PIH announces plan to “re-federalize” COCC fees

In a letter to executive directors dated April 1, Public and Indian Housing Deputy Assistant Secretary Milan Ozdinec announced upcoming changes to the treatment of fees paid to PHA central office cost centers (COCCs). The changes resulted from a critical OIG audit published in June 2014.

While the audit report recommended that HUD eliminate asset management fees, the OIG ultimately agreed not to pursue this recommendation. However, HUD will be implementing rulemaking to “re-federalize” fees paid to the COCC as recommended in the audit report. The letter states that no changes by PHAs are required at this time, but HUD is notifying agencies for planning purposes.

According to the letter:

This will mean that Section 8 (HCV) and 9 (operating fund and capital fund) funded fees that paid into the COCC will be limited to authorized Section 8 and 9 uses and eligible activities. Once paid into the COCC, these fees will become fully fungible and available for any Section 8 and 9 allowable uses, providing some flexibility to PHAs. Any non-federal fees paid to the COCC will still be considered non-federal, and remain subject to state, local and PHA-allowed activities, but will need to be tracked separately. This change only affects PHAs currently utilizing a COCC, and not those using a cost allocation method.

HUD will provide guidance and written procedures through the rulemaking process, which will begin later this year.

NMA's financial management experts will be available for limited free one-hour Q&A sessions at the The Housing Conference this September in San Antonio, Texas. Registered participants can sign up on a first-come, first-served basis starting April 15. Register online or email sales@nanmckay.com for more information.