Chapter 2. Policy and Procedure Development

1. Chapter 2.Policy and Procedure Development

2. Chapter 2. Section 1.Introduction Learning Objective Develop well-conceived policies and effective procedures, taking into account mandatory requirements and prohibitions and areas of policy discretion

3. Introduction • The objectives of this session are to: • Distinguish between mandatory and discretionary policy requirements • Analyze language in regulations to determine what decisions have to be made and included in written policy and/or procedures to ensure consistency in rent determinations

4. Introduction • The quality control study published by HUD PD&R Office says: • Weaknesses in PHA policies and procedures contribute to rent errors. • Areas of PHA discretion enable PHAs to adapt the program to local conditions [good!] • BUT also create the potential for confusion and inconsistency [not so good].

5. Introduction • The challenges for PHAs are to: • Understand what is mandatory and what is discretionary • Develop compliant policies and procedures for mandatory items • Develop reasonable policies in the discretionary areas

6. Introduction • The challenges for PHAs are to: • Develop procedures that translate the mandatory and discretionary policies into action • Communicate (and train) policies and procedures to ensure consistency • Monitor policies and procedures to ensure they are being complied with by staff

7. Introduction • To help you meet your challenges, we’ll: • Focus on distinction between mandatory vs. discretionary policies • Show you how lack of policies and procedures may be contributing to errors • Help you think through how your agency handles discretionary items • Suggest ways for improving your policies and procedures

8. Chapter 2. Section 2.The Need for Policies and Procedures

9. Why Policies and Procedures Are Needed • HUD requires written policies • 24 CFR 982.54 lists requirements for Admin Plan • Daily guidance to staff in the performance of routine activities • Make decisions more transparent to staff and the public • Are more defensible than unwritten policies when challenged • Ensure that everyone does things the same way (consistency, fairness, minimize litigation)

10. Why Policies and Procedures Are Needed • Provide a foundation for sound management and supervision • Approved policies and procedures allow supervisors to establish objective performance standards for staff • Provide a basis for auditor justification (SEMAP, RIM, IPA, others)

11. Mandatory vs. Discretionary Policies and Procedures • Mandatory Policy or Procedure: Required by current law, regulation, notice or handbook • Discretionary Policy or Procedure: Decisions made within legal and regulatory limits • Clarifying regulations when needed without changing their intent • Providing guidance and direction in areas on which HUD is silent (example: fraud detection) • Following a HUD requirement with one or more discretionary components (example: establishing subsidy standards)

12. Effect on RIM Reviews • Many errors result from lack of guidance to staff • During a RIM review, if there is no HUD “rule” that must be followed, the reviewer will look to see: • What policy and/or procedure the PHA has established • Whether that policy/procedure is being followed • If there is no policy or procedure and practice is inconsistent, the reviewer will note this as a finding

13. Effect on RIM Reviews • Inconsistency in operation can often be resolved by providing: • Consistent written policies and procedures • Staff training • Quality control follow-up

14. Mandatory and Optional References • The following references are binding: • Statutes • HUD Regulations • HCV: 24 CFR 982 and 24 CFR Part 5 and 24 CFR 985 • Current notices • Most PIH notices have an expiration date • PIH notices may be extended or reinstated • HUD Handbooks • Forms required by HUD regulations (such as 50058) • OGC Opinions or Rulings

15. Mandatory and Optional References • For issues not covered by mandatory references, HUD recommends using these when developing policies and procedures: • Guidebooks (reliance on it is “Safe Harbor”) • If statements in guidebook are based on regulation, they are not optional. • Notices that have expired (unless changed by mandatory reference) • Handbooks that have expired (unless changed by mandatory reference) • Recommendations from individual HUD staff not based on regulatory requirements

16. HUD Guidance as “Safe Harbor” • For issues not covered by mandatory references, HUD recommends that PHAs develop policies and procedures based on HUD guidance (creates “safe harbor”) • If alternative approach is used, PHAs must make their own determination of consistency with requirements and are not protected by the “safe harbor” concept.

17. HUD and PHA Roles • The role of the HUD field office staff is to: • Inform PHAs about what is mandatory and provide appropriate references • Inform PHAs as to what is optional or discretionary • Ensure that polices and procedures have been adopted and implemented

18. HUD and PHA Roles • The role of the PHA is to: • Develop policies and procedures to clarify requirements • Ensure consistency by all staff in the application of HUD regulations and PHA policies and procedures

19. Chapter 2. Section 3.Developing Policies and Procedures

20. Policies vs. Procedures • Policies • Expand upon and explain rules • State what will be done – whether it is a HUD requirement or a matter of PHA discretion • Include the performance standards necessary to meet requirements • Must be incorporated into a PHA’s administrative plan • Must be formally approved by a PHA’s Board • Must be readily available to public and staff

21. Policies vs. Procedures • Procedures • Explain how HUD regulations or PHA policies will be carried out (the steps or tasks required for implementation) • Include the instructions needed to evaluate whether performance standards have been met • May be recorded where and how a PHA chooses • Do not require Board approval • Are easier to change than policies

22. Policies vs. Procedures • Both policies and procedures must: • Comply with current HUD rules and other federal, state, and local requirements • Be reasonable and practical (balance simplicity and best practices) • Provide guidance and tools for implementation, as well as rules • Be in a format that easy to update and is accessible by staff.

23. Policies vs. Procedures • Policies without procedures result in inconsistent practices

24. Step 1: Identifying Decision Points • The first step in the process of policy and procedure development is identifying decision points. • Decision points are the questions your PHA must answer in order to administer your program in compliance with HUD regulations.

25. HUD Regulations • Child Care Example: • Two HUD regulations address this deduction (page 2-9)

26. Child Care: Decision Points • Page 2-9 • Child care expenses. Amounts anticipated to be paid by the family for the care of children under 13 years of age during the period for which annual income is computed, but only where such care is necessary toenable a familymember to actively seek employment,be gainfully employed, or to further his or her education and only to the extent such amounts are not reimbursed. The amount deducted shall reflect reasonable charges for child care. In the case of child care necessary to permit employment, the amount deducted shall not exceed the amount of employment income that is included in annual income.

27. HUD Interpretation of Child Care Expenses • A PHA may not disallow a deduction for child care expenses because there is an unemployed adult family member who may be available to provide the care. • A PHA may not decide who will provide child care for an applicant’s or a participant’s child(ren).

28. HUD Interpretation of Child Care Expenses • A PHA may not decide the type of child care available for a participant’s child(ren). • Citation: Verification Guidebook

29. Decision Points • To develop policies and procedures for implementing the child care expense deduction, your PHA must first identify the decision points in the HUD regulations and guidance.

30. Point 1: “Necessary to . . . enable a family member to (engage in a qualifying activity”) • In determining whether the child care is necessary, the PHA should compare the hours during which child care is provided to the hours family members are working or engaging in one of the other qualifying activities.

31. Point 2: “Enable a family member to actively seek employment” • PHA decision points: • What does “actively” mean? • What kinds of activities constitute “seeking”? • How often do those activities have to occur (performance standard)? • How will you document “actively seeking”? • Can more than one member be “actively seeking” employment?

32. Point 3: “Enable a family member to … be gainfully employed” • When more than one family member works, the PHA must determine which family member(s) are being enabled to work by the child care • Notice that the definition of child care expenses limits the amount that may be allowed for these expenses to the amount of employment income that is included in annual income • PHA policy may assume that the child care expenses enable the lowest paid individual to work, unless this is obviously not the case . . .

33. Point 4: “Enable a family member to …further his/her education” • PHA must verify that the family member enabled to further his/her education is actually enrolled in and attending an educational institution or program. • The days and times childcare provided must correspond to days and hours of school attendance.

34. Point 5: “Such amounts are not reimbursed” • This means that no one else must be paying for the child care expenses either directly or indirectly. • PHA needs to require the family to sign a certification of non-reimbursement (may be included on application/reexamination form). • PHA must also obtain certification from the child care provider on a 3rd party verification form.

35. Point 6: “Reasonable charges” • What is your PHA’s standard for “reasonable?” • HCV Guidebook says PHAs must determine whether child care costs are "reasonable". • Reasonable means reasonable for the care being provided. (in-home vs. day care center or elsewhere) • Remember: Families may choose the type of care to be provided.

36. Point 6: “Reasonable charges” • The PHA’s policy should define reasonableness as it pertains to child care expense. • For example, the policy could include the requirement to conduct some type of market survey to determine the rate of childcare under comparable conditions within the local market.

37. Step 2: Translating Requirements into Policies and Procedures • Policies state: • The requirement to be evaluated • (see examples in book – page 2-12) • The performance standard for the requirement • (see examples in book – page 2-12) • Procedures focus on the required steps to perform the function • (see examples in book – page 2-12)

38. Step 2: Translating Requirements into Policies and Procedures • See “Translating Requirements into Policies and Procedures” Example in course materials • Page 2-13

39. Step 2: Translating Requirements into Policies and Procedures • Learning Activity 2-1: Page 2-15 • Minimum Rent Policies and Procedures • “Criteria for Hardship Exemption” • 5 minutes

40. Developing Procedures • There is no HUD-required form or format, but procedures must be consistent with HUD requirements. • PHAs can develop procedures based upon the specific work flow at their own agencies.

41. Developing Procedures • Elements of a good procedure: • Explanation of (or citation for) policy • Task(s) that need to be done • Staff who is/are responsible • Time frames that must be observed • Forms and/or systems that will be used • Approvals that are necessary • Instructions for decisions and calculations that must be made by staff

42. Developing Procedures • See Excerpt from ABC PHA Minimum Rent Procedure (page 2-19)

43. Chapter 2. Section 4.Guidelines for ImplementingPolicies and Procedures

44. What Should the PHA Do? • Review HUD requirements • Regulations • Current notices • Remember that Guidebooks are not mandatory but are helpful references for acceptable policy language • Establish local policies and procedures • Train staff • Monitor staff for consistency • When questions arise, make decisions and add to already-established policy and procedures

45. Charts for Sample Policy Decisions • Annual Income and Assets • Income Exclusions • Medical Expenses • Child Care Expenses • Note: These are examples only; not intended to be all inclusive

46. Learning Objective • Develop well-conceived policies and effective procedures, taking into account mandatory requirements and prohibitions and areas of policy discretion