Tip #16: Learn how to reduce administrative costs.
When Congress reduces administrative fees, HUD is required to do a proration of the fee. When the fees are prorated, there are several considerations:
- Can we make our operation more efficient and effective without jeopardizing production and quality?
- Are staff being fully utilized?
- Are there administrative expenses that we can reduce?
- Can we increase our program utilization, since we get paid our fees by lease-up?
The largest administrative expense is salary-related costs. Here are some questions to ask:
- Is our program as streamlined as it needs to be? Are workflows efficient?
- Are our caseloads comparable to industry standards?
- Are salaries higher than those of others relative to similar jobs in the area?
- Is the use of overtime high?
- Are pay raises and cost of living adjustments higher than what is normally paid in our area?
- Are employee bonuses (if applicable) cash compensation?
Reviewing worker efficiencies in your PHA will help determine whether staff are fully utilized. Streamlining workflows can eliminate bottlenecks and inefficiencies. Consider the following strategies:
- Establish measurable performance standards for staff.
- Develop measurable standard operating procedures to eliminate variations by staff.
- Track production and accuracy, and identify underperformers
- Create work plans and hold staff accountable
- Assign staff to multiple functions to make full use of their time (for instance, clerical staff who can cover the lobby and assist in reexaminations)
Improving staff performance ensures that functions are properly completed the first time.
Finally, there are certain expenses typically viewed as fixed costs that can actually be adjusted. Review these costs annually:
- Cleaning fees
- Copier fees
- Telephone services
- Cell phones
- Utility costs
- Association memberships
- Office rent and space costs
- Storage fees
- Travel
- Corporate credit cards (are miles used for travel?)
- Office supplies
- Contractors
- Training (although this is a risk for audits)
- Perks
- Purchasing
You may find that your administrative costs are more flexible than you had realized.
Next: Achieving high performance in the HCV program: Tip #17
While serving as executive director of a Minnesota housing authority, Nan McKay started one of the nation’s first Section 8 programs. The agency was subsequently honored with a HUD award as one of 13 outstanding Section 8 programs in the country.
Founder and president of Nan McKay and Associates, she has devoted the past two years to redesigning NMA’s HCV Executive Management course, as well as rewriting the HCV Executive Management Master Book with Bill Caltabiano. Follow the #executivemanagement tag to keep up with all related blog posts.
