[Federal Register Volume 65, Number 125 (Wednesday, June 28, 2000)]
[Notices]
[Pages 40028-40031]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-16156]



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Part VI





Department of Housing and Urban Development





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Public Housing Assessment System Management Operations Scoring Process 
for PHAs With Fiscal Years Ending On or After March 31, 2000; Notice

Federal Register / Vol. 65, No. 125 / Wednesday, June 28, 2000 / 
Notices

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4509-N-15]


Public Housing Assessment System Management Operations Scoring 
Process for PHAs With Fiscal Years Ending On or After March 31, 2000

AGENCY: Office of the Director, Real Estate Assessment Center, HUD.

ACTION: Notice.

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SUMMARY: This notice provides additional information to public housing 
agencies (PHAs) and members of the public, regarding HUD's process for 
issuing Management Operations scores to PHAs with fiscal years ending 
on or after March 31, 2000, under the Public Housing Assessment System 
(PHAS). This notice is an update of the Management Operations Indicator 
scoring notice that was published on June 23, 1999, and takes into 
consideration public comment received on the June 23, 1999, notice. 
This notice provides the basis for scoring PHAs on their management 
operations as provided in the PHAS Amendments final rule published on 
January 11, 2000, with certain corrections published on June 6, 2000. 
This notice is applicable to PHAs with fiscal years ending on or after 
March 31, 2000. (The Management Operations Scoring notice applicable to 
PHAs with fiscal years ending before March 31, 2000, is published 
elsewhere in this Federal Register.) The changes made to the Management 
Operations Scoring process for PHAs ending on or after March 31, 2000, 
are discussed in the Supplementary Information section of this notice.

FOR FURTHER INFORMATION CONTACT: For further information contact Wanda 
Funk, Real Estate Assessment Center, Department of Housing and Urban 
Development, 1280 Maryland Avenue, SW, Suite 800, Washington, DC 20024; 
telephone Technical Assistance Center at 1-888-245-4860 (this is a toll 
free number). Persons with hearing or speech impairments may access 
that number via TTY by calling the Federal Information Relay Service at 
(800) 877-8339. Additional information is available from the REAC 
Internet Site, http://www.hud.gov/reac.

SUPPLEMENTARY INFORMATION:

1. Purpose of This Notice

    The purpose of this notice is to provide additional information 
about the scoring process for PHAS Indicator #3, Management Operations. 
The purpose of the Management Operations assessment is to measure 
certain key management operations and responsibilities of a PHA for the 
purpose of assessing the PHA's management operations capabilities.
    The majority of the information provided in this notice was 
originally published on May 13, 1999 (64 FR 26232), and republished on 
June 23, 1999 (64 FR 33708). HUD solicited public comment on both the 
May 13, 1999, and June 23, 1999, notices. This Management Operations 
Scoring Process notice, published in this edition of the Federal 
Register, has been revised to reflect the public comments received on 
the previous notices and to provide the basis for scoring PHAs on their 
management operations as provided in the PHAS Amendments Final Rule 
published on January 11, 2000 (65 FR 1712). This Management Operations 
Scoring notice is applicable only to PHAs with fiscal years ending on 
or after March 31, 2000. (The Management Operations Scoring notice 
applicable to PHAs with fiscal years ending September 30, 1999, or 
December 31, 1999, is published elsewhere in this edition of the 
Federal Register.)

2. Changes From the Public Housing Management Assessment Program 
(PHMAP) to PHAS

    The PHAS assessment of a PHA's management operations utilizes five 
of the eight PHMAP indicators:

    <bullet> Vacant unit turnaround time;
    <bullet> Capital Fund;
    <bullet> Work orders;
    <bullet> Annual inspection of units and systems; and
    <bullet> Security.

    Former sub-indicator #6, security and economic self-sufficiency, 
are now two separate sub-indicators: Sub-indicator #5 is security; and 
sub-indicator #6 is economic self-sufficiency. This change reflects 
compliance with and the intent of the Quality Housing and Work 
Responsibility Act of 1998 (Pub.L. 105-276, approved October 21, 1998 
(referred to as the ``Public Housing Reform Act'') which added economic 
self-sufficiency of public housing residents as an additional factor 
under section 6(j) of the U. S. Housing Act of 1937. The statute 
recognizes the importance of this area as a separate assessment factor, 
and the Department has amended the Management Operations Indicator to 
reflect the statutory guidance.
    The adjustment for physical condition and/or neighborhood 
environment will be made under PHAS Indicator #1, Physical Condition. 
The same definitions and exemptions that apply to the PHMAP also apply 
to the PHAS, except as noted in 24 CFR 902, subpart D. The PHMAP 
indicator for financial management is assessed under PHAS Indicator #2, 
Financial Condition; and PHMAP indicator #7 for resident services is 
assessed under PHAS Indicator #4, Resident Service and Satisfaction.
    The vacancy rate component and the rents uncollected sub-indicator 
are removed from the Management Operations Indicator as a result of the 
Department's consideration of public comments from the June 22, 1999, 
PHAS Amendments Proposed Rule (54 FR 33348). These factors are assessed 
under the Financial Condition Indicator through the ``occupancy loss'' 
and ``tenant receivable outstanding'' components, and the inclusion of 
these factors under both the Financial Condition Indicator and 
Management Operations Indicator was duplicative. These changes ensure 
that the PHAS is an effective and efficient assessment system by 
eliminating any duplicative efforts of information collection under the 
PHAS.
    There are certain differences between the PHMAP score and the PHAS 
score calculated for a PHA's management operations. Under the PHAS, PHA 
requested modifications and exclusions no longer apply. Under the PHAS, 
a PHA will not be assessed under a sub-indicator and/or component if 
the PHA does not receive funding for that program, i.e., Capital Fund. 
PHAs will certify to sub-indicator #2, Capital Fund, and all PHAs will 
certify to and be scored on sub-indicator #5, security, and sub-
indicator #6, economic self-sufficiency, under PHAS Management 
Operations Indicator #3.

3. Submission of Management Operations Certification

    Under the PHAS, a PHA is required to electronically submit 
certification on its performance under each of the Management 
Operations sub-indicators. If circumstances preclude a PHA from 
reporting electronically, HUD will consider granting short-term 
approval to allow a PHA to submit its Management Operations 
certification manually. A PHA that seeks approval to submit its 
certification manually must ensure that the REAC receives a request for 
manual submission in writing 60 calendar days prior to the submission 
due date of its Management Operations certification. The written 
request must include the reasons why the PHA cannot submit its 
certification electronically. The REAC will respond to such a request 
and will manually forward its determination in writing to the PHA.

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4. Elements of Scoring

    The Management Operations Indicator score provides an assessment of 
each PHA's management effectiveness. The computation of the score under 
this PHAS Indicator utilizes data that was submitted for PHMAP and 
requires three main calculations, which are:

<bullet> Scores are first calculated for all of the components that 
have been submitted by the PHA;
<bullet> Based upon the component scores, a score is then calculated 
for each sub-indicator; and
<bullet> From the six sub-indicator scores, an indicator score is 
then calculated.

    The three calculations are performed on the basis of the following:

<bullet> The point values of the six sub-indicators and/or 
components, which are listed in Table 1; and
<bullet> The multiplier value equivalent to the grades assigned 
under PHMAP listed in Table 2.

                       Table 1.--Management Operations Sub-Indicator and Component Points
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                                                    Sub-
                 Sub-indicator                   indicator                  Component                 Component
                                                   points                                               points
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Vacant Unit Turnaround Time...................          4.0                                          ...........
Capital Fund..................................          7.0  Unexpended Funds......................          1.0
                                                             Timeliness of Fund Obligation.........          2.0
                                                             Contract Administration...............          2.0
                                                             Quality of Physical Work..............          1.0
                                                             Budget Controls.......................          2.0
Work Orders...................................          4.0  Emergency Work Orders.................          2.0
                                                             Non-Emergency Work Orders.............          2.0
Inspections of Units and Systems..............          4.0  Inspection of Units...................          2.0
                                                ...........  Inspections of Systems................          2.0
Security......................................          4.0  Tracking/Reporting Crime-Related                1.0
                                                              Problems.
                                                ...........  Screening of Applicants...............          1.0
                                                ...........  Lease Enforcement.....................          1.0
                                                ...........  Grant Program Goals...................          1.0
Economic Self-Sufficiency.....................          7.0                                          ...........
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    The PHMAP grades for each component are assigned values to indicate 
the percentage of the component points that will be awarded in the 
calculations. The assigned values for the PHMAP grades are listed in 
Table 2. Note that some components are only graded on A, C, and F.

                        Table 2.--Possible Grades
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                            Grades                               Value
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A............................................................       1.00
B............................................................       0.85
C............................................................       0.70
D............................................................       0.50
E............................................................       0.30
F............................................................       0.00
------------------------------------------------------------------------

Calculations under the PHAS Management Operations Indicator are 
performed as follows:
    Component Score. The component score equals the component's total 
possible points multiplied by the value of the grade for the PHA. For 
example, a PHA with an equivalent grade of E for the component, 
``inspection of units,'' would receive 30% of the total possible 
component points of 2, for a score of 0.6 for the component. When non-
assessed components exist, the value of the non-assessed component must 
be redistributed proportionately across components that have been 
assessed.
    Sub-indicator Score. The sub-indicator score is the obtained by 
adding the redistributed component scores. When non-assessed Sub-
indicators exist, the value of the non-assessed sub-indicator must be 
redistributed proportionately across the sub-indicators that have been 
assessed. Note that if the value of a sub-indicator is changed because 
of redistribution of non-assessed points, the values of the components 
of that sub-indicator must be redistributed again. This component 
redistribution does not change the value of the sub-indicator, it 
simply ensures that the sum of the components equals the new sub-
indicator value.
    Indicator Score. The Indicator score is determined by adding the 
sum of the sub-indicators.

5. Examples of Score Computations

    An Example of Computing a Sub-Indicator Score With a Non-Assessed 
Component. Table 3 provides an example for the calculation of a Capital 
Fund sub-indicator score and its component scores when the Quality of 
Physical Work component has not been assessed. When non-assessed 
components exist, the value of the non-assessed component must be 
redistributed proportionately across components that have been 
assessed. In our example, the Capital Funds component, Quality of 
Physical Work, is not assessed. To redistribute the Quality of Physical 
Work points, each assessed component must be multiplied by the total 
possible points for the sub-indicator (7), and divided by the total 
possible points of the assessed components (5). The redistributed value 
of the total possible points for the Contract Administration component 
is calculated to be 1.4. In our example, the PHA has received a grade 
of C for Contract Administration; the PHA then receives only 70% of the 
redistributed points value for Contract Administration. As shown in 
Table 3, 70% of 1.4 equals 0.98 points. The Capital Fund sub-indicator 
score is then computed by summing the redistributed components. In the 
example from Table 3, the final score for the Capital Fund sub-
indicator is 6.2 (6.16 rounded to the nearest tenth).

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                                             Table 3.--Example Assessment of the Capital Fund Sub-Indicator
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                                                    Total
                                                   possible   Assessed     Redistribution     Redistributed               Grade         Score      Comp.
                    Component                     component  component       calculation        component      Grade      value      calculation   score
                                                    points     points                             points
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#1 Unexpended Funds.............................        1.0        1.0      (1.0 x 7.0 )/5.0          1.4            A        1.0       1.4 x 1.0  1.4
#2 Timeliness of Fund...........................        2.0        2.0      (2.0 x 7.0 )/5.0          2.8            A        1.0       2.8 x 1.0  2.8
#3 Contract Administration......................        1.0        1.0      (1.0 x 7.0 )/5.0          1.4            C        0.7       1.4 x 0.7  0.98
#4 Quality of Physical Work.....................        2.0         NA                    NA           NA           NA         NA              NA   NA
#5 Budget Controls..............................        1.0        1.0      (1.0 x 7.0 )/5.0          1.4            C        0.7       1.4 x 0.7  0.98
                                                 ----------------------                      ---------------                                      ------
      Total (Sub-indicator Score)...............        7.0        5.0  ....................          7.0    .........  .........  ..............  6.16
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    An Example of Computing the Management Operations Indicator Score 
for a PHA Without an Economic Self-Sufficiency Program. Table 4 
provides an example for the calculation of the Management Operations 
Indicator score when the Economic Self-Sufficiency sub-indicator has 
not been assessed (the PHA does not have a HUD-funded Economic Self-
Sufficiency Program). When a non-assessed sub-indicator exists, the 
value of the non-assessed sub-indicator must be redistributed 
proportionately across the sub-indicators that have been assessed. To 
redistribute the Economic Self-Sufficiency points, each assessed sub-
indicator must be multiplied by the total possible points for the MASS 
indicator (30), and divided by the total possible points of the 
assessed sub indicators (23). This calculation and the redistributed 
value of the total possible points for each sub-indicator is shown in 
Table 4. The final Management Operations Indicator score is derived by 
summing the redistributed sub-indicators.
    These scores are included in the PHAS Report. Note that in the PHAS 
Report, scores are rounded to the nearest tenth.

           Table 4.--Example of Assessment of the Management Operations Indicator Score for a PHA Without an Economic Self-Sufficiency Program
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                                                                                    Total possible
                                                                    Total possible   assessed sub-    Actual sub-      Redistribution      Redistributed
                           Sub-indicator                             sub-indicator     indicator       indicator         calculation       sub-indicator
                                                                        points          points           score                                points
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Vacant Unit Turn-Around Time......................................               4               4               4       (4  x  30)/(23)             5.2
Capital Fund......................................................               7               7            6.16    (6.16  x  30)/(23)            8.03
Work Orders.......................................................               4               4             4.0       (4  x  30)/(23)             5.2
Annual Inspection.................................................               4               4             2.8     (2.8  x  30)/(23)            3.65
Security..........................................................               4               4             4.0       (4  x  30)/(23)             5.2
Economic Self-Sufficiency.........................................               7              NA              NA                    NA              NA
                                                                   -------------------------------------------------------------------------------------
      Total Management Operations Indicator Points................              30              23              NA                    NA           27.28
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    An Example of Rescaling Components So that the Component Sum Equals 
a Redistributed Sub-indicator. In the previous example, the sub-
indicator points were redistributed because the Economic Self-
sufficiency sub-indicator was not assessed. After the sub-indicator 
points were redistributed the components comprising the sub-indicator 
no longer added up to the redistributed value of the sub-indicator. A 
calculation must be performed to rescale the components of a sub-
indicator so that those components add up to the redistributed sub-
indicator. Table 5 contains an example of rescaling the Capital Fund 
components so that they add up to the redistributed Capital Fund sub-
indicator. Each component is rescaled by multiplying by a factor of 30 
divided by 23. As can be seen from Table 5, the rescaled component 
values add up to 8.03 which is the redistributed sub-indicator points 
for Capital Funds as shown above in Table 4.

              Table 5.--Example Redistribution of Components Within the Capital Fund Sub-Indicator
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                                                               Component
                                                             values after                            Component
                         Component                               first       Component rescaling   values after
                                                            redistribution       calculation         rescaling
                                                              in table 3
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#1 Unexpended Funds.......................................             1.4       1.4  x  (30/23)            1.82
#2 Timeliness of Fund Obligation..........................             2.8       2.8  x  (30/23)            3.65
#3 Contract Administration................................            0.98      0.98  x  (30/23)            1.28
#4 Quality of Physical Work...............................              NA                    NA              NA
#5 Budget Controls........................................            0.98      0.98  x  (30/23)            1.28
                                                           -----------------------------------------------------
      Total Sub-Indicator Score...........................            6.16                                  8.03
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    Dated: June 20, 2000.
Donald J. LaVoy,
Director, Real Estate Assessment Center.
[FR Doc. 00-16156 Filed 6-27-00; 8:45 am]
BILLING CODE 4210-01-P