U.S. Department of Housing and Urban Development

PUBLIC AND INDIAN HOUSING

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Special Attention of: Notice PIH 95-53 (HA)

Public Housing Office Directors, Issued: September 6, 1995

Native Americans Programs Office Expires: September 30, 1996

Directors, Public Housing Agencies

and Indian Housing Authorities

Administering Section Cross References:

8 Programs

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Subject: Financial Management System for the Section 8 Certificate

and Voucher Programs

1\. PURPOSE. This Notice announces the availability of the

revised Financial Management System (FMS) software, which was

initially developed as a planning tool for use in the voucher

program. The FMS has been revised so it can be used by Public

Housing Agencies (HAs) to monitor the impact of issuing

certificates and vouchers under the requirements of the

Conforming Rule for Admissions, published on July 18, 1994.

The HA can enter data into the FMS relating to subsidy costs,

administrative fees, occupancy rates and tenant contributions,

and use the FMS to calculate the number of units that can be

leased-up over a specified time period, given the amount of

available funding. The FMS can also be used to estimate the

amount of amendment budget authority required by 15 year

certificate contracts.

The FMS is designed to assist HAs in planning and managing

their programs at an appropriate level; HAs should avoid large

fluctuations in the number of units under lease and

overleasing of units, which cause program funding shortfalls.

2\. APPLICABILITY. This notice applies to HAs, including Indian

Housing Authorities (IHAs), that operate certificate and/or

voucher programs. HUD State/Area Public Housing and Native

American Financial Analysts (FAs) must also become familiar

with this Notice in order to advise HAs regarding the use of

the FMS.

PH : Distribution: W-3-1, W-2(H), R-3-1(PIH), R-6, R-7, R-9,

138-2, 138-3, 138-7

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3\. GENERAL. Two changes occurred in 1994 which had a substantial

impact on the financial management of the certificate and

voucher programs. One was a change in HUD\'s funding

commitment under the Annual Contributions Contract (ACC) for

certificates, and the other was a change in tenant selection

procedures for both programs.

A. Annual Contributions Contracts (ACCs) for the certificate

program no longer include a reference to the number and

distribution of units by bedroom size. The certificate

program is funded like the voucher program and HAs must

administer their program within the total funds provided.

HAs must now monitor their certificate programs in a new

way to avoid commitments beyond the funds available. HAs

may, over time, have to adjust the overall size of their

certificate programs based upon their costs and the funds

available, much as they have always done for their

voucher programs. However, this planning, even for

vouchers, is now more difficult because HAs no longer

control the unit distribution.

B. The Conforming Rule published on July 18, 1994 requires

HAs to select families from the waiting list based upon

their preference ranking, regardless of the size

certificate or voucher for which families qualify. HAs

may no longer issue certificates or vouchers based upon

a pre-set unit size distribution. Over time, the program

unit distribution (and thus average subsidy commitments)

will be determined by the unit size for which families

who reach the top of the waiting list qualify.

4\. DESCRIPTION OF THE REVISED FMS. The FMS can be used either as

an automated system or as a manual system. Either system will

enable an HA to identify the effects of different assumptions

and factors that influence the rate of expenditure and to

generate an estimate of the number of certificates or vouchers

that can be supported by the total funds available over the

ACC term. Essential elements of the FMS are:

A. the New Increment Worksheet which helps an HA plan the

lease-up of a new increment, with separate assumptions

about the lease-up rate and about the unit bedroom

distribution that will result from taking applicants in

preference order from the waiting list;

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B.the Funds Available Worksheet which helps the HA identify

its current funding status (reserves and future HUD

commitments) and make assumptions about the levels of

renewal funding in the future;

C.the Total Program Plan Worksheet which uses data from the

New Increment and Funds Available Worksheets and

information about the remainder of the HA\'s program. It

requires assumptions about future changes to identify the

number of units the HA can afford to operate over a five

year planning period;

D.a lone disk compiled program that the HA can run on an

IBM-compatible personal computer; and

E.an instruction guide which provides a detailed

description of the FMS and step-by-step instructions for

using both the automated and manual versions of the

worksheets.

5.HOW TO ORDER THE FMS. HAs may order the FMS through the

HUD-USER Service. The address and telephone number are:

HUD-USER

P.O. Box 6091

Rockville, Maryland 20850

1-800-245-2691

The cost to the PHAs for the FMS package is \$20 for shipping

and handling. HUD-USER accepts credit cards.

HUD State/Area Offices may order the FMS by calling HUD User.

However, there is no charge to HUD State/Area Offices for the

FMS.

Joseph Shuldiner

Assistant Secretary for

Public and Indian Housing