House by House Reservation Rehabilitation Program Changes June 29,2015

2 CFR Part 200 aka OMBs What is it??? How it affects you….. –Cost Allocation Plans – Direct vs Indirect Costs –MFA oversight requirements …..Which ultimately affects sub-grantees Audit Requirements Coming soon Data Act Changes to Section 3

Audit Requirement Change Agencies must provide either an Independent Financial Audit or Audited Financial Statements. Both must contain a report on the financial statements and internal control and compliance. If applicable, a management letter addressing audit findings. Single Audit Threshold has changed. Beginning with Fiscal Year ending in 2015, the threshold was increased to $750,000 in one or more sources of Federal funding (was $500,000). Only local public bodies (local governments, housing authorities, etc.) are required to conduct annual independent financial audits by a certified auditor that has been approved by the New Mexico State Auditor’s Office and on the State Auditor’s List. All entities must at a minimum procure for auditing firm/services every 3 years, through a RFP and provide evidence of the procurement to MFA at the time of re-certification. Entity may still choose the same auditor if their response is more cost effective.

Program Requirements Subsidy amounts – Maximum amount is $65,000 –Hard construction costs capped at $55,000 –Soft costs capped at $10,000 to offset: Direct project related salaries for Project/Program Manager, Administrative Assistant, Construction Manager to prepare: –Work write-ups, cost estimates –Bid Documents, bid opening –Environmental review –Progress inspections Fees: –Title Search –Appraisal –Recording fees for Covenants/Tribal Land Award Agreements –Admin fee capped at 3%

Program Requirements Current Eligible Partners may have up to three (3) projects open at one time. New Eligible Partners have to complete one project to start. If funding allows, they may submit for another project upon completion of their initial project. All projects must be completed and closed out by MFA within 180 days. Projects not invoiced within the first 90 days may be subject to cancellation by MFA. Eligible partners are responsible for guaranteeing that the work is inspected and completed –Progress reports with pictures are required for all requests for reimbursement for hard construction costs. –Time for project management must be project specific, dated and signed by personnel and supervisor/manager

Uniform Physical Conditions Standards What is UPCS –In the absence of State or Local building code, it is the minimum standard that must be used when assessing a potential home for the Rehab program –Replaces Housing Quality Standards (HQS) –New Checklist and Manual –Not a Pass/Fail system –Levels of deficiencies NOD – no observable deficiency Levels 1, 2, 3 N/A Health and Safety –Non-life threatening –Life threatenting

Uniform Physical Conditions Standards 5 areas of inspection –Building Exterior Foundations Roof Walls –Building Systems Domestic Water Sanitary –Unit – all rooms inside the home, interior systems such as electrical and HVAC, HWH –Health and Safety –Additional inspection items

Uniform Physical Conditions Standards Checklist example: Inspectable Area: Unit Level Inspectable ItemObservable Deficiency NOD123NAH&S Bathroom Pages Bathroom Cabinets - Damaged/Missing Lavatory Sink - Damaged/Missing NLT Plumbing - Clogged Drains NLT Plumbing - Leaking Faucet/Pipes NLT Shower/Tub - Damaged/Missing NLT Ventilation/Exhaust System - Inoperable Water Closet/Toilet - Damaged/Clogged/Missing NLT

Uniform Physical Conditions Standards Manual example