Financial Management

Handbook 7475.1 REV.

CHAPTER 3. FIELD OFFICE REVIEW AND APPROVAL OF OPERATING

BUDGETS

3-1. PURPOSE.

This chapter provides guidelines and procedures for use by

Field Offices in the review and approval of Operating Budgets

and budget revisions.

3-2. TYPES OF BUDGET REVIEWS.

When an Operating Budget or a budget revision is submitted to a

Field Office, it will receive either a limited budget review or

a detailed budget review. These types of reviews are described

further in paragraph 3-5 of this chapter.

3-3. SELECTING THE TYPE OF REVIEW.

The decision on the type of review to be performed will be made

by the Field Office after considering the following areas:

a\. Type of HUD-assisted project. The type of HUD-assisted

project covered by the Operating Budget will influence the

type of review. For example, all Operating Budgets (and

budget revisions) for projects assisted under the Section

23 Leased Housing Program will receive a detailed review.

Operating Budgets for conventional Low-Income projects

will normally receive a limited review, if the PHA meets

the performance standards described in paragraph 3-4.

b\. Past year performance in meeting financial performance

standards. Five financial performance standards have been

established to assist Field Offices in determining the

type of budget review to be undertaken. If a PHA meets

these standards based on a Field Office review of its

year-end financial statements for the past year and other

reports, the standard procedure will be to conduct a

limited review.

c\. Current year information on PHA performance. Regardless

of past year financial performance, a Field Office may

decide to undertake a detailed review of an Operating

Budget if current information indicates that the PHA is

operating its program in such a manner that threatens the

future serviceability, efficiency, economy or stability of

the housing it operates.

3-4. FINANCIAL PERFORMANCE STANDARDS.

Listed below are general descriptions of the five financial

performance standards established to assist Field Offices in

determining the type of budget review to be undertaken.

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Information on the data sources and formats that may be used to

determine if the standard has been met, have been outlined in

Exhibit 3-1.

a\. Financial Performance Standard #1 - Operating Reserves

exclusive of Tenant Accounts Receivable (TARs) are at

least 30% of Maximum Allowable Reserves.

b\. Financial Performance Standard #2 - Operating Expenses

are less than or equal to Income.

c\. Financial Performance Standard #3 - Annual Utility

Consumption as compared to the average of the previous

three years\' rolling base consumption which has been

adjusted for variances in heating degree days has been

increased by more than 5%.

d\. Financial Performance Standard #4 - PHA is a High

Occupancy PHA or is meeting the occupancy goals of an

approved Comprehensive Occupancy Plan (COP).

e\. Financial Performance Standard #5 - Tenants Accounts

Receivable for Tenants In Possession excluding amounts

covered by formal up-to-date Repayment Agreement are less

than 10% of total charges.

3-5. BUDGET SUBMISSION AND REVIEW REQUIREMENTS (INCLUDING SECTION

23).

The selection of either a limited or detailed budget review

does not change any of the budget submission requirements

currently in effect. Budgets that are incomplete or do not

have adequate justification will be returned without HUD

approval. Exhibits 3-2 and 3-3 are provided as sample

notifications that required documents are missing from the

Operating Budget submission.

Presented below are general review requirements for conducting

a limited, detailed or Section 23 budget review.

a\. Limited Budget Review. The intent of the limited review

procedure is to place the responsibility for operating a

financially solvent PHA with its Board of Commissioners.

Paragraph (b) of 24 C.F.R. 990.112 states that the HUD

review of operating budgets will normally be limited to:

\(1\) Reviewing prescribed Performance Funding System (PFS)

forms;

\(2\) Reviewing the projected operating reserve to assure

that it meets HUD requirements; and

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\(3\) Assuring that it is complete and does not include

illegal or ineligible expenditures, mathematical

errors or errors in application of accounting

procedures, or is otherwise unacceptable to HUD.

b\. Detailed Budget Review. Paragraph (c) of 24 CFR 990.112

states that HUD may deviate from the limited budget review

if it is determined that the PHA is operating its program

in a manner which threatens the future serviceability,

efficiency, economy or stability of the housing which it

operates. Failure to pass the five financial performance

standards (paragraph 3-4) will trigger a detailed review.

If such action is deemed necessary, the PHA will normally

be given written notice prior to the submission of the

budget that a detailed budget review will be performed

(Exhibit 3-4). Once this is determined, HUD will review

the Operating Budget in depth, making any necessary

changes.

c\. Review of Section 23 Operating Budgets.

\(1\) The PFS regulations does not apply to the Section 23

program; therefore, Field Offices must conduct a

detailed budget review for each Section 23 operating

budget. Budgets are to be reviewed to determine that

all proposed expenditures are fully supported and are

necessary for the efficient operation of the program.

Particular care should be taken to determine the

reasons for significant differences in budgeted PUM

amounts between the conventional and Section 23

programs.

Each budget should fully explain the method used to

allocate salaries and indirect costs between the

Section 23, conventional and Section 8 programs.

Field Offices should review the PHA\'s cost allocation

method to assure that the Section 23 budget is not

being \"1oaded\" with costs that should be charged to

either the conventional or the Section 8 programs.

\(2\) Approval of Nonroutine Expenditures. In general, the

responsibility for nonroutine expenditures such as

extraordinary maintenance and replacement of equipment

rests with the project owner. The lease between the

owner and the PHA usually specifies which party to the

lease is responsible. However, due to the great

variation in leases currently in effect, it is

important that a copy of the lease agreement be kept

in the permanent file to be used as a guide in

reviewing budget requests for extraordinary

maintenance and/or replacement of equipment.

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\(a\) Bond Financed Projects. Most bond indentures require

that escrow accounts be established for extraordinary

maintenance and equipment replacement. The escrow

accounts are usually held by the Bond Trustee and are

disbursed to the PHA upon written request to cover

items identified as the lessor\'s responsibility in the

lease. Neither the PHA\'s financial statement nor

operating budget normally reflect expenditures funded

from the escrow accounts.

Any budgeted nonroutine expenditures must be carefully

reviewed to determine the responsible party under the

lease. If a budgeted nonroutine item is the

responsibility of the lessor and escrow funds are

available, the budgeted item is to be deleted from the

budget and the PHA advised to make a formal request to

the Trustee for release of escrowed funds. If

sufficient escrow funds are not available or the

Trustee refuses to release the funds, the appropriate

Office of Public Housing should be advised.

Operating subsidies are not to be provided for

nonroutine items which are determined to be the

responsibility of the lessor without first notifying

the Field Office.

\(b\) Privately Financed Projects (Private Owner Projects).

Lease agreements with individual owners vary; however,

most leases provide that extraordinary maintenance and

equipment replacement are the responsibility of the

lessor. If the Section 23 budget includes nonroutine

items, the Field Office must again determine the

responsible party under the lease. Generally, no

Section 23 operating budget should be approved nor

operating subsidy obligated which includes nonroutine

items that are determined to be the responsibility of

the owner. Most leases provide that if the lessor

fails to perform extraordinary maintenance, the PHA

can have the work done and withhold the cost from the

quarterly requests for partial payment of rent under

the lease. Field Offices should be assured that PHA\'s

are enforcing this provision of the lease.

The key to the responsibility for extraordinary

maintenance and replacement of equipment for both the

Bond Financed and Privately Financed projects is the

lease contract. Since almost all of the leases are

different, Field Offices must use their judgment in

applying the guidance in (a) and (b) above to the

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requirements of individual lease contracts.

Field Offices Counsel should be consulted if

questions of lease interpretation need

resolution.

\(3\) Monitoring Responsibilities. Field Offices have a

responsibility to specifically review the Leased

Housing Program during PHA monitoring visits.

3-6. BUDGET REVIEW GUIDANCE.

In order to provide advice and guidance to Field Offices in the

review of Operating Budgets, several exhibits have been

developed and are described below.

a\. Exhibit 3-5. This exhibit leads the reviewer through a

series of consistency and mathematical checks on the

Operating Budget and its supporting documents. This type

of analysis will be done on each Operating Budget

regardless of whether a limited or detailed budget review

will be conducted.

b\. Exhibit 3-6. The Limited Review Checklist has been

developed to assist the Field Office in determining if the

Operating Budget conforms to HUD requirements.

c\. Exhibits 3-7, 3-8, and 3-9. Separate Checklists have been

prepared for the Financial Analyst, Housing Management

Specialist and Engineer\'s use when performing a detailed

budget review.

3-7. BUDGET APPROVAL - GENERAL PROCESS AND DELEGATIONS OF AUTHORITY

a\. General Description. The Field Office Manager or his/her

designee will approve, disapprove or will give modified

approval of Operating Budgets. If the budget is

disapproved or approved with modifications, the PHA will

be notified in writing of the reason for disapproval or

modified approval. A modified budget shall constitute an

approved budget unless the PHA notifies the Field Office

in writing, within fourteen (14) days after receipt of the

budget, that they consider the modified approval a

disapproved budget. The Field Office shall promptly

notify the Regional Office of Public Housing and the

Regional Accounting Division (RAD) to suspend the payment

schedule should the PHA consider the modified budget as a

disapproval.

b\. Approval of Operating Budgets and Operating Reserve

Levels. Section 990.111(b) of the PFS regulation states:

\"\... The PFS does not specifically provide operating

subsidy to augment the PHA\'s operating reserve. However,

the full amount of the PHA\'s operating subsidy eligibility

may be

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provided to the PHA, and some part or all of this amount

may be used to augment the operating reserve as long as the

estimated year-end reserve balance, as shown in the

approved operating budget for the year for which these

funds are requested, does not exceed the Maximum Operating

Reserve amounts as shown in the same operating budget.\"

The approval of an operating budget that contains operating

subsidy obligates HUD to pay the amount identified. The

Field Office must ensure, therefore, that the amount of

subsidy contained in an operating budget does not exceed

the amount available with the RAD. See paragraph 1-4.h. on

Field Office controls.

c\. General Delegations of Budget Approval Authority.

1\. Field Offices.

\(a\) The Chief, AHMB, may approve operating budgets

and budget revisions for PHAs with less than 500

units which do not include a provision for

operating subsidies.

\(b\) The Deputy Director of Housing Management may

approve operating budgets and budget revisions

for PHAs as follows:

\(i\) PHAs having less than 500 units, for which

the budget and/or budget revision includes

provision for operating subsidies.

\(ii\) PHAs having 500 or more units, for which the

budget and/or budget revisions do not

include provision for operating subsidies.

\(c\) The Manager must approve operating budgets and

budget revisions which include a provision for

operating subsidies for PHAs with 500 or more

units.

2\. Collocated Field/Regional Offices

\(a\) The Director, Housing Management Division or the

Director, Technical Support Division (whichever

is applicable) may approve operating budgets and

budget revisions as follows:

\(i\) For PHAs having less than 500 units, for

which the budget and/or budget revision

includes a provision for operating

subsidies.

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\(ii\) For PHAs having 500 or are units, for which

the budget and/or budget revision do not

include a provision for operating

subsidies.

\(b\) The Director, Office of Public Housing must

approve operating budgets and budget revisions

which include a provision for operating

subsidies for PHAs with 500 or more units.

3-8. BUDGET APPROVAL - PHA OWING RESIDUAl RECEIPTS TO HUD.

Prior to approving an Operating Budget which provides for the

payment of operating subsidy, the Field Office shall review the

most recent listing of Residual Receipts due from PHAs within

its jurisdiction. If an amount due appears on the listing and

the PHA cannot provide satisfactory evidence that the debt has

been settled, (PHAs shall provide Field Offices with a copy of

the check or the wire transfer attachment 10-1(D) in Exhibit 10-

1, when remitting payments) the Field Office shall determine

whether any further debt service annual contributions are

payable under the ACC. If no further debt service contributions

are payable, the amount shall be offset from the operating

subsidy approved for the PHA. The Field Office shall obligate

the full amount of operating subsidy for which the PHA is

eligible, but shall advise the RAD to withhold payment of the

amount owed and transfer it by Standard Form 1081, \"Voucher and

Schedule of Withdrawals and Credits\" to Director, Office of

Finance and Accounting, Attention: Director, Subsidized Housing

Programs Division, AFGH. The Field Office shall provide the RAD

with the purpose of the transfer, the PHA name, the project name

and number, as appropriate, and a clear identification of the

amount withheld by using the appropriation account symbol (O4)

86xO164. In cases where the Field Office has approved a

repayment schedule, any payment not made in accordance with the

repayment schedule shall be offset from operating subsidy in

the same manner as provided above. In all other cases, the

Field Office shall forward the claim for unpaid residual

receipts to the Claims Collection Officer.

3.9. BUDGET APPROVAL - PHA WITH A DEFICIENCY IN RESIDUAL RECEIPTS.

a\. Definition. A deficiency in residual receipts

(deficiency) exists when the cumulative operating

expenditures of a PHA exceed its cumulative operating

receipts (including operating subsidy and operating

reserve). (At this point, the PHA, having exhausted its

operating reserve, is sometimes said to be in a \"negative

reserve\" position).

b\. Normal Budgetary Process. At the time the Operating

Budget, Form HUD-52564, is prepared for the requested

budget year, any approved deficiency amount that will

exist at the close of the current fiscal year operation

will be listed as an expense on

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Line 820, Other Deductions. In order to present an

approvable budget, the PHA normally would be expected to

absorb the entire amount of this deficiency during the

requested budget year. If this is done, the requested

Operating Budget would be \"balanced\" and, therefore, could

be approved by the Field Office in accordance with the

instructions contained in this Handbook.

c\. Approval of \"Deficit\" Budgets. If a PHA has a deficiency

in the current budget year that cannot be totally absorbed

in the requested budget year without jeopardizing the

normal operation of the PHA, HUD will consider approving

the \"deficit\" Operating Budget under the following

conditions:

\(1\) As a part of the Operating Budget, the PHA shall

prepare and submit to the Field Office a Financial

Workout Plan (FWP) acceptable to the HUD Field

Office. See the Troubled Public Housing Agency

Handbook 7475.14 for more information on preparing a

FWP.

\(2\) The FWP must project the elimination of the

deficiency within a period of time of no longer than

five fiscal years including the fiscal year in which

the initial FWP is approved under these procedures.

The FWP shall be reviewed each year and updated if

necessary.

\(3\) The proposed Operating Budget for the requested

budget year must reflect an amount of operating

receipts (including operating subsidy and non-HUD

contributions, if any) equal to or greater than the

projected annual amount of the total operating

expenditures. A FWP is unacceptable if the

deficiency is projected to increase during the

requested budget year. In such cases, therefore, the

Operating Budget is unapprovable.

d\. Operating Budget Approval. The Operating Budgets of PHAs

experiencing a deficiency will be subject to a detailed

review by the Field Office and are approvable contingent

upon the acceptability of the FWP.

\(1\) PHAs of less than 1,250 dwelling units. The FWP and

Operating Budget for this size PHA may be approved by

the Field Office Manager if so delegated by the

Regional Office. The Field Office submits a copy of

the approved FWP to the Director, Office of Public

Housing.

\(2\) PHAs of 1,250 or more dwelling units. The Field

Office will review the FWP and Operating Budget in-

depth and send its comments and recommendations to

the Regional Administrator, Attention: Director,

Office of Public Housing, for review and evaluation.

The Regional Office

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will transmit its recommendations and a copy of

the FWP to Headquarters, Assistant Secretary for

Public and Indian Housing, Attention: Chief,

Troubled Projects Branch. These documents will

be reviewed by Headquarters, and the Regional and

Field Offices will be advised, in writing,

regarding approval or disapproval. Based upon

Headquarters\' notification, the Field Office

revises, approves or disapproves the Operating

Budget and advises the PHA accordingly.

e\. Compliance with PFS Regulation Section

990.112(a)(2)(i). For PHAs with a deficiency in

residual receipts that cannot present a \"balanced\"

budget, an Operating Budget shall be deemed to comply

with the requirements of Section 990.112(a)(2)(i) of

the PFS regulations if it indicates a source of

funding adequate to cover all proposed expenditures

and if the PHA has presented a FWP acceptable to HUD.

3-10. LETTER OF INTENT.

Special circumstances as described below may require

Headquarters to authorize Field Offices to obligate

operating subsidies or leased housing adjustment funds by

letter of intent (LOI) before an operating budget has been

approved.

a\. Circumstances in which using a LOI may be appropriate

include:

\(1\) When changes to the Performance Funding System

(PFS) Handbook 7475.13 are made that update the

PFS equation and inflation factors, but do not

allow PHAs with fiscal years beginning January 1

sufficient time to use the new factors in the

preparation and submission of their Operating

Budgets. In this case, Field Offices may be

authorized to use a letter of intent as an

obligating document in lieu of an approved

Operating Budget for these PHAs. Detailed

instructions for the use of a LOI in this

situation will be provided by Headquarters.

\(2\) When there is the need to assure the timely

obligation of funds before the end of the Federal

Fiscal Year (FFY). In this case, all operating

subsidy eligibility, estimated eligibility and

adjustments to eligibility, for all PHAs with

fiscal years beginning January 1, April 1, July

1, and October 1 of the current FFY must be

obligated by September 30th. Specific authority

will be provided by Headquarters.

\(3\) When a PHA has been designated as a Financially

Troubled (FT) PHA and has not prepared and/or

submitted an approvable FWP or in some other way

cannot have its

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Operating Budget approved because of failure to

meet requirements of the Troubled Public Housing

Agency Handbook, 7475.14.

b\. The amount of funds requested should be based on:

\(1\) For operating subsidy requests in which the PHA

is not a Low Occupancy PMA, the PHA\'s last

approved operating subsidy eligibility, as

reflected on Line O3 of Form HUD 52721, Direct

Disbursement Payment Schedule Data-Operating

Subsidy, excluding any utility and other prior

year adjustments, increased by the PFS inflation

factor issued for the requested budget year. If

the last approved budget was not for the current

year, then the last approved eligibility amount

will be increased sequentially by each inflation

factor issued since the last approved budget.

\(2\) For operating subsidy requests for a Low

Occupancy PHA without an approved Comprehensive

Occupancy Plan, the last approved operating

subsidy eligibility should be recalculated using

97% as the occupancy percentage before increasing

the amount by the PFS inflation factor issued for

the RBY.

\(3\) For lease adjustment funds requests, the

estimated amount required for routine operating

costs and rents to owners not covered by Basic

Annual Contributions.

c\. Procedures for requesting use of a LOI. Approval to

use a LOI must come from the Assistant Secretary for

Public and Indian Housing. A Field Office should

request authorization to use a LOI in writing through

the Regional Administrator. Upon receipt,

Headquarters will consider authorization to obligate

by LOI and pay operating subsidy Funds. All requests

for authorization to use LOI must contain the

following information:

\(1\) The name of the PHA, ACC number, project

number(s), how the requested amount of the

subsidy to be obligated was calculated, Federal

fiscal year and the PHA fiscal year.

\(2\) A written justification explaining why a LOI is

needed. The narrative should refer to any steps

taken, or that will be taken, to obtain an

approvable operating budget.

3-11. DISTRIBUTION OF APPROVED BUDGET DOCUMENTS.

a\. The Approved Operating Budget and supporting documents

shall be distributed as follows:

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\(1\) A complete set to the PHA, with original

signatures.

\(2\) One copy of the complete set to the Field Office

files.

\(3\) One copy of the complete set to Administrative

and Management Services Division, Office of

Public and Indian Housing, PFA, Headquarters.

\(4\) One copy of the complete set to the Director

of Public Housing, Regional Office.

\(5\) One copy of the Form HUD-52564, with original

signatures of both the PHA and the HUD offical

along with one copy of the Form HUD-52721, with

original signature of the HUD offical to the

Director, Regional Accounting Division.

\(6\) One copy of the Form HUD-52564 to Director,

Subsidized Housing Program Division, AFGH, Office

of Finance and Accounting.

NOTE: PHAS ARE REQUIRED TO SUBMIT AN ORIGINAL AND 2

COPIES OF BUDGET DOCUMENTS FOR REVIEW AND APPROVAL

(SEE CHAPTER 2 PARAGRAPH 2-12)

b\. If a letter-of-intent is issued to obligate operating

subsidy, it shall be distributed as follows:

\(1\) The original letter to the PHA.

\(2\) One copy to the Field Office files.

\(3\) One copy to the Director, Regional Accounting

Division, with an original signature.

c\. If a PHA is in the PFS Monitoring System sample, one

copy of HUD-52564 and the PFS Worksheets shall be sent

to Financial Management and Occupancy Division, Office

of Public Housing, Headquarters. See Performance

Funding System Handbook 7475.13, Paragraph 19 and

Appendix 22, for instructions and a list of PHAs in

this sample.

3-12. ABSENCE OF AN APPROVED OPERATING BUDGET.

If a PHA begins its fiscal year without an approved budget,

all expenditures must be limited to the Total Routine

Expenses Line 600 included in the latest approved budget or

budget revision.

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3-13. ADVANCE FIELD OFFICE APPROVAL OF INDIVIDUAL ITEMS.

a\. A PHA may at any time request advance Field Office

approval of individual items immediately necessary for

the operation of its program which, in its opinion,

would probably result in an overrun of any controlled

account in its approved consolidated budget. Advance

Field Office approval of such items shall constitute a

commitment to approve a subsequent budget or budget

revision incorporating such items and increasing the

authorized total expenditures in any controlled

account by the amount necessary to avoid an overrun,

up to but not exceeding, the amounts approved. In the

case of increases in the HUD-determined prevailing

wage rates, the approved Form HUD-52158, Maintenance

Wage Rate Determinations, shall represent Field Office

approval for such increases.

b\. No request for advance Field Office approval is

necessary for the types of expenditures listed in

Chapter 2, Paragraph 2-14. Expenditures over the

approved budget caused solely by these items are

exempted as budget overruns. However, in the event a

budget revision is prepared due to other overruns in

controlled accounts, the revision should also include

any known increases in these items.

3-14. UNCOMPLETED OR DEFERRED WORK ITEMS OF EXTRAORDINARY

MAINTENANCE OR BETTERMENTS AND ADDITIONS.

In the case of Extraordinary Maintenance or Betterments and

Additions, approved work items authorized in the previous

year\'s budget may be completed or accomplished during the

current year even though such items are not specifically

included in the current year\'s budget. This authorization,

to complete or accomplish carryover work, does not

eliminate the need to reflect the items in a subsequent

year\'s budget. If in the subsequent year additional funds

are required to complete the budget carryover work, a

budget revision increasing the total amount approved for

the particular controlled account must be prepared and

approved prior to the end of the fiscal year. The above

provisions provide flexibility in the handling of

contracts, in cases where the required work 15 contracted

for in one fiscal year but cannot be completed until the

following fiscal year.

3-15. INELIGIBLE EXPENDITURES, MANAGEMENT STAGE, LOW-INCOME

PUBLIC HOUSING PROGRAM.

a\. Purpose. This paragraph outlines the policy of the

Department of Housing and Urban Development (HUD) with

respect to ineligible expenditures made by PHAs. It

also prescribes the actions to be taken by Field

Offices in the event that ineligible expenditures are

made by a PHA.

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b\. Policy.

\(1\) A PHA expenditure which is in violation of existing

statutes, the ACC or HUD regulations, or the result of

fraudulent activity by the PHA, is an ineligible

expenditure of the PHA\'s low-income housing programs.

\(2\) The Field Office shall review PHA reports, field audits,

field reviews, investigations or other pertinent data, to

assure that all expenditures are proper.

\(a\) If it is initially determined that a PHA expenditure

is ineligible, the Field Office shall immediately

notify the PHA of such determination and request the

PHA to (1) submit additional information or

documentation, (2) justification of the expenditure or

\(3\) make restitution to the program of the amount

found to be ineligible.

\(b\) If a final determination is made that an expenditure

is ineligible and the PHA fails to make full

restitution of the amount involved, the Field Offices

shall instruct the PHA to record the amount as a debit

to Account 1620, Undistributed Debits-Ineligible

Expenditures, and as a credit to either the expense

account(s) to which the expenditure was initially

charged or to Account 6010 - Prior Year Adjustments.

\(3\) Annual Reporting. Any ineligible expenditure shall remain

on the PHA\'s books of account and shall be reported

annually in its statements as a balance sheet item until

restitution is made or its elimination is authorized by

HUD.

3-13

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

Handbook

EXHIBIT 3-1 PAGE 1 OF 6

PHA FINANCIAL PERFORMANCE STANDARDS WORKSHEET

FOR FINANCIAL ANALYST (FA)

GENERAL DIRECTION. The following table Illustrates for each

Financial Performance Standard, the Forms to be used in determining

if the Standard has been met, the period of time the data on the Form

should cover and the time the Form would normally be submitted to the

Field Office.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

FINANCIAL PERFORMANCE FORM(s) PERIOD OF DATE FORM IS

STANDARD USED TIME COVERED SUBMITTED TO

FIELD OFFICE

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_

#1. Operating Reserves HUD-52599 1 Immediate 1/45 days

exclusive of Tenants HUD-52722B 2 Past Fiscal after close of

Accounts Receivable HUD-52721A 2 Year fiscal year 2/

(TARS), are at least 30 days after

30% of Maximum receipt of HDD

Operating Reserves. (Generally

will be rec\'d

90 to 120 days

after the PHA

fiscal year

ends)

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

#2. Operating Expenses are HUD-52599 Immediate 45 days after

less than or equal to Past Fiscal close of

Income. Year fiscal year

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

#3. Annual utility HUD-52722B 2 Immediate 30 days after

consumption as Past Fiscal receipt of HDD

compared to the three Year (Generally

years\' rolling base will be rec\'d

consumption which has 90 to 120 days

been adjusted for after the PHA

variances in heating fiscal year

degree days (HDD) has ends)

not increased by more

than five percent.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

#4. PHA is a High HUD-52728A Current With Operating

Occupancy PHA or is HUD-52728C Fiscal Year Budget for

meeting occupancy (if under current fiscal

goals of an approved a COP) year

Comprehensive

Occupancy Plan (COP).

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

#5. Tenants Accounts HUD-52295 Immediate 45 days after

Receivable for Tenants Past Fiscal the semiannual

in Possession Year and annual

(excluding amounts reporting

covered by formal up- period.

to-date repayment

agreement) are less

than 10% of total

charges.

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Previous Edition May Be Used 3-14 HUD-21D (10-68)

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

Handbook 7475.1 REV.

EXHIBIT 3-1 PAGE 2 OF 6

PHA FINANCIAL PERFORMANCE STANDARDS WORKSHEET

FOR FINANCIAL ANALYST (FA)

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year
Ending \_\_\_\_\_\_\_\_\_\_\_\_\_\_

FINANCIAL PERFORMANCE STANDARD NUMBER ONE

OPERATING RESERVES EXCLUSIVE OF TENANTS ACCOUNTS RECEIVABLE (TARS)

ARE AT LEAST 30% OF MAXIMUM OPERATING RESERVES.

1\. Operating Reserve. (Line 790, Form

HUD-52599, Statement of Operating Receipts

and Expenditures) \$\_\_\_\_\_\_\_\_\_\_\_\_

2\. Accounts Receivable. (Line 810 plus

Line 820, Form HUD-52599) \$\_\_\_\_\_\_\_\_\_\_\_\_

3 Line 1 minus Line 2 \$\_\_\_\_\_\_\_\_\_\_\_\_

4\. Increase or (decrease) to operating

reserve for Year end adjustment to

utilities. (Line 22, Form HUD-52722-B,

Adjustment for Utility Consumption

and Rates) \$\_\_\_\_\_\_\_\_\_\_\_\_

5\. Increase or (decrease) to operating

reserve for Year end adjustment to

interest earnings. (Line 11, Form

HUD-52721A Calculation of Performance

Funding System Operating Subsidy, Target

Investment Income portion only) \$\_\_\_\_\_\_\_\_\_\_\_\_

6\. Increase or (decrease) to operating

reserve for Year end adjustment to

audit expenses. (Line 3, Form HUD-52721A) \$\_\_\_\_\_\_\_\_\_\_\_\_

7 Adjusted Operating Reserve (Add Line 3 plus

increase or (decrease) of Lines 4, 5, and 6) \$\_\_\_\_\_\_\_\_\_\_\_\_

8\. Maximum Operating Reserve approved

(Line 800, Form HUD-52599) \$\_\_\_\_\_\_\_\_\_\_\_\_

9\. 30 Percent of Maximum Operating Reserve

approved. (Line 8 times .30) \$\_\_\_\_\_\_\_\_\_\_\_\_

10\. Is amount on Line 7 greater than or equal to

amount on Line 9? yes\_\_\_\_ no\_\_\_\_

3-15

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

7475.1 REV. Handbook

EXHIBIT 3-1 PAGE 3 OF 6

PHA FINANCIAL PERFORMANCE STANDARDS WORKSHEET

FOR FINANCIAL ANALYST (FA)

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year
Ending\_\_\_\_\_\_\_\_\_\_\_\_\_\_

FINANCIAL PERFORMANCE STANDARD NUMBER TWO

OPERATING EXPENSES ARE LESS THAN OR EQUAL TO INCOME.

1\. Total Operating Receipts Exclusive Of

HUD Contributions. (Line 170, Form

HUD-52599, Statement of Operating Receipts

and Expenditures) \$\_\_\_\_\_\_\_\_\_\_\_\_

2\. Contributions Earned - Operating Subsidy:

Current Year. (Line 720, HUD-52599) \$\_\_\_\_\_\_\_\_\_\_\_\_

3\. The portion of the adjusted operating reserve

above 30% of the maximum operating reserves

exclusive of Tenants Accounts Receivable

(TARs), may be counted as income.

(see Financial Performance Standard Number One,

Line 7 minus Line 9) \$\_\_\_\_\_\_\_\_\_\_\_

4\. Total income (Add Lines 1, 2, and 3) \$\_\_\_\_\_\_\_\_\_\_\_

5\. Total routine expenses. (Line 520,

Form HUD-52599) \$\_\_\_\_\_\_\_\_\_\_\_

6\. Total income minus routine expenses

(Line 4 minus Line 5) \$\_\_\_\_\_\_\_\_\_\_

7\. Is amount on Line 6 greater than or equal

to zero? yes\_\_\_\_ no\_\_\_\_

3-16

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

Handbook 7475.1 REV.

EXHIBIT 3-1 PAGE 4 OF 6

PHA FINANCIAL PERFORMANCE STANDARDS WORKSHEET

FOR FINANCIAL ANALYST (FA)

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year Ending
\_\_\_\_\_\_\_\_\_\_\_\_\_\_

FINANCIAL PERFORMANCE STANDARD NUMBER THREE

ANNUAL UTILITY CONSUMPTION, AS COMPARED TO THE AVERAGE OF THE

PREVIOUS THREE YEARS\' ROLLING BASE CONSUMPTION, WHICH HAS BEEN

ADJUSTED FOR VARIANCES IN HEATING DEGREE DAYS (HDD) HAS NOT INCREASED

BY MORE THAN FIVE PERCENT.

1\. Total Actual Utilities in fiscal year

for which adjustment is Requested.

(Line 13, col. 3, Form HUD-52722B, Adjustment

for Utility Consumption and Rates) \$\_\_\_\_\_\_\_\_\_\_\_\_

2\. Costs of Estimated Consumption at Average

Rate adjusted for the HDD of Rolling Base

Period (RBP) for PHA fiscal years indicated

above. (Line 17, col. 3, Form HUD-52722B) \$\_\_\_\_\_\_\_\_\_\_\_\_

3 Actual Utility Consumption divided by Base

Consumption (Line 1 divided Line 2) \_\_\_\_\_\_\_\_\_\_\_\_%

4 Is the amount on Line 3 less than or equal

to 1.05? yes\_\_\_\_ no\_\_\_\_

3-17

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

7475.1 REV. Handbook

EXHIBIT 3-1 PAGE 5 OF 6

PHA FINANCIAL PERFORMANCE STANDARDS WORKSHEET

FOR FINANCIAL ANALYST (FA)

PHA\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year Ending
\_\_\_\_\_\_\_\_\_\_\_\_

FINANCIAL PERFORMANCE STANDARD NUMBER FOUR

PHA IS A HIGH OCCUPANCY PHA OR IS MEETING THE OCCUPANCY GOALS OF AN

APPROVED COMPREHENSIVE OCCUPANCY PLAN (COP).

1\. Is the PHA currently a High Occupancy PHA?

Has box 35, 35a or 35b been checked

on Form HUD-52728-A? If yes, skip to

Line 4 and check yes. yes\_\_\_\_\_ no \_\_\_

2\. If the PHA is currently a Low Occupancy PHA,

does it have an approved Comprehensive

Occupancy Plan (COP)?

If no, skip to Line 4 and check no. yes\_\_\_\_ no\_\_\_\_

3\. If the PHA has an approved COP, is it

meeting the occupancy goals of the Plan?

If Line 25 of Form HUD-52728-A for the current

year, is equal to or greater than Line 17

of Form HUD-52728-C for the equivalent Plan Year,

check yes on Line 4. If not, check no.

(Note: If appropriate, substitute Line 28

of Form HUD-52728-C for Line 17)

4\. Does the PHA meet this Financial

Performance Standard? yes\_\_\_\_\_ no\_\_\_\_

3-18

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

Handbook 7475.1 REV.

EXHIBIT 3-1 PAGE 6 OF 6

PHA FINANCIAL PERFORMANCE STANDARD WORKSHEET

FOR FINANCIAL ANALYST (FA)

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year
Ending \_\_\_\_\_\_\_\_\_\_\_\_

FINANCIAL PERFORMANCE STANDARD NUMBER FIVE

TENANTS ACCOUNTS RECEIVABLE FOR TENANTS IN POSSESSION (EXCLUDING

AMOUNTS COVERED BY FORMAL UP-TO-DATE REPAYMENT AGREEMENT) ARE LESS

THAN 10% OF TOTAL CHARGES.

1\. Percent of amount delinquent (excluding

amount covered by formal up-to-date

repayment agreement) to total charges.

(Section E, Item 5, column A of the annual

or semiannual Report of Tenants Accounts

Receivable, Form HUD-52295) \_\_\_\_\_\_\_%

Is the amount on Line 1 less than 10% ? yes\_\_\_\_\_ no\_\_\_\_\_\_

3-19

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

7475.1 REV. Handbook

EXHIBIT 3-2 PAGE 1 OF 4

SAMPLE: BUDGET CHECKLIST FORM LETTER

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Dear Executive Director:

This is to notify you that your budget package submitted for

Project(s) \_\_\_\_\_\_\_\_ for the FYE \_\_\_\_ is incomplete. When
items are

missing, there is a delay in completing the budget review and

approval process.

Please provide the materials (original and 2 copies) indicated

on the attached budget checklist within ten days after receipt of

this letter. No further processing will be done until the documents

have been received by this office.

If you have questions regarding the budget submission

requirements, please call \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

Sincerely,

Field Office Official

Attachment

3-20

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

Handbook 7475.1 REV.

EXHIBIT 3-2 PAGE 2 OF 4

FIELD OFFICE

OPERATING BUDGET CHECKLIST

Submission (Check one)

\_ \_ \_

\_ Original \_ Resubmission No. \_\_\_ \_ Revision No. \_\_\_

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
FYE\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

The documents as checked are missing from the Operating Budget

submission.

\_\_\_\_\_ a. HUD-52564 Operating Budget

\_\_\_\_\_ b. HUD-52566 Schedule of All Positions and Salaries

\_\_\_\_\_ c. HUD-52567 Schedule of Nonroutine Expenditures

\_\_\_\_\_ d. HUD-52571 Schedule of Administration Expense

Other Than Salaries

\_\_\_\_\_ e. HUD-52573 Summary of Budget Data and

Justifications

\_\_\_\_\_ f. HUD-52720 Funding Formula Data Collection Form

\_\_\_\_\_ g. HUD-52720A Worksheet No. I: Multiplications

\_\_\_\_\_ h. HUD-52720B Worksheet No. II: Calculating Variable

Products and Formula Expense Level

\_\_\_\_\_ i. HUD-52720C Worksheet No. III: Calculation of

Allowable Expense Level (First PFS

Year Only)

\_\_\_\_\_ j. HUD-52720D Worksheet No. IV: Calculating Revised

Allowable Expense Level

3-21

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

7475.1 REV. Handbook

EXHIBIT 3-2 PAGE 2 OF 4

FIELD OFFICE

OPERATING BUDGET CHECKLIST

Submission (Check one)

\_ \_ \_

\_ Original \_ Resubmission No.\_\_\_\_ \_ Revision No. \_\_\_

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ FYE
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

The documents as checked are missing from the Operating Budget

submission.

\_\_\_\_ a. HUD-52564 Operating Budget

\_\_\_\_ b. HUD-52566 Schedule of All Positions and Salaries

\_\_\_\_ c. HUD-52567 Schedule of Nonroutine Expenditures

\_\_\_\_ d. HUD-52571 Schedule of Administration Expense

Other Than Salaries

\_\_\_\_ e. HUD-52573 Summary of Budget Data and

Justifications

\_\_\_\_ f. HUD-52720 Funding Formula Data Collection Form

\_\_\_\_ g. HUD-52720A Worksheet No. I: Multiplications

\_\_\_\_ h. HUD-52720B Worksheet No. II: Calculating Variable

Products and Formula Expense Level

\_\_\_\_ i. HUD-52720C Worksheet No. III: Calculation of

Allowable Expense Level (First PFS

Year Only)

\_\_\_\_ j. HUD-52720D Worksheet No. IV: Calculating Revised

Allowable Expense Level

3-22

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

Handbook 7475.1 REV.

EXHIBIT 3-2 PAGE 4 OF 4

FIELD OFFICE

OPERATING BUDGET CHECKLIST

\_\_\_\_\_ y. List of Housing Manager and Assistant Housing

Manager Positions in accordance with Handbook

7460.2 dated 11/80, paragraph 24(b)

\_\_\_\_\_ x. Other
(comments):\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

3-23

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

7475.1 REV. Handbook

EXHIBIT 3-3 PAGE 1 OF 1

(To be used with Exhibit 2-1.)

SAMPLE: OPERATING BUDGET CHECKLIST FORM LETTER

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Dear Executive Director:

This is to notify you that the materials indicated under the

column marked \"Field Office Use\" were not received. Please review

the attached Operating Budget Checklist and submit (original and 2

copies) the required information within ten days of receipt of this

letter.

No further processing of your budget will be done until the

documents are received by this office. If you have questions

regarding the requirements for budget submission, please contact

your Housing Management Specialist, \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_or
your

Financial Analyst, \_\_\_\_\_ at \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

Sincerely yours,

Field Office Official

Enclosures

3-24

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

Handbook 7475.1 REV.

EXHIBIT 3-4 PAGE 1 OF 1

SAMPLE: DETAILED REVIEW FORM LETTER

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Dear \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_:

This is to advise you that in accordance with 24 CFR

990.112(c) future Operating Budgets and Operating Budget revisions

for \_\_\_\_\_\_\_\_\_ , Project No. \_\_\_\_\_\_\_\_\_\_\_\_ , will be
scheduled for a

detailed review by this Office. This determination has been made

for the following reason(s).

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

You will receive written notification when the limited

review is being reinstated. If you have questions concerning this

decision, please contact your Financial Analyst at
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_, or your Housing Management Specialist at
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_.

Sincerely,

Field Office Official

3-25

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

7475.1 REV.

EXHIBIT 3-5 PAGE 1 OF 60

BUDGET REVIEW PROCESS

Review Operating Budget (Form HUD-52564 for completeness i.e., FYE,

Projected Number(s), and Contract Number).

Review Operating Budget for mathematical accuracy.

Review items and information in budget for eligibility and

compliance with regulations.

Do amounts reported in columns 2 and 3 of Operating Budget agree

with the year end financial statements and/or latest approved

budget?

1\. Add Form HUD-52564, Operating Budget and calculate PUMs.

NOTES:

3-26

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

7475.1 REV.

EXHIBIT 3-5 PAGE 30 OF 60

HUD-52721A Form Approved

December 1976 OMB. No. 2577 - 0029

U.S. Department of Housing and Urban Development

Low-Income Housing

PHA-OWNED RENTAL HOUSING

Calculation of Performance Funding System Operating Subsidy

Public Housing Agency Submission:

\_\_ Original

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_ Revision No.\_\_\_

Unit Months Available Fiscal Year Ending Contract Number

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Line Requested Approved

No. Description by PHA by HUD

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(PUM) (PUM)

ALLOWABLE EXPENSES AND ADDITIONS:

01 Allowable Expense Level plus Transition

Funding, if applicable (See instructions.) \_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_

02 Utilities Expense Level (Line 12, form

HUD-52722A) \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

03 Estimated or Actual Cost of Biennial IPA

Audit Scheduled for Requested Year \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

04 Costs Attributable to Deprogrammed Units \_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_

05 Total Allowable Expenses and Additions

(Sum of Lines 01 thru 04) \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

DWELLING RENTAL INCOME

06 Estimated Dwelling Rental Income \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

07 Change Factor \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

08 Projected Dwelling Rental Income (Line 06 \_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_

x Line 07)

09 Average Occupancy Percentage \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

10 Estimated Dwelling Rental Income (Line 08 \_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_

x Line 09)

NON-DWELLING INCOME:

11 Interest on General Fund Investments \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

12 Other Income \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

13 Total Non-Dwelling Income (Line 11

plus Line 12) \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

14 TOTAL OPERATING RECEIPTS (Line 10 plus

Line 13) \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

OPERATING SUBSIDY CALCULATION

15 (Income) or Deficit PUM (Line 05 minus

Line 14) (See instructions.) \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

16 Unit Months Available \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

3-55

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

7475.1 REV.

EXHIBIT 3-5 PAGE 31 OF 60

BUDGET REVIEW PROCESS

\* Compare Line 23, Form HUD - 52721A with Lines 930-960 Form HUD -

52564\.

3-56

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7475.1 REV.

EXHIBIT 3-5 PAGE 32 OF 60

HUD-52721A Form Approved

December 1976 OMB. No. 2577-0029

Line Requested Approved

No. Description by PHA by HUD

(In Whole Dollars)

17 (Income) or Deficit Before Add-On

(Line 15 x Line 16) \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

18 Add-Ons to Allowable Expense Level

(See Instructions) \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

19 (Income) or Deficit after Add-Ons -

Subject Year (Line 17 plus or minus Line

18\) \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

20 Utilities Adjustment - Subject Year

(Line 22, Form HUD 52722B, See

Instructions) \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

21 (Income) or Deficit - After Utility

Adjustment (See Instructions) \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

22 Actual or Estimated Cost of Biennial

IPA Audit Scheduled for Subject Year \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

23 Operating Subsidy Eligibility (See

Instructions) \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

Note: Use Lines 24, 25, and 26 only if a

revision of HUD-52721A is being

submitted for a fiscal year prior

to the current year, to determine

the additional amount of operating

subsidy eligibility which could be

approved per adjustment, or the

amount of previously approved

operating subsidy which must be

recovered by HUD.

24 Previously Approved PFS Operating Subsidy

for Prior Fiscal Year (See Instructions) \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

25 Additional Amount of Operating Subsidy

Eligibility which could be due PHA

(See Instructions) \_\_\_\_\_\_\_ \_\_\_\_\_\_\_\_

26 Amount of Previously Approved Operating

Subsidy which Must be Recovered by HUD

(See Instructions) (\_\_\_\_\_\_) (\_\_\_\_\_\_\_)

3-57

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7475.1 REV. PAGE 33 OF 60

EXHIBIT 3-5

BUDGET REVIEW PROCESS

1\. The PFS Form HUD-52722B for utility adjustment now requires

changes to Line 16, HUD-52722B, to adjust space heating consumption

upward and downward by a factor. This factor is obtained by

dividing the Heating Degree Days (HDD) for the subject year into the

average HDD for the rolling base years. This adjustment cannot be

completed until the HDD factors have been made available to the PHA

by the Field Office.

2\. For projects with less than 12 months consumption (including

projects not substantially occupied for the 12 months) adjust Line

08, HUD-52722A, consumption figures as follows:

Eliminate the estimated consumption included on Line 08 for

the projects with less than 12 months experience before

including Line 09, HUD-52722A. On Line 16, HUD-52722B add

to Line 16 actual consumption for project where estimated

consumption was estimated.

3-58

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7475.1 REV.

EXHIBIT 3-5 PAGE 60 OF 60

BUDGET REVIEW PROCESS

Part VIII - Certification of Public Housing Agency/Indian Housing

Authority

Obtain signature of Deputy Director for Housing Management or

Manager, as applicable. Refer to General Delegations of Budget

Approval Authority, paragraph 3 - 7c.

3-85

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Financial Management

7475.1 REV. Handbook

EXHIBIT 3-6 PAGE 1 OF 6

OPERATING BUDGET LIMITED REVIEW CHECKLIST: PHA-OWNED RENTAL HOUSING

Submission (Check One)

\_ \_ \_

\_ Original \_ Resubmission No. \_\_\_ \_ Revision No. \_\_\_

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year
Ending \_\_\_\_

Date Rec\'d \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date to HMS
\_\_\_\_\_\_\_\_\_\_\_

45th Day \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date to Engineer
\_\_\_\_\_\_

Question Yes No N/A Remarks

General Budget

1\. Are all items listed on Operating

Budget Checklist included in budget

package submission? \_\_\_ \_\_\_ \_\_\_

(FA)

2\. Have all vacant deprogrammed units,

nondwelling units, and employee

units for which rent is not being

charged in accordance with 24 CFR 960,

been excluded from the calculation of

unit months? \_\_\_ \_\_\_ \_\_\_

(HMS FA)

3\. Has PHA been conducting annual reexams

in accordance with 24 CFR 960.209? If

not, refer to 24 CFR 990.115 for

conditions on subsidy payments. \_\_\_ \_\_\_ \_\_\_

(HMS)

4\. Has PHA been calculating rents

in accordance with 24 CFR 913? If not,

should operating subsidy be withheld? \_\_\_ \_\_\_ \_\_\_

(HMS)

3-86

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

Handbook 7475.1 REV.

EXHIBIT 3-6 PAGE 2 OF 6

OPERATING BUDGET LIMITED REVIEW CHECKLIST: PHA-OWNED RENTAL HOUSING

PHA\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year
Ending\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Questions Yes No N/A Remarks

General Budget (con\'t)

5\. If PHA has over 75 units, have all

required employees been certified

as Housing Managers? \_\_\_ \_\_\_ \_\_\_

(HMS)

6\. Does the budget include any illegal

or ineligible expenditures? \_\_\_ \_\_\_ \_\_\_

(HMS & FA)

7\. Has budget been reviewed (and corrected,

if necessary) for mathematical errors

or errors in application of accounting

procedures? \_\_\_ \_\_\_ \_\_\_

(FA)

PFS

1\. Is the PHA able to omit the submission

of Forms HUD-52720, HUD-52720A, and

HUD-52720B in accordance with HUD

Handbook 7475.13 Chg-15, Paragraph 23,

Simplification of the Delta? If no, are

historical data and PFS factors used on

these forms correct? \_\_\_ \_\_\_ \_\_\_

(FA)

2\. Have the PFS forms been reviewed and

found to be correct? \_\_\_ \_\_\_ \_\_\_

(FA)

3\. Has independent audit cost on Line 03

of Form HUD-52721A been verified? \_\_\_ \_\_\_ \_\_\_

(FA)

3-87

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Financial Management

7475.1 REV. Handbook

EXHIBIT 3-6 PAGE 3 OF 6

OPERATING BUDGET LIMITED REVIEW CHECKLIST PHA-OWNED RENTAL HOUSING

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year Ending
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Questions Yes No N/A Remarks

PFS (con\'t)

4\. What rent roll was used in calculating

estimated dwelling rental income (Line

06 of Form HUD-52721A) \_\_\_\_\_\_\_? Is it

correct? \_\_\_ \_\_\_ \_\_\_

(FA)

5\. Has average (projected) occupancy

percentage (Line 09 of Form

HUD-52721A) been calculated

in accordance with the vacancy rule? \_\_\_ \_\_\_ \_\_\_

(FA)

6\. Is Interest on General Fund Investments

(Line 11 of Form HUD-52721A) based on

estimated investment income

requirements? \_\_\_ \_\_\_ \_\_\_

(FA)

7\. Does PUM for Other Income agree with

budgeted amount for Excess Utilities

plus Nondwelling Rentals, plus

applicable Other Operating Receipts? \_\_\_ \_\_\_ \_\_\_

(FA)

8\. Does Line 16 of Form HUD-52721A agree

with the unit months used on the

Operating Budget? \_\_\_ \_\_\_ \_\_\_

(FA)

9\. Have all required adjustments been

processed? \_\_\_ \_\_\_ \_\_\_

a\. Utility, FYE \_\_\_\_ \_\_\_ \_\_\_ \_\_\_

b\. Investment Income, FYE \_\_\_\_ \_\_\_ \_\_\_ \_\_\_

c\. Audit, FYE \_\_\_\_ \_\_\_ \_\_\_ \_\_\_

(FA)

3-88

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Financial Management

Handbook 7475.1 REV.

EXHIBIT 3-6 PAGE 4 OF 6

OPERATING BUDGET LIMITED REVIEW CHECKLIST PHA-OWNED RENTAL HOUSING

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year Ending
\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Questions Yes No N/A Remarks

PFS (con\'t)

10\. Itemize Subsidy

a\. Current Year Eligibility \_\_\_\_\_\_\_\_\_\_\_

b\. Utility Adj. (FYE\_\_\_) \_\_\_\_\_\_\_\_\_\_\_

c\. Investment Income Adj. (FYE \_\_\_) \_\_\_\_\_\_\_\_\_\_\_

d\. Audit Adj. (FYE \_\_\_\_) \_\_\_\_\_\_\_\_\_\_\_

Other Adj. (Itemize and include any

offsets) \_\_\_\_\_\_\_\_\_\_\_

f\. Total Eligibility \_\_\_\_\_\_\_\_\_\_\_

(FA)

11\. Does Line 10 above agree with Line 960

of the Operating Budget? \_\_\_ \_\_\_ \_\_\_

(FA)

12\. Are the utility rates

shown on Form HUD-52722A

reasonable? \_\_\_ \_\_\_ \_\_\_

(Engineer)

13\. Are the applicable three years being

used on Lines 1, 2, and 3 on Form

HUD-52722A, in accordance with

Section 990.107 of the PFS regulations? \_\_\_ \_\_\_ \_\_\_

(Engineer)

14\. Are the utility rates and consumption

amounts shown on Form HUD-52722B

reasonable? \_\_\_ \_\_\_ \_\_\_

(Engineer)

3-89

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Financial Management

7475.1 REV. Handbook

EXHIBIT 3-6 PAGE 5 OF 6

OPERATING BUDGET LIMITED REVIEW CHECKLIST PHA-OWNED RENTAL HOUSING

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year
Ending \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Question Remarks

Operating Reserves

To determine the cash available in the operating reserve, and

analyze the relationship between the projected reserve balance and

the maximum reserve authorized, the following calculation should be

performed:

1\. Latest actual Operating Reserve (\_\_\_\_\_\_\_\_).
\$\_\_\_\_\_\_\_\_\_\_

date

2\. Sum of Projected increase or decrease

in operating reserve for current

budget year and requested budget year. \$\_\_\_\_\_\_\_\_\_\_

3\. Projected Operating Reserve for requested

budget year. (Line 1 plus Line 2) \$\_\_\_\_\_\_\_\_\_\_

4\. Maximum Operating Reserve authorized. \$\_\_\_\_\_\_\_\_\_\_

5\. Percentage of maximum (Line 3 divided

by Line 4). \_\_\_\_\_\_\_\_\_%

6\. Analyze projected cash flow utilizing Balance Sheet

(Form HUD-52595) for date shown in Line 1 as Follows:

Operating Reserve (Account 2820) \$\_\_\_\_\_\_\_

LESS:

Accounts Receivable (Accounts 1122-1145) \$\_\_\_\_\_\_\_

Advances (Accounts 1155-1157) \$\_\_\_\_\_\_\_

Deferred Charges (Account 1211-1290) \$\_\_\_\_\_\_\_

Total Reductions \$\_\_\_\_\_\_\_

Available Cash \$\_\_\_\_\_\_\_

ADD:

Projected Increase (Line 2 above ) \$\_\_\_\_\_\_\_

Projected Cash Available \$\_\_\_\_\_\_\_

(FA)

3-90

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Financial Management

Handbook 7475.1 REV.

EXHIBIT 3-6 PAGE 6 OF 6

OPERATING BUDGET LIMITED REVIEW CHECKLIST PHA-OWNED RENTAL HOUSING

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year Ending
\_\_\_\_\_\_\_\_\_\_\_

Financially or Operationally Troubled Gross Indicators (1,250 or

more dwelling units)

Questions Yes No N/A Remarks

1\. Does budget project an Operating Reserve

level of less than 20% of the maximum? \_\_\_ \_\_\_ \_\_\_

(FA)

2\. As Operating Reserve between 20

and 40% of the maximum? \_\_\_ \_\_\_ \_\_\_

(FA)

3\. Do vacancies exceed 3% of available

dwelling units, or are than 5 vacant

units after adjusting for on-schedule

modernization? \_\_\_ \_\_\_ \_\_\_

(HMS)

4\. Do accounts receivable from Tenants in

Possession exceed 10% of monthly rental

and other charges? \_\_\_ \_\_\_ \_\_\_

(HMS)

Recommendations:

\_ \_ \_

Approval \_ Approval \_ Approval \_

\_ \_ \_

Disapproval \_ Disapproval \_ Disapproval \_

\_ \_ \_

Modified Approval \_ Modified Approval \_ Modified Approval \_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

FA HMS Engineer

3-91

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Financial Management

7475.1 REV. Handbook

EXHIBIT 3-7 PAGE 1 OF 8

OPERATING BUDGET DETAILED REVIEW CHECKLIST

FINANCIAL ANALYST (FA)

Submission (Check One)

\_ \_ \_

\_ Original \_ Resubmission No. \_\_\_\_\_ \_ Revision No. \_\_\_\_

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year Ending
\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Date Rec\'d \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ 45th Day
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Questions Yes No N/A Remarks

General Budget

1\. Have all vacant deprogrammed units

nondwelling units, and employee

units, for which rent is not being

charged in accordance with 24 CFR 960

been excluded from the calculation

of unit months? \_\_\_ \_\_\_ \_\_\_

2\. Has Housing Management Specialist (HMS)

Detailed Review Checklist been received

and comments adhered to? \_\_\_ \_\_\_ \_\_\_

3\. Has Engineer\'s Detailed Review Checklist

been received and comments adhered to? \_\_\_ \_\_\_ \_\_\_

4\. Do amounts included in Columns 2 and 3

of Operating Budget agree with the year

end financial statements and/or latest

approved budget? \_\_\_ \_\_\_ \_\_\_

5\. If PHA has over 75 units, (excluding

Section 23) have all required

employees been certified as

Housing Managers? \_\_\_ \_\_\_ \_\_\_

3-92

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Financial Management

Handbook 7475.1 REV.

EXHIBIT 3-7 PAGE 2 OF 8

OPERATING BUDGET DETAILED REVIEW CHECKLIST

FINANCIAL ANALYST (FA)

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year Ending
\_\_\_\_\_\_\_\_\_\_\_\_

Questions Yes No N/A Remarks

General Budget (con\'t)

6\. Does the budget include any illegal or

ineligible expenditures? \_\_\_ \_\_\_ \_\_\_

7\. Has budget been reviewed (and corrected,

if necessary) for mathematical errors or

errors in application of accounting

procedures? \_\_\_ \_\_\_ \_\_\_

Operating Income

1\. Refer to PFS checklist for operating

income for PHAs under PFS. If budget

does not agree with PFS calculations on

Form HUD-52721A, is variance realistic

and justifiable? \_\_\_ \_\_\_ \_\_\_

Operating Expenditures

1\. If the PHA is under contract management,

does PUM for administration agree with

management fee in the management

contract? \_\_\_ \_\_\_ \_\_\_

2\. Are amounts budgeted for salaries and

positions reasonable? \_\_\_ \_\_\_ \_\_\_

3\. If the PHA has other HUD-aided or

nonaided programs, are prorations of

salaries and other administration

expenses to these programs reflected on

Forms HUD-52566 and 52571? \_\_\_ \_\_\_ \_\_\_

Is proration reasonable? \_\_\_ \_\_\_ \_\_\_

3-93

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Financial Management

7475.1 REV Handbook

EXHIBIT 3-7 PAGE 3 OF 8

OPERATING BUDGET DETAILED REVIEW CHECKLIST

FINANCIAL ANALYST (FA)

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year Ending
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Questions Yes No N/A Remarks

Operating Expenditures (con\'t)

4\. Has the PHA scheduled single audit

during the requested budget year? \_\_\_ \_\_\_ \_\_\_

5\. Are maintenance salaries in line with

(no less than) the latest approved

Maintenance Wage Rate Determination

(Form HUD-52158)? Effective date

of latest Form HUD-52158. \_\_\_ \_\_\_ \_\_\_

7\. Does Form HUD-52573 contain adequate

justification to support budgeted

amounts? \_\_\_ \_\_\_ \_\_\_

8\. Does PILOT (Line 520) equal 10%

of shelter rent? (Line 040 minus Line

390 times 10%). \_\_\_ \_\_\_ \_\_\_

Nonroutine Expenditures

1\. Are nonroutine expenditures explained in

sufficient detail on Form HUD-52567? \_\_\_ \_\_\_ \_\_\_

Other Expenditures

1\. Are amounts included in these line

items sufficiently explained? \_\_\_ \_\_\_ \_\_\_

Line 910 of Form HUD-52564 (Section 23)

1\. Does the Basic Annual Contribution

(Leased project) agree with the amount

in the latest approved Annual

Contributions Contract? \_\_\_ \_\_\_ \_\_\_

3-94

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Financial Management

Handbook 7475.1 REV.

EXHIBIT 3-7 PAGE 4 OF 8

OPERATING BUDGET DETAILED REVIEW CHECKLIST

FINANCIAL ANALYST (FA)

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year
Ending \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Questions Yes No N A Remarks

Other HUD Contributions

PFS

1\. Have the PFS Forms been reviewed and

found to be correct? \_\_\_ \_\_\_ \_\_\_

2\. Has independent audit cost on Line 03

of Form HUD-52721A been verified? \_\_\_ \_\_\_ \_\_\_

3\. What rent roll was used in calculating

estimated dwelling rental income (Line

06 of Form HUD-52721A) \_\_\_\_\_\_\_? Is it

correct? \_\_\_ \_\_\_ \_\_\_

4\. Has average (projected) occupancy

percentage (Line 09 of Form HUD-52721A)

been calculated in accordance with the

vacancy rule? \_\_\_ \_\_\_ \_\_\_

5\. Is Interest on General Fund Investments

(Line 11 of Form HUD-52721A) based on

estimated investment income

requirements? \_\_\_ \_\_\_ \_\_\_

6\. Does PUM for Other Income agree with

budgeted amount for Excess Utilities

plus Nondwelllng Rentals, plus Applic-

able Other Operating Receipts?

Are the amounts reasonable based on

past history? \_\_\_ \_\_\_ \_\_\_

3-95

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Financial Management

7475.1 REV. Handbook

EXHIBIT 3-7 PAGE 5 OF 8

OPERATING BUDGET DETAILED REVIEW CHECKLIST

FINANCIAL ANALYST (FA)

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year Ending
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Questions Yes No N/A Remarks

PFS (con\'t)

7\. Does difference in PFS and budgeted

other income represent income excluded

by PFS regulations? \_\_\_ \_\_\_ \_\_\_

8\. Does Line 16 of Form HUD-52721A agree

with the unit months used on the

operating budget? \_\_\_ \_\_\_ \_\_\_

9\. Have all required adjustments been

processed? \_\_\_ \_\_\_ \_\_\_

a\. Utility, FYE \_\_\_\_ \_\_\_ \_\_\_ \_\_\_

b\. Investment Income, FYE \_\_\_\_ \_\_\_ \_\_\_ \_\_\_

c\. Audit, FYE \_\_\_\_ \_\_\_ \_\_\_ \_\_\_

10\. Itemize Subsidy

a\. Current Year Eligibility \_\_\_\_\_\_\_\_\_\_\_

b\. Utility Adj. (FYE \_\_\_) \_\_\_\_\_\_\_\_\_\_\_

c\. Investment Income Adj. (FYE \_\_\_\_) \_\_\_\_\_\_\_\_\_\_\_

d\. Audit Adj. (FYE \_\_\_\_) \_\_\_\_\_\_\_\_\_\_\_

e\. Other Adj. (Itemize and include any \_\_\_\_\_\_\_\_\_\_\_

offsets) \_\_\_\_\_\_\_\_\_\_\_

\_\_\_\_\_\_\_\_\_\_\_

f\. Total Eligibility \_\_\_\_\_\_\_\_\_\_\_

3-96

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

Handbook 7475.1 REV.

EXHIBIT 3-7 PAGE 6 OF 8

OPERATING BUDGET DETAILED REVIEW CHECKLIST

FINANCIAL ANALYST (FA)

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year
Ending \_\_\_\_\_\_\_\_\_\_\_\_\_

Questions Yes No N/A Remarks

PFS (con\'t)

11\. Does Line 10 above agree with Line

960 of the Operating Budget? \_\_\_ \_\_\_ \_\_\_

12\. Are the utility rates and consumption

amounts shown on Form HUD-52722A

reasonable? \_\_\_ \_\_\_ \_\_\_

13\. Are the utility rates and consumption

amounts shown on Form HUD-52722B

reasonable? \_\_\_ \_\_\_ \_\_\_

Section 23

1\. Does operating subsidy agree with

subsidy requests? \_\_\_ \_\_\_ \_\_\_

NOTE: Subsidy should be the lesser of

the amount of the deficit shown on Line 920

or the amount necessary to keep reserves

at 40% of maximum.

Operating Reserves

To determine the cash available in the operating reserve, and

analyze the relationship between the projected reserve balance and

the maximum reserve authorized, the following calculation should be

performed:

1\. Latest actual Operating Reserve (\_\_\_\_\_\_). \$\_\_\_\_\_\_\_\_

date

2\. Sum of Projected increase or decrease

in operating reserve for current

budget year and requested budget year. \$\_\_\_\_\_\_\_\_\_

3-97

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

7475.1 REV. Handbook

EXHIBIT 3-7 PAGE 7 OF 8

OPERATING BUDGET DETAILED REVIEW CHECKLIST

FINANCIAL ANALYST (FA)

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year
Ending \_\_\_\_\_\_\_\_\_\_\_\_\_\_

Questions Yes No N/A Remarks

Operating Reserves (con\'t)

3\. Projected Operating Reserve for requested

budget year. (Line 1 plus Line 2) \$\_\_\_\_\_\_\_\_

4\. Maximum Operating Reserve authorized. \$\_\_\_\_\_\_\_\_

5\. Percentage of maximum (Line 3 divided

by Line 4). \_\_\_\_\_\_\_\_%

6\. Analyze projected cash flow utilizing Balance Sheet

(Form HUD-52595) for date shown in Line 1 as follows:

OPERATING RESERVE (Account 2820) \$\_\_\_\_\_\_\_\_\_

LESS:

Accounts Receivable (Accounts 1122-1145) \$\_\_\_\_\_\_

Advances (Accounts 1155-1157) \$\_\_\_\_\_\_

Deferred Charges (Account 1211-1290) \$\_\_\_\_\_\_

TOTAL Reductions \$\_\_\_\_\_\_\_\_

Available Cash \$\_\_\_\_\_\_\_\_

ADD:

Projected Increase (Line 2 above ) \$\_\_\_\_\_\_\_\_

Projected Cash Available \$\_\_\_\_\_\_\_\_

Financially or Operationally Troubled Gross Indicators (1,250 or

more dwelling units)

1\. Does budget project an Operating Reserve

level of less than 20% of the maximum? \_\_\_ \_\_\_ \_\_\_

2\. Is Operating Reserves between 20 and 40%

of the maximum. \_\_\_ \_\_\_ \_\_\_

3-98

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

Handbook 7475.1 REV.

EXHIBIT 3-7 PAGE 8 OF 8

OPERATING BUDGET DETAILED REVIEW SHEET

FINANCIAL ANALYST (FA)

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year Ending
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Question Yes No N/A Remarks

Financially or Operationally Troubled Gross Indicators (1,250 or

more dwelling units) (con\'t)

3\. Do vacancies exceed 3% of available

dwelling units or more than 5 vacant

units, after adjusting for on-schedule

modernization? \_\_\_ \_\_\_ \_\_\_

4\. Do accounts receivable from tenants in

possession exceed 10% of monthly rental

and other charges? \_\_\_ \_\_\_ \_\_\_

5\. Is the physical condition of units

deteriorating to a degree threatening

the long-term viability of the projects? \_\_\_ \_\_\_ \_\_\_

\_\_

Recommendation: Approval \_\_

\_\_

Disapproval \_\_

\_\_

Modified Approval \_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

FA Date

3-99

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

7475.1 REV. Handbook

EXHIBIT 3-8 PAGE 1 OF 3

OPERATING BUDGET DETAILED REVIEW CHECKLIST

HOUSING MANAGEMENT SPECIALIST (HMS)

Submission (Check One)

\_ \_ \_

\_ Original \_ Resubmission No. \_\_\_\_\_ \_ Revision No. \_\_\_

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year
Ending \_\_\_\_\_\_\_\_\_\_\_\_\_\_

Date to HMS \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date Due to FA
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Attached is the subject PHA\'s operating budget/budget revision.

Based on this budget and any additional information, please forward

your comments on the following items to the Financial Analyst.

1\. Has PHA been conducting annual reexams in accordance with 24 CFR

960.209? (If not, refer to 24 CFR 990.115 for conditions on

subsidy payments.)

2\. Has PHA been calculating rents in accordance with 24 CFR 913?

If not, is there a justifiable reason that subsidy should not be

withheld?

3\. Operating Receipts (Lines 010-060 of Form HUD-52564 and Form

HUD-52573)

\_\_ \_\_

The amounts budgeted are: Reasonable \_\_ Unreasonable \_\_

Comments:

3-100

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

Handbook 7475.1 REV.

EXHIBIT 3-8 PAGE 2 OF 3

OPERATING BUDGET DETAILED REVIEW CHECKLIST

HOUSING MANAGEMENT SPECIALIST (HMS)

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year Ending
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

4\. Administration (Lines 110-190 of Form HUD-52564, Forms HUD-

52573, HUD-52566 and HUD-52571)

\_\_ \_\_

The amounts budgeted are: Reasonable \_\_ Unreasonable \_\_

Comments:

5\. Tenant Services (Lines 210-290 of Form HUD-52564)

\_\_ \_\_

The amounts budgeted are: Reasonable \_\_ Unreasonable \_\_

Comments:

6\. Ordinary Maintenance and Operations (Lines 410-450 of Form HUD-

52564 and Form HUD-52573)

\_\_ \_\_

The amounts budgeted are: Reasonable \_\_ Unreasonable \_\_

Comments:

7\. Protective Services (Lines 460-490 of Form HUD-52564)

\_\_ \_\_

The amounts budgeted are: Reasonable \_\_ Unreasonable \_\_

Comments:

3-101

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

7475.1 REV Handbook

EXHIBIT 3-8 PAGE 3 OF 3

OPERATING BUDGET DETAILED REVIEW CHECKLIST

HOUSING MANAGEMENT SPECIALIST (HMS)

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year Ending
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

8\. General Expense (Lines 510-600 of Form HUD-52564 and Form HUD-

52573\)

\_\_ \_\_

The amounts budgeted are: Reasonable \_\_ Unreasonable \_\_

Comments:

9\. Rents to Owners of Leased Projects (Line 610 of Form HUD-

52564\)

\_\_ \_\_

The amounts budgeted are: Reasonable \_\_ Unreasonable \_\_

Comments:

10\. Nonroutine Expenditures (Lines 710-790 of Form HUD-52564, Forms

HUD-52573 and HUD-52567)

The items included and amounts budgeted are:

\_\_ \_\_

Reasonable \_\_ Unreasonable \_\_

Comments:

\_\_

Recommendation: Approval \_\_

\_\_

Disapproval \_\_

\_\_

Modified Approval \_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

HMS Date

3-102

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

Handbook 7475.1 REV.

EXHIBIT 3-9 PAGE 1 OF 3

OPERATING BUDGET DETAILED REVIEW CHECKLIST

ENGINEER

Submission (Check One)

\_ \_ \_

\_ Original \_ Resubmission No. \_\_\_\_\_ \_ Revision No. \_\_\_\_

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year Ending
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Date to Engineer \_\_\_\_\_\_\_\_\_\_\_\_ Date Due to FA
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Attached is the subject PHA\'s original operating budget/budget

revision. On the basis of your observations during the latest survey

and any other available information, please forward your comments on

the following items to the Financial Analyst.

1\. Excess Utilities - Line 020 of Form HUD-52564

The amount budgeted and supported on Form HUD-52673 is:

\_\_ \_\_

Reasonable \_\_ Unreasonable \_\_

Comments:

2\. Utility Allowances (Reference 24 CFR 965.470-480)

Current utility allowances have/have not been

calculated and revised in accordance with

24 CFR 965.470-480 and are

\_\_ \_\_

Reasonable \_\_ Unreasonable \_\_

Comments:

3-103

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

7475.1 REV. Handbook

EXHIBIT 3-9 PAGE 2 OF 3

OPERATING BUDGET DETAILED REVIEW CHECKLIST

ENGINEER

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year Ending
\_\_\_\_\_\_\_\_\_\_\_\_\_\_

3\. Utility Adjustment (Reference 990.107(d) to (f))

The rates and consumption amounts on Form HUD-52722A are:

\_\_ \_\_

Reasonable \_\_ Unreasonable \_\_

Comments:

4\. Ordinary Maintenance and Operation (Lines 410-450 of Form HUD-

52564 and Form HUD-52573)

Amounts budgeted for Labor, Materials and Contract Costs are:

\_\_ \_\_

Reasonable \_\_ Unreasonable \_\_

Comments:

5\. Nonroutine Expenditures (Lines 710-790 of Form HUD-52564 and

Forms HUD-52573 and HUD-52567)

Individual items included and amounts budgeted for

Extraordinary Maintenance, Replacement of Equipment,

Betterments and Additions and Other Nonroutine Expenditures are:

\_\_ \_\_

Reasonable \_\_ Unreasonable \_\_

Comments:

3-104

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Financial Management

Handbook 7475.1 REV.

EXHIBIT 3-9 PAGE 3 OF 3

OPERATING BUDGET DETAILED REVIEW CHECKLIST

ENGINEER

PHA \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Fiscal Year Ending
\_\_\_\_\_\_\_\_\_\_\_\_\_

\_\_

Recommendation: Approval \_\_

\_\_

Disapproval \_\_

\_\_

Modified Approval \_\_

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_

Engineer Date

3-105

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_