Help Your Housing Authority’s Board Understand Program Results
The governing boards of most public housing authorities (PHAs) may include locally elected officials, citizen volunteers, and community members. They are often bright, sincere, committed individuals who come from a variety of professional and personal backgrounds — which don’t always include housing. It can be challenging for your PHA’s executive leadership to educate board members on vital organizational issues, especially when they have competing ideas of what your PHA’s success should look like.
When board commissioners are uninitiated or have divergent motivations and visions for their governing roles, it can be difficult to align their oversight with your mission-focused work. This could become particularly problematic if the Trump Administration’s plan to cut $6 billion from the Housing and Urban Development (HUD) budget actually materializes. You and your board members should consider the budgetary implications of these potential cutbacks. This would be a good time to implement proactive measures and explore additional sources of revenue or approaches to minimizing expenses. Involving board members early in this process will provide them additional insight into your program operations and help prevent their questions if budgetary shortfalls do occur.
You can generally reach some consensus about governance and organizational direction when you help them understand that, in this industry, programmatic results are the name of the game. Taking these steps may help give your board members the information and tools they need to define and achieve success, even under budgetary constraints.
Help your board understand what makes your PHA unique
When board members learn the regimented nature of spending within a PHA, they start to think differently about funding and program success. PHAs usually have more than one program under management, and money from each program is typically locked into that program and not available to other areas of the organization. Plus, unlike a business, the funding source (usually HUD) explicitly dictates what your PHA can and cannot do with the money. The presence of numerous grant compliance requirements may impose additional limitations on spending or require additional spending to ensure compliance. Providing budgetary and financial reporting data by program to board members is an essential step in their analysis of the PHA.
Define success by program results and opportunities
When board members look at each program individually, they tend to see PHA success in a new light. In some programs, for instance, financial prudence signifies success, while the desired outcomes of others are more intangible, like relationships with stakeholders and municipalities. When board members differ on goals — such as affordability versus quality in housing projects — key metrics can help them better identify and understand success. It helps to break down the significant programs for most PHA’s and identify key metrics to help board members understand how they differ. These outlines may help you communicate the nuances of each program while also considering potential opportunities for fiscal improvement.
Section 8 Housing Choice Voucher
Revenue for this program comes from administrative and housing assistance payments (HAP subsidies). Approximately 90 percent of HCV program expenses are directly to landlords, and roughly 10 percent are administrative. Money from the Section 8 program cannot be loaned to other programs.
- Number of vouchers leased determines administrative funding (set amount per unit)
- Number of vouchers leased tells you how many families you are serving
- Portable receivables: Is the PHA tracking? Collecting timely? Monitoring late payment?
- Portability receivables can cause issues if not specifically identified by tenant or received timely
Public Housing and Capital Fund
Public Housing and Capital Fund program revenues come from operating and capital fund subsidies and tenant rental income. Building operations (e.g., maintenance and utilities) and administrative and program operation costs account for its expenses. PHAs are responsible for all operations, and funds cannot be loaned to other programs.
- Number of units leased (“heads in beds”)
- Managing operating costs (manage by the budget)
- Timely rent collection
- Identifying tenant fraud
- Managing unit turnarounds (the quicker the better)
- Public housing assessment score (PHAS)
Central Office Cost Center (COCC)
All revenue from federal programs comes through fees. Rules for funding the COCC may be changing, which will impact the availability of resources for unrestricted purposes. You cannot borrow money from other federal programs (even temporarily) to cover shortfalls. Unallowable borrowing can lead to repayment agreements with HUD, audit findings, and increased HUD oversight of your PHA.
Your key metric for this program is straightforward: Can your COCC support itself?
When it comes to your various business activities, specific metrics for success run the gamut, but a few essential questions can help you gauge how effective they are:
- Are your PHA’s business activities making a surplus?
- Are the risks worth the investment?
- What other opportunities exist that you are not taking advantage of?
- Are you being truly resourceful, such as having discussions with local governments about potential properties they can donate for redevelopment purposes?
Find greater operational efficiencies
You can help engage your board commissioners in program management by proposing operational cost-saving activities such as these listed below. When they comprehend the balancing acts involved in maximizing resources and minimizing expenses, they may better appreciate what it takes to achieve success in this complex industry.
- Push for more lease-ups to increase occupancy, and shorten unit turnaround times to decrease vacancies.
- Consider outsourcing some functions (like tenant recertifications) to a third party or cross-utilizing housing specialists.
- Update tenant preferences to give priority to employed applicants when possible to increase tenant revenue.
- Manage employee costs, as this represents a large expenditure. Review benefit plans, determine if single employer OPEB plans are financially feasible, and review union contracts if significant budget cuts occur.
- Actively monitor receivables from all sources (tenants, government grantors, other PHAs), and push for prompt payment.
How we can help
CLA’s housing authority professionals are deeply experienced in PHA programs. We can help you articulate their operational and financial functions to your authority’s governing body and train board members on some of the more complicated aspects of each program.