PIH raises estimate of 2014 admin fee proration to 79%

In a letter mailed to PHA executive directors last Friday, the Financial Management Division (FMD) announced an increase in its estimate of the proration for 2014 administrative fees from 75 percent to 79 percent.

The increase is not correcting any mathematical errors made by FMD in calculating its original estimate. Rather, HUD is using discretionary authority given to it by Congress to supplement the amount appropriated for administrative fees in 2014 with unobligated balances, including recaptures and carryovers, remaining from prior years. A second letter, sent Wednesday, was accompanied by a spreadsheet for each individual PHA showing fee eligibility and fees earned January–June. The upshot:

• You can expect a retroactive increase to your advances for July through September "once the department receives the final allotment(s), which could occur during the month of September or October 2014."
• If you have been using the original proration estimate of 75 percent to calculate administrative fees under portability, you should begin using 79 percent instead. So your calculation will be 79 percent of 80 percent, or 63.2% percent, of the Column B rate. For the January for June period, FMD recommends that you continue to use the original proration estimate of 75 percent.

NOTE: In this blog post, we originally stated that HUD would recapture unused amounts after December 31, 2014. NMA has learned that this is not the case, and in fact, PHAs have no time limit on their use of the new funds. Great news!

We should know more soon. In the meantime, if you have questions, you can send an email to PIH.Financial.Management.Division@hud.gov.

NMA vice president of finance Ray Adair has a wide range of experience in finance and accounting, both with private companies and government entities, and is considered one of the public housing industry’s leading experts in the areas of financial management and accounting for HUD’s public housing and HCV programs.

With the additional admin fees available to your agency, now is a smart time to schedule training. NMA recently published our seminar calendar for the fourth quarter of 2014, with classes conveniently located across the country. Are you having trouble finding the class you want? We can bring the seminar to you. Email sales@nanmckay.com for more information about our affordable onsite training options.