Icr 2535 0107

Paperwork Reduction Act Submission

Please read the instruction before completing this form. For additional forms or assistance in completing this forms, contact your agency’s Paperwork Reduction Officer. Send two copies of this form, the collection instrument to be reviewed, the Supporting Statement, and any additional documentation to: Office of Information and Regulatory Affairs, Office of Management and Budget, Docket Library, Room 10102, 725 Seventeenth St. NW, Washington, DC 20503.

1. Agency/Subagency Originating Request: U.S. Department of Housing and Urban Development Office of Public and Indian Housing Real Estate Assessment Center		2. OMB Control Number: a. 2535-0107	b.   None      
3. Type of information collection: (check one) New Collection X Revision of a currently approved collection Extension of a currently approved collection Reinstatement, without change, of previously approved collection for which approval has expired Reinstatement, with change, of previously approved collection for which approval has expired Existing collection in use without an OMB control number For b-f, note item A2 of Supporting Statement instructions.	4. Type of review requested: (check one) X Regular Emergency - Approval requested by       Delegated 5. Small entities: Will this information collection have a significant economic impact on a substantial number of small entities? Yes X No 6. Requested expiration date: a. X Three years from approval date b. Other (specify)      

7. Title:

Public Housing Financial Management Template

8. Agency form number(s): (if applicable)

N/A

9. Keywords:

Public housing, housing, financial statements, accounting, accountants

10. Abstract:

The Public Housing Assessment System requires public housing agencies to submit financial information annually to HUD. The Uniform Financial Reporting Standards for HUD housing programs requires that this information be submitted electronically, using generally accepted accounting principles, in a prescribed format. HUD will implement a revised financial data schedule (FDS) to capture property level financial data.

11. Affected public: (mark primary with “P” and all others that apply with “X”) a.   Individuals or households e.   Farms b.   Business or other for-profit f.   Federal Government c. X Not-for-profit institutions g. X State, Local or Tribal Government		12. Obligation to respond: (mark primary with “P” and all others that apply with “X”) a.   Voluntary b. X Required to obtain or retain benefits c. P Mandatory
13. Annual reporting and recordkeeping hour burden: a. Number of respondents 3,996 b. Total annual responses 7,573 Percentage of these responses collected electronically 100% c. Total annual hours requested 41,885 d. Current OMB inventory 38,864 e. Difference (+,-) +3,021 f. Explanation of difference: 1. Program change: 3,021 2. Adjustment:		14. Annual reporting and recordkeeping cost burden: (in thousands of dollars) Do not include costs based on the hours in item 13. a. Total annualized capital/startup costs $0.00 b. Total annual costs (O&M) c. Total annualized cost requested d. Current OMB inventory e. Difference f. Explanation of difference: 1. Program change: 2. Adjustment:
15. Purpose of Information collection: (mark primary with “P” and all others that apply with “X”) a.   Application for benefits e.  Program planning/management b. X Program evaluation f.   Research c.   General purpose statistics g. P Regulatory or compliance d. X Audit		16. Frequency of recordkeeping or reporting: (check all that apply) a. X Recordkeeping b. Third party disclosure c. X Reporting: 1. On occasion 2. Weekly 3. Monthly 4. Quarterly 5. Semi-annually 6. X Annually 7. Biannually 8. Other (describe)      
17. Statistical methods: Does this information collection employ statistical methods? Yes X No	18. Agency contact: (person who can best answer questions regarding the content of this submission) Name: Wanda Funk Phone: 202-475-8736

19. Certification for Paperwork Reduction Act Submissions

On behalf of the U.S. Department of Housing and Urban Development, I certify that the collection of information encompassed by this request complies with 5 CFR 1320.9.

Note: The text of 5 CFR 1320.9, and the related provisions of 5 CFR 1320/8(b) (3) appear at the end of the instructions. The certification is to be made with reference to those regulatory provisions as set forth in the instructions.

The following is a summary of the topics, regarding the proposed collections of information that the certification covers:

1. It is necessary for the proper performance of agency functions;

2. It avoids unnecessary duplication;

3. It reduces burden on small entities;

4. It uses plain, coherent, and unambiguous terminology that is understandable to respondents;

5. Its implementation will be consistent and compatible with current reporting and recordkeeping practices;

6. It indicates the retention periods for recordkeeping requirements;

7. It informs respondents of the information called for under 5 CFR 1320.8(b)(3):

1. Why the information is being collected;

2. Use of the information;

3. Burden estimate;

4. Nature of response (voluntary, required for a benefit, or mandatory);

5. Nature and extent of confidentiality; and

6. Need to display currently valid OMB control number;

8. It was developed by an office that has planned and allocated resources for the efficient and effective management and use of the information to collected (see note in item 19 of the instructions);

9. It uses effective and efficient statistical survey methodology; and

10. It makes appropriate use of information technology.

If you are unable to certify compliance with any of these provisions, identify the item below and explain the reason in item 18 of the Supporting Statement.

Signature of Program Official: X Elizabeth A. Hanson, Deputy Assistant Secretary Office of Public and Indian Housing, Real Estate Assessment Center

Date:

Supporting Statement for Paperwork Reduction Act Submissions

A. Justification

1. On September 19, 2005, the United States Department of Housing and Urban Development (HUD) published regulations that revised 24 CFR, part 990 Revision to the Public Housing Operating Fund Program; Final Rule (the Final Rule) (Exhibit A). The Final Rule states that, in accordance with the directives received from the U.S. Congress, public housing agencies (PHAs) and HUD are to convert from an agency-centric model to an asset-management model. The asset management model is more consistent with the management norms in the broader multi-family management industry. In order to implement asset management, the Final Rule stipulates that PHAs must implement project-based management, project-based budgeting, and project-based accounting.

In accordance with these principals, the Final Rule provides for operating subsidy to be provided at the project level. Subsequently, financial reporting will be required at the project level, replacing the current convention of subsidy issuance and financial reporting at the PHA or entity-wide level. The Financial Assessment Sub-System-Public Housing (FASS-PH) is in the process of being modified to accommodate these changes. In the revised structure, the FASS-PH is able to receive project-level and project-specific data. The financial data will still be consolidated into a PHA report, but the individual project-level data will be reported and used for scoring and other analytical purposes.

Applicability of asset management requirements will vary by size. Under 24 CFR 990.260(b), PHAs with fewer than 250 public housing units are exempt from asset management. In accordance with section 225 of the Consolidated Appropriations Act, 2008 (P.L. 110-161), PHAs that own and operate 400 or fewer units may elect to be exempt for any asset management requirement, except for PHAs eligible for a discontinuation of reduction in operating subsidy, i.e., stop-loss agencies. To be eligible for stop-loss, a PHA must implement asset management. However, asset management will be mandatory for PHAs consisting of more than 400 units. The project-level FASS-PH, described below, will be applicable to all PHAs, regardless of asset management implementation. The project-level FASS-PH will be available for PHAs having a fiscal year end of June 30, 2008, and after.

Modifications to the FASS-PH

• Asset Management Project (AMP) or Project

Under the conventions of the Final Rule, each PHA will have property groupings called asset management projects. Both Low Rent and Capital Fund Programs financial data will be reported at the AMP/project level. This change does not in any way merge the Low Rent and Capital Fund Programs, but merely combines a certain level of financial reporting activities of these programs for FASS-PH reporting at the AMP/project level.

• Central Office Cost Center (COCC)

Under asset management, PHAs will no longer allocate costs. Instead, services will be provided centrally by the PHA’s COCC. The COCC has been added to the FASS-PH. The COCC will charge the AMPs/ projects fees for the provision of administrative and maintenance services. Some of the fees levied by the COCC are contingent upon the existence of excess cash, described below, at the AMP?project level. These fees, called “asset management fees,” are only paid by the AMPs/projects when they enjoy financial health, as evidenced by their excess cash. The COCC will report the fees charged as revenue. Fees will be reported as an expense to the AMP/project.

• Elimination Column

An elimination column has been added to the FASS-PH to assist in the consolidation of the financial statements. It provides a location in which to post eliminating entries. These entries will be necessary to adjust transactions between the AMPs/projects and the COCC or inter-AMP/project transactions. This prevents double counting/reporting of these transactions as they flow upward to the overall financial statements. For example, the fee expense charged to each AMP/project and fee revenue earned by the COCC is eliminated in order to reflect only the true revenues and expenses in the top-level financial reporting.

• Excess Cash

Excess cash is defined as the sum of certain current assets accounts less the sum of all current liabilities accounts, less one month worth of operating expenses for the AMP/project. Excess cash is calculated using balance sheet approach. The system automatically calculates excess cash for each AMP/project. Transfers made by AMPs/projects will be restricted to the amount of excess cash that each AMP/project possesses.

Line Item Changes

Many new line items have been added to the FASS-PH. The majority of the new line items are Income Statement line items. Most of these line items were added to capture the requirements of asset management, and project based accounting. Below is a list of the line item changes.

• Line items 356 – Financial Accounting Standards Board (FASB) 5 Liabilities and 357 – Accrued Pension and Other Post Employment Benefits (OPEB) Liability were added to the balance sheet as new line items.

• Line items 509.2 – Fund Balance Reserved, 511.2 – Undesignated Fund Balance, and 512.2 – Unreserved Undesignated Fund Balance, were added to the balance sheet to accommodate modified accrual.

• New detail links for line 122 – accounts receivable (A/R) HUD other projects, 342 – deferred revenue, 343 – current portion of long term debt – capital projects/mortgage revenue, and 351 – long term debt.

• The following line items have changes to their definition: 121 – A/R PHA Projects, 174 – Other Assets, and 345 – Other Current Liabilities.

• The following line items were deleted due to Pre-Government Accounting Standards Board (GASB) 34: 146, 501, 502, 503, 504, 505, 507, 508, 509, 510, 511, and 512.

• The following line items were added to revenue line items: 70710, 70720, 70730, 70740, 70750, and 70700.

• The following line items were added to expense line items: 91300, 91310, and 92000.

• The following line items were added to the operating administrative expense line items: 91400, 91600, 91700, 91800, and 91900.

• The following line item was added to the utilities expense line item: 93600.

• The following line items were added to the maintenance line items: 94300 and 94000.

• The following line item was added to protective services: 95000.

• The following line items were added to the insurance expense line items: 96110, 96120, 96130, 96140, 96210, and 96100.

• The following line items were added to the interest expense line items: 96710, 96720, and 96730.

• The following line items were added to the other financing sources line items: 10091, 10092, 10093, and 10094.

• The following line item was added to the new excess cash line item: 11270.

• The following line items were added to the capital fund and management improvements line items: 11610, 11620, 11630, 11640, 11650, 11660, 13510, and 13901.

• The following line items have changes to their definition: 968, 913, 916, and 943.

• The following line items were deleted due GASB 34: 1102, 1101, 1112.

2. A primary objective of HUD in revising 24 CFR part 990 is to shift the emphasis of PHA management from its current PHA centric management model to an asset management model. The new regulations specifically state, “PHAs shall manage their properties according to an asset management model, consistent with management norms in the broader multifamily management industry.”¹ The goals of asset management are to improve the operational efficiency and effectiveness of managing public housing assets; better preserve and protect each asset; provide appropriate mechanisms for monitoring performance and the property level; and facilitate future investment and reinvestment in public housing by public and private sector entities.

HUD has made significant use of the requirements of the current collection of information. This includes:

• Submission of PHA Entity-Wide and Program-Level Financial Data – HUD uses an automated financial assessment system based on PHA entity-wide and program-level financial data to evaluate the financial health of PHAs. Those PHAs performing poorly receive technical assistance from HUD. They are also subject to additional reporting requirements and possible penalties.

• Electronic Submission in Accordance with Generally Accepted Accounting Principles (GAAP) Standards – The electronic submission of required financial information and statements in accordance with GAAP standards has resulted in significant benefits, such as increasing the speed of information preparation and exchange; cost savings from reduced need for paper submission; and faster, more accurate HUD review and analysis. In addition, electronic submission has reduced the administrative burden that manual submission presents to HUD program participants and HUD staff.

• Uniform Financial Reporting Standards (UFRS) – Prior to the adoption of UFRS, financial reporting standards varied from program to program, making it difficult for HUD to monitor participants’ compliance with various program statutory, regulatory, and contractual requirements. However, standardization of financial reporting requirements for PHAs has brought uniformity to the financial reporting process and has made it easier for HUD to identify and mitigate the risks of financial loss.

2. The electronic submission of required financial information and statements has resulted in significant benefits, such as increasing the speed of information preparation and exchange; cost savings from reduced need for paper submission; and faster HUD review and analysis. In addition, electronic submission has reduced the administrative burden that manual submission presents to HUD program participants and HUD staff alike. The collection of information is collected by Internet based electronic collection forms. The collection of information involves the use of two collection methods. Each method transfers PHA data to an information technology management system referred to as ‘Secure Systems’. The first method consists of manually entering data into Secure Systems. The second method consists of using specialized software called Extensible Markup Language (XML) that converts data captured within a PHA’s accounting system into the HUD prescribed format.

Attached are copies of the computer screens for unaudited and audited financial submissions used by PHAs to transmit financial data to HUD. Upon completion of each Public Housing Financial Management Template, the PHA must electronically transmit the financial data to HUD via the Internet. Exhibit B is the PHA template for an unaudited financial statement. Exhibit C is the PHA template for an audited financial statement for an agency with expenditures of federal awards of at least $500,000 annually. Exhibit D is a listing of added and deleted financial data schedule line items as a result of asset management. Exhibit E is a copy of the OMB Disclosure Statement. This disclosure statement appears on the first screen respondents see when they enter the system to make a submission

4. No similar information is available. Currently, HUD does not require PHAs to submit financial data at an AMP/project level nor does any other government agency collect this information. The current data required of PHAs at an entity-wide and program level does not include detailed information necessary to meet HUD’s management objectives identified in Section #2, i.e., shift to asset management. There is no risk of duplication.

5. The impact of the revised data collection system will have limited impact on small PHAs. Under 24 CFR 990.260 (b) “PHAs that own and operate fewer than 250 dwelling rental units may treat their entire portfolio as a single project.” However, for calendar year 2008, that regulation is superseded by § 225 of Title II of Division K of the Consolidated Appropriations Act, 2008, Pub. L. 110-161 (approved December 26, 2007). Under that law, PHAs that own and operate 400 or fewer units may elect not to transition to asset management. The requirements call for the collection of AMP/project level financial information in addition to current entity-wide financial information. However, because the majority of small PHAs have only one or two AMPs/projects, the new collection requirement will be nearly identical to current requirements. Small PHAs with multiple AMPs/projects that may find the new collection information requirement burdensome may elect not to transition to asset management and continue to report all their properties as a single AMP/property. Thus, their reporting requirements will not change under the new rule.

5. As part of its ongoing mission to provide safe, decent and affordable housing to lower income households, HUD is continuously striving to identify fraud, waste, and abuse of HUD resources. Without the submission of project-based data, HUD will not be able to monitor a PHA’s progress in implementing asset management, which is required of PHAs by FY 2011 pursuant to 24 CFR part 990, and compiling project-based financial statements. The submission of annual financial information is a long-standing statutory and regulatory requirement of entities that conduct business with HUD. The revised reporting standards will only improve HUD’s interest (as well as the interest of taxpayers) in mitigating the risks of financial loss due to inefficient management, fraud or insolvency of a PHA.

5. Since the electronic submission process requires respondents to submit confidential financial data, HUD has provided each program participant with a unique user identification code, limited the information available via its assessment system to employees with approved security access to the system, and allowed submitters “read-only” capability that will allow them to view their submitted data via the Internet. The other special circumstances listed as part of the instructions are not applicable to this data collection process.

8. HUD published a Notice of Proposed Information Collection for Public Comment on March 24, 2008, in the Federal Register. (See Exhibit F). The public was given until May 23, 2008, to submit comments on the proposed information collection. HUD received no comments on this proposed collection.

Various notices have been published in the Federal Register, comments from interested persons invited, and summaries of the comments together with responses published.

The new project-based reporting requirements are a direct result of the new rule for the Public Housing Operating Fund Program published in the Federal Register on September 19, 2005. As described in Item 2, the Final Rule revises 24 CFR, part 990 and was the end product of a comprehensive and inclusive process. HUD developed the Final Rule with active participation of PHAs, public housing residents, and other relevant parties using procedures of the Negotiated Rulemaking Act of 1990. A Committee was formed in 2004 and convened on four separate occasions to develop a draft rule. On April 14, 2005, the proposed revisions as agreed upon by the Committee with modifications by HUD and other executive agencies were published in the Federal Register. The public was provided with an opportunity to give their comments until June 13, 2005. The Final Rule incorporating public comments was published in the Federal Register on September 19, 2005.

In addition, during the process of creating the project-based accounting requirements, HUD met formally and informally with public housing industry experts and participants on numerous occasions to develop these rules. These meetings provided insight as to the most efficient project-based approach, which minimize PHA burden while at the same time meeting HUD’s goal of asset management.

9. There are no payments or gifts to respondents.

9. All data that can be linked to a particular PHA is secured from public access. Currently, when a PHA submits data electronically to HUD, security prevents users outside of HUD from intercepting this data. HUD's web access security system ensures that all financial data is secure. The authorities or justifications for the security system are: the Information Security HUD Handbook 2400.24, the Computer Security Act of 1987, the Clinger-Cohen Act of 1996, OMB Circular A-130 part 3, and the Government Information Security Reform Act of 2000 (GISRA). HUD's web access security system allows users to apply online for an ID and password and to reset a forgotten password. It also controls and limits access to systems for authorized users by managing the roles and responsibilities for each user of each system. There are primary and secondary users. Secondary users are granted read-only access to the system. (This is similar to the access that users submitting information have; however, the user only is able to see his/her submission.) HUD authorized primary users (i.e., selected staff) have security access to update the information, with strict controls of the tasks that they may perform.

11. No sensitive questions are being asked.

11. Financial management template submissions are required by HUD for PHAs that administer only low rent units, low rent and section 8 units, and only section 8 units, through HUD’s web access secure systems. The estimated burden hours for the collection of this data reflect the PHAs’ experience with inputting data into the Public Housing Financial Management Template. The following tables list the burden hours associated with the two required Public Housing Financial Management Template submissions (unaudited and audited). In the charts, below, the burden hour calculations are shown by the number of AMPs/projects contained in a PHA, and are further separated for PHAs that administer only low rent units, low rent and section 8 units, and only section 8 units. The calculations assume that PHAs with more AMPs/projects are larger. Larger PHAs tend to participate in more federal programs and require more time to complete the template because they have to input more data. For PHAs with fewer AMPs/projects, the time to complete the template should be less because they tend not to have the variety of funding sources or financing vehicles typically available to larger-sized PHAs. The estimated burden hours are adjusted upward from the previous submission due to the significant changes that have been made to the FASS-PH.

Unaudited Average Burden Hour Estimates for PHAs
Number of AMPs	Low Rent Only		Low Rent & Sec. 8		Section 8 Only		Totals
	# PHAs	Burden Hrs.	# PHAs	Burden Hrs.	# PHAs	Burden Hrs.	# PHAs	Burden Hrs.
1	1,363	1.5	918	7.0	0	0.0	2,281	8,470.5
2 – 5	129	3.0	502	13.0	0	0.0	631	6,913.0
6 – 10	2	10.0	138	26.0	0	0.0	140	3,608.0
>11	4	20.0	90	40.0	0	0.0	94	3,680.0
No AMPs	0	0.0	0	0.0	850	4.5	850	3,825.0
Subtotals	1,498		1,648		850		3,996	26,496.5

Audited Average Burden Hour Estimates for PHAs
Number of AMPs	Low Rent Only		Low Rent & Sec. 8		Section 8 Only		Totals
	# PHAs	Burden Hrs.	# PHAs	Burden Hrs.	# PHAs	Burden Hrs.	# PHAs	Burden Hrs.
1	1,182	1.5	904	4.0	0	0.0	2,086	5,389.0
2 – 5	126	2.0	512	7.5	0	0.0	638	4,092.0
6 – 10	2	5.0	140	16.0	0	0.0	142	2,250.0
>11	4	10.0	88	20.0	0	0.0	92	1,800.0
No AMPs	0	0.0	0	0.0	619	3.0	619	1,857
Subtotals	1,314		1,644		619		3,577	15,388.0

The estimated annual costs to respondents are provided in the table, below, and reflect the estimated burden hours for unaudited and audited submissions shown in the charts above. The population of PHAs used in the tables below consists of PHAs for fiscal year 2007. This population was chosen to ensure that a full fiscal year was represented and included both unaudited and audited submissions. Unaudited submissions are due two months after a PHA’s fiscal year end and audited submissions are due nine months after a PHA’s fiscal year end. For the unaudited submissions, the hourly cost for response is assuming a Manager’s annual salary of $66,951 (at GS-13/1) or an hourly rate of $32.08. For the audited submission, the hourly cost for response is assuming a certified public accountant annual salary of $79,115 (at GS-14/1) or an hourly rate of $37.91.

Total Estimated Cost to Respondents
Financial Submission	Number of Respondents	Total Burden Hours	X	Hourly Rate	=	Annualized Cost
Unaudited	3,996	26,496.5		$32.08		$850,007.72
Audited	3,577	15,388.0		$37.91		$583,359.08
Totals	7,573	41,884.5				$1,433,366.80

13. No other costs are associated with the collection of this information.

14. The estimated annualized costs to the federal government, based on a GS-13/1 rate, are provided in the table, below. The GS-13/1 rate is the average salary for FASS analysts. The hourly cost for cost is assuming an analyst’s annual salary of $66,951 or an hourly rate of $32.08. The average amount of time it takes for an analyst to review an unaudited submission is almost a full hour (approximately 55.52 minutes). The average amount of time it takes for an analyst to review an audited submission is a little more than three and a half hours or approximately 3.613 hours.

Total Estimated Cost to the Federal Government
FDS Submission	Number of Respondents	Total Burden Hours	X	Hourly Rate	=	Annualized Cost
Unaudited	3,996	3,697.5		$32.08		$118,615.80
Audited	3,577	12,924.0		$32.08		$414,601.92
Totals	7,573	16,621.5				$533,217.72

15. The reduction in number of respondents has been reduced by 242 due to more accurate information regarding the number of section 8 only respondents.

The increase in burden hours for PHAs is due to the changes that will be made to the FASS-PH template as a result of the conversion to asset management. Currently, PHAs are required to submit their financial data to HUD on an entity-wide basis, all programs and activities. The asset management model includes another level of reporting to account for the Low Rent and Capital Fund Programs at the AMP/project level. The additional burden hours are attributable to the increase reporting at the AMP/project level. However, the impact of the revised data collection system will have limited impact on small entities (i.e., PHAs with less than 400 units) since small PHA may treat their entire portfolio as a single project. A summary of the changes to the financial template that will have an impact on PHAs are as follows:

• Modified FASS template to include an AMP/project reporting module (Low rent and Capital Fund);

• Modified FASS template to include a COCC and Elimination Column; and

• Additional Financial Data Schedule Line items to properly account for property level reporting.

16. For low rent only and low rent/section 8 PHAs, the PHAS regulation provides that each PHA shall post its overall PHAS score and status within two weeks of receipt of its overall score and status. The PHAS regulation sets forth the time schedule for the annual financial submission process. For low rent only and low rent/section 8 PHAs, see 24 CFR parts 5 and 902. Section 8 submissions are not scored; however, section 8 information is required to be submitted in accordance with 24 CFR part 5, Subpart H.

17. HUD is not seeking approval to not display the expiration date of the OMB approval. The OMB number and the updated expiration date will be displayed on a “Disclosure Statement” that will be the first screen that is viewed on each of the automated forms after OMB approval is received.

18. There are no exceptions to the certification statement identified in item #19 of the form OMB 83-I.

2. Collections of Information Employing Statistical Methods

This collection of information does not employ statistical methods.

1 24 CFR 990.255 (a)

OMB-83-I 10/95