U.S. Department of Housing and Urban Development

H O U S I N G

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Special Attention of: Notice H 92-73 (HUD)

All Regional Administrators

All Regional Directors of Housing Issued: September 28, 1992

All Regional Contracting Officers Expires: September 30, 1993

All Field Office Managers
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All Chiefs, Property Disposition Cross References:

Branch Handbook 4310.5

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Subject: Monitoring Real Estate Asset Managers and Closing Agents

Prompt monitoring of Real Estate Asset Managers\' (REAMs) and

Closing Agents\' performance is essential to protect HUD\'s

interests and to ensure compliance with contract requirements and

performance schedules. Current procedures in Property

Disposition Handbook 4310.5, Paragraphs 7-8 and 8-10 Item D-1,

that address the monitoring of third party contracts, do not

always provide timely detection of problems and are resource

intensive. The purpose of this Notice is to advise Offices of

the need for further improvement in the area of monitoring REAMs

and Closing Agents and announce changes to the above referenced

Handbook paragraphs that are to be implemented immediately.

REVIEWS OF REAMs

At the Chief Property Officer\'s discretion, Senior Realty

Specialists and/or the GTR may be delegated the responsibility to

conduct annual reviews of the REAM\'s performance. Field Offices

are to use the attached format, Guide For Monitoring of Real

Estate Asset Managers, when conducting these reviews.

Bi-monthly on-site reviews are no longer required. Field

Offices are to determine the frequency of on-site reviews by

using risk ranking factors to establish priorities for monitoring

REAMs. This risk based system will also ensure that limited

review resources are targeted toward poorly performing, high risk

REAMs. The risk based system coupled with the 10 percent monthly

property inspections which is outlined in Paragraph 8-11 F. of

the Property Disposition Handbook, will assist in providing

tighter internal controls in the detection and prevention of

fraud, waste and mismanagement by REAMs.

Field Offices are to assign a risk ranking to each REAM

contract to indicate either high, moderate or low risk. Results

from prior reviews, untimely performance, excessive costs, volume

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HSIP : Distribution: W-3-1, W-2(OGC)(H)(Z),W-3(A)(H)(ZAOO), W-4(H),R-1,

R-2, R-3, R-3-1(H)(RC),R-3-2,R-3-3,R-6,R-6-1,R-6-2,

R-7,R-7-1, R-7-2, R-8, R-8-1

Previous Editions Are Obsolete HUD 21 B(3-80)

GPO 871 902

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of properties being managed and the sales turnover rate for

properties managed by each REAM should be used to determine the

frequency of reviews by using the following scale:

Risk Ranking Frequency of Review

High Monthly

Moderate Quarterly

Low Semi-annually

To determine the REAM\'s rating status, within 60 days after

contract award, the Field Office must conduct an initial

monitoring review using the attached monitoring guide. All

existing REAM contracts must be reviewed within 60 days after

receipt of this Notice. Within five (5) working days of review,

forward a fully executed copy of the report to the REAM. All

monitoring reviews must be documented in the REAM\'s individual

file to support follow-up reviews or contract termination as well

as recommendations to extend under the contract option clause.

File documentation shall consist of all instructions, guidance or

monitoring provided to the REAM during the life of the contract.

Oral communication regarding deficiencies or performance

improvement must be documented with a memorandum to the file.

CPOs must see that performance deficiencies are corrected in a

timely manner and, as appropriate, recommend administrative

sanctions or termination for default. Unacceptable performance

with proper documentation can result in termination of the

contract.

Field Offices are to develop a control log to record overall

results of REAM reviews and include target dates for follow-up

reviews for the purpose of ensuring that corrective action has

been taken to resolve any noted deficiencies. CPOs or designees

are responsible for data entries. The control log must be

maintained and include at least the following information:

REAM\'s Name Contract Number

Award Date Date Review Scheduled

Actual Review Date Review Performed By

Overall Rating Number of Findings

Date of Follow-Up Review Number of Cleared Findings

Date of Cure Notice Termination Date

Headquarters will monitor Field Office\'s performance

through the FY 1993 Field Management Plan. Regional Offices will

continue to have the responsibility of following up on a regular

basis to assure that Field Offices are consistently and uniformly

monitoring REAMs. To ensure that this task is being performed,

Headquarters will continue to review Regional Office\'s oversight

actions through our Regional Reviews.

In implementing risk analysis, Field Offices may give

factors various weights or counts as deemed appropriate. CPOs

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are to use the following definitions in developing the ranking

factors for REAMs and may add additional criteria as deemed

appropriate.

High Risk - REAM\'s performance is unsatisfactory, but has a

possibility of improvement. Performance is characterized by the

following:

\- Requirements in the REAM\'s contract are frequently not

complied with.

\- Findings from prior review(s) remain outstanding.

\- REAM consistently provides untimely performance and

newly acquired properties are rarely inspected within

48 hours.

\- Information required of the REAM, such as the 9516-A,

vendor invoice and related SAMS forms are frequently

not provided in a timely or accurate manner.

\- The REAM is frequently not preparing properties for

sale in a timely manner.

\- Excessive complaints are received regarding condition

of properties

\- Inventory turnover (i.e., property sales) is not

occurring in a reasonable time period.

\- Properties are not sold in a reasonable timeframe

resulting in higher than acceptable turnover rate.

\- Repairs are excessive and exceeds budgeted repair cost

or are not cost effective.

\- The REAM is unable to adequately maintain the

properties in required condition and is incurring

higher than normal maintenance and operating costs.

\- Subcontractors\' prices are not justified and where

appropriate, subcontractors are not being rotated.

\- Operating controls over the REAM\'s property management

function and fiscal procedures are not in place.

\- The Ream requires constant supervision to resolve

complaints and conflicts from both outside parties and

the Department\'s personnel.

Moderate Risk - REAM\'s performance is exhibiting signs of

deterioration, requiring additional monitoring and control.

Performance is characterized by the following:

\- Requirements in the REAM\'s contract have not been

consistently complied with.

\- Findings from prior review(s) on occasion are not

resolved in a timely manner.

\- REAM periodically provides untimely performance and

occasionally newly acquired properties are not

inspected within 48 hours.

\- Information required of the REAM, such as the 9516-A,

vendor invoice and related SAMS forms have periodically

not been provided in a timely and accurate manner.

\- The REAM is periodically not preparing properties for

sale in a timely manner.

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\- Few complaints are received regarding the condition of

properties.

\- Inventory turnover (i.e., property sales) is

demonstrating adverse trends.

\- Properties are periodically sold in an undesirable

timeframe resulting in a less than acceptable turnover

rate.

\- Repairs have been periodically excessive and not within

the budgeted repair cost or cost effective.

\- Concern exists as to whether the REAM is adequately

maintaining the properties in required condition and is

incurring higher than normal maintenance and operating

costs.

\- Subcontractors\' prices are periodically not being

justified and where appropriate, subcontractors are

rotated.

\- Operating controls over REAM\'s property management

function and fiscal procedures are in place but not

effective.

\- The Ream requires increasing supervision to resolve

complaints and conflicts from both outside parties and

the Department\'s personnel.

Low Risk - REAM\'s performance is an acceptable level of risk.

Performance is characterized by the following:

\- Requirements in the REAM\'s contract are consistently

complied with.

\- Findings from prior review(s) are resolved in a timely

manner.

\- REAM provides timely performance and newly acquired

properties are inspected within 48 hours of

acquisition.

\- Information required of REAM, such as the 9516-A,

vendor invoice and related SAMS forms have been

provided in a timely and accurate manner.

\- The REAM prepares properties for sale in a timely

manner.

\- Complaints are rarely received regarding the condition

of properties.

\- Inventory turnover (i.e., property sales) is occurring

in a reasonable time period.

\- Properties are sold within the projected timeframe

resulting in an acceptable turnover rate.

\- Repairs are in accordance with outstanding instructions

and within budgeted repair cost and are cost effective.

\- The REAM is adequately maintaining the properties in

required condition and is incurring acceptable

maintenance and operating costs.

\- Subcontractors, prices are justified and where

appropriate, subcontractors are being rotated.

\- Operating controls over the REAM\'s property management

function and fiscal procedures are in place and

effective.

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\- The REAM requires minimal supervision to resolve

complaints and conflicts from both outside parties and

the Department\'s personnel.

When performing on-site reviews and property inspections,

focus on problem indicators by utilizing reports from the Single

Family Accounting Management System (SAMS). Poorly performing

REAM should be targeted for more frequent and more thorough

reviews. Prior to scheduled reviews, retrieve all SAMS reports

that are necessary. Review previous months SAMS reports to

determine if a pattern of weakness has developed.

Desk Monitoring

To monitor problem areas the table below provides a

cross-reference between problem indicators related to REAM

performance and reports that are available through SAMS. In

order for these reports to be effective, SAMS input must be

maintained and updated on a daily basis. Reports which enable

such monitoring of REAMs include:

===========================================================================

POTENTIAL SAMS REPORTS/PERFORMANCE MEASUREMENT DATA

PROBLEM AREAS

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REAM does not Inspection Reports not Received (OC/RP/IR)

complete initial - Provides information on habitability inspections

physical inspection requested of REAMs but not yet received.

report, HUD 9516-A

on a timely basis.

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REAM does not Cases Failing Critical Path Reports (DM/RP/CP)

prepare property for - Identifies cases remaining in the pipeline for

sale in a timely an excessive period of time.

manner.

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Repair costs needed Repair Costs by Repair Program Report (DM/RP/CP)

to prepare a - Lists Contractors from a selected repair trade

property for sale for a specified entity indicating their order of

exceeds approved use.

budgeted repair

costs.

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REAM is not rotating Contractor Rotation History Report (AP/RP/CR)

contractors. - Lists Contractors from a selected repair trade

for a specified entity indicating their order of

use.

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REAM is not Cases Listed But Unsold Report (DM/RP/US) - Lists

maintaining properties listed for sale but are unsold after 15

property, resulting days from the date listed and the number of days

in property not they have been listed. From 16-30 and over 30

selling. days, report also lists number of times

properties are reanalyzed.

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Invoices submitted Monthly REAM Billings Report (ME/RP/AM) - To

by the REAM are not verify the accuracy of the REAM\'s monthly invoice

accurate. for management services.

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Extensive repairs Profit/Loss Report by Acquisition Cost (DM/RP/PL)

not cost effective. - Provides a summary of the dollar amount spent

on a property from acquisition to sales closing.

===========================================================================

To assist Field Offices with monitoring, Headquarters is

making a revision to the REAM solicitation format issued under

Notice H 91-12 dated February 6, 1991. In this revision, REAMs

will be required to submit photographs with repair specifications

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prior to work authorization and to submit photographs upon

completion of repairs to accompany the invoice for payment. Do

not implement this requirement until the revision has been

received. Field Offices are to continue to use forms HUD-9529

and 9537 when monitoring the existing AMB contracts. These forms

will become obsolete when the last AMB contract expires or is

terminated.

REVIEW AND MONITORING OF CLOSING AGENTS

Through use of various SAMS reports, and with the clear

understanding that monitoring, as outlined below, will be

followed regularly, and increased where individual situations

warrant, the requirement for bi-monthly on-site reviews of

closing agents by HUD staff may be altered according to the

following:

Desk Monitoring

Reports available through SAMS must be utilized at least

monthly to monitor all aspects of the closing process,

including the contract closing agents. Obviously, to be of

benefit, SAMS must be maintained on an absolutely updated

basis at all times. Among the closing functions which

should be monitored by this means, and the standard SAMS

reports which enable such monitoring, are:

===========================================================================

REVIEW OBJECTIVE SAMS REPORTS/PERFORMANCE MEASUREMENT DATA

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Timely closing Delayed Sales Closing Report (CM/DC) - Provides a

listing of delayed closings and any identified

reasons for the delays.

Closing Agent Monthly Summary Report (DM/MS)

\- Provides a summary of all cases out to closing

for a given month, including the number assigned,

closed and on hand at the end of the month, and

the average number of days needed to close cases

during the current and previous months.

Closing Agent Inventory Report (DM/CA) - Lists

cases assigned to closing agents; provides Step

8 date, scheduled closing date, extension date,

and number of days beyond the scheduled closing

date.

Cases Failing Processing Steps (DM/CP)

\- Identifies cases remaining in processing

pipeline beyond specified time parameters for DM

steps.

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Timely and full Unmatched Sales Proceeds (CL/UM) - Displays cases

submission of sales in Step 8 or less which have sales proceeds

proceeds. recorded by wire transfer.

Unreconciled Sales Closing Report (DM/UR) - Lists

the cases which are unreconciled and displays

reasons therefor, including those instances where

no sales proceeds are received.

Closing Agent Performance Report (DM/MC) - Tracks

the amount of time it takes the closing agent to

wire the proceeds for each closing.

Sales Closing Performance Report (ME/SC)

\- Provides the average number of workdays from

date of closing to date sales proceeds were wire

transferred.

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Timely submission of Closing Agent Performance Report (DM/MC) - Tracks

closing package. the amount of time it takes the closing agent to

submit the closing package to HUD for each

closing.

Sales Closing Performance Report (ME/SC)

\- Provides the average number of workdays from

date of closing to date HUD received sales closing

package.

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On-Site Monitoring

The requirements of Handbook 4310.5, REV-1, paragraph 7-8, are to

be followed when conducting the monitoring of closing agents.

The above SAMS reports will assist Field Offices in regular

on-going desk monitoring. Additionally, on-site reviews shall be

conducted according to the following:

The below ranking factors are to be used in determining the

required frequency of on-site reviews of closing agents, although

additional criteria may be added as appropriate:

High Risk - Closing Agent\'s performance is unsatisfactory, but

has a possibility of improvement. Relationship is characterized

by the following;

\- Contract requirements frequently are not complied with.

\- Results from prior review(s) remain outstanding.

\- Consistently provides untimely performance with regard

to wire transfer of funds and submission of closing

packages.

\- Frequently is not establishing settlement dates in a

timely manner.

\- Complaints frequently are received regarding

performance responsibilities.

\- Closings frequently are not conducted within the

required timeframe.

\- Weekly status reports frequently are not provided in an

accurate and timely manner.

\- Frequently fails to represent the Department at third

party closings.

\- Frequently does not handle extensions of closing dates

in satisfactory manner.

\- Frequently does not maintain case files in accordance

with contract requirements.

\- Requires constant supervision to resolve complaints and

conflicts from both outside parties and the

Department\'s personnel.

Moderate Risk - Closing agent\'s performance is exhibiting signs

of deterioration, requiring additional monitoring and control.

Performance is characterized by the following:

\- Contract requirements have not been consistently

complied with.

\- Results from prior review(s) on occasion are not

complied with.

\- Periodically provides untimely performance with regard

to wire transfer of sales proceeds and submission of

closing packages.

\- Periodically not establishing settlements in a timely

manner.

\- Weekly status reports periodically are not provided in

a timely and accurate manner.

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\- Few complaints are received regarding performance.

\- Periodically fails to represent the Department at third

party closings.

\- Requires increasing supervision due to concerns with

performance required by the contract.

Low Risk - Closing agent\'s performance is an acceptable level of

risk. Performance is characterized by the following:

\- Contract requirements are consistently complied with.

\- Results from prior review(s) are handled in a timely

manner.

\- Provides timely performance with regard to wire

transfer of sales proceeds and submission of closing

packages.

\- Weekly status reports are provided in a timely and

accurate manner.

\- Establishes settlement dates in a timely manner.

\- No complaints are received regarding the contract

responsibility performance.

\- Sold properties are closed within the appropriate

timeframe.

\- Handles extensions of closing dates in a satisfactory

manner.

\- Records are maintained in accordance with the contract

requirements.

\- Consistently represents the Department at third party

closings.

Following the ranking of each closing agent, according to

the above factors, reviews shall be conducted as follows:

Risk Ranking Frequency of Review

High Monthly

Moderate Quarterly

Low Semi-annually

To determine the closing agent\'s rating status, 60 days

after the contract award, the Field Office must conduct an

initial monitoring review using the checklist provided in

Appendix 72 of Handbook 4310.5. Within five (5) working days of

review, forward a fully executed copy of the report to the

closing agent. All monitoring reviews must be documented in the

closing agent\'s individual file to support follow-up reviews or

contract termination as well as recommendations to extend under

the contract option clause. File documentation shall consist of

all instructions, guidance or monitoring provided to the closing

agent during the life of the contract.

Oral communication regarding deficiencies or performance

improvement must be documented with a memorandum to the file.

CPOs must see that performance deficiencies are corrected in a

timely manner and, as appropriate, recommend administrative

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sanctions or termination for default. Unacceptable performance

with proper documentation can result in termination of the

contract.

Field Offices are to develop a control log to record overall

results of closing agent reviews and include target dates for

follow-up reviews for the purpose of ensuring that corrective

action has been taken to resolve any noted deficiencies. CPOs

are responsible for data entries. The control log must be

maintained and include, but not limited to, the following

information:

Closing Agent\'s Name Contract Number

Award Date Date Review Scheduled

Actual Review Date Review Performed By

Overall Rating Number of Findings

Date of Follow-Up Review Number of Cleared Findings

Date of Cure Notice Termination Date

Forward quarterly reports that highlight the past quarter\'s

performance to the Regional Office for review. Regional Offices

will continue to have the responsibility of following up on a

regular basis to assure that Field Offices are consistently and

uniformly monitoring closing agents. To ensure that this task is

being performed, Headquarters will continue to review Regional

Office\'s oversight actions through our quarterly survey on

closing agents as well as our Regional Reviews.

Each Field Office Manager (Regional Director of Housing in

co-located offices) is fully responsible for ensuring that the

procedures outlined herein are followed and that these functions

are being property and adequately monitored.

Please contact the Single Family Property Disposition

Division at (202) 708-0740 for any questions regarding REAM

procedures and (202) 708-1832 for closing agent procedures.

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

Arthur J. Hill

Assistant Secretary for Housing

\- Federal Housing Commissioner

Attachment

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ATTACHMENT

GUIDE FOR

MONITORING OF REAL ESTATE ASSET MANAGERS

REAM (Contract Area):
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Contract No\_\_\_\_\_\_\_\_\_\_\_ Award Date\_\_\_\_\_\_\_\_ Expiration
Date\_\_\_\_\_\_\_\_

If contract extended, indicate option period
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Field
Office:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Reviewer:\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
Review Date:\_\_\_\_\_\_\_\_\_\_\_\_\_

Total Points \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Overall Risk
Rating\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

=================================================================

Instructions Check appropriate box indicated below. Field

Offices are to assign a risk ranking factor to

each REAM contract upon completion of review to

determine the frequency of future reviews. Rating

to be High; Moderate; or Low. Each no response

counts as one (1) point. Use the following scale

to determine frequency of reviews.

Note: The point system is merely a suggestion. Offices may

apply various weights or counts as deemed appropriated

but the risk ranking and review frequency factors; must

remain unchanged. Some items may not be applicable

based on the service items contained in the individual

REAM contract. Mark these \"N/A\" for not applicable.

Points Risk Ranking Review Frequency

69-46 High Monthly

45-22 Moderate Quarterly

21-0 Low Semi-Annual

=================================================================

Accounting/Disbursements yes no

a\. Is the REAM submitting invoice requesting

payment for management fees not later than

the tenth day of the month and in accordance

with the subject contract? Check the monthly

REAM Billing Report - ME/RP/AM. \_\_\_\_ \_\_\_\_

b\. Collections

Is the REAM forwarding rent and any other

collections to the HUD lockbox within 24 hours

of receipt? \_\_\_\_ \_\_\_\_

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yes no

Are rental leases, receipt books and tenant

cards being maintained? \_\_\_\_ \_\_\_\_

Are Delinquent Notices sent to tenants and

the Delinquent Tenant Report submitted to HUD

by the 10th calendar day of the month? \_\_\_\_ \_\_\_\_

When necessary, are late charges being imposed,

workout agreements developed or eviction

actions initialed? \_\_\_\_ \_\_\_\_

c\. Is the REAM maintaining work order and transmittal

logs in accordance with the contract? \_\_\_\_ \_\_\_\_

d\. Are all inspections of properties recorded on

HUD-9519 or 9519-A? \_\_\_\_ \_\_\_\_

e\. Are proper forms being completed (work order,

9542, 9519, SAMS 1106,SAMS 1111 etc.,) as they

relate to purchase procedures? \_\_\_\_ \_\_\_\_

=================================================================

Files & Records

a\. Are individual property files established and

maintained as required by the contractor? \_\_\_\_ \_\_\_\_

b\. Are files complete and adequately documented? \_\_\_\_ \_\_\_\_

=================================================================

Initial Services to be Performed

a\. Are newly assigned properties inspected

within 48 hours and thereafter as

necessary? \_\_\_\_ \_\_\_\_

b\. Is the REAM performing Occupied Conveyance

procedure in accordance with contract

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

c\. Are emergency repairs handled in appropriate

manner? \_\_\_\_ \_\_\_\_

d\. Does the REAM complete the initial physical

inspection report, HUD 9516-A on a timely basis?

Check Inspection Report Not Received - OC/RP/IR. \_\_\_\_ \_\_\_\_

e\. Are For Sale and Warning Signs being posted in

accordance with requirements? \_\_\_\_ \_\_\_\_

f\. Are police, utility companies and taxing

authorities being timely notified of

Government ownership? \_\_\_\_ \_\_\_\_

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yes no

g\. Is Field Office being timely and correctly

notified by Form HUD-9516-A or otherwise, of

damage and/or adverse occupancy, including

personal property? \_\_\_\_ \_\_\_\_

h\. Is the initial service package, including

HUD-9516-A submitted within five (5) days of

assignment? \_\_\_\_ \_\_\_\_

i\. Are hazardous conditions being identified

and removed in accordance with the contract? \_\_\_\_ \_\_\_\_

j\. Are properties being maintained in accordance

with the contract (broom clean condition)? \_\_\_\_ \_\_\_\_

k\. Are Trash and Debris being removed from the

properties? \_\_\_\_ \_\_\_\_

l\. Is winterization done in accordance with

outstanding instructions? \_\_\_\_ \_\_\_\_

m\. SECURING - Are properties being secured in

accordance with instructions? \_\_\_\_ \_\_\_\_

\- Front, Back, Side doors and Windows

secured? \_\_\_\_ \_\_\_\_

\- Appropriate Lock Box being utilized? \_\_\_\_ \_\_\_\_

\- Garages and Storage Sheds properly

secured? \_\_\_\_ \_\_\_\_

n\. MOWING-TRIMMING-SNOW REMOVAL - Is REAM

arranging and supervising mowing, weed

removal, trimming of shrubs, etc. and snow

removal when needed? \_\_\_\_ \_\_\_\_

o\. Does the REAM have adequate systems to monitor time

frames, i.e. repairs and inspections of repairs,

submission of document? \_\_\_\_ \_\_\_\_

p\. Is the REAM preparing properties for sale in a

timely manner. Review Properties Failing

Critical Path Report - DM/RP/CP and Cases

Listed but Unsold Report - DM/RP/US. \_\_\_\_ \_\_\_\_

q\. Are tenant complaints responded to within the

timeframes indicated in the contract? \_\_\_\_ \_\_\_\_

r\. Are operating systems being tested and systems

check reports provided within five (5) days

of assignment? \_\_\_\_ \_\_\_\_

s\. TEST REPORTS - When required, is REAM

obtaining and transmitting certified test reports

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

yes no

concerning the condition of the operating system

and equipment? Are these test accurate? \_\_\_\_ \_\_\_\_

t\. Are sign-in sheets posted on interior of

property in accordance with contract? \_\_\_\_ \_\_\_\_

u\. Is the REAM providing a listing of needed repairs

with cost estimates within five (5) days of

assignment? \_\_\_\_ \_\_\_\_

=================================================================

Continuing Services to be Performed

a\. Repairs and Purchasing

1\. Is the REAM\'s list of qualified

contractors up to date and in use? \_\_\_\_ \_\_\_\_

2\. Are repair contractors being rotated on

the REAM\'s vendors list according to

instructions? Review the Contractor

Rotation History Report - AP/RP/CR. \_\_\_\_ \_\_\_\_

3\. Do repair costs needed to prepare

properties for sale exceed approved

budgeted repair costs? Review the Repair

Costs by Repair Program Report - DM/RP/CP

and the Profit/Loss Report by Acquisition

Cost - DM/RP/PL. \_\_\_\_ \_\_\_\_

4\. Are bid solicitations in accordance with

good business practice and Federal

procurement regulations and HUD policies?

5\. Is work beginning timely? \_\_\_\_ \_\_\_\_

6\. Do repairs appear to be extensive and/or

not cost effective? \_\_\_\_ \_\_\_\_

7\. Are repair contractors being supervised

and are inspections being made to assure

satisfactory compliance with repair and

maintenance contracts? \_\_\_\_ \_\_\_\_

8\. Work progresses sufficiently to assure

timely completion and compliance with

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

9\. Does the REAM follow up on deficiencies

noted during inspections? \_\_\_\_ \_\_\_\_

10\. Are repair contractors that

consistently perform inadequately

recommended for removal from the list of

qualified contractors? \_\_\_\_ \_\_\_\_

11\. Is the REAM adhering to local office

limitations on purchases? \_\_\_\_ \_\_\_\_

12\. Emergency Procedures - Does REAM

understand and comply with emergency

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

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

13\. Are Work Orders, Invoices and SAMS 1106 yes no

forms prepared accurately and according to

instructions and processed in a timely

manner? \_\_\_\_ \_\_\_\_

b\. Post Closing Complaints

1\. Are the nature and frequency of

occurrence of post-closing complaints within

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

c\. Repair Specification :

1\. ADEQUACY - Are repair specifications

comprehensive in order that repair

contractors can bid responsively? \_\_\_\_ \_\_\_\_

2\. COST ESTIMATES - Can the REAM\'s cost

estimates be utilized in management

decision in determination of the

Disposition Program? \_\_\_\_ \_\_\_\_

=================================================================

General Considerations

a\. Does the REAM have a record of harmonious

relationships and demonstrated ability to

work with repair contractors, selling agents

and other interested parties within the

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

\- Are there complaints from tenants,

subcontractors, selling brokers on file

in connection with REAM\'s services?

\- Does the REAM represent the Government in

a reputable manner? \_\_\_\_ \_\_\_\_

\- Is there any litigation in connection with

the REAM\'s services? \_\_\_\_ \_\_\_\_

b\. Is the REAM available during normal business

hours on a reasonable basis? \_\_\_\_ \_\_\_\_

c\. Does the REAM adhere to norms established for

processing time? \_\_\_\_ \_\_\_\_

=================================================================

Administrative and Record Keeping

a\. Is the REAM\'s staff adequate? \_\_\_\_ \_\_\_\_

b\. Are inventory controls and inventory status

records adequate? \_\_\_\_ \_\_\_\_

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

yes no

c\. Does the REAM have an adequate tickler or follow-up

system for inspections, purchase orders, work

orders, reports, etc? \_\_\_\_ \_\_\_\_

d\. Does the REAM have an adequate understanding of

HUD\'s policies and procedures with regard to:

1\. Equal Opportunity? \_\_\_\_ \_\_\_\_

2\. Affirmative fair marketing? \_\_\_\_ \_\_\_\_

3\. Procurement? \_\_\_\_ \_\_\_\_

e\. Does the REAM have an adequate understanding in

relation to property disposition activities of

federal income tax levies, mechanic\'s and

material-man\'s liens, and notice of

bankruptcy or garnishment against contractors? \_\_\_\_ \_\_\_\_

f\. Are the following conditions adequate?

1\. Office hours \_\_\_\_ \_\_\_\_

2\. Availability of the REAM or qualified staff \_\_\_\_ \_\_\_\_

3\. Businesslike office appearance \_\_\_\_ \_\_\_\_

4\. Attitude of the REAM and/or staff \_\_\_\_ \_\_\_\_

=================================================================

Discussion Items Either Predetermined Prior to Review or

Developed During Review Other Than Above.

1\.

2\.

3\.

4\.

Follow-up Items That May Be Used to Advise REAMs Concerning

Deficiencies.

1\.

2\.

3\.

4\.

Total Number of Findings \_\_\_\_\_\_\_\_\_\_

Total Number of Findings Related to Failure to Meet Schedules \_\_\_

Total Repeat Findings \_\_\_\_\_\_\_\_\_

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

Summary and Explanation of Comments

Remedial Actions to be Taken

(If additional space is necessary, continue on separate

sheets and attach to this report.)

Signature\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

(HUD Staff Member Making Review) Title of Reviewer

CPO\'s Signature \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ Date
Signed\_\_\_\_\_\_\_\_\_\_\_\_\_

=================================================================

CPO\'s comments, If any:

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

Definitions for developing REAM\'s ranking factors.

High Risk - REAM\'s performance is unsatisfactory, but has a

possibility of improvement. Performance is characterized by the

following:

\- Requirements in the REAM\'s contract are frequently not

complied with.

\- Findings from prior review(s) remain outstanding.

\- REAM consistently provides untimely performance and

newly acquired properties are rarely inspected within

48 hours.

\- Information required of the REAM, such as the 9516-A,

vendor invoice and related SAMS forms are frequently

not provided in a timely or accurate manner.

\- The REAM is frequently not preparing properties for

sale in a timely manner.

\- Excessive complaints are received regarding condition

of properties

\- Inventory turnover (i.e., property sales) is not

occurring in a reasonable time period.

\- Properties are not sold in a reasonable timeframe

resulting in higher than acceptable turnover rate.

\- Repairs are excessive and exceeds budgeted repair cost

or are not cost effective.

\- The REAM is unable to adequately maintain the

properties in required condition and is incurring

higher than normal maintenance and operating costs.

\- Subcontractors\' prices are not justified and where

appropriate, subcontractors are not being rotated.

\- Operating controls over the REAM\'s property management

function and fiscal procedures are not in place.

\- The Ream requires constant supervision to resolve

complaints and conflicts from both outside parties and

the Department\'s personnel.

Moderate Risk - REAM\'s performance is exhibiting signs of

deterioration, requiring additional monitoring and control.

Performance is characterized by the following:

\- Requirements in the REAM\'s contract have not been

consistently complied with.

\- Findings from prior review(s) on occasion are not

resolved in a timely manner.

\- REAM periodically provides untimely performance and

occasionally newly acquired properties are not

inspected within 48 hours.

\- Information required of the REAM, such as the 9516-A,

vendor invoice and related SAMS forms have periodically

not been provided in a timely and accurate manner.

\- The REAM is periodically not preparing properties for

sale in a timely manner.

\- Few complaints are received regarding the condition of

properties.

\- Inventory turnover (i.e., property sales) is

demonstrating adverse trends.

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

\- Properties are periodically sold in an undesirable

timeframe resulting in a less than acceptable turnover

rate.

\- Repairs have been periodically excessive and not within

the budgeted repair cost or cost effective.

\- Concern exists as to whether the REAM is adequately

maintaining the properties in required condition and is

incurring higher than normal maintenance and operating

costs.

\- Subcontractors\' prices are periodically not being

justified and where appropriate, subcontractors are

rotated.

\- Operating controls over REAM\'s property management

function and fiscal procedures are in place but not

effective.

\- The Ream requires increasing supervision to resolve

complaints and conflicts from both outside parties and

the Department\'s personnel.

Low Risk - REAM\'s performance is an acceptable level of risk.

Performance is characterized by the following:

\- Requirements in the REAM\'s contract are consistently

complied with.

\- Findings from prior review(s) are resolved in a timely

manner.

\- REAM provides timely performance and newly acquired

properties are inspected within 48 hours of

acquisition.

\- Information required of REAM, such as the 9516-A,

vendor invoice and related SAMS forms have been

provided in a timely and accurate manner.

\- The REAM prepares properties for sale in a timely

manner.

\- Complaints are rarely received regarding the condition

of properties.

\- Inventory turnover (i.e., property sales) is occurring

in a reasonable time period.

\- Properties are sold within the projected timeframe

resulting in an acceptable turnover rate.

\- Repairs are in accordance with outstanding instructions

and within budgeted repair cost and are cost effective.

\- The REAM is adequately maintaining the properties in

required condition and is incurring acceptable

maintenance and operating costs.

\- Subcontractors\' prices are justified and where

appropriate, subcontractors are being rotated.

\- Operating controls over the REAM\'s property management

function and fiscal procedures are in place and

effective.

\- The REAM requires minimal supervision to resolve

complaints and conflicts from both outside parties and

the Department\'s personnel.

\*U.S. Government Printing Office: 1992 - 312-218/60288