7560.5

CHAPTER 9. MEMORANDUM OF AGREEMENT (MOA) FOR

TROUBLED AND MOD-TROUBLED PHAS

9-1 OBJECTIVE. The objective of this Chapter is to provide guidance in

addressing troubled and mod-troubled PHAs (PHAs which are troubled

with respect to 14) which have major problems in key management

performance areas.

9-2 MEMORANDUM OF AGREEMENT (MOA) REQUIREMENT.

A. A Memorandum of Agreement (MOA), a binding contractual agreement,

shall be required for each PHA designated as troubled and/or

mod-troubled. (6)(j)(2)(B) of the Act and 24 CFR §901.140(a)

1\. A PHA may be designated as troubled, regardless of size,

which achieved a total weighted PHMAP score of less than 60%.

24 CFR 901.115(c)

2\. A PHA may be designated as mod-troubled, regardless of size,

which achieved a total weighted PHMAP modernization score on

indicator #2, modernization, of less than 60%. 24 CFR

901.115(d)

3\. A PHA that is designated both troubled and mod-troubled shall

be required to develop and execute a combined MOA.

B. The scope of the MOA will vary depending upon the extent of the

problems present in the PHA, but shall include the elements listed

in paragraph 9-6, below.

C. An MOA for a mod-troubled PHA shall address modernization

deficiencies as well as any other deficiencies discovered as a

result of the PHMAP assessment.

9-3 DESIGNATION OF A PHA AS TROUBLED AND/OR MOD-TROUBLED.

A. Field Office responsibility.

1\. The Field Office shall assess PHAs, utilizing the PHMAP

SMIRPH module, and conduct the Annual Performance Review,

utilizing the PHA Performance Profile module in SMIRPH, or

Form HUD-52413, PHA Performance Profile, Appendix 1, The

Field Office Monitoring of Public Housing Agencies (PHAs)

Handbook 7460.7, as revised, of all

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7460.5

Chapter 9, paragraph 9-3A1 (continued)

PHAs in its jurisdiction within 90 calendar days after the

due date for PHA certification submission (180 calendar days

after PHA FYB). 24 CFR 901.120(a)

2\. In the initial year of PHMAP implementation and for the

purposes of the CGP, the Field Office shall assess PHAs

under the PHMAP and conduct the Annual Performance Review

of PHAs in accordance with Chapter 4, paragraphs 4-2C1, C2

and C3, of this Handbook. 24 CFR 901.120(b)(2)

3\. The performance indicators and components included in

indicators #1 through #12 shall constitute the criteria by

which PHAs shall be evaluated for the purpose of determining

whether a PHA is troubled. (6)(j)(2)(A)(i) of the Act

4\. The components included in indicator #2, modernization,

shall constitute the criteria by which PHAs shall be

evaluated for the purpose of determining whether a PHA is

mod-troubled. (6)(j)(1) (I)(iii) of the Act and

(2)(A)(i)

5\. The designation of troubled and mod-troubled will depend

upon the criteria listed in paragraphs 9-2A1 and A2, above.

24 CFR 901.115(c) and (d) and 901.150(a)

6\. The Field Office may conduct an on-site confirmatory review

of PHAs within its jurisdiction within 90 calendar days

after the due date for PHA certification submission to

verify the indicators a PHA has certified to as well as the

accuracy of the information received in the Field Office

pertaining to the remaining indicators. 24 CFR 901.120

\(c\)

7\. In the initial year of PHMAP implementation and for the

purposes of CGP, the Field Office may conduct an on-site

confirmatory review of PHAs in accordance with Chapter 4,

paragraph 4-3B, of this Handbook. 24 CFR 901.120(c)

8\. The Field Office shall make the initial determination of

troubled and mod-troubled designation. 24 CFR

901.120(a)(1)

9\. The Field Office shall notify each PHA in its jurisdiction

of its determination for each respective PHA within 90

calendar days after

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7560.5

Chapter 9, paragraph 9-3A9 (continued)

the due date for PHA certification submission (180 calendar

days after PHA FYB). PHA notification will include, at a

minimum: 24 CFR 901.120(b)

a\. A copy of the SMIRPH PHA Performance Profile module, or

Form HUD-52413, PHA Performance Profile, Appendix 1,

The Field Office Monitoring of Public Housing Agencies

(PHAs) Handbook 7460.7, as revised, which includes the

score for indicators, components, the total weighted

PHMAP score, and the total weighted PHMAP modemization

score; 24 CFR 901.120(b)

b\. The grade in each indicator and component; 24 CFR

901.120 (b)

c\. A PHA\'s troubled and/or mod-troubled designation; 24

CFR 901.120(b)

d\. Any determination concerning exclusion and modification

requests; 24 CFR 901.120(b)

e\. The requirements for and the purpose of an MOA are to

be stated, as follows:

\(1\) The statutory basis upon which an MOA is required

for the PHA (24 CFR 901.140);

\(2\) The purpose that the MOA is to serve; e.g., the

improvement of a PHAs total weighted PHMAP score

or modernization score to 60% or above; and

\(3\) Indication that failed performance by the PHA

under its MOA may result in HUD\'s imposition of

financial and/or other sanctions, including the

petitioning for the court appointment of a

receiver to conduct the affairs of the PHA in a

manner consistent with the United States Housing

Act of 1937. 24 CFR 901, subpart C

f\. The types and dates of additional reviews, such as a

coordinated review for a troubled PHA or an in-depth

modernization review

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7460.5

Chapter 9, paragraph 9-3A9f (continued)

for a mod-troubled PHA, necessary as a result of the

management assessment; and

g\. When a coordinated review for a troubled PHA or an

in-depth modernization review for a mod-troubled PHA is

not to be conducted, the notification letter shall

indicate the proposed date to initiate the on-site

development of the MOA (refer to paragraph 9-5D,

below); and

h\. Any final date by which appeals may be received. 24

CFR 901.120(b)

10\. In the initial year of PHMAP implementation and for the

purposes of the CGP, the Field Office shall notify PHAs of

their initial designation of troubled in accordance with

Chapter 4, paragraph 4-3B, of this Handbook. 24 CFR

901.120(b)(2)

11\. The Field Office shall send a copy of this notification to

the PHAs Executive Director and Chairperson of the Board of

Commissioners.

12\. The Field Office shall send a letter to the appointing

official(s) of the Board within 15 calendar days after the

notification letter to the PHA if the PHA does not appeal

its designation, or after the appeals process has been

completed, which should point out the importance of the

local government\'s active participation in assisting efforts

to improve the PHA and the need for financial support,

technical expertise and linkages to the private sector, as

is appropriate to the PHAs troubled and/or mod-troubled

condition and needs.

13\. The Field Office should, on a risk analysis basis, conduct

and complete a coordinated review of a troubled PHA or an

in-depth modernization review of a mod-troubled PM as soon

as possible after the Annual Performance Review of the PHA,

or after the appeals process, if any, has been completed

unless such a review has been completed within the past 12

months.

a\. If the Field Office does not have adequate resources to

conduct a coordinated review of a troubled PHA or an

in-depth modernization review of a mod-troubled PHA,

the respective review shall be conducted as soon as

practicable. If the Field Office cannot conduct the

respective review within 12 months

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7560.5

Chapter 9, paragraph 9-3A13a (continued)

after the Annual Performance Review of the PHA, the

Assistant Secretary shall be notified.

b\. If the respective review is not conducted, a period of

not longer than 60 calendar days should elapse form the

date of the conclusion of the Annual Performance Review

to the arrival of the team participants at the PHA to

work on the development of the MOA (refer to paragraph

9-5D, below).

14\. The Field Office shall issue the final report of the

coordinated review, if conducted, in accordance with the

Field Office Monitoring of Public Housing Agencies (PHAs)

Handbook 7460.7, as revised. If a coordinated review is

conducted, the final report shall indicate the proposed date

to initiate the on-site development of the MOA and an

explanation of the role the PHA/HUD/local government team

participants are requested to play.

B. Regional Office responsibility. The Regional Administrator may

review a PHA\'s score and modification and exclusion requests

prior to the transmission of the notification letter to the PHA,

except as specified in 901.125(b). 24 CFR 901.125(a)

1\. In the initial year of PHMAP implementation and for the

purposes of the CGP, the Regional Administrator may review a

PHAs score and modification and exclusion requests prior to

the transmission of the notification letter to the PHA,

except as specified in 901.125(b), in accordance with

Chapter 4, paragraph 4-3B, of this Handbook. 24 CFR

901.125(a)

2\. The Assistant Secretary shall be notified by the Regional

Administrator in instances where high performer designation

is rescinded by the Regional Administrator.

9-4 NOTIFICATION OF HEADQUARTERS. Immediately following the designation

of a PHA as troubled and/or mod-troubled, the Regional Administrator

shall forward a memorandum to the Assistant Secretary, Attention:

Director, Office of Assisted Housing, providing the following

information on each troubled and/or mod-troubled PHA:

A. Name of the PHA:

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7460.5

Chapter 9, paragraph 9-4 (continued)

B. Number of PHA-owned public housing dwelling unit:

C. Name and telephone number of the Executive Director, Board

Chairperson and Chief Executive of local government;

D. Each PHA\'s total weighted PHMAP score and/or PHMAP modernization

score;

E. Initiatives to be taken by the Field and Regional Office in

assisting the PHA to seek public and private entity involvement

and any suggestions/ recommendations to the PHA as to how this

might be best accomplished; (6)(j)(2)(B) of the Act and 24 CFR

901.140(a)(8) and (b)

F. Proposed date of the coordinated review; and

G. Proposed date to begin on-site negotiation of the MOA, with a

listing of participants and their areas of expertise, as well as

any request for special technical expertise from Headquarters.

H. Headquarters notification will be incorporated into SMIRPH as

soon as possible, thereby eliminating the need for the Regional

Administrator to transmit a memorandum to Headquarters.

9-5 MOA DEVELOPMENT. The development of the MOA requires extremely

close communication and coordination between all parties involved.

This is particularly true regarding local government and private

sector involvement. (6)(j)(2)(B) of the Act and 24 CFR

901.140(a)(8) and (b)

A. PHA responsibility. The PHA shall have primary responsibility

for obtaining active local government and private sector

participation in assisting PHA improvement efforts. 24 CFR

901.140(b)

1\. Private sector and local government involvement should be

encouraged in MOA negotiations. Such technical advice,

hands-on assistance and monetary support should be pursued

by the PHA and supported by the Field and Regional Offices.

(6)(j)(2)(B) of the Act and 24 CFR 901.140(a)(8) and

\(b\)

2\. The Regional Administrator and Field Office Manager shall be

vested with the responsibility for taking all possible

actions to help the PHA

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7560.5

Chapter 9, paragraph 9-5A2 (continued)

in attaining such participation. (6)(j)(2)(B) of the Act

and 24 CFR 901.140(a)(8) and (b)

a\. This participation should include active involvement in

the establishment of performance targets and

identification of strategies to attain the targets.

b\. To the extent it is determined that improvement in

specific areas is dependent upon other than local

resources (e.g., HUD) consideration shall be given to

HUD resources and constraints, including but not

limited to technical assistance.

B. The available resources and capabilities.

1\. One of the primary purposes of the on-site work (refer to

paragraph 9-5D, below) is to arrive at preliminary agreements

among the participants as to available resources and

capabilities.

2\. Resources and capabilities relate to the:

a\. PHA\'s management capability;

b\. PHA\'s financial resources;

c\. Local government\'s willingness to provide technical

and/or financial assistance in making on-going

improvements; and

d\. Degree and type of private sector assistance which can

be obtained.

C. Participants. The participants in MOA development and

negotiations should include representatives of the entities

listed below.

1\. Representatives from HUD\'s Field Office.

2\. Representative from HUD\'s Regional Office, if appropriate

(refer to paragraph 9-512, below).

3\. PHA staff.

4\. Board Chairperson and/or members.

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7460.5

Chapter 9, paragraph 9-5C (continued)

5\. Resident representative.

a\. It is expected that the resident representative would

be selected by the city-wide resident organization

where one exists.

b\. Otherwise, the most equitable and representative

process possible shall be used.

c\. The resident representative shall participate in MOA

negotiation but shall not be a signatory to the MOA.

The resident representative is expected to play a role

in follow-up monitoring of MOA performance.

6\. Local government and private sector representatives shall be

included as determined appropriate in accordance with

paragraph 9-6D3, below.

D. On-Site work. The team participants shall meet at the PHA as

soon as possible following the PHA being designated as troubled

and/or mod-troubled.

1\. This effort shall be coordinated by the Regional

Administrator or his/her designee.

2\. A period of not longer than 60 calendar days should elapse

from the date of the conclusion of the coordinated review to

the arrival of the team participants to work on the

development of the MOA.

3\. The intent of an MOA is to assist a PHA in improving its

management capabilities. The PHA as an entity, comprised of

the Board of Commissioners and all PHA personnel, rather

than a specific individual, is accountable and responsible

for improving its management capabilities. Therefore, the

development and execution of an MOA for troubled and

mod-troubled PHAs shall not be delayed due to changing

circumstances at the PHA. Such changes include, but are not

limited to:

a\. Change in the Executive Director;

b\. Change in executive staff;

c\. Change in Board composition; or

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7560.5

Chapter 9, paragraph 9-5D3 (continued)

d\. Change in the Chief Executive of local government.

4\. One of the primary purposes of the on-site work is to arrive

at preliminary agreements among the participants as to the

MOA. Based in significant part on the results of the Field

Office\'s on-site coordinated review, the team shall work

together to arrive at agreements in accordance with

paragraph 9-2B, above.

5\. The end product resulting from the on-site work should be a

draft MOA.

E. Organizational review. The team participants shall be

responsible for the concurrent review of the draft MOA by their

respective organizations (e.g., PHA Board of Commissioners and

Executive Director, resident representative, Chief Executive

Officer of the local government, Field Office Manager and

Regional Administrator).

1\. It is extremely important at this juncture that all parties

to the impending MOA work together in a spirit of mutual

cooperation in order to resolve any differences.

2\. It is anticipated that the team participants will converse

via telephone, conference calls and local meetings.

F. Field Office responsibility. The Field Office shall be the

primary party responsible for following up with the PHA,

residents, local government and the private sector to ensure to

the maximum extent possible that any differences of approach or

opinion on the draft MOA are resolved and, if not, raised to the

attention of the Regional Office.

G. Regional Office responsibility. The Regional Office shall be

responsible for coordinating the review process within HUD to

resolve any differences as quickly as possible on the content of

the MOA.

H. On-Site reassessment. Although not intended as a normal

operating procedure, there may be instances arising from the

organizational reviews which dictate the return of team

participants to the PHA. This may be necessary in order to

collect additional information, present new proposals and to

finalize an MOA on which the PHA and HUD can agree.

I. Final negotiations/execution of the MOA.

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7460.5

Chapter 9, paragraph 9-5I (continued)

1\. Field Office responsibility.

a\. The Field Office shall have the lead responsibility in

coordinating with all other MOA participants, internal

or external to HUD, to schedule the on-site gathering

of all key parties for the purpose of signing the MOA

as well as to negotiate any remaining points which

could not otherwise be resolved.

b\. The key participants may meet on site at the PHA or

office of the Chief Executive of local government, or

such other local site as is deemed appropriate.

c\. The Field Office shall be responsible for working with

the PHA to ensure that public awareness and attention

are focused on the participants\' mutual, cooperative

efforts to bring about improvement in the local PHA\'s

condition. Media (newspaper, television, etc.)

coverage should be pursued as one means of

accomplishing this end.

2\. Regional Office responsibility. The Regional Administrator

may redelegate to the Field Office Manager the

responsibility of all MOA activities for PHAs with less than

1250 units.

3\. Key participants. The primary signatories to the MOA shall

be in accordance with paragraph 9-6H, below.

J. The development of the MOA is a means to the objectives of

improving PHA management capabilities and improving residents\'

quality of life. Therefore, the MOA should be developed and

executed as expeditiously as possible. An MOA should be

developed and executed within 60 calendar days after the

conclusion of any required on-site work.

K. If the MOA is not developed and executed within 60 calendar days

after the conclusion of any required on-site work, HUD will

impose improvement requirements on the troubled and/or

mod-troubled PHA.

9-6 SPECIFIC REQUIREMENTS OF THE MOA.

A. The MOA is a binding contractual agreement between HUD and the

troubled and/or mod-troubled PHA. It shall set forth the targets

agreed upon and the PHA\'s commitment to taking all actions within

its control to

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7560.5

Chapter 9, paragraph 9-6A (continued)

achieve the targets as well as the consequences of failing to

meet the targets. 24 CFR 901.140(a), (a)(2), (a)(5) and

(a)(7)

B. ACC requirement. An MOA does not supersede, modify or amend a

PHAs ACC or in any way excuse a PHA from complying fully with its

ACC. In particular, the Department does not waive its rights

under Part 11, 501 and 502 of the ACC. A PHAs satisfaction

of, or failure to meet, the goals set forth in an MOA does not

limit, modify or preclude the Department\'s right to take any

remedial action allowed by the ACC or any provision of the Act or

the regulations thereunder. Therefore, the Department has the

right to declare a substantial default or a substantial breach of

a PHA under the terms of the PHA\'s ACC at any time for sufficient

cause regardless of the terms of an MOA,

C. Part A, Participants, of the MOA shall include pertinent

information regarding the PHA and a listing of the name, agency,

title and phone number of MOA participants.

D. Part B, Public and Private Entity Involvement, of the MOA shall

include information regarding the types and monetary value of

assistance provided to the PHA by the local government and

private entities in carrying out the MOA and rectifying the PHAs

problems. (6)(j)(2)(B) of the Act and 24 CFR 901.140(a)(8)

1\. A PHA shall have primary responsibility for obtaining active

local public and private entity participation in assisting

PHA improvement efforts. (6)(j)(2)(B) of the Act and 24

CFR 901.140(a)(8) and (b)

2\. Private sector involvement may include active participation

in PHA improvement efforts, as evidenced by a commitment to

effecting change at the PHA and/or a commitment to provide

assistance, financial or otherwise, to the PHA.

3\. Local public and private entity participation should be

premised upon:

a\. The participant\'s knowledge of the PHA;

b\. The ability to contribute technical expertise with

regard to the PHAs specific problem areas; and

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7460.5

Chapter 9, paragraph 9-6D3 (continued)

c\. The authority to make preliminary/tentative commitments

of support, financial or otherwise.

4\. A representative from the private sector, where appropriate,

may be agreeable to providing a letter of support, etc.

E. Part C, Performance Targets, of the MOA shall include the

deficient indicators, baseline data for each deficient indicator,

the MOA annual performance goal, and quarterly targets for

improvement of performance indicators. The inclusion of targets

for improving PHA performance in the MOA is a statutory

requirement. (6)(j)(2)(B)(i) of the Act and 24 CFR

901.140(a)(2)

1\. Deficiencies to be addressed in the MOA may be prioritized

in cases where a PHA\'s management capabilities are minimal.

For example, an MOA goal may be for all PHA management staff

to receive management training and certification before

increasing operating reserves to at least 20%.

2\. Baseline data, which may be the PHAs performance level in

each of the indicators identified as a problem. 24 CFR

901.140(a)(1)

3\. The annual MOA performance goal for each deficient indicator

is the target for improvement of each deficient indicator

for each year of the MOA.

4\. Quarterly performance targets for each deficient indicator,

which may be the attainment of a higher level of performance

within an indicator that is a problem. For example, the

reduction of rents uncollected to 3% or less by the end of

the respective MOA annual period. (6)(j) (2)(B)(2) of

the Act and 24 CFR 901.140(a)(2)

5\. The annual and quarterly performance targets shall span a

maximum time period of five years, or a lesser period in

which the PHA achieves a total weighted PHMAP and/or

modernization score of at least 60%.

a\. For the first year, targets for the effective MOA shall

include annual and quarterly performance targets.

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7560.5

Chapter 9, paragraph 9-6E5 (continued)

b\. Targets for the remaining years of the MOA may include

annual and quarterly performance targets, but at a

minimum, shall include annual performance targets.

c\. To the extent possible, annual and quarterly

performance targets will be quantified (e.g., vacancies

reduced to 3% within one year).

d\. It may be appropriate to include non-quantified targets

to achieve improvement (e.g., the development and

implementation of a PHA preventive maintenance program

by a specified date.

6\. A PHA operating budget submission and CIAP application or

CGP annual statement will be considered unapprovable if it

fails to reflect an assignment of resources and financial

expenditures that support attaining the performance targets.

F. Part D, Strategies, of the MOA shall include a listing of those

major strategies to be used by the PHA in achieving the annual

and quarterly performance targets within the time period of the

MOA in accordance with Part C and a description of HUD technical

assistance which shall be provided to the PHA. The inclusion of

PHA strategies and a description of the technical assistance to

be provided to the PHA in the MOA are statutory requirements.

(6)(j)(2)(B)(ii) of the Act and 24 CFR 901.140 (a)(3) and (4)

1\. The strategy portion of Part D is prepared by the PHA. It

documents how the PHA proposes to achieve the annual and

quarterly performance targets, with the exception of HUD

technical assistance to the PHA, which is prepared by HUD in

consultation with the PHA. A PHA\'s strategies should reflect

the PHAs CGP management needs assessment, and the CGP

management needs assessment should reference the MOA.

2\. It is expected that these major strategies will have evolved

from the on-site coordinated review and the MOA processes,

and may be subject to revision by the PHA, on a yearly

basis, to ensure the achievement of the annual and quarterly

performance targets in Part C.

3\. The development of PHA strategies is the sole responsibility

of the PHA as to content and implementation. However, a

PHA\'s strategies

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7460.5

Chapter 9, paragraph 9-6F3 (continued)

to achieve the annual and quarterly performance targets are

expected to be realistic and achievable within the

respective time frames.

4\. Part D shall include the technical assistance to the PHA

provided by the Field Office. For example, the training of

PHA employees in specific management areas or the resolution

of outstanding HUD monitoring findings. (6)(j)(2)(B)(ii)

of the Act and 24 CFR 901.140(a)(4)

G. Part E, Incentives and Sanctions, of the MOA shall include PHA

incentives for meeting specific targets and sanctions for failure

to meet the annual and quarterly performance targets. The

inclusion of incentives and sanctions in the MOA are statutory

requirements. (6)(j)(2)(B)(iii) of the Act and 24 CFR

901.140(a)(6) and (7)

1\. Incentives for meeting such targets, such as:

(6)(j)(2)(B)(iii) of the Act and 24 CFR 901.140(a)(6)

a\. The removal of troubled or mod-troubled designation;

and

b\. A higher capacity rating for competitive grant programs

as a PHA improves it performance under the MOA.

2\. The consequences of failing to meet the targets, including

sanctions, as described in the Field Office Monitoring of

Public Housing Agencies (PHAs) Handbook 7460.7, as revised.

Sanctions include, but are not limited to:

(6)(j)(2)(B)(iii) of the Act and 24 CFR 901.140(a)(7)

a\. The imposition of budgetary limitation;

(6)(j)(2)(B)(iii) of the Act and 24 CFR 901.140(a)(7)

b\. Declaration of substantial default and subsequent

action under 901.200; (6)(j)(2)(B)(iii) of the Act

and 24 CFR 901.140(a)(7)

c\. Limited denial of participation; (6)(j)(2)(B)(iii)

of the Act and 24 CFR 24 and 901.140(a)(7)

d\. Suspension; (6)(j)(2)(B)(iii) of the Act and 24 CFR

24 and 901.140(a)(7)

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7560.5

Chapter 9, paragraph 9-6G2 (continued)

e\. Debarment; and (6)(j)(2)(B)(iii) of the Act and 24

CFR 24 and 901.140(a)(7)

f\. The imposition of operating funding and modernization

thresholds. (6)(j)(2)(B)(iii) of the Act and 24 CFR

901.140 (a) (7)

H. Part F, Signatories and PHA Assurances, of the MOA shall provide

for the signatures of the executing parties as stated below, and

the PHAs assurances of its commitment to take all actions within

its control to achieve the annual and quarterly performance

targets. 24 CFR 901.140(c)(1), (2),(3) and (4)

1\. PHA assurances shall also be included in the Board

resolution executing the MOA and shall precede the

signatures of the PHA Chairperson and Executive Director.

2\. The MOA shall be executed by the following: 24 CFR

901.140(c)

a\. The Executive Director; 24 CFR 901.140(c)(2)

b\. The Chairperson of the Board; 24 CFR 901.140(c)(1)

c\. The appointing authorities of the Board of

Commissioners, when the PHA is a part of local

government, unless exempted by the Regional

Administrator (i.e., for reasons of the refusal on the

part of the appointing authorities to execute the MOA,

or unreasonable delays in the execution of the MOA);

24 CFR 901.140(c)(4)

d\. The Field Office Manager; and/or 24 CFR 901.140(c)

\(3\)

e\. The Regional Administrator. 24 CFR 901.140(c)(3)

3\. The date the Regional Administrator executes the MOA shall

be the date the MOA becomes effective.

I. A PHA shall monitor MOA implementation to ensure that performance

targets are met in terms of quantity, timeliness and quality.

24 CFR 901.140(d)

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7460.5

Chapter 9, paragraph 9-6 (continued)

J. MOA duration. The initial MOA under the PHMAP will be negotiated

and executed for a time period of six quarters. This will allow

for the negotiation and execution of a second-year MOA, if

necessary, prior to the expiration of the initial MOA (refer to

paragraph 9-13C, below). Subsequent year MOAs will be negotiated

and executed for a period of four to six quarters, depending on

whether or not a PHA appeals subsequent years\' PHMAP

designations.

9-7 RELATIONSHIP OF MOA TO OTHER APPROVED PLANS. Pursuant to

HUD guidelines, PHAs may have been required to develop other planning

documents (e.g., Comprehensive Occupancy Plan (COP), Nondiscrimination

Plan (NP) or Action Plan). Part C of the MOA which delineates annual

and quarterly performance targets must be completed for failed

indicators even though they may have been previously listed in another

plan(s).

A. Additional strategies need not be developed for those failed

indicators that the MOA participants deem to have been

appropriately addressed in another plan(s). In such instances,

the MOA, Part D, Strategies, shall include such previously

developed strategies and the other plan(s) shall be referenced in

Part D of the MOA.

B. Although other approved plans may have annual and quarterly

performance targets and strategies that span a period of less

than five years, the annual and quarterly performance targets in

Part C and the strategies in Part D of the MOA shall reflect a

maximum five-year rolling base time period, if appropriate, or a

period of time sufficient for a PHA to achieve a total weighted

PHMAP or modernization score of 60% or above.

C. Following approval and execution of the MOA the Field Office

and/or Regional Office and the PHA may determine that adjustments

to other plans are warranted.

9-8 RELATIONSHIP OF MOA TO BUDGET AND BUDGET APPROVAL.

A. The PHA\'s budget bears a direct relationship to the PHA\'s MOA.

The operating budget must support all annual and quarterly

performance targets outlined in Part C of the MOA

1\. To ensure this, troubled and mod-troubled PHA budgets shall

be subject to a detailed budget review by the Field Office.

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7560.5

Chapter 9, paragraph 9-8A (continued)

2\. The primary financial impact on a mod-troubled PHA is its

funding under the CGP.

B. A PHA budget submission shall be considered unapprovable under

Part II, 407(E)(1) of the ACC, if it fails to reflect an

assignment of resources and financial expenditures supportive of

attaining the performance targets in Part C of the MOA. The

Field Office\'s review of Part D, Strategies, of the MOA will be

very helpful in arriving at this determination. Refer to

paragraph D, below, regarding the use of a letter of intent where

the budget is not considered approvable.

C. Budget approval shall not be withheld on the basis of an MOA

which is yet to be approved where any of the following

circumstances may apply.

1\. The Regional or Field Office is satisfied that the proposed

operating budget reflects the MOA which is considered

approvable, but not yet approved.

2\. The MOA is still under development. In such instances, the

Regional Office shall be satisfied that the budget proposal

meets the requirements of 24 CFR 990.112(a)(1) and Part

II, 407(E)(1) of the ACC, relative to efficient and

economical operation.

3\. The Field Office shall exercise care in giving PHAs

appropriate notification, within required time frames, to

ensure that automatic budget approval does not ensue.

Part II, 407(F) of the ACC)

D. For use of letter of intent, refer to the Financial Management

Handbook 7475.1, as revised.

9-9 PUBLIC AND PRIVATE SECTOR INVOLVEMENT. PHAs are encouraged on

an ongoing basis to aggressively pursue obtaining local assistance

(refer to paragraph 9-5A and B, above). Involvement of outside

organizations, public and private, will be necessary if a troubled or

mod-troubled PHA is to attract the resources necessary to assist it in

bringing about substantial improvements. (6)(j)(2)(B) of the Act

and 24 CFR 901.140(b)

A. Failure to initiate such outreach may severely limit a PHAs

ability to bring about significant changes in its public housing

condition.

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7460.5

Chapter 9, paragraph 9-9 (continued)

B. Many PHAs have been successful in receiving Community Development

Block Grant funding, additional police support, etc., from their

cities. Private enterprise has provided expertise in such areas

as data processing, fiscal management, etc., at little or no cost

to some PHAs. However, attracting such assistance requires that

the PHA aggressively promote its role as a vital part of the

community.

C. The Field Office Manager and Regional Administrator shall ensure

that they support, as much as possible, the PHA attempts to

enlist the assistance of local government, the community and the

private business sector. (6) (j)(2)(B) of the Act and 24 CFR

901.140(b)

D. Attempts should be made to seek local press coverage regarding

City, private sector, HUD and PHA cooperative efforts to improve

the local public housing program (refer to paragraph 9-5I1c,

above).

9-10 ONGOING PHA COMMITMENT TO APPROVED MOA. Once approved by a

PHA and HUD, a PHA shall be bound by the contractual terms of its MOA.

24 CFR 901.140(a)

A. Subsequent changes in the membership of a PHAs Board do not

entitle the new Board to disregard the provisions of the MOA

adopted by the previous Board, since the MOA is a contractual

agreement between the PHA and HUD.

B. Should a new Board approve actions inconsistent with the PHA\'s

obligations under the previously adopted MOA, HUD may proceed to

impose those sanctions which may be appropriate.

9-11 REMOTE MONITORING. HUD and the PHA shall monitor MOA

implementation to ensure that annual and quarterly performance targets

are met in terms of quantity, timeliness and quality.

A. MOA Quarterly Performance Target Progress Report (MOAQPTPR). A

PHAs progress subsequent to MOA approval will be monitored

through the SMIRPH module (Form HUD-53333), MOA Quarterly

Performance Target Progress Report (MOAQPTPR). The MOAQPTPR

shall be prepared by the Field Office on the basis of information

provided by the PHA. The PHA shall provide the resident

representative with like information.

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7560.5

Chapter 9, paragraph 9-11 (continued)

B. Report submittal. The Field Office shall initiate those actions

necessary to ensure the receipt of thorough and accurate

information from the PHA in a timely manner, so as to allow for

Field Office review and comment, preparation of the MOAQPTPR, and

be available for review and comment by the Regional Office within

60 calendar days following the end of the quarter covered by the

MOAQPTPR.

1\. The MOAQPTPR shall be available for review by Headquarters

within 75 calendar days following the end of the quarter

covered by the MOAQPTPR.

2\. Reporting shall begin with the close of the quarter in which

a PHA\'s MOA is executed by HUD (e.g., the initial MOAQPTPR

on a troubled or mod-troubled PHA shall cover the first

quarter addressed under the approved MOA).

C. Letter to the Board Chairperson and local government. Concurrent

with the Field Office\'s preparation of the MOAQPTPR, the

responsible HUD office should determine whether the troubled or

mod-troubled PHA\'s performance should be brought to the attention

of the PHA Board Chairperson and its Chief Executive of local

government.

1\. At a minimum, this action should be taken at the time of the

Annual Performance Review.

2\. Copies of the letters shall be forwarded to the Regional

Administrator.

9-12 ON-SITE MONITORING. The Field Office shall perform a PHA on-site

analysis on a risk analysis basis. Such visits may be coordinated

with other reviews, if timely, to minimize staff and travel fund

impact. On-site monitoring should be performed if necessitated by the

PHA\'s MOA performance.

A. The purpose of the on-site analysis shall be to assess the

accuracy of PHA-reported MOA target achievements and the quality

of the PHA\'s work resulting in target achievements.

1\. For example, a sample of turnaround units would be inspected

to determine whether they were adequately turned around

(cleaned, repairs made, etc.) prior to being re-rented, and

to determine whether the number of vacancy days for the

sample was accurately calculated.

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7460.5

Chapter 9, paragraph 9-12A (continued)

2\. Technical assistance should be provided by HUD, as needed.

(6)(j) (2)(B)(ii) of the Act and 24 CFR 901.140(a)(4)

B. In addition to the on-site monitoring, a coordinated review shall

be conducted on a risk analysis basis until troubled or

mod-troubled designation is removed.

9-13 ANNUAL MOA NEGOTIATIONS.

A. An MOA shall be negotiated on an annual basis (refer to paragraph

9-6I, above).

B. The first-year MOA, with a maximum five-year rolling base time

period, for troubled and mod-troubled PHAs may not result in

improved PHA performance to a point where HUD can remove the

troubled or mod-troubled designation. In such instances, a new

MOA, with a maximum five-year rolling base time period, shall be

negotiated and executed for the subsequent year(s).

C. NO LAPSE OF TIME SHALL OCCUR BETWEEN THE FIRST MOA

AND SUBSEQUENT MOAS. The MOA is a contractual document and the

subsequent year(s) MOA shall be negotiated and executed as

expeditiously as possible. A \"labor/management negotiation

strategy\" should be utilized by Field and Regional Offices.

1\. The Field Office and Regional Office shall repeat the MOA

development process described in paragraph 9-5, above.

2\. The content of the new MOA shall rely heavily upon the PHAs

past performance.

3\. As a result of the PHAs past performance, the MOA may need:

a\. A heavier infusion of City support and involvement;

b\. A revision of the projected rate at which annual and

quarterly performance targets are anticipated to

improve;

c\. A substantial revision of the strategies to be relied

upon;

d\. Additional or different technical assistance provided

by HUD; or

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7560.5

Chapter 9, paragraph 9-13C3 (continued)

e\. A heavier reliance on sanctions.

4\. It is at the point of negotiation of the new MOA, if not

having occurred earlier, that HUD shall normally make a

final determination regarding the PHAs compliance with the

previous MOA and whether it is appropriate to proceed with

the enforcement of sanctions.

D. If the subsequent year(s) MOA is not developed and executed

within 60 calendar days after the conclusion of any required

on-site work, HUD will impose improvement requirements on the

troubled and/or mod-troubled PHA.

9-14 REMOVAL FROM TROUBLED AND MOD-TROUBLED PHA DESIGNATION.

PHAs have the statutory right to petition for the removal of troubled

and mod-troubled designation, and to appeal the denial of such a

petition. A PHA shall have a troubled and/or mod-troubled designation

removed based upon a recommendation by the Field Office, as concurred

upon by the Regional Office when the PHA achieves a total weighted

PHMAP and/or modernization score of 60% or greater.

(6)(j)(2)(A)(iii) of the Act and 24 CFR 901.142(a)

A. PHA responsibility.

1\. A PHA has the right to petition the Field Office Manager for

the removal of troubled and mod-troubled designation,

documenting justification for such removal.

(6)(j)(2)(A)(iii) of the Act and 24 CFR 901.130(a) and

901.142(a)

a\. The Field Office shall make recommendations on

petitions to remove troubled or mod-troubled status to

the Regional Administrator, except where authority to

remove troubled and mod-troubled status has been

redelegated to the Field Office Manager by the Regional

Administrator. (6)(j)(2)(A)(iii) of the Act and 24

CFR 901.120(d) and 901.142(a)

b\. The Regional Administrator shall rule on petitions to

remove troubled and mod-troubled status, except where

authority to remove troubled and mod-troubled status

has been redelegated to the Field Office Manager by the

Regional Administrator. (6) (j)(2)(A)(iii) of the

Act and 24 CFR 901.125(e) and 901.142 (a)

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7460.5

Chapter 9, paragraph 9-14A (continued)

2\. A PHA has the right to appeal any refusal to remove troubled

and mod-troubled designation to the Assistant Secretary,

Attention: Director, Office of Assisted Housing.

(6)(j)(2)(A)(iii) of the Act and 24 CFR 901.130(d) and

901.142(b)

B. Field Office responsibility.

1\. The Field Office Manager may determine, independent of such

a petition, that based on a PHA\'s subsequent total weighted

PHMAP score or total weighted PHMAP modernization score

which is 60% or greater, the troubled or mod-troubled

designation should be removed. 24 CFR 901.140(e)

2\. In either instance (PHA petition to remove troubled or

mod-troubled designation or a PHA\'s annual PHMAP total

weighted PHMAP and/or annual PHMAP modernization score is

60% or greater), the Field Office Manager shall make a

recommendation to the Regional Administrator for a final

determination on the removal or nonremoval of troubled and

mod-troubled designation. 24 CFR 901.140(e)

C. Regional Office responsibility.

1\. The Regional Administrator shall make a final determination

on the Field Office\'s recommendation on the petition for

removal or nonremoval of troubled or mod-troubled

designation within 30 calendar days of receipt of the

petition. 24 CFR 901.130(f) and 901.140(e)

a\. Such ruling on the petition should be made after an

on-site review, if one is conducted.

b\. Such ruling on the petition shall include documented

justification.

2\. The Regional Administrator may redelegate to the Field

Office Manager the authority to remove PHAs under 1250 units

from troubled and mod-troubled status. 24 CFR

901.140(e)

D. Headquarters responsibility. The Assistant Secretary shall make

a final determination on the appeal of a Regional Office\'s denial

on a PHA\'s petition for removal of troubled or mod-troubled

designation within 30 calendar days from the receipt of the

appeal. 24 CFR 901.130(c)(1)

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7560.5

Chapter 9, paragraph 9-14 (continued)

E. A PHA shall have troubled and/or mod-troubled designation removed

upon recommendation by the Field Office and concurrence by the

Regional Office when the PHA achieves a total weighted PHMAP

and/or modernization score of 60% or greater, except in an

unusual circumstance(s) where extreme noncompliance issues exist.

24 CFR 901.140(e)

F. A PHA may be required to develop an Improvement Plan (IP) (refer

to Chapter 10 of this Handbook) to continue correcting deficient

indicators after a PHA achieved a total weighted PHMAP and/or

modernization score of 60% or greater and troubled and/or

mod-troubled designation has been removed by HUD.

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