MONEY BUDGET ISSUES, REPORTING ISSUES, THE AUDIT PROCESS, ACCOUNTABILITY ISSUES

MONEY

BUDGET ISSUES, REPORTING ISSUES, THE AUDIT PROCESS,

ACCOUNTABILITY ISSUES

STEP ONE: PROCUREMENT

• Check your policy• Check for internal controls• Ask questions• Avoid pitfalls

ETHICAL ISSUES

• ACCOUNTABILITY• FOLLOW POLICY• AVOID APPEARANCE OF IMPROPRIETY• ACC ISSUES• HOW DOES IT LOOK?• TAKING GIFTS?

ISSUES BEFORE TAKING STEPS

• PROCURING VS. ORDERING• COCC OR PROJECT LEVEL• THE PROCUREMENT POLICY• WHO DETERMINES?• WHAT STEPS:– NEEDS ASSESSMENT, COST ASSESSMENT– PURCHASE ORDER– BUDGET APPROVAL

IS AN RFP NECESSARY?

• BLANKET PURCHASE?• WHO WRITES?• GUIDANCE FROM SAMPLES• MINORITY PARTICIPATION• ADVERTISING• WEBSITE• LOOK AT PROCURMENT POLICY!!!!

ANALYZING NEEDS

• IS IT A SMALL OR LARGE PURCHASE?• WHAT DOES PROCUREMENT POLICY SAY?• WHO NEEDS TO APPROVE?• GETTING QUOTES• WAS THIS PLANNED??

SOLICITING BIDDERS

• CAN BE DONE AT PROJECT LEVEL• ACTIVELY SOLICIT PARTICIPATION• UTILIZE MINORITY AND WOMEN OWNED

BUSINESSES• ADVERTISE THROUGH AGENCIES SUCH AS THE

CHAMBER OF COMMERCE, MINORITY AND SMALL BUSINESS AGENCIES

IMPORTANT RULES

• DON’T BREAK DOWN CONTRACTS TO AVOID PROCURMENT PROCESS: SMALL VS. LARGE PURCHASES

• DO BREAK DOWN CONTRACTS WHEN APPROPRIATE TO ALLOW SMALLER FIRMS TO BID

• ADVERTISE, ADVERTISE, ADVERTISE

PUBLISH REQUIRED FORMS

• SOME BIDS REQUIRE FORMS TO BE COMPLETED BY THE BIDDER

• SEE PROCUREMENT SECTION AT: MHATODAY.ORG

• BEWARE OF INSURANCE REQUIREMENTS, BUSINESS LICENSES, LEGAL ENTITY STATUS

• DRUG FREE, WAGE AND HOUR

GETTING VENDORS INFORMED

• SCHEDULE MEETING OF POSSIBLE VENDORS• GO THROUGH GOVERNMENT REQUIREMENTS• COMMUNICATE WITH BUSINESS COMMUNITY

AND INVITE THEM TO BE ON THE LIST• REGISTER PROSPECTIVE BIDDERS• SEND ALL BID PACKET: MAIL OR EMAIL OR

WEBSITE

SOLE SOURCE/ONE BID

• ANY CONTRACT OVER 100K MUST HAVE TWO BIDDERS

• SOLE SOURCE MUST BE DOCUMENTED’• SUGGEST THAT HUD REVIEW SOLE SOURCE

OR IF ONLY ONE BID RECEIVED• SMALL PURCHASES, MID-RANGE PURCHASES,

LARGE PURCHASES: RULES MAY DIFFER

BID DELIVERY REQUIREMENTS

• NOTATE TIME BIDS DUE• USE OUTSIDE OF ENVELOPE TO GET SOME

INFORMATION: CONTRACTOR LICENSE, INSURANCE COVERAGES, BUSINESS LICENSE

• LATE BIDS DO NOT COUNT• GATHER BIDS AT THE TIME DESIGNATED AND

HAVE A WITNESS• MARK BIDS RECEIVED AFTER “LATE”

OPENING BIDS

• PUBLIC MEETING?• TALLLY SHEET• AWARDING BID:– CHECK BUSINESS REQUIREMENTS– INSURANCE– BOND– SPECS– REFERENCES

AWARDING BID

• AFTER VERIFICATION: NOTIFY SUCCESSFUL BIDDER

• DETERMINE START DATE• NOTIFY OTHER BIDDERS• IF BID NOT PERFORMED, CHECK INTO NEXT

LOWEST BIDDER AVAILABILITY

BIDDER CHALLENGES

• FOLLOW THE PROCUREMENT POLICY• ARE BIDS PUBLIC INFORMATION?• WHAT ABOUT CONFIDENTIAL INFORMATION?• TRADE SECRETS?

THE PAPER TRAIL

• INTERNAL PAPERWORK• PURCHASE ORDER• COMPARATIVE PRICING EVALUATION• METHOD OF PROCUREMENT• THE ORDER• RECEIPT• INVENTORY• USE SEPARATE FILES FOR PROCUREMENT

INTERNAL CONTROLS

• DO RANDOM REVIEWS TO INSURE PROCEDURES AND POLICY DONE CORRECTLY

• DEVELOP AGENCY WIDE AND PROJECT INTERNAL CONTROLS

• BE SURE ALL FILES ARE COMPLETE AND ALL FORMS COMPLETED

INSIST ON COMPLIANCE

• HAVE A POLICY• FOLLOW THE POLICY• WATCH OUT FOR ETHICS PROBLEMS• DON’T BE INTIMIDATED BY “FRIENDS”• DON’T ACCEPT OR SOLICIT GIFTS OR FAVORS

FROM VENDORS• KEEP GOOD RECORDS• REVIEW FILES ON A REGULAR BASIS

STEP TWO: THE AUDIT

• Belongs to the PHA.• Must be independent.• Procurement of services of audit firm• Must include entity-wide operation, including

component units and/or joint venture activities.

The RFP

• Page 7 of handout.• Prepare at least 8 months prior to fiscal year

end.• Follow procurement policy for bids.• Evaluate and award.• Do signed agreement.

Procedure

• Set timetable• Board committee?• Fraud• Timetable: Handout page 14

Red Flags

• Cheapest not always the best.• Number of field days must be adequate.• No plan developed, including fraud.• Licensing problem if auditor works multi-state.• Auditor has no experience in PHA or multi-

family work.

Board Participation

• Committee should work as liason between board, PHA and auditor.

• Have regular meetings with auditor to monitor progress.

• Rough audit report at least 3 months prior to submission date.

• Final report at least 2 months prior to submission.

Ask Questions

• Audited financial statement is your report.• Understand what is says.• Implement solutions to problems identified.• Findings are not always the staff’s misconduct.• Follow the advice of your professionals.

STEP THREE: THE CRISIS

• PHAS and SEMAP• Performance Issues• Funding issues: programs• Tackling the problem• Tenants, participants, landlords, staff, etc

Budget Cuts

• PHA budget/funding• Central office• Section 8 (Housing Choice Vouchers)• Recapture of reserves

Making It Work

• Section 8 lack of funding provisions: roughly 83 percent of needs for administrative.

• Public Housing• Working with contractors/providers• Staff salaries/benefits• New cap and reporting• What can’t be reduced?

Additional Sources of Income

• Grants• Rents• Mixed finance developments

CONCLUSION

• FOLLOW THE MONEY !• FOLLOW THE POLICIES !• PLAN AHEAD !• BE READY FOR SURPRISES !• GET ADVICE !• PUBLIC RELATIONS PRACTICES