Yesterday, March 23, HUD published PIH-2017-06, a notice titled “Cash Management Requirements for the Housing Choice Voucher Program.” This notice replaces the previous cash management notice (PIH 2011-67) and “revises the cash reconciliation timeframes and provides additional guidance to MTW PHAs.”
While NAHRO will provide additional coverage of the notice in its the next issue of its newsletter, the Monitor, here are few points from the notice.
- Monthly disbursements are based on the most recent validated Voucher Management System (VMS) Housing Assistance Payment (HAP) costs. Disbursements may be scheduled for one or multiple months at a time. Disbursements will be made on the first business day of the month. The notice provides an example document showing how PHAs will be notified of disbursements.
- HUD assesses national program cost trends and may include small increases or decreases to disbursement amounts to account for increases or decreases in national leasing or other costs.
- PHAs whose monthly costs exceed the scheduled disbursements may submit a request for additional advance to their Financial Analyst at the Financial Management Center (FMC).
- Disbursements will be scheduled for deposit in a PHA’s bank on the first business day of the month.
- At least twice a year HUD will compare a PHA’s actual costs to funds disbursed plus other program revenues (e.g., fraud recoveries). Future disbursements will be adjusted accordingly. HUD will address disbursement shortfalls at a reconciliation at the end of the calendar year. In the end-of-the-year reconciliation, if HAP expenses were less than total HAP disbursement combined with other program revenue and Restricted Net Position (RNP), there will be an offset.
- HUD will process prior period adjustments once in the next year.
- The notice provides a sample document HUD will use following each interim and year-end cash reconciliation.
- Incremental vouchers (i.e., first time vouchers) such as HUD-VASH or tenant protection vouchers will have their funding disbursed in equal monthly amounts according to the effective date and expiration dates of their contracts.
- Excess HAP and RNP are to be deposited in an interest-bearing account and at least once a year, PHAs are required to remit that interest to the Treasury.
- PHAs are still able to access their program reserves for eligible HAP needs whenever necessary by contacting their Financial Analyst at FMC.
MTW agencies are subject to cash management requirements. Non-HAP expenses funded from HAP are not considered for the monthly HAP disbursement calculations. Any MTW PHA that needs more than the calculated amount should contact their Financial Analyst at the FMC for additional disbursement, which may include eligible MTW non-HAP expenses.
Additional coverage on the notice will be forthcoming for members. The notice can be read here.