[Federal Register Volume 61, Number 232 (Monday, December 2, 1996)]
[Proposed Rules]
[Pages 63930-63941]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-30297]
[[Page 63929]]
_______________________________________________________________________
Part II
Department of Housing and Urban Development
_______________________________________________________________________
24 CFR Part 985
Section 8 Rental Voucher and Certificate Programs and Management
Assessment Program (SEMAP); Proposed Rule
Federal Register / Vol. 61, No. 232 / Monday, December 2, 1996 /
Proposed Rules
[[Page 63930]]
DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT
24 CFR Part 985
[Docket No. FR-3986-P-01]
RIN 2577-AB60
Section 8 Rental Voucher and Certificate Programs Section 8
Management Assessment Program (SEMAP)
AGENCY: Office of the Assistant Secretary for Public and Indian
Housing, HUD.
ACTION: Proposed rule.
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SUMMARY: This proposed rule would establish the Section 8 Management
Assessment Program (SEMAP) to objectively measure public housing agency
(HA) performance in key Section 8 tenant-based assistance program
areas. SEMAP would enable HUD to ensure program integrity and
accountability by identifying HA management capabilities and
deficiencies and by improving risk assessment to effectively target
monitoring and program assistance. HAs could use the SEMAP performance
analysis to assess their own program operations.
DATES: Comment due date: January 31, 1997.
ADDRESSES: Interested persons are invited to submit comments regarding
this proposed rule to the Office of the General Counsel, Rules Docket
Clerk, room 10276, Department of Housing and Urban Development, 451
Seventh Street, SW, Washington, DC 20410-0500. Comments should refer to
the above docket number and title. Facsimile (FAX) comments are not
acceptable. A copy of each communication submitted will be available
for public inspection and copying during regular business hours (7:30
a.m. to 5:30 p.m. Eastern time) at the above address.
FOR FURTHER INFORMATION CONTACT: Gerald Benoit, Director, Operations
Division, Office of Rental Assistance, Public and Indian Housing,
Department of Housing and Urban Development, Room 4220, 451 Seventh
Street, SW, Washington, DC 20410, telephone (202) 708-0477. Hearing or
speech impaired individuals may call HUD's TTY number (202) 708-4594 or
1-800-877-8399 (Federal Information Relay Service TTY). (Other than the
``800'' number, these are not toll-free numbers.)
SUPPLEMENTARY INFORMATION:
I. Purpose
This proposed rule provides an objective system for HUD to measure
HA performance in administering the Section 8 tenant-based assistance
programs, and to identify HA management capabilities and deficiencies
using criteria that are key to effective program administration. This
proposed rule does not apply to Indian housing authority (IHA)
administration of these programs. Performance of IHA administration of
the Section 8 programs is assessed using the HUD Office of Native
American Programs Risk Assessment and Determination for Allocation of
Resources (RADAR) instrument. RADAR will incorporate the SEMAP
performance indicators. The proposed rule does not cover the Section 8
moderate rehabilitation program; however, the Department expects that
in most cases an HA's performance under the tenant-based programs will
reflect its performance under the moderate rehabilitation program as
well. The proposed rule provides procedures for addressing problem
areas and poor performance through corrective action plans and follow-
up monitoring.
At a time of diminishing HUD staffing resources, use of SEMAP will
enable the Department to improve its risk assessment and to effectively
target monitoring and program assistance to housing agencies that need
most improvement and that pose the greatest risk.
The proposed rule describes 15 performance indicators that will be
used to assess HA performance; the annual HA SEMAP certification and
HUD review process; HUD scoring procedures and procedures for
designating high, standard and troubled performers; and requirements
for corrective action plans and strategies for improving performance.
While the Department plans to use SEMAP as its fundamental means of
measuring HA Section 8 performance, SEMAP will be used in conjunction
with independent auditor (IA) audit reports, fair housing and equal
opportunity compliance reviews, HUD reviews of financial documents, on-
site reviews, housing quality standards (HQS) reviews, participant
complaints, and other pertinent information to assess ultimately an
HA's overall performance under the Annual Contributions Contract (ACC).
II. Discussion
A. Performance Indicators
Overview
Section 985.3 lists 15 SEMAP performance indicators which are key
to effective and cost efficient program administration. The indicators
were chosen first and foremost to ensure that the Section 8 programs
consistently operate to meet the intended result of helping eligible
families afford decent rental units at a reasonable subsidy cost (i.e.,
to assist ``the right families in the right units at the right cost'').
In addition, certain indicators measure whether rental assistance is
delivered effectively (e.g., time from request for lease approval to
HQS inspection, lease-up, deconcentration) and whether the HA advances
the critical goal of family self-sufficiency (FSS) (e.g., FSS
enrollment, welfare to work).
The Department considered including an indicator which would show
whether families admitted to the program have incomes below the income
limits, but all information HUD has indicates that there are almost no
admissions of families with incomes over the income limits. Adding this
as a SEMAP indicator would have very little useful purpose, since
virtually all HAs are in full compliance with the requirement. The
Department requires 100 percent reporting of all income and rent
determinations, and monitoring income eligibility is built into the
Multifamily Tenant Characteristics System (MTCS). MTCS is the
Department's national data base on participants and rental units in the
Section 8 rental certificate, rental voucher, and moderate
rehabilitation programs and in the Public and Indian Housing programs.
There is a SEMAP indicator on HA verification of family income.
The Department also considered including indicators on financial
management, but concluded that existing procedures for HUD review of
budgets, requisitions and year-end financial statements and the annual
independent audit already provide for sufficient HUD oversight of the
financial management area.
Remarks on Particular Indicators
The ratings for the annual reexaminations indicator and the annual
HQS inspections indicator at Secs. 985.3(d) and 985.3(i), indicate that
annual reexaminations and HQS inspections may not be more than 2 months
overdue. This 2 month allowance is provided only to accommodate a
possible lag in the HA's electronic reporting of the annual
reexamination or the annual HQS inspection on Form HUD-50058, and to
allow the processing of the data into the MTCS. The Form HUD-50058 data
are used to measure performance under this indicator. The 2 month
allowance provided here for rating purposes does not mean that any
delay in completing
[[Page 63931]]
annual reexaminations and HQS inspections is ever permitted.
The indicator at Sec. 985.3(j) for HQS quality control inspections
shows whether an HA supervisor or other qualified person reinspects a
random sample of at least 5 percent of completed HQS inspections. A
small HA with only 1 or 2 employees may arrange with a nearby HA to
have a qualified HQS inspector perform the required quality control
inspections.
The indicator at Sec. 985.3(l), for lease-up shows whether the HA
executes assistance contracts on behalf of eligible families for the
number of units that has been under budget for at least one year. In
the event that the Congress continues hold-back requirements on
turnover of rental vouchers and certificates in future fiscal years
when SEMAP is implemented, HUD plans to waive the SEMAP regulation
concerning ratings under this indicator and to instead provide that the
number of units under contract would be divided by the number of units
budgeted for the last HA fiscal year reduced by a HUD-determined
percentage of the number of units budgeted to determine the lease-up
rate for rating purposes.
The ratings under the lease-up indicator are based on the
assumption that an HA uses all available annual contributions in
determining the total number of units budgeted. In the event the HUD
State or Area Office (hereafter referred to as HUD Office) approves an
HA budget that budgets fewer units than could be supported with
available annual contributions due to limited HA management capacity,
and as a result the rating on the indicator as determined under
Sec. 985.3(l)(3) is overstated, the HUD Office may decrease the points
it assigns for the lease-up indicator to adjust for the approved
``under-budgeting''.
The indicator at Sec. 985.3(m) for FSS enrollment applies only to
HAs with mandatory FSS programs (i.e., HAs that received FY 1992 FSS
incentive award Section 8 funding or that received FY 1993 and later
year Section 8 funding (excluding renewal funding)).
The deconcentration indicator at Sec. 985.3(n) applies only to HAs
with jurisdiction in metropolitan areas. This indicator compares the
dispersal of Section 8 families with children throughout a metropolitan
area to the dispersal of FMR-priced units throughout the metropolitan
area. FMR-priced units are standard quality housing units, excluding
zero- and one-bedroom units, that rent at or below the FMR as
determined using 1990 Census data and FMRs. The indicator measures
whether Section 8 families with children are at least as dispersed
throughout the area as are the FMR-priced units, both within the HA's
area of jurisdiction and within the entire metropolitan area. The
Department does not intend that the SEMAP indicator for deconcentration
should cause any metropolitan HA to directly or indirectly reduce a
family's opportunity to select among available units. HUD intends that,
by including the dispersal of Section 8 families with children
throughout metropolitan areas as a measure of performance, HAs will be
encouraged to provide more outreach to owners in all areas of their
respective jurisdictions and more counseling and transportation
assistance to motivate and increase housing choice on the part of
families.
Future Implementation of Welfare-to-Work Indicator
The welfare-to-work indicator at Sec. 985.3(o) shows whether the HA
helps assisted families move from welfare to work by measuring the
percent of welfare families who move from welfare to work during the
course of a year. This indicator will be implemented in SEMAP beginning
in federal fiscal year 1999, to allow HAs sufficient time to build
capacity and coordinate social services to achieve the performance
objective. This means the welfare-to-work indicator will first be used
for HAs with an HA fiscal year end of September 30, 1998, and then will
be applied for all subsequent annual SEMAP reviews.
Solicitation of Specific Comment on Particular Indicators
The Department specifically invites comment on whether the proposed
fair market rent (FMR) limit/payment standards indicator and the annual
reexaminations indicator should be retained as SEMAP indicators in a
final rule. The FMR limit/payment standards indicator and the annual
reexaminations indicator would show whether the HA complies with key
program requirements that directly affect whether the correct housing
assistance payments (HAPs) and family shares are paid. The Department,
however, has some concern about the appropriateness of their placement
in a management assessment program that is primarily intended to be
outcome oriented rather than compliance oriented. In short, all HAs
should be fully performing on these indicators.
The Department also specifically invites comment on whether SEMAP
ought to include performance indicators on rent burden, portability,
timeliness of HAPs to owners, or any other key area. A rent burden
indicator could set a standard that would encourage HAs to ensure that
needy families do not spend a disproportionate share of income toward
rent. For example, the Department considered including a performance
indicator that not more than 20 percent of rental voucher program
participants pay more than 40 percent of adjusted monthly income for
rent. However, the Department recognizes that there has never been any
articulated federal standard concerning rent burden in the rental
voucher program, and that HAs have only limited control over a family's
choice to assume a greater rent burden than the traditional 30 percent
of annual adjusted income. Also, 40th percentile FMRs, and potentially
lower payment standards, may place increased pressure on families to
choose to pay more than 40 percent of income for rent, particularly if
the families want to choose housing outside areas of low income
concentration.
The Department is considering adding, and requests comment on, a
SEMAP indicator to measure an HA's performance in: (1) Analyzing
computer matching results that HUD supplies to HAs from the
Department's Tenant Eligibility Verification System (TEVS), and (2)
taking appropriate administrative actions. Those actions will help
ensure integrity in rental assistance programs. TEVS processes data
from the computer matching of social security and supplemental security
income data and Federal tax return data (i.e., Form W-2 and Form 1099
data) shown on files of the Social Security Administration and the
Internal Revenue Service, with family-reported income data that HAs
submit electronically to the Multifamily Tenant Characteristics System
(MTCS). See 60 FR 21548; May 2, 1995 and 61 FR 37804; July 19, 1996 for
more detail. Housing agencies will be asked to resolve income
discrepancies reported by TEVS and to track the amount of money
recovered.
During Fiscal Year 1996 HUD implemented a computer matching project
involving social security and supplemental security income for HAs
serviced by HUD's Great Plains, Rocky Mountains, Pacific/Hawaii and
Northwest/Alaska offices. HUD anticipates that the social security and
supplemental security income matching will be operational nationwide by
March 1997. The Federal tax return data matching is now in a pilot
testing stage. Therefore, it is premature to propose a specific SEMAP
indicator at this time. The Department, however, expects that HA
actions to analyze matching results and to take appropriate
administrative
[[Page 63932]]
actions will become an important indicator of HA performance at some
time during the next two years. The Department anticipates providing a
maximum of 10 points for this indicator.
The Department is considering adding an indicator that would
measure whether the HA adequately explains to rental voucher and
certificate holders how portability works, and whether the initial HA
promptly reimburses the receiving HA in accordance with established
portability billing and payment deadlines.
Effort to Minimize New Recordkeeping
A key consideration in determining the 15 SEMAP indicators was
whether the Department can measure performance under the indicators
using readily available data, without imposing substantial new or undue
recordkeeping burdens on HAs. Under the proposed SEMAP indicators, an
HA that is not already doing so will need to begin maintaining
documentation of the time from receipt of request for lease approval to
HQS inspection, and of its 5 percent HQS quality control inspections.
For all other SEMAP indicators, the Department expects that HAs already
keep records that will demonstrate performance in conformity with
longstanding program requirements.
B. Program Operation
The basic SEMAP procedures have been modeled on the Public Housing
Management Assessment Program (PHMAP) required by section 6(j) of the
U.S. Housing Act of 1937 (42 U.S.C. 1437d(j)). While SEMAP is not
required by law, HUD has determined that a management assessment
program for Section 8 tenant-based assistance similar to PHMAP can
improve the Department's oversight of the Section 8 programs and help
HUD to target monitoring and assistance to programs that pose the
greatest risk and to HAs needing most improvement.
1. SEMAP Certification
Section 985.101 requires an HA administering a Section 8 tenant-
based assistance program to submit annually a SEMAP certification form
within 45 days after the beginning of its fiscal year. The
certification form requires short answers from HAs concerning HA
performance under the 15 SEMAP indicators and assures HUD that HA
responses are accurate and that there is no evidence of seriously
deficient performance. A proposed SEMAP certification form is attached
as Appendix 1 to this proposed rule. The HA board of commissioners
approves, and the board chairperson and HA executive director sign, the
certification.
2. SEMAP Score and Overall Performance Rating
HUD Assessment and Verification of SEMAP Certification
Upon receipt of the annual HA SEMAP certification, the HUD Office
will independently assess each HA's performance under SEMAP using
family data reported by HAs on Forms HUD-50058 and HUD-50058-FSS and
maintained in the HUD MTCS, annual audit reports, and other available
information to verify the HA responses. The HUD Office may also conduct
an on-site confirmatory review to verify an HA certification under any
indicator. Based upon this HUD review and verification, the HUD Office
will prepare a SEMAP profile for each HA, assigning a rating for each
SEMAP indicator in accordance with the regulation.
Determination of SEMAP Score and Overall Performance Rating
The HUD Office will sum its ratings for the individual indicators
and divide by the potential maximum number of points to arrive at an
overall HA SEMAP score. HAs with SEMAP scores of at least 90 percent
will receive an overall performance rating of high performer; HAs with
SEMAP scores of 60 to 89 percent will receive an overall performance
rating of standard; and HAs with scores of less than 60 percent will
receive an overall performance rating of troubled. The HUD Office may
modify an HA's overall performance rating (of high performer or
standard) when warranted by circumstances that have bearing on the
SEMAP indicators such as adverse litigation, fair housing and equal
opportunity compliance concerns, fraud or misconduct, audit findings,
or substantial noncompliance with program requirements. HUD will
provide the HA a written explanation of any modified overall
performance rating.
HUD Notification to HA of SEMAP Ratings
Within 45 days of receipt of the HA's certification, the HUD Office
will complete an HA SEMAP profile and will notify the HA in writing of
its rating on each SEMAP indicator, the HA's overall SEMAP score and
its overall performance rating (high performer, standard, or troubled).
The HUD notification letter will identify and require correction of any
program management deficiencies within 45 days.
3. Required Actions for SEMAP Deficiencies
Section 985.106 requires that the HA improve its Section 8 program
management for any SEMAP indicator that is rated zero (a ``SEMAP
deficiency''), and must send HUD a written report of the corrective
action taken on the SEMAP deficiency within 45 days of receipt of its
SEMAP ratings from HUD. If an HA fails to correct SEMAP deficiencies as
required, HUD will require that the HA prepare and submit a written
corrective action plan for the deficiency within 30 days.
HUD must, under Sec. 985.107, review on-site any HA that is
assigned an overall performance rating of troubled. HUD will issue a
written report of its on-site review findings and recommendations. Upon
receipt of the HUD report, the HA must write a corrective action plan
and submit it to HUD for approval. Both the HA and HUD must monitor
implementation of a corrective action plan to ensure targets for
improved performance are met.
Any HA assigned an overall performance rating of troubled may not
use any part of the administrative fee reserve for other housing
purposes (see 24 CFR 982.155(b)). In these cases, the HUD Office may
require use of the administrative fee reserve for specific
administrative improvements in areas where administration is found
deficient.
4. HAs Under the Jurisdiction of More than One HUD Office
For any HA with jurisdiction under the jurisdiction of more than
one HUD Office (e.g, a state agency), the HUD Office with the greatest
amount of funding obligated under ACCs will assume all responsibility
for administration of SEMAP for the HA.
C. Default Under ACC
An HA's failure to correct identified SEMAP deficiencies or to
prepare and implement a corrective action plan required by HUD may
constitute a default under the ACC as determined by HUD. The ACC
provides for HUD notice of a determination of default to the HA and
authorizes HUD to take possession of all or any HA property, rights, or
interests in connection with a program if HUD determines that the HA
has failed to comply with obligations under the ACC, including
compliance with any final SEMAP regulation, or with obligations under a
HAP contract.
III. Findings and Certifications
Paperwork Reduction Act Statement
The proposed information collection requirements contained at
Secs. 985.101,
[[Page 63933]]
985.106 and 985.107 of this proposed rule have been submitted to the
Office of Management and Budget (OMB) for review, under section 3507(d)
of the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).
(a) In accordance with 5 CFR 1320.5(a)(1)(iv), the Department is
setting forth the following concerning the proposed collection of
information:
(1) Title of the information collection proposal: Section 8
Management Assessment Program (SEMAP)
(2) Summary of the collection of information:
A proposed SEMAP certification form is attached as Appendix 1 to
this proposed rule. The corrective action plan is a written plan
prepared by an HA to address program management deficiencies or
findings identified by HUD through remote monitoring or on-site review
that will bring the HA to an acceptable level of performance. Through
the report of corrective action, an HA describes how it corrected any
SEMAP deficiency (indicator rating of zero).
(3) Description of the need for the information and its proposed
use:
HUD has determined that a management assessment program for Section
8 tenant-based assistance, similar to the Public Housing Management
Assessment Program (PHMAP) and including SEMAP certifications,
corrective action plans, and reports of corrective actions, can improve
the Department's oversight of the Section 8 programs and help HUD to
target monitoring and program assistance to public housing agency (HA)
programs needing most improvement and posing the greatest risk.
HUD will use the HA's SEMAP certification, together with otherwise
available data, to assess HA management capabilities and deficiencies,
and to assign an overall performance rating to each HA administering
Section 8 tenant-based assistance. HUD will rate an HA on each SEMAP
indicator, and will complete an HA SEMAP profile identifying any
program management deficiencies and assigning an overall performance
rating. An HA's written report of correction of a SEMAP deficiency will
be used as documentation that the HA has taken action to address
identified program weaknesses. Where HUD assigns an overall performance
rating of troubled, the HA's corrective action plan will be used to
monitor the HA's progress on program improvements.
(4) Description of the likely respondents, including the estimated
number of likely respondents, and proposed frequency of response to the
collection of information:
Respondents will be PHAs. The estimated number of respondents is
included in paragraph (5), immediately below. The proposed frequency of
responses is once annually.
(5) Estimate of the total reporting and recordkeeping burden that
will result from the collection of information:
Section 8.--Management Assessment Program
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Responses Total
Information collection Number of per annual Hours per Total hours Regulatory
respondents respondent responses response reference
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SEMAP Certification.......... 2,670 1 2,670 \1\ 5-6 14,500 985.101
Corrective Action Plan....... 260 1 260 10 2,600 985.107(c)
Report on Correction of SEMAP 670 1 670 2 1,340 985.106
Deficiency.
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Total Annual Burden.... ........... ........... ........... ........... 18,440 ................
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\1\ 1,150 metropolitan HAs will require an extra hour to write narrative on actions to broaden metropolitan area-
wide housing choice.
(b) In accordance with 5 CFR 1320.8(d)(1), the Department is
soliciting comments from members of the public and affected agencies
concerning the proposed collection of information to:
(1) Evaluate whether the proposed collection of information is
necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility;
(2) Evaluate the accuracy of the agency's estimate of the burden of
the proposed collection of information;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond; including through the use of appropriate automated
collection techniques or other forms of information technology, e.g.,
permitting electronic submission of responses.
Interested persons are invited to submit comments regarding the
information collection requirements in this proposal. Comments must be
received within sixty (60) days from the date of this proposal.
Comments must refer to the proposal by name and docket number (FR-3447)
and must be sent to: Joseph F. Lackey, Jr., HUD Desk Officer, Office of
Management and Budget, New Executive Office Building, Washington, DC
20503.
Environmental Impact
A Finding of No Significant Impact with respect to the environment
has been made in accordance with HUD regulations at 24 CFR part 50,
which implement section 102(2)(C) of the National Environmental Policy
Act of 1969. The Finding of No Significant Impact is available for
public inspection between 7:30 a.m. and 5:30 p.m. weekdays in the
Office of the Rules Docket Clerk at the above address.
Regulatory Planning and Review
This proposed rule has been reviewed in accordance with Executive
Order 12866, issued by the President on September 30, 1993 (58 FR
51735, October 4, 1993). Any changes to the proposed rule resulting
from this review are available for public inspection between 7:30 a.m.
and 5:30 p.m. weekdays in the Office of the Rules Docket Clerk.
Regulatory Flexibility Act.
In accordance with 5 U.S.C. 605(b) (the Regulatory Flexibility
Act), the undersigned hereby certifies that this proposed rule does not
have a significant economic impact on a substantial number of small
entities. The proposed rule establishes management assessment criteria
for HAs. HUD does not anticipate a significant economic impact on a
substantial number of small entities, since the proposed rule
establishes management assessment criteria which will be utilized by
State/Area Offices for monitoring purposes and the provision of
technical assistance to HAs.
Unfunded Mandates Reform Act
The Secretary has reviewed this proposed rule before publication
and by
[[Page 63934]]
approving it certifies, in accordance with the Unfunded Mandates Reform
Act of 1995 (2 U.S.C. 1532), that this proposed rule does not impose a
Federal mandate that will result in the expenditure by State, local,
and tribal governments, in the aggregate, or by the private sector, of
$100 million or more in any one year.
Federalism
The General Counsel, as the Designated Official under section 6(a)
of Executive Order 12612, Federalism, has determined that the policies
contained in this proposed rule will not have substantial direct
effects on States or their political subdivisions, or the relationship
between the Federal government and the States, or on the distribution
of power and responsibilities among the various levels of government.
The proposed rule is intended to promote good management practices by
including, in HUD's relationship with HAs, continuing review of HAs'
compliance with already existing requirements. The proposed rule does
not create any new significant requirements of its own. As a result,
the proposed rule is not subject to review under the Order.
Family Impact
The General Counsel, as the Designated Official under Executive
Order 12606, The Family, has determined that this proposed rule does
not have potential for significant impact on family formation,
maintenance, and general well-being, and, thus, is not subject to
review under the Order. The proposed rule involves requirements for
management assessment of HAs. Any effect on the family would be
indirect. To the extent families in public housing will be affected,
the impact of the rule's requirements is expected to be a positive one.
Catalog
The catalog of Federal Domestic Assistance numbers are 14.855 and
14.857.
List of Subjects in 24 CFR Part 985
Grant programs--housing and community development, Housing, Rent
subsidies, Reporting and recordkeeping requirements.
Accordingly, 24 CFR, chapter IX is proposed to be amended by adding
a new part 985 to read as follows:
PART 985--SECTION 8 MANAGEMENT ASSESSMENT PROGRAM (SEMAP)
Subpart A--General
Sec.
985.1 Purpose and applicability.
985.2 Definitions.
985.3 Indicators, HUD verification methods and ratings.
Subpart B--Program Operation
985.101 SEMAP certification.
985.102 SEMAP profile.
985.103 SEMAP score and overall performance rating.
985.104 HA right of appeal of overall rating.
985.105 HUD Office SEMAP responsibilities.
985.106 Required actions for SEMAP deficiencies.
985.107 Required actions for HA with troubled performance rating.
985.108 SEMAP records.
985.109 Default under the Annual Contributions Contract (ACC).
Authority: 42 U.S.C. 1437a, 1437c, 1437f, and 3535(d).
Subpart A--General
Sec. 985.1 Purpose and applicability.
(a) Purpose. The Section 8 Management Assessment Program (SEMAP) is
designed to assess whether the Section 8 tenant-based assistance
programs operate to help eligible families afford decent rental units
at a reasonable subsidy cost. SEMAP also establishes an objective
system for HUD to measure HA performance in key Section 8 program areas
to enable the Department to ensure program integrity and
accountability. SEMAP provides procedures for HUD to identify HA
management capabilities and deficiencies in order to target monitoring
and program assistance more effectively. HAs can use the SEMAP
performance analysis to assess and improve their own program
operations.
(b) Applicability. This rule applies to HA administration of the
tenant-based Section 8 rental voucher and rental certificate programs
(24 CFR part 982), the project-based component of the certificate
program (24 CFR part 983), and enrollment of Section 8 participants
under the family self-sufficiency program (FSS) (24 part CFR 984). This
rule does not apply to Indian housing authority (IHA) administration of
these programs. Performance of IHA administration of the Section 8
programs is assessed using the HUD Office of Native American Programs
Risk Assessment and Determination for Allocation of Resources
instrument. SEMAP does not cover the Section 8 moderate rehabilitation
program (24 CFR part 882, subparts D and E).
Sec. 985.2 Definitions.
(a) The terms Department, Fair Market Rent, HUD, Secretary, and
Section 8, as used in this part, are defined in 24 CFR 5.100.
(b) The definitions in 24 CFR 982.4 apply to this part. As used in
this part:
Corrective action plan means a HUD-required written plan to address
HA program management deficiencies or findings identified by HUD
through remote monitoring or on-site review that will bring the HA to
an acceptable level of performance.
HA means a Housing Agency, excluding an IHA.
HUD office means a HUD State or Area Office unless otherwise
specified.
MTCS means Multifamily Tenant Characteristics System. MTCS is the
Department's national data base on participants and rental units in the
Section 8 rental certificate, rental voucher, and moderate
rehabilitation programs and in the Public and Indian Housing programs.
MTCSupport means HUD's automated system to provide summary reports
of Section 8 participant data collected and maintained in HUD's MTCS.
Performance indicator means a standard set for a key area of
Section 8 program management against which the HA's performance is
measured to show whether the HA administers the program properly and
effectively. (See Sec. 985.3.)
SEMAP certification means the HA's annual certification to HUD, on
the form prescribed by HUD, concerning its performance in key Section 8
program areas.
SEMAP deficiency means any rating of 0 points on a SEMAP
performance indicator.
SEMAP profile means a summary prepared by the HUD Office of an HA's
ratings on each SEMAP indicator, its overall SEMAP score, and its
overall performance rating (high performer, standard, troubled).
Sec. 985.3 Indicators, HUD verification methods and ratings.
This section states the performance indicators that are used to
assess HA Section 8 management. The HUD Office will use the
verification method identified for each indicator in reviewing the
accuracy of an HA's annual SEMAP certification. The HUD Office will
prepare a SEMAP profile for each HA assigning a rating for each
indicator as shown. If the HUD verification method for the indicator
relies on data in MTCSupport and HUD determines those data are
insufficient to verify the HA's certification on the indicator due to
the HA's failure to
[[Page 63935]]
adequately report family data, the HUD Office shall assign a zero
rating for the indicator:
(a) Selection from the Waiting List. (1) This indicator shows
whether the HA has written admission policies in its administrative
plan and whether the HA follows these policies when selecting
applicants for admission from the waiting list. (24 CFR 982.54(d)(1)
and 982.204(a)).
(2) HUD verification method: The latest independent auditor (IA)
annual audit report.
(3) Rating: (i) The latest IA audit report states that: The HA has
written admission policies in its administrative plan and, based on
random samples of applicants and admissions, documentation in the
tenant files shows that families were selected from the waiting list
for admission in accordance with these policies and met the selection
criteria that determined their places on the waiting list and their
order of admission. 10 points.
(ii) The latest IA audit report does not support the statement in
paragraph (a)(3)(i) of this section. 0 points.
(b) Rent reasonableness. (1) This indicator shows whether the HA
has and implements a written methodology to determine and document for
each unit leased that, at the time of initial leasing and at least
annually during an assisted tenancy, the rent to owner is reasonable
based on current rents for comparable unassisted units. The HA's system
must take into consideration the location, size, type, quality, age and
amenities of the unit to be leased in determining comparability and the
reasonable rent.
(2) HUD verification method: The latest IA annual audit report.
(3) Rating: (i) The latest IA audit report states that:
(A) The HA has a written methodology it follows to determine rent
reasonableness; and
(B) Based on a random sample of tenant files, the HA documents rent
reasonableness for each unit leased at initial leasing and annually
thereafter. 20 points.
(ii) The latest IA audit report includes the statement in paragraph
(b)(3)(i) of this section, except that the HA documents rent
reasonableness for only 80 to 99 percent of units at initial leasing
and annually thereafter. 10 points.
(iii) The latest IA audit report does not support either statement
in paragraphs (b)(3)(i) and (b)(3)(ii) of this section. 0 points.
(c) Fair market rent (FMR) limit and payment standard (PS). (1)
This indicator shows whether at least 90 percent of the units newly
leased under the rental certificate program have initial gross rents at
or below the applicable FMR/exception rent limits, and whether the HA
has adopted payment standards for the rental voucher program, for each
FMR area in the HA jurisdiction, which do not exceed the applicable
FMR/exception rent limits.
(2) HUD verification method: MTCSupport--Rents and Rent Burdens
Report--Shows newly leased certificate units' gross rents as percent of
FMR and shows voucher payment standards as percent of FMR.
(3) Rating: (i) At least 90 percent of the units newly leased under
the rental certificate program have initial gross rents at or below the
applicable FMR/exception rent limits and the HA's rental voucher
program payment standards do not exceed the applicable FMR/exception
rent limits. 5 points.
(ii) More than 10 percent of rental certificate program units have
been newly leased at initial gross rents that exceed the applicable
FMR/exception rent limits or the HA's rental voucher program payment
standards exceed the FMR/exception rent limits. 0 points.
(d) Annual reexaminations. (1) This indicator shows whether the HA
conducts a reexamination for each participating family at least every
12 months.
(2) HUD verification method: MTCSupport--Key Management Indicators
Report--Shows percent of reexaminations that are more than 2 months
overdue. The 2-month allowance is provided only to accommodate a
possible lag in the HA's electronic reporting of the annual
reexamination on Form HUD-50058, and to allow the processing of the
data into MTCS. The 2-month allowance provided here for rating purposes
does not mean that any delay in completing annual reexaminations is
permitted.
(3) Rating: (i) Fewer than 2 percent of all HA reexaminations are
more than 2 months overdue. 10 points.
(ii) 2 to 10 percent of all HA reexaminations are more than 2
months overdue. 5 points.
(iii) More than 10 percent of all HA reexaminations are more than 2
months overdue. 0 points.
(e) Correct tenant rent calculations. (1) This indicator shows
whether the HA correctly calculates tenant rent in the rental
certificate program and the family's share of the rent to owner in the
rental voucher program.
(2) HUD verification method: MTCSupport--Key Management Indicators
Report--Shows percent of all tenant rent and family's share of the rent
to owner calculations that are incorrect based on data sent to HUD by
the HA on Forms HUD-50058.
(3) Ratings: (i) 2 percent or fewer of all HA tenant rent and
family's share of the rent to owner calculations are incorrect. 5
points.
(ii) More than 2 percent of all HA tenant rent and family's share
of the rent to owner calculations are incorrect. 0 points.
(f) Income determination and utility allowances. (1) This indicator
shows whether, at the time of admission and reexamination, the HA
verifies and correctly determines adjusted annual income for each
assisted family, and whether the HA maintains and properly applies an
up-to-date utility allowance schedule. (24 CFR 813.109).
(2) HUD verification method: The latest IA annual audit report.
(3) Rating: (i) (A) The latest IA audit report states that, based
on the audit and a random sample of tenant files, for at least 90
percent of families:
(1) The HA obtains third party verification of reported family
income, assets, and composition, and/or documents tenant files to show
why independent verification is not possible;
(2) The HA properly attributes and calculates allowances for any
medical, child care, and/or handicapped assistance costs; and
(3) The HA uses the appropriate utility allowances for the unit
leased.
(B) The audit report also states that the HA has analyzed utility
rate data within the last year, and adjusted its utility allowance
schedule if there has been a change of 10 percent or more in a utility
rate since the last time the utility allowance schedule was revised. 20
points.
(ii) The latest IA audit report includes the statements in
paragraph (f)(3)(i) of this section, except that the HA obtains third
party verifications, properly attributes allowances, and uses the
appropriate utility allowances for only 80 to 89 percent of families.
10 points.
(iii) The latest IA audit report does not support the statements in
either paragraph (f)(3)(i) or (f)(3)(ii) of this section. 0 points.
(g) Time from request for lease approval (RFLA) to HQS inspection.
(1) This indicator shows whether the HA promptly inspects a unit when a
rental voucher or certificate holder submits a RFLA.
(2) HUD verification method: On-site confirmatory review.
(3) Rating: (i) 90 percent or more units are inspected within 7
calendar days of HA receipt of RFLA. 10 points.
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(ii) 90 percent or more units are inspected within 14 calendar days
of HA receipt of RFLA. 5 points.
(iii) Less than 90 percent of units are inspected within 14
calendar days of RFLA. 0 points.
(iv) If a unit for which an HA receives a RFLA is occupied, and
therefore not available for inspection at the time the HA receives the
RFLA, the HA may document this fact and the date that the HA is later
notified that the unit is vacant and available for inspection. The
later date may be used as the date of the HA's receipt of the RFLA for
rating under this indicator.
(h) Pre-contract housing quality standards (HQS) inspections. (1)
This indicator shows whether each unit leased passed HQS inspection
before the beginning date of the assisted lease term. (24 CFR 982.305).
(2) HUD verification method: MTCSupport--Key Management Indicators
Report--Shows percent of newly leased units where the effective date of
the assistance contract is before the date the unit passed HQS
inspection.
(3) Rating: (i) Each unit under HAP contract passed HQS inspection
before the beginning date of the assisted lease term. 5 points.
(ii) Any unit has been leased that did not pass HQS inspection
before the beginning date of the assisted lease term. 0 points.
(i) Annual HQS inspections. (1) This indicator shows whether the HA
inspects each unit under contract at least annually. (24 CFR
982.405(a)).
(2) HUD verification method: MTCSupport--Key Management Indicators
Report--Shows percent of HQS inspections that are more than 2 months
overdue. The 2-month allowance is provided only to accommodate a
possible lag in the HA's electronic reporting of the annual HQS
inspection on Form HUD-50058, and to allow the processing of the data
into MTCS. The 2-month allowance provided here for rating purposes does
not mean that any delay in completing annual HQS inspections is
permitted.
(3) Rating: (i) No annual HQS inspections of units under contract
are more than 2 months overdue. 10 points.
(ii) Some but less than 10 percent of all annual HQS inspections of
units under contract are more than 2 months overdue. 5 points.
(iii) 10 percent or more of all annual HQS inspections of units
under contract are more than 2 months overdue. 0 points.
(j) HQS quality control inspections. (1) This indicator shows
whether an HA supervisor or other qualified person reinspects a random
sample of at least 5 percent of completed HQS inspections. (24 CFR
982.405(b)).
(2) HUD verification method: The latest IA annual audit report.
(3) Rating: (i) The latest IA audit report states that the auditor
has determined that an HA supervisor or other qualified person performs
reinspections of a sample of 5 percent of inspections for quality
control purposes. 5 points.
(ii) The latest IA audit report does not support the statement in
paragraph (j)(3)(i) of this section. 0 points.
(k) HQS enforcement. (1) This indicator shows whether, following
each HQS inspection, the unit passes HQS or cited deficiencies are
corrected within 30 days or any HA-approved extension. In addition, if
deficiencies are not corrected timely, the indicator shows whether the
HA stops (abates) HAPs or terminates the HAP contract or, for family-
caused defects, takes prompt and vigorous action to enforce the family
obligations. (24 CFR 982.404).
(2) HUD verification method: The latest IA annual audit report.
(3) Rating: (i) The latest IA audit report states that the review
of a random sample of tenant files shows that, if HQS deficiencies are
not corrected within 30 days or any HA-approved extension, the HA stops
(abates) HAPs or takes prompt and vigorous action to enforce family
obligations. 10 points.
(ii) The latest IA audit report does not support the statement in
paragraph (k)(3)(i) of this section. 0 points.
(l) Lease-up. (1) This indicator shows whether the HA successfully
contracts for the units that have been under budget for at least one
year.
(2) HUD verification method: Latest Report on Program Utilization
(HUD-52683).
(3) Rating: (i) 98 percent or more of the units budgeted for the
last completed HA fiscal year are under contract. 20 points.
(ii) 95 percent or more but less than 98 percent of the units
budgeted for the last completed HA fiscal year are under contract. 10
points.
(iii) Less than 95 percent of the units budgeted for the last
completed HA fiscal year are under contract. 0 points.
(iv) If the HA failed to submit the required Report on Program
Utilization, 0 points shall be assigned for this indicator.
(m) Family self-sufficiency (FSS) enrollment. (1) This indicator
shows whether the HA has enrolled families in the FSS program as
required. This indicator applies only to HAs with mandatory FSS
programs (i.e., HAs that received FY 1992 FSS incentive award Section 8
funding or that received FY 1993 or later year Section 8 funding
(excluding renewal funding)). (24 CFR 984.105).
(2) HUD verification method: MTCSupport--Resident Characteristics
Report--Shows number of families enrolled in FSS. This number is
divided by the number of mandatory FSS slots based on funding reserved
for the HA through the second to last completed Federal fiscal year.
(3) Rating: (i) The HA has filled 80 percent or more of its
mandatory FSS slots. 10 points.
(ii) The HA has filled 60 to 79 percent of its mandatory FSS slots.
5 points.
(iii) The HA has filled fewer than 60 percent of its mandatory FSS
slots. 0 points.
(n) Deconcentration. (1) This indicator applies only to HAs with
jurisdiction in metropolitan areas. The indicator shows whether the HA
effectively solicits participation of owners of affordable units in all
areas of its jurisdiction, provides assistance to Section 8 families
with children to motivate and increase housing choice, and takes action
to broaden metropolitan area-wide housing choice.
(2) HUD verification method: MTCS data and HA narrative describing
actions to broaden metropolitan area-wide housing choice. HUD assesses
the HA's effectiveness in encouraging deconcentration by determining
whether Section 8 families with children are at least as dispersed
throughout the metropolitan area as FMR-priced units. FMR-priced units
are standard quality rental units, excluding zero- and one-bedroom
units, that rent at or below the FMR. To compare the dispersal of
Section 8 families with children to the dispersal of FMR-priced units,
HUD first determines the dispersal of FMR-priced units among all census
tracts in an HA jurisdiction and in the metropolitan area based on 1990
census data and FMRs. HUD then considers the poverty rates of the
census tracts and determines what poverty rate divides the FMR-priced
units in half (the ``dividing poverty rate''). That is, at what poverty
rate are half of the FMR-priced units dispersed in census tracts with
poverty rates above that level, and half dispersed in census tracts
with poverty rates below that level. Then HUD determines the percent of
Section 8 families with children that reside in census tracts with
poverty rates below the dividing poverty rate. The goal is to have at
least 60 percent of Section 8 families with children living in census
tracts with poverty rates below the dividing poverty rate. HUD makes
the determination twice: First, for only the
[[Page 63937]]
HA's area of jurisdiction, and then for the entire metropolitan area.
HUD also assesses the HA's actions to broaden metropolitan area-wide
housing choice such as counseling, transportation assistance, and
cooperation with other metropolitan area HAs or nonprofit organizations
which promote housing choice.
(3) Rating: (i) At least 50 percent of Section 8 families with
children reside in the HA jurisdiction census tracts with poverty rates
below the dividing poverty rate; and at least 50 percent of Section 8
families with children reside in the metropolitan area census tracts
with poverty rates below the dividing poverty rate, or the HA is taking
action to broaden metropolitan area-wide housing choice. 10 points.
(ii) 40 to 49 percent of Section 8 families with children reside in
the HA jurisdiction census tracts with poverty rates below the dividing
poverty rate; and 40 to 49 percent of Section 8 families with children
reside in the metropolitan area census tracts with poverty rates below
the dividing poverty rate, or the HA is taking action to broaden
metropolitan area-wide housing choice. 5 points.
(iii) Neither statement in paragraph (n)(3)(i) or (n)(3)(ii)
applies. 0 points.
(o) Welfare to work. (1) This indicator shows whether the HA helps
assisted families move from welfare to work. HUD will determine the
percentage of the HA's rental voucher and certificate program families
whose primary source of income at the start of the previous federal
fiscal year was AFDC and/or general assistance (``welfare families'')
(excluding families whose head of household is elderly or disabled)
which had earnings as the primary source of income (``working
families'') at the end of the previous federal fiscal year. This
indicator will be implemented in SEMAP beginning in federal fiscal year
1999.
(2) HUD verification method: MTCSupport--Key Management
Indicators--Shows percent of welfare families who became working
families during the previous federal fiscal year.
(3) Rating: (i) More than 15 percent of welfare families became
working families during the previous federal fiscal year. 10 points.
(ii) Between 5 and 15 percent of welfare families became working
families during the previous federal fiscal year. 5 points.
(iii) Fewer than 5 percent of welfare families became working
families during the previous federal fiscal year. 0 points.
Subpart B--Program Operation
Sec. 985.101 SEMAP certification.
(a) An HA must submit the HUD-required SEMAP certification form
within 45 calendar days after the start of its fiscal year.
(1) The certification must be approved by HA board resolution and
be signed by the board of commissioners chairperson and by the HA
executive director. Where a unit of local government or a state
administers the Section 8 program, a resolution approving the
certification is not required, and the certification must be executed
by the Section 8 program director and the chief executive officer of
the unit of government.
(2) An HA that subcontracts administration of its program to one or
more subcontractors shall require each subcontractor to submit the
subcontractor's own SEMAP certification on the HUD-prescribed form to
the HA in support of the HA's SEMAP certification to HUD. The HA shall
retain subcontractor certifications for three years.
(3) An HA may include with its SEMAP certification any information
bearing on the accuracy or completeness of the information used by the
HA in providing its certification.
(b) Failure of an HA to submit its SEMAP certification within 45
calendar days after the start of its fiscal year will result in an
overall performance rating of troubled and the HA will be subject to
the requirements at Sec. 985.107.
(c) An HA's SEMAP certification is subject to HUD verification by
an on-site confirmatory review at any time.
Sec. 985.102 SEMAP profile.
Upon receipt of the HA's SEMAP certification, the HUD Office will
rate the HA's performance under each SEMAP indicator in accordance with
Sec. 985.3. If an HA administers both the rental certificate program
and the rental voucher program, performance under each indicator is
initially assessed separately for each program. If the indicator
ratings differ by program, the HUD Office shall assign the HA the lower
rating for the indicator. The HUD Office will then prepare a SEMAP
profile for each HA which shows the rating for each indicator, sums the
indicator ratings, and divides by the total possible points to arrive
at an HA's overall SEMAP score.
Sec. 985.103 SEMAP score and overall performance rating.
(a) High performer rating. HAs with SEMAP scores of at least 90
percent shall be rated high performers under SEMAP. An HA that achieves
an overall performance rating of high performer may receive national
recognition by the Department.
(b) Standard rating. HAs with SEMAP scores of 60 to 89 percent
shall be rated standard.
(c) Troubled rating. HAs with SEMAP scores of less than 60 percent
shall be rated troubled.
(d) Modified rating. (1) Notwithstanding an HA's SEMAP score, the
HUD Office may modify an HA's overall performance rating when warranted
by circumstances which have bearing on the SEMAP indicators such as
adverse litigation, a conciliation agreement under Title VI of the
Civil Rights Act of 1964 (42 U.S.C. 3600-3620), fair housing and equal
opportunity monitoring and compliance review findings, fraud or
misconduct, audit findings or substantial noncompliance with program
requirements.
(2) When the HUD Office modifies an overall performance rating for
any reason it shall explain in writing to the HA the reasons for the
modification.
Sec. 985.104 HA right of appeal of overall rating.
An HA may appeal its overall performance rating to the HUD Office
by providing justification of the reasons for its appeal.
Sec. 985.105 HUD Office SEMAP responsibilities.
(a) Annual review. The HUD Office shall assess each HA's
performance under SEMAP annually and shall assign each HA a SEMAP score
and overall performance rating.
(b) Notification to HA. No later than 45 calendar days after
receipt of the HA's SEMAP certification, the HUD Office shall notify
each HA in writing of its rating on each SEMAP indicator, of its
overall SEMAP score and of its overall performance rating (high
performer, standard, troubled). The HUD notification letter shall
identify and require correction of any SEMAP deficiencies (indicator
rating of zero) within 45 calendar days.
(c) On-site confirmatory review. The HUD Office may conduct an on-
site confirmatory review to verify the HA certification and the HUD
rating under any indicator.
(d) Changing rating from troubled. The HUD Office must conduct an
on-site confirmatory review of an HA's performance before changing any
annual overall performance rating from troubled to standard or high
performer.
(e) Appeals. The HUD Office must review, consider and provide a
final
[[Page 63938]]
written determination to an HA on its appeal of its overall performance
rating.
(f) Corrective action plans. The HUD Office must review the
adequacy and monitor implementation of HA corrective action plans
submitted under Sec. 985.106(c) or Sec. 985.107(c), and provide
technical assistance to help the HA improve program management. If an
HA is assigned an overall performance rating of troubled, the HA's
corrective action plan must be approved by the HUD Office.
Sec. 985.106 Required actions for SEMAP deficiencies.
(a) When the HA receives the HUD Office notification of its SEMAP
rating, an HA must correct any SEMAP deficiency (indicator rating of
zero) within 45 calendar days.
(b) The HA must send a written report to the HUD Office on its
correction of any identified SEMAP deficiency.
(c) If an HA fails to correct a SEMAP deficiency within 45 calendar
days as required, the HUD Office may then require the HA to prepare and
submit a corrective action plan for the deficiency within 30 calendar
days.
Sec. 985.107 Required actions for HA with troubled performance rating.
(a) Required on-site review. Upon assigning an overall performance
rating of troubled, the HUD Office must conduct an on-site review of HA
program management.
(b) HUD written report. The HUD Office must provide the HA a
written report of its on-site review containing HUD findings of program
management deficiencies and recommendations for improvement.
(c) HA corrective action plan. Upon receipt of the HUD Office
written report on its on-site review, the HA must write a corrective
action plan and submit it to HUD for approval. The corrective action
plan must:
(1) Specify goals to be achieved;
(2) Identify obstacles to goal achievement and ways to eliminate or
avoid them;
(3) Identify resources that will be used or sought to achieve
goals;
(4) Identify an HA staff person with lead responsibility for
completing each goal;
(5) Identify key tasks to reach each goal;
(6) Specify time frames for achievement of each goal, including
intermediate time frames to complete each key task; and
(7) Provide for regular evaluation of progress toward improvement.
(d) Monitoring. The HA and the HUD Office must monitor the HA's
implementation of its corrective action plan to ensure performance
targets are met.
(e) Use of administrative fee reserve prohibited. Any HA assigned
an overall performance rating of troubled may not use any part of the
administrative fee reserve for other housing purposes (see 24 CFR
982.155(b)).
(f) Upgrading poor performance rating. The HUD Office shall change
an HA's overall performance rating from troubled to standard or high
performer if HUD determines that a change in the rating is warranted
because of improved HA performance and an improved SEMAP score.
Sec. 985.108 SEMAP records.
The HUD Office shall maintain SEMAP files, including
certifications, notifications, appeals, corrective action plans, and
related correspondence for at least three years.
Sec. 985.109 Default under the Annual Contributions Contract (ACC).
HUD may determine that an HA's failure to correct identified SEMAP
deficiencies or to prepare and implement a corrective action plan
required by HUD constitutes a default under the ACC.
Dated: October 21, 1996.
Kevin Emanuel Marchman,
Acting Assistant Secretary for Public and Indian Housing.
Note: Appendix 1 will not be codified in the Code of Federal
Regulations.
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[FR Doc. 96-30297 Filed 11-29-96; 8:45 am]
BILLING CODE 4210-33-C
