comes from the initial public
housing agency’s Housing Choice Voucher program allocation. The receiving public housing
agency bills the initial public housing agency for the full housing assistance payment for the
family’s unit and for 80 percent of the ongoing administrative fee earned by the initial public
housing agency for that unit. The initial public housing agency is required to pay the receiving
public housing agency within 30 days of the initial billing for housing assistance payments and
fees and on a monthly basis thereafter or in accordance with a schedule developed between the
initial and receiving public housing agencies. The initial bill from the receiving public housing
agency to the initial public housing agency automatically establishes a request for regular
payment in the future.

The Authority has a baseline allocation of 803 Section 8 housing choice vouchers. As of
December 31, 2009, the Authority had 775 vouchers leased. Additionally, the Authority
administered 161 vouchers that had ported in from other public housing agencies. The Authority
received more than $6.7 million for its 2009 housing assistance payments (nearly $5.6 million)
and administrative fees (more than $1.1 million) from HUD.

Audit Objective

The objective of this audit was to determine whether the Authority used Section 8 program funds
in accordance with HUD rules and regulations.




                                                5
                                   RESULTS OF AUDIT

Finding: The Authority Was Not Fully Reimbursed for Housing
           Assistance Payments Made for Its Portability Tenants

The Authority was not fully reimbursed for housing assistance payments made for its portability
tenants. We attribute these deficiencies to the Authority’s lack of procedures and controls for
portability accounting. Additionally, there was a lack of tracking and reconciliation between what
was paid and what was received. As a result, over the years, the Authority used more than $2.2
million from its net restricted assets account to pay for the shortfall, operated in a deficit situation,
and did not have sufficient funds to pay for its portability tenants. Ultimately, these deficiencies put
tenants at risk of losing their housing assistance.




 Portability Tenants’ Assistance
 Not Properly Reimbursed

        We reviewed the portability tenants’ payments sent to the Authority from the initial
        housing agencies between June and December 2009 and found that the Authority

            Was underreimbursed $140,754 in housing assistance for some portability tenants.
            Did not receive $49,046 in housing assistance payments for some portability tenants.
            Was overreimbursed $55,854 for some portability tenants.

        Collectively, this equated to a shortfall of $133,946 in housing assistance payments
        during the period reviewed. Appendix C contains a detailed listing of the portability
        tenants reviewed and the over/underreimbursement amounts.

        The Authority Was Underreimbursed $140,754

        A review of housing assistance payments to the owners of 207 total tenants revealed 92
        tenants for which the Authority was underreimbursed. The underreimbursement occurred
        when there was a recertification during the year or other change to the tenant’s income
        and housing assistance payment amount. While the Authority submitted the bill to the
        initial public housing agency with the new amount, the initial public housing agency did
        not make the needed adjustment. An example would be tenant number 122. In June
        2009, this tenant’s monthly housing assistance payment increased from $781 to $978;
        however, the initial public housing agency did not adjust the amount sent to the Authority
        and continued to send only $781 each month. Thus, for this tenant, the initial public
        housing agency underreimbursed the Authority $533 between June and December 2009.




                                                    6
We also found some instances in which the initial public housing agencies were
inconsistent when making the housing assistance payments each month. For example, for
tenant number 5, the initial public housing agency only made the monthly housing
assistance payments to the Authority 4 of the 7 months reviewed. Thus, the Authority
was underreimbursed $3,536.

Collectively, we found underreimbursements of $140,754 between June and December
2009 related to 92 of the 207 portability tenants in our audit scope. Since the Authority
did not track and reconcile the portability payments, it was unaware of the
underreimbursements.

The Authority Received No Reimbursement for $49,046

We found 24 portability tenants for which the initial public housing agencies did not
reimburse the Authority for any of the housing assistance payments between June and
December 2009 totaling $49,046. There were 16 tenants for whom the Authority only
made one payment, which was for the month of December 2009. This apparent
discrepancy could mean that the initial public housing agency did not send the first
payment until January 2010; however, January 2010 was outside our audit scope and
was, therefore, not reviewed. There were also two tenants for whom the Authority made
payments to the owner for both November and December 2009; however, the initial
public housing agency did not send a housing assistance payment reimbursement. For
the remaining six tenants, the Authority made several monthly payments to the owners,
and the initial public housing agency did not send reimbursements to the Authority.

The Authority Was Overreimbursed $55,854

The Authority was overreimbursed a total of $55,854 from various initial public housing
agencies related to 50 tenants. For example, tenant number 158 was reimbursed by the
initial public housing agency from June through December 2009 for $594 each month.
However, the Authority only submitted payment to the tenant’s owner in November and
December 2009. A billing was sent to the initial public housing agency with an April 6,
2009, submission date stating that the housing assistance payment amount had changed
effective June 1, 2009. In this example, the housing assistance payments contract
amendment notice was sent to the initial public housing agency 2 months before the
change in rent was to take effect, and the initial public housing agency complied. The
Authority received the new housing assistance payment amount for 5 months without
sending the payment to the owner. The reason for this gap in payment to the owner was
unclear as the tenant had been at the same residence and with the same owner since 2008.
Ultimately, if the Authority collected rent for a tenant and did not make the payment to
the owner, it would constitute an overpayment on behalf of the initial public housing
agency.




                                         7
The Authority’s Billing Process
and Lack of Policies and
Procedures


      The Authority Lacked Policies and Procedures for Portability Receivables

      The Authority’s administrative plan contained a section entitled Financial/Owner
      Payment (chapter 14), which detailed what must be done for an owner to receive
      payment, who would cut the checks, and the check distribution. However, the
      administrative plan lacked information regarding receipt of payments. The
      administrative plan also had a section entitled Briefing of Families and Issuance of
      Vouchers (chapter 10), which discussed portability billing. However, there was no
      discussion on receipt of payments related to portability. A review of the Authority’s in-
      house policies and procedures included a section on portability, and this information was
      consistent with the information in the Housing Choice Voucher Guidebook’s chapter 13
      on portability. However, the Authority did not have specific policies or procedures
      regarding the reconciliation of portability receivables.

      The Authority Had Made Improvements

      In 2009, an employee from the controller’s office began working side by side with an
      employee from the Authority. Their work together resulted in an Excel spreadsheet
      entitled Landlord Payment Run, which listed all owners, their tenants’ name, and the
      amount of the housing assistance payment. The information on this spreadsheet came
      from the contract amendments and was entered into the spreadsheet by the Authority’s
      employee. Each month this spreadsheet was sent to the controller’s office and used to
      enter payments to the landlords (owners) in the accounting system. Once the controller’s
      office printed the checks, it reconciled the Authority’s Landlord Payment Run to the
      controller’s office’s Payee Run report, and once everything reconciled, the checks or
      direct deposit payments were made.

      Before 2009, the Authority’s employee would send a pay slip, which was an 8-by-11-
      inch sheet of paper, to the controller’s office for every tenant. Depending on how many
      tenants the Authority had, the controller’s office could receive in excess of 900 sheets of
      paper each month. Each paper had one of three different fund account numbers on it
      distinguishing the tenant as either a regular, port-in, or port-out tenant. However, the
      proper fund account numbers were not entered into the accounting system properly,
      which was confirmed by the controller’s office employee. Part of this problem was
      related to the pay slips being grouped alphabetically instead of by fund account numbers
      and human error related to data entry.




                                               8
         We acknowledge the hard work of the Authority and the controller’s office but note that
         additional work is needed to resolve the portability receivables problem as determined by
         our audit work. The Authority knew what it had billed the other public housing agencies
         but did not track or reconcile housing assistance payments billed and received. We asked
         why this process was not performed and were told it had been done several years earlier
         by a contract employee (temporary employee); however, once that employee’s contract
         ended, the City did not renew it, and the reconciliation ended. We also asked why the
         employee who coded the payments did not perform the reconciliation and were informed
         that this person had another responsibility to another program.


    Effects on the Net Restricted
    Asset Account

         The Authority’s reserve account combined the regular housing assistance payments, port-
         in payments, and administrative activities of the Authority. Therefore, the City’s
         controller provided us a separate spreadsheet schedule that separated the regular housing
         assistance payments from the portability payments, both of which included the
         administrative fees. Appendix D details the balances in the account from 2005 through
         2009.

         Our analysis showed that the Authority generally received sufficient revenue for its
         regular housing assistance payments but not for its portability tenants. Due to the
         Authority’s failure to fully collect its portability receivables, there was a shortfall.
         Consequently, the $2.2 million in its net restricted asset account funds as reported to
         HUD as of August 2009 became a negative amount as of January 2010. Ultimately, this
         shortage was funded by the City’s general fund.1 However, it is important to note that in
         January 2010, HUD recaptured $1.7 million from the Authority, which was the amount
         HUD showed that the Authority should have had in its net restricted account. The
         controller believed that if HUD had not taken the $1.7 million, the Authority would only
         have a shortage of $1.1 million instead of $2.8 million. This $2.8 million is based upon
         the City’s cash flows as of January 31, 2010, which showed the difference between the
         Authority’s expenditures and revenues to be a negative $2.8 million.

    Conclusion

         We attribute the deficiencies described above to the Authority’s lack of procedures and
         controls for portability accounting. Specifically, the authority did not track or reconcile
         housing assistance billed and received. As a result, over the years, the Authority used
         more than $2.2 million from its net restricted assets account to pay for the shortfall, operated
         in a deficit situation, and did not have sufficient funds to pay for its portability tenants.
         Since the Authority essentially absorbed these portability tenants without receiving the
         subsidy from HUD, the City funded the housing assistance payments from its general

1
 We also note that for the instances in which the Authority did not collect housing assistance payments for its
portability tenants, it also did not collect the related administrative fee.


                                                          9
    fund, which ultimately put tenants at risk of losing their housing assistance when it runs
    out of general funds.

Recommendations

    We recommend that the Director of the Los Angeles Office of Public Housing to require
    the Authority to

     1A.   Implement procedures in accordance with PIH (Public and Indian Housing)
           Notice 2008-43 and controls to track and reconcile portability tenants’ housing
           assistance paid and received from the respective public housing agency.

     1B.   Seek reimbursement of $189,800 ($140,754 + $49,046) from initial housing
           authorities for unreimbursed housing assistance payments for portability tenants
           and maintain and provide supporting documentation of reimbursement efforts.

     1C.   Reimburse $55,854 in overreimbursed housing assistance payments to the
           respective initial housing authorities.

     1D.   Evaluate and reconcile its portability tenant billings and payments for calendar
           year 2010 after implementation of the procedures and controls in recommendation
           1A. Implementation of such procedures and controls will ensure that this amount
           of housing assistance payments will be funds to be put to better use in the future.
           The Authority should also provide information regarding its evaluation and
           reconciliation of its portability tenant billings and payments for calendar year
           2010 after implementation of the procedures and controls in recommendation 1A.

     1E.   Implement and submit measures taken to address financial shortfalls, pursuant to
           PIH Notice 2009-44, to ensure that its net restricted asset account is maintained as
           required and assisted tenants are not put at risk of losing their housing assistance.




                                             10
                        SCOPE AND METHODOLOGY

We performed our onsite audit work at the Authority, located in Compton, CA, from January to
August 2010. Our audit generally covered billings of more than $1.1 million and accounts
receivable related to portability of more than $1 million that affected the period June through
December 2009. We expanded our scope when necessary. Our objective was to determine
whether the Authority used Section 8 program funds in accordance with HUD rules and
regulations.

To accomplish our objectives, we

       Reviewed applicable HUD handbooks, guidebooks, and the Code of Federal Regulations.

       Reviewed applicable PIH notices issued.

       Reviewed applicable policies and procedures established by the Authority and its public
       housing authority annual plan for 2009.

       Interviewed various Authority and City employees.

       Reviewed single audit reports issued by independent public accountants.

       Reviewed housing assistance payment records and checks.

       Reviewed revenues related to portability.

We nonstatistically selected December 2009 and later expanded the audit scope to include the
period June through December 2009 as a result of the problems identified. We selected the 2009
timeframe because the Authority had previously experienced portability billing issues (2005-
2007) and believed it had resolved the problems as of 2009.

We conducted the audit in accordance with generally accepted government auditing standards.
Those standards require that we plan and perform the audit to obtain sufficient, appropriate
evidence to provide a reasonable basis for our findings and conclusions based on our audit
objective. We believe that the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objective.




                                               11
                              INTERNAL CONTROLS

Internal control is a process adopted by those charged with governance and management,
designed to provide reasonable assurance about the achievement of the organization’s mission,
goals, and objectives with regard to

       Effectiveness and efficiency of operations,
       Reliability of financial reporting, and
       Compliance with applicable laws and regulations.

Internal controls comprise the plans, policies, methods, and procedures used to meet the
organization’s mission, goals, and objectives. Internal controls include the processes and
procedures for planning, organizing, directing, and controlling program operations as well as the
systems for measuring, reporting, and monitoring program performance.



 Relevant Internal Controls

       We determined that the following internal controls were relevant to our audit objective:

                  Compliance with laws and regulations – Policies and procedures that
                  management has implemented to reasonably ensure that resource use is
                  consistent with laws and regulations.

                  Effectiveness and efficiency of operations – Policies and procedures that the
                  audited entity has implemented to provide reasonable assurance that a
                  program meets its objective, while considering cost effectiveness and
                  efficiency.

       We assessed the relevant controls identified above.

       A deficiency in internal control exists when the design or operation of a control does not
       allow management or employees, in the normal course of performing their assigned
       functions, the reasonable opportunity to prevent, detect, or correct (1) impairments to
       effectiveness or efficiency of operations, (2) misstatements in financial or performance
       information, or (3) violations of laws and regulations on a timely basis.




                                               12
Significant Deficiency


     Based on our review, we believe that the following item is a significant deficiency:

                The Authority did not have policies and procedures and controls in place to
                track and reconcile portability tenants’ housing assistance paid and received
                from the respective public housing authorities (see finding 1).




                                              13
                                      APPENDIXES

Appendix A

        SCHEDULE OF FUNDS TO BE PUT TO BETTER USE

                  Recommendation            Funds to be put to
                      number                     better use 1/
                         1B                          $189,800
                         1C                           $55,854
                        Total                        $245,654


1/      Recommendations that funds be put to better use are estimates of amounts that could be
used more efficiently if an Office of Inspector General (OIG) recommendation is implemented.
These amounts include reductions in outlays, deobligation of funds, withdrawal of interest, costs
not incurred by implementing recommended improvements, avoidance of unnecessary
expenditures noted in preaward reviews, and any other savings that are specifically identified. In
this instance, if the Authority implements our recommendations, it will cease to pay for housing
assistance for tenants for which the Authority should receive reimbursement. Instead, it will
increase its portability receivables, and once the Authority successfully improves its controls,
this will be a recurring benefit.




                                               14
Appendix B

        AUDITEE COMMENTS AND OIG’S EVALUATION


Ref to OIG Evaluation   Auditee Comments




Comment 1




                         15
16
17
                        OIG Evaluation of Auditee Comments

Comment 1   We commend the Authority for its responsiveness to our audit recommendations
            and its efforts to implement corrective action. We will review the proposed
            corrective action in coordination with HUD during the audit resolution process.




                                           18
Appendix C

   SCHEDULE OF OVER/UNDERREIMBURSED HOUSING
  ASSISTANCE PAYMENTS FOR PORTABILITY TENANTS
      Tenant   HAP* amount    HAP amount     Difference
      number       paid out   received

         1           $8,110         $8,110           $0
         2           $4,102         $3,976         $126
         3           $3,036         $5,060      -$2,024
         4           $8,048         $8,198        -$150
         5           $8,249         $4,713       $3,536
         6           $4,874         $4,869           $5
         7           $7,587         $7,900        -$313
         8           $6,081         $4,266       $1,815
         9           $8,330         $5,950       $2,380
        10           $4,428         $7,461      -$3,033
        11           $6,926         $4,975       $1,951
        12           $2,488         $2,488           $0
        13           $7,574         $7,574           $0
        14           $7,023         $5,999       $1,024
        15           $4,951         $3,488       $1,463
        16           $8,957         $7,720       $1,237
        17           $7,447         $5,430       $2,017
        A              $267             $0         $267
        18           $4,643         $3,976         $667
        19           $1,037         $1,140        -$103
        20           $7,993         $7,677         $316
        21           $9,328         $7,997       $1,331
        22           $6,713         $8,396      -$1,683
        23           $4,428         $4,428           $0
        24           $7,792         $9,360      -$1,568
        25           $1,945         $1,730         $215
        26           $3,261         $2,675         $586
        27           $3,909         $2,721       $1,188
        28           $5,804         $5,804           $0
        B              $817             $0         $817
        29           $5,620         $6,282        -$662
        30           $2,565         $2,565           $0
        31          $10,955         $6,260       $4,695
        32          $10,801        $10,801           $0
        33           $7,322         $7,322           $0
        34           $6,328         $7,910      -$1,582
        35           $5,530         $3,950       $1,580
        36           $3,467         $2,726         $741
        37           $4,576         $4,588         -$12



                              19
38    $5,915         $5,841       $74
39    $7,067         $6,056    $1,011
40    $9,251         $7,923    $1,328
41    $4,277         $4,427     -$150
C     $6,132             $0    $6,132
42    $4,520         $5,670   -$1,150
D       $556             $0      $556
43   $10,721        $12,579   -$1,858
44   $10,514        $10,619     -$105
45    $8,388         $8,256      $132
46    $9,408         $9,520     -$112
47    $1,638         $1,116      $522
E     $8,050             $0    $8,050
F     $3,092             $0    $3,092
G     $1,467             $0    $1,467
H     $1,063             $0    $1,063
 I    $1,048             $0    $1,048
 J      $811             $0      $811
48    $9,065         $5,556    $3,509
49    $5,682         $6,432     -$750
K       $902             $0      $902
L       $452             $0      $452
M       $781             $0      $781
50   $10,717        $10,717        $0
51    $4,962         $4,906       $56
52    $4,892         $4,022      $870
53    $5,554         $5,554        $0
54    $5,450         $3,964    $1,486
55    $6,418         $9,051   -$2,633
56    $5,520         $6,440     -$920
57    $5,040         $4,270      $770
58    $7,380             $0    $7,380
59    $6,516         $7,796   -$1,280
60    $3,992         $3,365      $627
61    $4,905         $4,206      $699
62   $13,573         $9,695    $3,878
N     $1,101             $0    $1,101
63    $6,571         $4,923    $1,648
64    $6,653         $6,641       $12
65    $3,900         $2,277    $1,623
66    $3,777         $3,777        $0
67    $6,036         $6,036        $0
68    $3,147         $3,147        $0
69    $4,250         $6,822   -$2,572
70    $7,462         $7,462        $0
71    $9,765         $7,423    $2,342
72   $10,926         $8,764    $2,162
O       $768             $0      $768



               20
 P       $940             $0      $940
 73    $6,349         $5,439      $910
 74      $852           $852        $0
 75    $7,110         $5,092    $2,018
 76    $6,895         $5,910      $985
 77    $8,127         $5,805    $2,322
 78    $5,860         $7,325   -$1,465
 79    $7,721         $5,515    $2,206
 80    $6,937         $6,358      $579
 81    $4,730         $5,506     -$776
 82    $5,740         $5,646       $94
 83    $8,576         $8,576        $0
 84    $5,355         $5,355        $0
 85    $1,164         $1,164        $0
 86    $4,207         $3,005    $1,202
 87    $5,847         $5,627      $220
 88    $8,260         $8,260        $0
 89    $6,264         $6,308      -$44
 90    $9,381         $6,699    $2,682
 91    $8,997         $8,078      $919
 92    $8,015         $8,015        $0
 93    $5,595         $4,927      $668
 94   $10,122        $10,067       $55
 95    $5,383         $4,641      $742
 96    $3,130         $2,230      $900
 97    $3,396         $2,420      $976
 98    $3,484         $3,484        $0
 99    $5,343         $3,819    $1,524
100    $6,591         $6,607      -$16
101    $2,544         $2,544        $0
102    $3,671         $2,619    $1,052
103    $7,987         $7,987        $0
104    $5,150         $6,136     -$986
105    $6,737         $4,807    $1,930
106    $3,946         $4,160     -$214
107    $4,248         $3,538      $710
108   $10,968         $9,185    $1,783
109    $6,650         $4,770    $1,880
110    $5,304         $5,287       $17
111    $4,924         $3,517    $1,407
112    $4,898         $4,840       $58
113    $6,192         $5,192    $1,000
114    $4,384         $4,384        $0
115    $4,652         $3,989      $663
116    $9,816         $7,028    $2,788
117    $7,630         $7,630        $0
118    $8,861        $10,419   -$1,558
119    $7,685         $8,490     -$805



                21
120   $11,382        $11,382        $0
121    $6,783         $4,522    $2,261
122    $6,846         $6,313      $533
123    $4,775         $4,947     -$172
124    $5,094         $5,943     -$849
125    $6,505         $6,505        $0
126    $9,442         $9,545     -$103
127    $7,042         $7,042        $0
128    $6,453         $6,533      -$80
129    $5,680         $5,479      $201
 Q       $902             $0      $902
130    $6,307         $6,364      -$57
131    $6,292         $4,496    $1,796
132    $1,260         $1,260        $0
133    $7,321         $8,337   -$1,016
134    $3,110         $4,195   -$1,085
135    $3,020         $3,020        $0
136    $3,077         $2,897      $180
137    $2,568         $1,284    $1,284
138   $11,270        -$2,130   $13,400
 R     $1,610             $0    $1,610
 S       $700             $0      $700
139    $5,666         $4,853      $813
140   $10,740        $11,045     -$305
141    $7,950         $8,860     -$910
142    $9,560         $9,114      $446
143    $1,874         $1,964      -$90
144    $1,562         $3,160   -$1,598
 T     $3,124             $0    $3,124
145    $7,836         $5,585    $2,251
146    $6,412         $7,406     -$994
147    $7,305         $7,305        $0
148   $10,766        $10,766        $0
149    $7,966         $6,838    $1,128
150    $2,720         $2,666       $54
 U       $849             $0      $849
151    $2,835         $2,835        $0
152    $5,401         $4,622      $779
153   $10,843        $10,843        $0
154    $8,323         $8,547     -$224
155    $7,679         $7,679        $0
156    $2,078         $7,869   -$5,791
 V     $2,668             $0    $2,668
157    $1,964         $5,104   -$3,140
158    $1,188         $4,158   -$2,970
159    $7,413         $7,488      -$75
160   $10,787        $10,787        $0
161    $8,050         $5,802    $2,248



                22
     162                 $3,145              $2,310             $835
     163                 $2,749              $2,058             $691
     164                 $7,924              $8,106            -$182
     165                 $5,512              $3,938           $1,574
     166                 $8,078              $8,064              $14
     167                $11,124             $11,032              $92
     168                 $8,395              $8,395               $0
      W                 $10,465                  $0          $10,465
     169                 $3,270              $8,480          -$5,210
     170                 $4,894              $3,635           $1,259
     171                 $4,099              $4,308            -$209
     172                 $5,176              $5,492            -$316
     173                 $6,457              $3,375           $3,082
     174                 $2,067              $2,067               $0
     175                 $6,249              $6,110             $139
      X                    $481                  $0             $481
     176                 $2,326              $1,163           $1,163
     177                $10,040             $10,040               $0
     178                 $4,851              $4,851               $0
     179                 $7,812             -$2,952          $10,764
     180                 $5,712              $5,712               $0
     181                 $8,121              $5,816           $2,305
     182                 $8,270              $6,100           $2,170
     183                 $1,954              $3,908          -$1,954
                     $1,180,174          $1,046,228         $133,946

*HAP = housing assistance payment

                                      Legend
$
49,046         No payments came in for these tenants


(55,854)       <Other housing agencies overpaid>

140,754        The City was underreimbursed

49,046         The City paid for these tenants and did not receive reimbursement
$133,946       Total variance




                                        23
Appendix D

      SCHEDULE OF NET RESTRICTED ASSET ACCOUNT
                BALANCES FOR 2005-2009
                      Regular housing
        2005        assistance payments          Ports           Combined
Revenue                       $5,454,864            $3,555,632      $9,010,496
Expenditure                     4,983,374            4,557,472        9,540,846
Ending balance                $ 471,490           ($1,001,840)       ($530,350)

                      Regular housing
        2006        assistance payments          Ports           Combined
Beginning balance               $471,490          ($1,001,840)      ($-530,350)
Revenue                         5,729,597            2,176,747        7,906,344
Expenditure                     4,477,797            4,014,271        8,492,068
Ending balance                $1,723,290          ($2,839,364)     ($1,116,074)

                      Regular housing
        2007        assistance payments          Ports           Combined
Beginning balance              $1,723,290         ($2,839,364)     ($1,116,074)
Revenue                         4,993,417            2,611,254        7,604,671
Expenditure                     5,473,307            3,493,976        8,967,283
Ending balance                 $1,243,400         ($3,722,086)     ($2,478,686)

                      Regular housing
        2008        assistance payments          Ports           Combined
Beginning balance              $1,243,400         ($3,722,086)     ($2,478,686)
Revenue                         6,951,095            2,886,501        9,837,596
Expenditure                     5,922,129            2,969,603        8,891,732
Ending balance                 $2,272,366         ($3,805,188)     ($1,532,8220

                      Regular housing
        2009        assistance payments          Ports           Combined
Beginning balance              $2,272,366         ($3,805,188)     ($1,532,822)
Revenue                         3,213,347            1,115,579        4,328,926
Expenditure                     3,213,758            1,089,718        4,303,476
Ending balance                 $2,271,955         ($3,779,327)     ($1,507,372)




                                            24
Appendix E

                                        CRITERIA
Housing Choice Voucher Program Guidebook Chapter 13 – Portability

13.5 RECEIVING PHA RESPONSIBILITIES

When the family arrives at the receiving PHA’s [public housing agency] office, the receiving
PHA issues the family a housing choice voucher to enable the family to search in its jurisdiction.
The housing choice voucher the receiving PHA issues may not expire before the expiration date
established by the initial PHA. For extensions to the housing choice voucher term and the
processing of requests for tenancy approval, however, the receiving PHA’s policies apply. In
addition, the receiving PHA uses its own policies to determine the appropriate unit size for a
family moving into its jurisdiction.

The receiving PHA must inform the initial PHA immediately whether it will absorb or
administer the family’s housing choice voucher assistance and if it approves an extension to the
voucher term or changes the unit size of the family’s voucher.

The receiving PHA’s payment standards are used when the portable family leases a unit. The
family will need to be informed of the receiving PHA’s policies and payment standards before it
begins its search.

Decision to Absorb or Administer

The receiving PHA has the option to administer the subsidy for the initial PHA or to absorb the
portable family into its own housing choice voucher program.

If the receiving PHA decides to administer the initial PHA’s housing choice voucher assistance,
the housing assistance for the portable family comes from the initial PHA’s housing choice
voucher allocation. The receiving PHA bills the initial PHA for the full housing assistance
payment for the family’s unit and for 80 percent of the ongoing administrative fee earned by the
initial PHA for that unit.

A PHA that decides to administer a housing voucher may change that decision and decide to
absorb at any time in the future. Many agencies, having opted to administer housing vouchers
during a time when leasing rates were high and local sentiment favored using housing assistance
funds for families from the local waiting list, reversed those decisions when housing markets
tightened, leasing rates slowed and PHAs faced low utilization rates and low SEMAP [Section
Eight Management Assessment Program] scores. It is not necessary to wait for a recertification
or other anniversary date to absorb an administered voucher.

The receiving PHA must promptly inform the initial PHA whether it will bill the initial PHA for
assistance on behalf of the portable family or will absorb the family into its own program.



                                                25
When a new voucher holder leases up under portability, the receiving PHA’s decision whether to
administer the subsidy or absorb the family will determine which PHA counts the family for
income targeting purposes. If the receiving PHA bills the initial PHA, the family will be included
in the initial PHA’s income targeting calculations; if the receiving PHA absorbs, it will include
the family in its admissions when calculating the percentage of extremely low-income families.

Portability Billing

When a family leases up, the receiving PHA is responsible for completing Part II of form HUD
52665 and sending it back to the initial PHA within 10 days of HAP [housing assistance
payments] contract execution. A copy of the new form HUD 50058 and any related income
verifications must be attached.

The receiving PHA must bill the initial PHA within six months of the date the initial PHA issued
the housing voucher. If the receiving PHA fails to meet this deadline, the initial PHA is not
obligated to honor the housing voucher and the receiving PHA must absorb the portable family.

The initial PHA is required to pay the receiving PHA within 30 days of the initial billing for
housing assistance payments and fees and on a monthly basis thereafter or in accordance with a
schedule developed between the initial and receiving PHAs. The initial bill from the receiving
PHA to the initial PHA automatically establishes a request for regular payment in the future; the
receiving PHA is not required to continue submitting billing forms.

When the receiving PHA administers the subsidy, the initial PHA retains 20 percent of the
ongoing administrative fee for that housing choice voucher unless both PHAs reach a different
agreement. The initial PHA may also be eligible for a preliminary fee if the portable voucher is
part of a funding increment awarded during the first 12 months of the PHA’s housing choice
voucher program.

The receiving PHA bills the initial PHA for the full amount of the housing assistance payment
and 80 percent (or other amount agreed to by both PHAs) of the ongoing administrative fee
earned by the initial PHA. (The fee amount to be used when calculating the on-going
administrative fee is the amount identified in column 2 of the annual fee notice published by
HUD in the Federal Register.)

The receiving PHA may also bill the initial PHA for the $75 hard-to-house fee when the family
leased includes more than three minors or a person with disabilities.

Either PHA may contact the HUD state or area office for assistance in resolving portability
disputes between PHAs, although efforts to reach mutual agreements without HUD’s
involvement are encouraged. Frequently, involvement of management or executive staff at both
agencies and agreement to use logs and other monitoring tools internally is all that is required.

HUD may reduce administrative fees to an initial PHA if the PHA does not promptly reimburse
the receiving PHA or may impose other sanctions against PHAs that are not in compliance with
portability procedures.



                                               26