Title: Missouri Housing Development Commission
1(No Transcript)
2Asset Management Compliance Accounting
- Presented by
- Deb Giffin Director, Asset Management
- Scott Hanak Supervisor, Asset Management
- August 28, 2007 315 430
3Asset Management
- Industry Definition
- A systematic process of effectively monitoring
the physical, fiscal, and regulatory operations
of affordable housing by using sound business
practice and economic rationale to measure
performance. - Reality
- Everything After Closing!!
4Meet the Staff
MHDC STL 4625 Lindell, Suite 300 St. Louis, MO
63108 314-877-1350
5Responsibilities
- Budgets
- Annual Financial Statements
- Rent Increases
- Occupancy
- Replacement Reserves
- Operating Reserves
- Insurance Claims
- Surplus Cash
- Owners Equity
- Management Fees
- IRP Administration
- RAP Administration
Note Above list applies to all properties that
have at least an MHDC mortgage. Rules for Tax
Credit Only properties may be different.
6Upcoming Due Dates
- Budgets due - November 15, 2007
- Rent Increases due November 15, 2007
- AFS due March 31, 2008
- Monthly Occupancy due -15th of every month
72008 Policy Changes!
- Rent Increase will be required to be submitted at
budget time or by December 31st - No more
February 1st to April 30th window - Rent increases for all elderly properties will be
capped at the Social Security COLA adjustment .
(2007 COLA 3) - Effective on all 2008 rent
increase requests - www.ssa.gov/cola/automatic-cola.htm
- R4R requests will be required to be submitted
through on-line AMRS system Effective January
1, 2008
8Management Fees
- 3 increase for 1st time increases
- 2 increase thereafter up to 40
- of Collected Revenue requests are converted to
per unit for reasonableness test - Submit Request 30 days prior to expiration - Form
2004-A Management Certification
9Review Process
- Look at DCR before and after increase
- Most Recent Inspection Rating
- Open 8823s
- Current Occupancy
- Non-Compliance Issues!!
10Something to Think About
- MHDC is considering adjustments to the
management fee cap. Any suggestions? -
11Insurance Claims
- Notify MHDC immediately (24 hrs if at all
possible) - Submit Insurance Checklist
- Need copy of Insurance Claim
- Schedule an MHDC inspection
- Claim check must be deposited with MHDC
- Applies only to MHDC mortgage properties!
12Insurance Claim Checks
- Must name MHDC as an additional loss payee
- Check needs to be endorsed prior to submission to
MHDC - Held in a separate insurance account
- Owner/contractor is reimbursed upon completion of
work and MHDC inspection - Partial releases are allowed still subject to
MHDC inspections
13Accounting Treatment
- Remaining balances are transferred to R4R
- No Netting of Expenses
- Consult CPA for appropriate GAAP accounting
- Financial Statement Disclosure required!
- May be subjected to an insurance investigation if
procedures are not followed!
14Non-Compliance
- Failure to submit AFS and Budgets by due date
- Failure to respond to AFS Budget findings
- Failure to respond to open inspection items
- Failure to report occupancy totals for 3
consecutive months
15While in Non-Compliance
- In violation of the Regulatory Agreement!
- Placed on a minimum 90 day review period
- MHDC will not process
- Replacement reserve withdrawals
- Rent increases
- Surplus cash disbursements
- Operating reserve requests
16Websites to Remember
- www.mhdc.com
- Asset Management Section
- Download all forms, handbooks, and policies
- Extensive FAQ Sections
- amrs.mhdc.com
- Asset Management Reporting System
- Need User Name and Password
17AMRS(Asset Management Reporting System)
amrs.mhdc.com
18Modules
19New Features
- New look and feel to Main Menu
- Archived Reports capability
- Ability to review submission status
- Extension request button still needs MHDC
approval - Replacement Reserve Request Module
20Main Menu
21Archived Reports
22Submission Status
23Replacement Reserve Module
- New look Same Process
- Quicker turnaround times
- Improved tracking capability
- No more paper
- Use the Budget/AFS password
24Replacement Reserve Module
25Replacement Reserve Module
26Replacement Reserve Module
27Replacement Reserve Module
28Replacement Reserve Module
29Replacement Reserve Module
30AMRS(Asset Management Reporting System)Helpful
Tips
31Logging In
32Logging In
If you do not see this question Your pop-up
blocker needs to be turned off for this site only
33Updating Contact Info
It is the propertys responsibility to keep this
current
34Help Bubbles
Over 100 help bubbles containing definitions and
tips
35Top 5 Budgeting Errors
- Poor or unreasonable explanations
- Gross potential rents are incorrect
- Budgeting large R4R in operations
- Non-operating items are included in operating
budget - Applying an across the board increase for every
line item
36Unreasonable Explanations
Above examples were taken from the 2007 budget
submission period
37Good Explanations
- Explain the specific event(s) that changed
- Explain the full change in amount
- Pertain to the right year
- Are consistent
38Example
- Budget Scenario Budget projects 10,000 for
Insurance. Insurance was 3,000 in the previous
year. - Explanation
- Insurance quote shows a 4,000 increase for the
upcoming year. Additionally, due to the recent
floods in the surrounding area management has
decided to purchase additional coverage which is
estimated to be 3,000 more.
39Gross Potential Rent
GPR should not be netted, and should be based
upon the Regulatory Agreement, Land Use
Restriction Agreement, HUD Rent Schedule or
MHDCs Schedule II.
40Budget Menu
If the submission bar is not 100 your submission
is not complete!
41Top 5 AFS Errors
- Not using the required Chart of Accounts
- Audit Report does not match Submission Entry
- Gross Potential Rent calculation
- Non-operating items are included in operating
expenses Surplus cash note interest is not an
operating expense - Overpaid Management Fees
42Non-Operating Expenses
43Calculating Management Fees
44The AFS Header
All questions can be answered from the contents
of the financial statement when qualified staff
input information
45Surplus Cash Distributions
- Question is only asked if Surplus Cash Exists
- Selecting OK will take you to the request form
- Selecting Cancel submits your AFS, but no
distribution request is submitted - Still can request a distribution a later date if
cancel is selected
46Surplus Cash Request
47Top 5 Rent Increase Errors
- Not charging current rents!
- Didnt provide 3 comparables - for each BR size
- Incomplete rent rolls were uploaded
- Not Implementing rents at effective date
- Poor Budgeting
483 Comparables
49The Rent Increase Request
- Rent Increase will be required to be submitted at
budget time or by December 31st (No more February
1st to April 30th window) - Question is asked at the end of the budget
submission - Can still request an increase by December 31st if
request is not entered at budget submission
50Implementing Rent Increases
- Notify tenants of a proposed rent increase at the
time of the request - MHDC authorizes adding language to the lease that
allows for a rent increase at any point during
the year with a 30 day notice maximum of 1
increase per year
51Top 5 Occupancy Errors
- Not Submitting
- Not providing explanations if occupancy is below
85 - Reporting the number of occupied units instead of
vacant units - Did not answer the waiting list question
- Reporting on incorrect bedroom sizes
Failure to report occupancy timely places the
property in Non-Compliance
52Occupancy
53Under 85
3 consecutive months below 85 (after
stabilization) places the property on the
Commission Watch List.
54Questions