Cfr 990.280 & Cfr 900.285

Asst. Secry., for Public and Indian Housing, HUD
may group up to 250 scattered-site
dwelling rental units into a single
project.
§ 990.270 Asset management.
As owners, PHAs have asset management responsibilities that are above
and beyond property management activities. These responsibilities include
decision-making on topics such as
long-term capital planning and allocation, the setting of ceiling or flat rents,
review of financial information and
physical stock, property management
performance, long-term viability of
properties, property repositioning and
replacement strategies, risk management responsibilities pertaining to regulatory compliance, and those decisions otherwise consistent with the
PHA’s ACC responsibilities, as appropriate.

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§ 990.275 Project-based
management
(PBM).
PBM is the provision of propertybased management services that is tailored to the unique needs of each property, given the resources available to
that property. These property management services include, but are not limited to, marketing, leasing, resident
services, routine and preventive maintenance, lease enforcement, protective
services, and other tasks associated
with the day-to-day operation of rental
housing at the project level. Under
PBM, these property management services are arranged, coordinated, or overseen by management personnel who
have been assigned responsibility for
the day-to-day operation of that property and who are charged with direct
oversight of operations of that property. Property management services
may be arranged or provided centrally;
however, in those cases in which property management services are arranged
or provided centrally, the arrangement
or provision of these services must be
done in the best interests of the property, considering such factors as cost
and responsiveness.
§ 990.280 Project-based budgeting and
accounting.
(a) All PHAs covered by this subpart
shall develop and maintain a system of
budgeting and accounting for each

§ 990.280

project in a manner that allows for
analysis of the actual revenues and expenses associated with each property.
Project-based budgeting and accounting will be applied to all programs and
revenue sources that support projects
under an ACC (e.g., the Operating
Fund, the Capital Fund, etc.).
(b)(1) Financial information to be
budgeted and accounted for at a project
level shall include all data needed to
complete project-based financial statements in accordance with Accounting
Principles Generally Accepted in the
United States of America (GAAP), including revenues, expenses, assets, liabilities, and equity data. The PHA
shall also maintain all records to support those financial transactions. At
the time of conversion to project-based
accounting, a PHA shall apportion its
assets, liabilities, and equity to its respective projects and HUD-accepted
central office cost centers.
(2) Provided that the PHA complies
with GAAP and other associated laws
and regulations pertaining to financial
management (e.g., OMB Circulars), it
shall have the maximum amount of responsibility and flexibility in implementing project-based accounting.
(3) Project-specific operating income
shall include, but is not limited to,
such items as project-specific operating subsidy, dwelling and non-dwelling rental income, excess utilities income, and other PHA or HUD-identified income that is project-specific for
management purposes.
(4) Project-specific operating expenses shall include, but are not limited to, direct administrative costs,
utilities costs, maintenance costs, tenant services, protective services, general expenses, non-routine or capital
expenses, and other PHA or HUD-identified costs which are project-specific
for management purposes. Project-specific operating costs also shall include
a property management fee charged to
each project that is used to fund operations of the central office. Amounts
that can be charged to each project for
the property management fee must be
reasonable. If the PHA contracts with
a private management company to
manage a project, the PHA may use
the difference between the property
management fee paid to the private

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§ 990.285

24 CFR Ch. IX (4–1–11 Edition)

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management company and the fee that
is reasonable to fund operations of the
central office and other eligible purposes.
(5) If the project has excess cash flow
available after meeting all reasonable
operating needs of the property, the
PHA may use this excess cash flow for
the following purposes:
(i) Fungibility between projects as
provided for in § 990.205.
(ii) Charging each project a reasonable asset management fee that may
also be used to fund operations of the
central office. However, this asset management fee may be charged only if the
PHA performs all asset management
activities described in this subpart (including project-based management,
budgeting, and accounting). Asset management fees are considered a direct
expense.
(iii) Other eligible purposes.
(c) In addition to project-specific
records, PHAs may establish central
office cost centers to account for nonproject specific costs (e.g., human resources, Executive Director’s office,
etc.). These costs shall be funded from
the property-management fees received
from each property, and from the asset
management fees to the extent these
are available.
(d) In the case where a PHA chooses
to centralize functions that directly
support a project (e.g., central maintenance), it must charge each project
using a fee-for-service approach. Each
project shall be charged for the actual
services received and only to the extent that such amounts are reasonable.
§ 990.285 Records and reports.
(a) Each PHA shall maintain projectbased budgets and fiscal year-end financial statements prepared in accordance with GAAP and shall make these
budgets and financial statements available for review upon request by interested members of the public.
(b) Each PHA shall distribute the
project-based budgets and year-end financial statements to the Chairman
and to each member of the PHA Board
of Commissioners, and to such other
state and local public officials as HUD
may specify.
(c) Some or all of the project-based
budgets and financial statements and

information shall be required to be submitted to HUD in a manner and time
prescribed by HUD.
§ 990.290 Compliance with asset management requirements.
(a) A PHA is considered in compliance with asset management requirements if it can demonstrate substantially, as described in paragraph (b) of
this section, that it is managing according to this subpart.
(b) Demonstration of compliance
with asset management will be based
on an independent assessment.
(1) The assessment is to be conducted
by a professional familiar with property management practices and costs
in the region or state in which the PHA
is located. This professional is to be
procured by HUD.
(2) The professional review and recommendation will then be forwarded to
the Assistant Secretary for Public and
Indian Housing (or designee) for final
determination of compliance to asset
management.
(c) Upon HUD’s determination of successful compliance with asset management, PHAs will then be funded based
on this information pursuant to
§ 990.165(i).
(d) PHAs must be in compliance with
the project-based accounting and budgeting requirements in this subpart by
FY 2007. PHAs must be in compliance
with the remainder of the components
of asset management by FY 2011.

Subpart I—Operating Subsidy for
Properties Managed by Resident Management Corporations (RMCs)
§ 990.295 Resident Management Corporation operating subsidy.
(a) General. This part applies to all
projects managed by a Resident Management Corporation (RMC), including
a direct funded RMC.
(b) Operating subsidy. Subject to paragraphs (c) and (d) of this section, the
amount of operating subsidy that a
PHA or HUD provides a project managed by an RMC shall not be reduced
during the three-year period beginning
on the date the RMC first assumes
management responsibility for the
project.

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