Project Based Accounting

presenterbelchManagement

Nov 18, 2013 (3 years and 7 months ago)

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Project Based Accounting

& Asset Management

Julie Miles, Financial Analyst

HUD
-
Kansas City, KS

913
-
551
-
5529


1

Agenda

All PHAs


Project
-
Based Budgeting & Accounting

Small PHAs (Less Than 250 PH Units)


Single AMPs


Multiple AMPs

Large PHAs (250+ PH Units)


Decliners Accelerate AM Implementation for
Stop
-
Loss

2

Asset Management

Asset
Management
(AM)

Project
-
Based
Management
(PBM)

Project
-
Based
Accounting
(PBA)

Project
-
Based
Budgeting
(PBB)

3

PBB & PBA

Project Level


Budgeting


Accounting


Financial Statement Reporting

Applies To All Programs & Revenue
Sources Supporting Projects Under ACC

4

PBM

Focus on Operation & Management of Project

Address Project Needs With Project Resources

Day
-
to
-
Day Responsibilities & Decision
-
Making
at Project Level

not Central Office

Project
-
Specific:


Marketing


Leasing


Resident Services


Routine and Preventative Maintenance


Lease Enforcement


Protective Services

5

AM

AM = PBM + PBB + PBA

PHA
-
Wide Policy & Direction

Long
-
Term Capital & Administrative Planning

Property Management Performance

Review of Entity
-
wide Financial Information

Long
-
Term Viability of Properties

Risk Management

Property Repositioning & Replacement




6

Applicability

PBB & PBA

Required

for All PHAs


FYBs 7/1/07 & Later

PBM & AM
Required

FY 11


PHAs With 250 or More PH Units


Accelerate AM Implementation for Stop Loss

PBM & AM
Optional


PHAs With Less Than 250 PH Units & 1 AMP


Elect AM Implementation for Stop Loss Incentive

7

PBB

Budget
Required

for Each AMP

Budget
Recommended

for Central Office
Cost Center (COCC)


Stop
-
Loss
Requires

COCC Budget

Board Approval of Each AMP on 1
Resolution

Unless Troubled, Budget Submission to
HUD Not Required

Submit Board Resolution to HUD Field
Office

8

PBB Format

Revise Existing Budget Forms

No Uniform Budget Format, but Must:


Reconcile to FDS


Allow Comparison to Actual Revenues &
Expenses


Include All Revenues & Expenses of the
Operating & Capital Funds


Include Estimate of Operating Subsidy
Proration


Include Fungibility Transfers (ex. CFP for
Operations)


Include Anticipated Uses of Excess Cash

9

New FDS Format

AMP Level Financial Reporting

Operating Fund and Capital Fund
Reporting

at AMP Level vs. PHA Level

New Columns


AMP & COCC Columns Replace Low
-
Rent
and CFP Columns


Elimination Column Subtracts Internal
COCC/AMP Transactions from Entity
-
Wide
Totals

10

New FDS Line Items

Fee Revenues & Expenses

More Expense Detail


Other Operating
-
Administrative


Ordinary Maintenance & Operations
-
Contract
Costs


Insurance Premiums

Memo Accounts


Measure Revenue Loss


Unit Month Detail


CFP Expenditure Data

11

New FDS

PHA Level

$
Thousands

Program

Total

Total
AMPs

S8
HCV

Rural
Housing

COCC

Elim.

Assets

$10,100

$300

$750

$400


-
$50

$11,500

Liabilities

$4,850

$200

$250

$300

-

$50

$5,550

Equity

$5,250

$100

$500

$100



$5,950

Revenue

$1,730

$1,000

$575

$270

-
$250

$3,325

Expenses

$1,360

$990

$560

$240

-
$250

$2,900

Net
Income

$370

$10

$15

$30

$425



12

New FDS

AMP Level

$ Thousands

Asset Management Projects

Total

Project
1

Project
2

Project
3

Other
AMP

Assets

$3,434

$3,254

$3,130

$282

$10,100

Liabilities

$1,649

$1,522

$1,503

$176

$4,850

Equity

$1,785

$1,732

$1,627

$106

$5,250













Revenue

$588

$527

$536

$78

$1,730

Expenses

$462

$429

$421

$47

$1,360

Net Income

$126

$98

$115

$31

$370

13

PBA
-
CFP

CFP for AMPs Only

Except COCC CFP
Management Fee

Unobligated Grants: Actual Costs

Actual Costs for Unobligated Grant Prior to AM

Future Grants: Fee
-
for
-
Service if Implement AM

Transfers to Operations Allowed with Current
Regulatory Limits

Work Item Fungibility Continues

Future Transition of BLIs to FDS

14

PBA
-
PHAS

New PHAS Assessment

Starting FYE 6/30/08

AMP
-
Level Score Rolled Up to PHA
-
Level
Score

First Year Transitional Scores

First Year CFP Bonus Based on Previous
PHAS Score

15

Stop
-
Loss

Transition Calculation


FFY 04 Subsidy Eligibility if New Operating
Subsidy Formula Implemented


5
-
Year Loss Phase
-
in

Year 1 CY 07 5% Limit = 95% Add
-
on

Year 2 CY 08 24% Limit = 76% Add
-
on

Year 3 CY 09 43% Limit = 57% Add
-
on

Year 4 CY 10 62% Limit = 38% Add
-
on

Year 5 CY 11 81% Limit = 19% Add
-
on

Stop
-
Loss Limits Loss to Applicable
Percent in Year Stop
-
Loss Approved

16

Stop
-
Loss Due Dates

Year 1 Due 10/15/07

Year 2 Due 4/15/08

Year 3 Due 10/15/08

Year 4 Due 10/15/09

Year 5 Due 10/15/10

17

Stop
-
Loss for Large PHAs

250 PH Units or More

COCC

Multiple AMPs

Traditional Asset Management

18

Stop
-
Loss for Small PHAs

Less Than 250 PH Units

Alternate Asset Management (No COCC) if PUM
Admin Doesn’t Exceed Admin Threshold

Admin Threshold Published in Supplement to PIH
Notice 2007
-
09, Financial Management Handbook,
Table 9.1

Admin Threshold Updated Annually, Schedule of
Management Fees, Table 2, 80
th

Percentile
Administrative Costs

http://www.hud.gov/offices/pih/programs/ph/am/acc
ounting.cfm

19

PUM Admin Calculation

+ Admin Salaries

+ Admin Benefits

+ Outside Management Expense

+ Other Admin

+ Admin Costs CFP BLI 1408 Mgmt Improvements

÷

Occupied Units & Approved Vacancies




***Calculation Excludes Audit Expense & Excludes
Limited Vacancies

20

Appeal for Changing Market
Conditions

May Increase Subsidy if Vacant Unit Months Exceeded
Limited Vacancies

Decreases PUM Admin Cost

Appeal With OpSub Calculation or by OpSub Revision
Deadline


List of Unit Numbers & Periods Vacant


Narrative Explaining Specific Changing Market Conditions
(ex. Population Decline, Competing Project, etc.)


Narrative Explaining Marketing Efforts


Certify No Waiting List for Unit Months in Appeal


Certify Unit Months in Appeal Ready to Rent (not
Downtime or Make
-
Ready)

21

AM

250+ PH Units

To Qualify for Stop
-
Loss, Decliners Less
Than 250 PH Units & Exceeds Admin
Limit

22

AM

COCC

$4 PUM AM OpSub Add
-
on if 2+ AMPs

Monitor Cash Flow at AMP Level

Bank Account Per AMP Not Required

Replace Cost Allocation with Fee
-
for
-
Service

23

AM

Balance Sheet Allocation

Required 1
st

Year of AM

Assign to AMP/COCC/Other Program if
Direct Relationship Exists

Assign Equipment to Controlling
AMP/COCC/Other Program

24

Legacy Costs & Associated
Unfunded Liabilities

Allocate to AMP, COCC & Other
Programs to Ensure All Bear
Proportionate Share

May Consider
Ability to Pay

25

Compensated Absences

Allocate Based on Current Employee
Assignment

Transfer Associated Liability & Liquid Asset if
Employee Transfers

A/P & A/R if No Liquid
Asset Available

COCC May Setup A/R from AMPs & Other
Programs for COCC Share At Initial Balance
Sheet Allocation

Not Subject to Excess Cash Rules

Eliminate A/R & A/P on FDS

26

Pension & Other Post
-
Employment Benefits (OPEBs)

Current & Retired Employees

Pension, Retiree Medical & Other
Related Expenses

Accounting & Contributions Based on
Retirement Plan

Allocate Annual Contribution Based on
Employee Assignment

27

Other Post
-
Employment
Benefits (OPEBs)

Historically Pay
-
As
-
You
-
Go

GASB 45 Requires Liability Recording

Annual Required Contribution (ARC)


Normal Annual Cost


Share of Unfunded Liability

Not to
Exceed 30 Years

Charge to COCC for All Employees

28

OPEBs (Continued)

Non
-
COCC Employee Share: AMPs &
Other Programs Transfer Liquid
Assets Annually to COCC to Cover
ARC

COCC Employee Share Covered by
Fees Earned

A/P & A/R if No Liquid Assets
Available

Not Subject to Excess Cash Rules

29

Other Liabilities

Lawsuits, Legal Actions, Lead
-
Based
Paint, Asbestos

Record at COCC

Recover from AMPs & Other Programs
Based on Reasonable Method

Not Subject to Excess Cash Rules

A/P & A/R if No Liquid Assets Available

30

AM

Balance Sheet Allocation

Restricted Assets

Real & Personal Property Assigned to
COCC


Restricted Assets Subject to Federal
Program Rules


Future Guidance on COCC Asset Disposal

31

AM

Working Capital

Assign Cash to COCC Equivalent of Up to
6 Months Estimated Property
Management, Bookkeeping, and AM Fees
Based on 100% Occupancy of All ACC
Units

Not Subject to Excess Cash Restrictions

If Cash Not Available at AMP, May Record
Receivable/Liability


Receivable/Liability Must Be Paid Prior to
Payment of Additional AM Fees or AMP
Fungibility Transfer

32

Cost Assignment

Front Line (AMP) Expenses


Related to Direct Operation of the Property

vs. Management Fee (COCC) Expenses


Related to Corporate Support

Guidance


Asset Management Planning Document
Attachment B


PIH Notice 2007
-
9, Financial Management
Handbook Supplement Table 7.2


Multifamily Management Agent Handbook, HUD
4381.5, Chapter 6

33

Central Front
-
Line Admin

Reasonably Prorate Direct Labor, Supplies &
Equipment to AMPs

Prorated Costs Include Equipment Purchased
with Capital or Operating Funds remain AMP
Program Assets

Document Proration Method

Adjust to Actual Costs at Year
-
End At Minimum

Cannot Exceed Cost if Performed On
-
site

Can’t Prorate if On
-
site Staff Also Perform Task

34

Prohibited Central Front
-
Line Admin

Supervision Cost of Front
-
Line Admin

Except for
Central Waiting Lists, Central Resident Services, and
Central Protective Services

Procurement/Warehousing

Unless Cheaper than
Project
-
Based Procurement/Warehousing & HUD
Approves

Rent Collection

Unless Listed in Employee’s Job
Duties

Resident Services

Unless Can’t Reasonably Track
Costs to AMPs

Protective Services

Unless Can’t Reasonably Track
Costs to AMP & Plan for Future Direct Deployment if
Extensive Central Services

35

Central Front
-
Line Maintenance

Technical & Routine Maintenance

Must Use Fee
-
for
-
Service

Begins 2
nd

Year of PBB/PBA

Actual Services Only

Can’t Exceed Market Rates

Supporting Documents for Rates

Can’t Prorate Unrecovered Costs Due to Under
-
Utilization or Unreasonable Low Rates

Can’t Charge Projects for Costs of Centralized
Supervisor or Admin Assistants

36

Shared Resource Costs

Spread Cost to AMPs Receiving Service


Few AMPs Sharing Resource vs. All AMPs


If Staff Shared between AMPs & COCC,
Prorate Based on Time Spent on AMPs &
COCC


Limited to Reasonable Labor Rates

37

COCC

Not Subject to Program Income Rules if
Fees Reasonable


State and Local Restrictions May Still Apply


May Include Business Activities


Example: Management Fees for Non
-
Profit or
Private Properties

38

Fees

Property Management

Bookkeeping

Asset Management

CFP Management

HCV Program Management

Other PIH & HUD Program Management

Non
-
Federal Program Management

39

Property Management Fee

Multifamily Property Management Fee
Schedule

Federally Subsidized
Properties

80th Percentile Property Management
Fees

For
-
Profit and Limited Divided FHA
Properties

Other Local Market Data

40

Property Management Fee

Reasonable in 2
nd

+ Years


Additional 2 Year Extension Available


Stop
-
Loss Requires Reasonableness in 1
st

Year

Earned Monthly for Occupied & HUD
-
approved
Vacancy, but Not Limited Vacancies

COCC Retains Difference Between Fee
Charged to AMP and Fee Paid for Private
Management, Including Mixed Finance Projects.

COCC Earns Fee if Manages Mixed Finance
Property

Demo/Dispo: 75% Year 1, 50% Year 2

Demo: 25% Year 3

41

Bookkeeping Fee

Up to $7.50 PUM

Reasonable in 2
nd

+ Years


Additional 2 Year Extension Available


Stop
-
Loss Requires Reasonableness in 1
st

Year

Earned Monthly for Occupied & HUD
-
approved
Vacancy, but Not Limited Vacancies

Cannot charge if Project Accounting Functions
Also Performed On
-
site & Charged as Front
-
line/AMP Cost

Can Also Charge to HCV Program

42

Asset Management Fee

1
st

Year

Up to $10 PUM

2
nd
+ Years

Up to $10 PUM
and

Not To
Exceed Excess Cash Calculation

Earned Monthly for All ACC Units

Earned For Demo/Dispo Units Until Vacant

PHAs With 250+ PH Units

PHAs With Less than 250 PH Units & 2+
AMPs & COCC

No Accruals

43

CFP Management Fee

Up to 10% to Admin BLI 1410 & Counts
Toward 10% Admin Limit

Available to Earn & Draw When Grant
Awarded & Available

Prior to AM Implementation & Beginning
With FFY 2007, Can’t Draw Unobligated
Funds Under Admin BLI 1410 of Open
CFP Grants as CFP Management Fee

44

CFP Management Fee
(Continued)

FFY 2007 Charge Management Fees
Commencing with Start of First Year
PBB/PBA


May Have Partial Year Actual Cost &
Partial Year Fees

Subject to Fee Reasonableness in 2
nd

Year


FYEs 6/30/09, 9/30/09, 12/31/09, 3/31/10

45

HCV Program Management Fee

Voluntary

Higher of 20% of HCV Admin Revenue or
$12 PUM per Voucher Leased

Guidance HCV Program Management
Fee vs. Front
-
Line Costs


PIH Notice 2007
-
9, Financial Management
Handbook Supplement Table 7.2


46

Other Management Fees

Development Activities


3% Total Project Budget


Up to 6% if HUD Approved

Other PIH & HUD Grants Management


Up to 15% Grant Amount, if No Fee Rate
Established

Non
-
Federal Program Management


Voluntary Fee
-
for
-
Service

47

Fee Payment & Documentation

Invoice Recommended

Documentation Supporting How Fees
Earned


Occupancy


Fee Reasonableness

48

Fungibility

1
st

Year AM: Full Fungibility AMP/COCC

2
nd

Years AM: Fungible Only Between AMPs
& Subject to
Positive

Excess Cash
Restriction

3
rd
+ Years AM: Fungible Only Between
AMPs & Subject to
1
-
Month

Excess Cash
Restriction

No Restriction on Transfers from COCC to
AMPs

FDS Must Be Submitted & Accepted

49

Excess Cash Calculation: 2
nd

Year

Based on Prior Year FDS

Adjust Excess Cash Limit for Audited FDS
Submission


+ Unrestricted Cash

+ Cash
-
Tenant Security Deposits

+ Cash
-
Restricted for Payment of Current Liabilities

+ Total Receivables, Net of Allowance for Doubtful
Accounts

+ Unrestricted Investments

+ Interprogram Due From

-
Current Liabilities

***Must Be Positive**

50

Excess Cash Calculation: 3
rd
+ Years

Based on Prior Year FDS

Adjust Excess Cash Limit for Audited FDS
Submission


+ Unrestricted Cash

+ Cash
-
Tenant Security Deposits

+ Cash
-
Restricted for Payment of Current Liabilities

+ Total Receivables, Net of Allowance for Doubtful
Accounts

+ Unrestricted Investments

+ Interprogram Due From

-

Current Liabilities

-

Average Monthly Operating Expenses

51

Excess Cash Uses

AMP Reserve

Transfer to other AMPs

Pay Asset Management Fee to COCC, but No
Loan/Transfer

Other Eligible Purposes


Develop New Units
-
to Extent Allowed Under
Program Rules


Legal Costs Incurred Prior to AM


Legacy Costs

52

Resources

PIH Notice 2006
-
14

http://www.hudclips.org/sub_nonhud/html/pdfforms/06
-
14PIH.doc


PIH Notice 2006
-
35

http://www.hudclips.org/sub_nonhud/html/pdfforms/06
-
35PIH.doc


Stop
-
Loss Submission Kit

http://www.hud.gov/offices/pih/programs/ph/am/docs/stoplosskit.pdf


Asset Management Planning Guide

http://hudstage.hud.gov/offices/pih/programs/ph/am/docs/pham.pdf


PIH Notice 2007
-
9

http://www.hudclips.org/sub_nonhud/cgi/pdfforms/07
-
9PIHSupp.doc

53