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###### Department of Housing and Urban Development

          - [Docket No. FR-4687-N-01]
          - RIN 2577-AC08

# AGENCY:

Office of the Assistant Secretary for Public and Indian Housing, and Office of the Director of the Real Estate Assessment Center, HUD.

# ACTION:

Notice of revised timetable for issuance of management operations official scores and PHAS advisory scores and intent to commence informal meetings on PHAS.

# SUMMARY:

This document advises that the Management Operations indicator under the Public Housing Assessment System (PHAS) will continue to be the official assessment for public housing agencies (PHAs) with fiscal years ending on June 30, 2000, through June 30, 2001. Accordingly, HUD will issue these management scores and PHAS advisory scores as provided in the Supplementary Information section of this document. Further, this document notifies the public of the intent of the Department to conduct informal consultations with PHAs, public housing residents, representatives of PHAs and residents, housing advocacy representatives, governmental representatives, and such other groups that HUD may identify regarding ways to improve HUD's on-going procedures for assessing the performance of public housing agencies. It is expected that these informal consultations will commence within the near future and occur periodically through November, 2001, and thereafter as necessary on dates and at locations provided by the Department.

# FOR FURTHER INFORMATION CONTACT:

For further information contact the Office of Public and Indian Housing, Office of Troubled Agency Recovery Attention: Judy Wojciechowski, Director of PHAS Operations, U. S. Department of Housing and Urban Development, 451 Seventh Street, SW, Room 4112, Washington, D.C. 20410 or the Real Estate Assessment Center (REAC), Attention: Wanda Funk, U. S. Department of Housing and Urban Development, 1280 Maryland Avenue, SW, Suite 800, Washington DC, 20024; telephone Customer Service Center at (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:

HUD's rule implementing the PHAS was published on September 1, 1998 (64 FR 46596), and became effective October 1, 1998. Although the PHAS regulation became effective October 1, 1998, the final rule provided a one year delayed implementation date.

On January 11, 2000 (65 FR 1712), HUD issued an amended PHAS rule. The amendments were prompted by both statutory and administrative changes to the PHAS and comments from interested parties. The amended rule deferred full implementation of PHAS for PHAs with fiscal year end dates of September 30, 1999, and December 31, 1999. The January 11, 2000 rule provided that these PHAs would receive an assessment score based only on the Management Operations indicator (MASS).

On June 6, 2000 (65 FR 36042), HUD issued a technical correction to the January 11, 2000, final rule and one of the corrections further deferred full implementation of PHAS for PHAs with fiscal years ending on and after June 30, 2000.

The Conference Report 106-988 for the Department's Fiscal Year 2001 Appropriations Act (Pub L. 106-377, approved October 27, 2000), directed the Department to, among other things, continue to assess the accuracy and effectiveness of the PHAS system, perform a statistically valid test of PHAS, conduct a thorough analysis of the results, and have the methodology and results reviewed by an independent expert before taking any adverse action against a PHA based solely on its PHAS score. A report addressing these issues was provided to HUD's Committee on Appropriations on March 1, 2001.

Consistent with the direction of the conferees, HUD issued a PIH notice (Notice PIH 2001-5), issued January 19, 2001, that provided prior to March 1, 2001, HUD would not take adverse action against PHAs solely on the basis of the PHAS scores. “Adverse action” was defined as troubled designations based upon the official PHAS composite score. In accordance with the PIH notice, all official troubled/substandard designations (with the exception of substandard management operations indicator designations), beginning with PHAs with June 30, 2000, fiscal year end dates, were held in abeyance prior to HUD's March 1, 2001, submission date.

Given these recent events, HUD has determined that full implementation of PHAS should be further deferred until after June 30, 2001. Accordingly, PHAs with fiscal years ending June 30, 2000, through June 30, 2001, will receive an assessment solely on the basis of HUD's assessment of the PHA's management operations in accordance with 24 CFR part 902, subpart D of the PHAS regulations (PHAS Indicator #3, Management Operations), as amended by the January 11, 2000, final rule, and corrected by the June 6, 2000, PHAS Technical Correction.

Further, it is the Department's intent to meet with public housing stakeholders (such as PHAs, representatives of PHAs, public housing residents, representatives of PHAs and residents, housing advocacy representatives, governmental representatives and other groups HUD may identify) and seek their input to identify any necessary modifications to the rule and to publish, if appropriate, a new amended PHAS rule to address changes. Through these meetings, HUD is not seeking consensus advice, but only feedback on experiences with the PHAS, identification of problems and recommendations for modifications. In the interim, modified PHAS scores, as established by appropriate procedures and notification, may be issued to PHAs with fiscal years ending on September 30, 2001, December 31, 2001, March 31, 2002, and June 30, 2002. The following sets out the timetable for issuance of PHAS advisory scores and official MASS scores.

## Revised Timetable

### PHAs With Fiscal Years Ending 6/30/00, 9/30/00, 12/31/00, 3/31/01 and 6/30/01

For PHAs with fiscal years ending June 30, 2000, September 30, 2000, December 31, 2000, March 31, 2001, and June 30, 2001, HUD will not issue PHAS scores for the fiscal years ending on these dates. For these PHAs, in lieu of a PHAS score, HUD will issue the following:

*Management Assessment Score.*                     PHAs with a fiscal year ending June 30, 2000, September 30, 2000, December 31, 2000, March 31, 2001, or June 30, 2001, will receive an official assessment score on the basis of HUD's assessment of the PHA's management operations in accordance with 24 CFR part 902,                           ( print page 29343)                        subpart D of the PHAS regulation (PHAS Indicator #3, Management Operations).                

1. A PHA may be designated troubled (substandard management) as a result of the management operations assessment score.

2. A PHA may appeal its management operations score in accordance with 24 CFR 902.69.

*PHAS Advisory Score.*                     PHAs with a fiscal year ending June 30, 2000, September 30, 2000, December 31, 2000, March 31, 2001, or June 30, 2001, will be issued a PHAS advisory score. The PHA must comply with the requirements of 24 CFR part 902 (the PHAS regulation) so that HUD may issue the advisory score.                

1. Physical inspections will continue to be performed by HUD, as part of the PHAS advisory score process, using HUD's Uniform Physical Condition Standards inspection protocol. However, PHAs with an overall score in the PHAS Physical Condition indicator of at least 80 percent of the 30 available points (or 24 points) will not be inspected this fiscal year. The physical inspection scores from last year will be utilized to calculate the PHAS advisory scores for these PHAs.

2. All PHAs are required to document the correction or abatement of exigent health and safety hazards in accordance with PHAS requirements and should provide Field Offices with certification of such action(s).

3. PHAs must comply with the reporting requirements of PHAS, and be assessed by HUD under the PHAS on an advisory basis.

4. PHAs may not appeal advisory scores, but are encouraged to take advantage of the technical review process for the Physical Condition indicator and the Resident Service and Satisfaction indicator (24 CFR part 902.68). Also available under the Physical Condition indicator is the database adjustment (24 CFR part 902.25).

5. Notwithstanding the automatic designations generated by the Department's technological systems, all designations other than MASS troubled (substandard management) will be held in abeyance, as well as any incentives that are awarded for such designations.

## PHAs With Fiscal Years Ending After 6/30/01

Since it is the intent of the Department to conduct informal consultations with PHAs, residents, and others interested in public housing, on ways to improve HUD's on-going methodology and procedures for assessing the performance of public housing agencies, and these informal consultations are expected to commence within the near future and continue periodically through November 2001; PHAs with fiscal years ending after June 30, 2001 through June 30, 2002, may be issued modified PHAS scores as established by appropriate procedures and notification.

Dated: May 22, 2001.

Gloria Cousar,

Acting General Deputy Assistant Secretary for Public and Indian Housing.

Barbara Burkhalter,

Deputy Director, Real Estate Assessment Center.

[FR Doc. 01-13487 Filed 5-29-01; 8:45 am]

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