HUD Releases Guidance on PHA Salary Restrictions

On October 3, HUD PIH Issued Notice PIH-2016-14 (HA) titled, “Guidance on the Public Housing Agency (PHA) salary restriction in HUD’s annual appropriations.” Congress prohibits PHAs from using any Tenant-Based Voucher, Operating Fund, or Capital Fund dollars to pay any amount of salary above the base rate of pay for level IV of the Executive Schedule. To fulfill its obligations under HUD’s annual appropriations, each PHA must compute the amount of impacted salary and bonus for each covered individual during the PHA’s fiscal year. If any covered individual has a salary and bonus that exceeds the annual rate of basic pay for a position at level IV of the Executive Schedule, the PHA must ensure that the amount in excess is not paid from Section 8 or Section 9 funds. Covered individuals include the “chief executive officer” as well as “any other official or employee” of the PHA with an annual salary (including any bonus) greater than the then prevailing salary for level IV of the Executive Schedule.

PHAs should calculate excess salary and bonuses reasonably and should document the calculation so that, if audited, the PHA can explain how each covered individual’s salary and bonus exceeding level IV of the Executive Schedule for that fiscal year were funded and prove to the auditor that there was no improper use of the applicable Section 8 or Section 9 monies to fund excess PHA salary and bonus payments.

For more information on this requirement, see NAHRO’s coverage of the FY16 Omnibus (members only).

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