Moving to Work (MTW) Guidance on Monitoring of MTW Demonstration Site

Introduction

MTW is a challenging program to manage and monitor given the complexity and diversity of the MTW Demonstration sites and their respective implementation plans.  With participant PHAs freed from significant portions of HUD regulations, HUD Headquarters recognized that Review Teams would need support to perform program monitoring activities and ensure participant PHAs adhere to the specifics of their MTW Agreement and the demonstration’s standard requirements to:

• Serve essentially the same number of households

• Ensure 75 percent of MTW participants are very-low income

• Establish a reasonable rent policy to encourage employment and self-sufficiency

• Assure that housing provided under the demonstration meets housing quality standards established or approved by HUD

Field Office staff remains responsible for standard PHA compliance issues. HUD Field Offices will remain responsible for the general oversight of PHA operations.  The monitoring conducted through MTW does not exempt PHAs from standard and routine monitoring and performance assessments conducted by HUD Field Office staff. Field Offices will continue to handle elements that are part of the traditional HUD monitoring review, such as environmental reviews and FHEO compliance.  The HUD Field Office staff will also remain responsible for the monitoring of standard HUD requirements, such as wage rates, environmental reviews, and fair housing and equal opportunity practices.  Monitors and other staff should use this guide as a supplement to traditional HUD monitoring tools. 

The Review Team will conduct an initial monitoring site visit in the first year of program implementation. This will enable those PHAs that may experience implementation problems at the outset of the demonstration to obtain the risk mitigation and program support necessary to remedy any issues of non-compliance in the early stages of the program.

The MTW monitoring protocol provides a general framework for the site-visits, but recognizes that each monitoring visit will require some customization. The MTW monitoring protocol, with the accompanying monitoring tool, is intended to help the Review Team focus on priority items specific to MTW.   The monitoring tool recognizes prior HUD approval of MTW specific policies and seeks to guide an assessment of overall compliance with key related requirements.

Remote Monitoring

Remote monitoring is the primary method that HUD uses to monitor PHAs.  Staffing and travel funds, coupled with demand workload, limit the amount of time for on-site reviews.  Remote monitoring provides information that HUD staff can use to offer risk mitigation to PHAs, alert HUD and PHAs to potential problems, correct PHA errors and minor problems before they worsen, and assure HUD that PHAs are performing at an acceptable level.  Second, remote monitoring provides some of the information that serves as the foundation for an on-site review.  Remote monitoring identifies the issues, problems, concerns, and negative trends in each of the functional areas, which assists in determining the necessity for an on-site review, and in sharpening its focus.

During the term of the MTW demonstration, block grant Public Housing Authorities (PHAs) prepare and conduct their activities in accordance with an Annual MTW Plan and Annual MTW Report.  The MTW Annual Plan, a comprehensive framework for the PHA’s activities, must be submitted to HUD no later than 60 days prior to the start of the PHA’s fiscal year (or within a reasonable period of execution of the Agreement).  The Annual MTW Report, which compares the PHA’s performance with its Annual MTW Plan, must be submitted to HUD annually no later than 60 days after the end of the fiscal year. As part of periodic remote monitoring reviews of these sites, monitors should review the MTW Annual Plan and Report to verify that:

• The plan conforms to the terms and conditions of the Moving to Work demonstration and its Appendix containing the Statement of Authorizations.

• The PHA adheres to MTW reporting requirements outlined in Attachment B-MTW Annual Plan and Report Elements.

• The funding request included in the Annual Plan document was based upon the methodology outlined in Attachment A-Calculation of Subsidies

Given the unique and comprehensive nature of the activities the PHAs carry out under MTW, in part due to the authority granted to PHAs to depart from standard program requirements, the MTW Annual Plan and the MTW Annual Report provide customized assessment tools to support other HUD reporting requirements. Monitors should complete a thorough and critical review and use the analytical questions and commentary as guides to identify areas that may need further inquiry or review. 

Compliance Matrix (for Block Grant Agencies)

To assist in the review of the block grant annual plans and reports, and to standardize reporting from this review, HUD provides a compliance matrix for block grant agencies. This tool addresses the specific requirements as outlined in Attachment B of the MTW Agreement. The intent of this matrix is to detail a block grant PHA's compliance with specific terms of the MTW agreement. The tool is not intended to replace standard HUD compliance monitoring

The tool's six major columns and explanations for their use are as follows:

• Elements. This column outlines the detailed reporting requirements for each element outlined in Attachment B of the MTW Agreement.  Attachment B requires PHAs to report in the following categories: Households Served, Occupancy Policies, Changes in the Housing Stock, Sources and Amounts of Funding, Uses of Funds, Capital Planning, Management Information for Owned/Management Units, Management Information for Leased Housing, Resident Programs, and Other Information Required by HUD.

• MTW Annual Plan. In this column, Reviewers should indicate whether, for each of the required elements, the PHA complies with the terms and conditions of the MTW Agreements, and the reporting requirements. In addition, the Reviewer should indicate whether the funding request is consistent with the MTW Agreement.

• MTW Annual Report. In this column, Reviewers should indicate whether, for each of the required elements, the PHA complies with the terms and conditions of the MTW Agreements, and the reporting requirements.

• Analytical Questions/Commentary.  Reviewers should value the information that PHA’s provide within the Annual Report and Plan within the context of the PHA’s historical performance as known and reported to HUD previously.  To assist Monitors to value the information provided in the MTW Annual Plan and MTW Annual Report, HUD provides additional analytical questions. The MTW Agreements do not specify that PHAs provide the answers to these additional analytical questions.  This list is not comprehensive, but rather provides a general framework for supplemental review. These questions provide a link to the traditional PHA monitoring and on-going responsibilities of the HUD Field Offices.

To provide supplemental information about the MTW plan, Reviewers may use these additional questions in discussions with the PHA about their implementation of the MTW program.  Reviewers may also conduct independent analysis based on the information that PHAs are required to submit within the MTW Agreement to further evaluate the PHA in key areas, such as financial soundness.  To assist Reviewers to value information provided in the MTW Annual Report and MTW Annual Plan.

Risk Assessment

Effective oversight requires that Reviewers be proactive in helping PHAs identify and address performance and compliance problems.  HUD advocates a cooperative problem-solving approach as the ideal model for the PHA improvement process.  At the same time, the Reviewers recognize the need to take strong and decisive action if the PHA lacks the capacity, will or local support to effectuate necessary improvements.  Consequently, in a review of the Annual Report planned outcomes as compared to actual outcomes, Reviewers should assess PHA performance and compliance capacity, as well as ability/prospects to carry out needed improvements. 

Effective monitoring and on-site reviews can trigger change within the PHA.  This requires the Reviewer to be more than just familiar with HUD requirements; it requires the Reviewer to look beyond regulations, handbooks and checklists and to think analytically and systematically about a PHA and its operations.  The Reviewer can then use this opportunity to provide program support and to work with the PHA in analyzing problems and developing workable solutions, and acting as a catalyst for the provision of outside risk mitigation.

Within their traditional role, Field Offices receive cyclical reports, copies of newly adopted/revised PHA policy documents, independent audit reports, Inspector General audit reports, follow-up information from the PHAs on these audit reports, as well as on the Field Office's own review reports, contracting actions, and fund requisitions/LOCCS reports (see LOCCS Desk Reference Guide).  Reviewers should consider alternative sources of information, as well as contact with the MTW PHAs as they identify implementation concerns for MTW. 

MTW Monitoring Tool Instructions

To assist the Review Team in their remote monitoring and on-site review, HUD provides a MTW monitoring tool that is used for both block grant and non-block grant MTW sites. This tool includes two components: a general monitoring tool for use at all sites and a site-specific tool.  The general tool outlines terms and conditions with which all MTW sites must comply.  The site-specific tool reflects the requirements specified in each site’s individual MTW agreement with HUD; it provides a checklist for the terms stated in each individual agreement.  The two monitoring tools used together provide a checklist for the Review Team’s activities.

General Project Monitoring Tool

The tool's six major columns and explanations for their use are as follows:

• Agreement/Legal reference.  Indicates the specific legal/agreement reference for each program requirement to which the site must comply.   

• Requirements for PHAs compliance. All of the site specific terms of the MTW agreement and the program requirements are grouped into seven major categories:

-          PHA Record-Keeping and Reporting. Includes the PHA’s requirements for record keeping and submission of report/information for monitoring and assessment purposes, such as financial statements, PHA Plans, SEMAP, PHAS, Annual Report, and other information necessary for evaluation purposes.

-          PHA Physical Structure and Quality Standard. Includes review of PHA properties to ensure compliance with demolition and deposition and the Housing Quality Standards (HQS).  Most of these requirements remain under HUD’s traditional PHA monitoring functions and should be included in the standard monitoring activities of the Field Office.

-          PHA Rent Policy. Provides a detailed checklist for PHA requirements for the implementation of MTW rents.

-          Finances.  Pertains primarily to a review of PHA budgets and year-end statements as they pertain to MTW.  Some of the requirements may remain under HUD’s traditional PHA monitoring functions and will be addressed in the standard monitoring activities of the Field Office.

-          Admissions and Eligibility Requirements. Includes a review of PHA compliance with HUD requirements to serve essentially the same number and mix of families (by family size) as pre-MTW and to serve 75% very low-income families.

-          Sanctions/Hardship. Addresses the requirement that MTW PHAs adopt and adhere to a hardship policy.

-          Legal and Organizational Oversight, and Other Required Procedures. Outlines requirements for board approvals.

• Supporting References.  Provides a baseline of sources for the Review Team to review to ensure and verify PHA compliance with the basic MTW requirements.

• Is the PHA in compliance? Indicates whether the PHA is in compliance with the listed requirements. If the PHA does not provide supporting documentation demonstrating their compliance with a given requirement, they are assumed not to be in compliance.

• Verification.  Asks the Review Team to explain their decision as to whether the PHA is in compliance with any given requirement.  If the PHA is not in compliance, the monitoring team should indicate why.  If the PHA is compliant, the Review Team should indicate how this information was verified.

• Comments/Issues.  This column provides space for additional explanation and support.

Site-specific Monitoring Tool

Each MTW site must also comply with the specific terms of its MTW statement of authorizations (the appendix to the legal MTW agreement). The Statement of Authorizations (hereby referred to generically as the “MTW Agreement”) is the legal contract between HUD and the PHA outlining the requirements for an individual MTW program.  These tools draw upon the specific program design elements as they are outlined in the Statement of Authorizations.  The site-specific tool columns follow the same format as the general tool. 

Summary Report

The Review Team will prepare a final report, documenting how the review was conducted, the findings and recommendations. The purpose of the final report is to present the review team's final conclusions about the PHA's MTW program, and to provide recommendations to bring about improved MTW program implementation. Because the final report documents the PHA compliance with HUD requirements, its findings, causes, and recommended actions should be clear, persuasive, and well documented.  The analysis of findings and discussions with other HUD staff should accurately present the views of the PHA, particularly where there are disagreements between the monitors and the PHA (See Attachment E: Outline for the Final Report).

If the Review Team finds that a PHA program is in non-compliance, HUD will provide written notification of this finding and the corrective action(s) required.  Non-compliance from the MTW program requirements include:

• Use of MTW funds for non-MTW purposes

• Non-compliance with legislative, regulatory or other requirements applicable to the MTW Agreement

• Material breach of the MTW Agreement

• Material misrepresentation of the MTW Plan

In cases of non-compliance, the PHA and the Review Team will work collaboratively to structure workable solutions. The review team should work with the PHA to identify specific actions to be taken, specify the persons responsible for the actions and the specific time frames to address each finding and recommendation.  The Review Team and the PHA should focus on the desired results. What tasks need to be done? Who is responsible for doing them? What time frames should be established? What resources are available?

The MTW Review Team will ensure that the final report is distributed to the appropriate contacts, within the HUD Field Office and HUD Headquarters.

On-site Review

The site visit is the critical point in the review process.  During the site visit, the review team confirms its understanding of the processes and procedures from its remote monitoring and prior research and analysis. Because this research is critical to both the on-going implementation of the MTW program at each site and to HUD’s overall analysis of the MTW program, the review team must take care to conduct objective, thorough analyses and to document all of its findings and observations carefully.  The monitoring is an opportunity to uncover program support needs, not previously identified, and make substantive recommendations.

The monitoring visit should typically last 1 ½-2 days.  On the first day, the Review Team will confirm their understanding of the program's operations based on their remote monitoring.  The second day will include property visits and an exit conference to discuss the monitoring results.

The Review Team, PHA staff and other review participants should work collaboratively to identify obstacles impeding the PHA's implementation of the MTW program.  Some obstacles may be more or less outside of the PHA's control or influence.  These obstacles may be found in the local political climate, poor performance by other local agencies and entities (i.e., police, city services, social service agencies, etc.).  A PHA's ability to influence change in these obstacles may be limited.  However, they must be identified, understood, and addressed if improvement is to take place.  As part of the monitoring process, the team should develop a comprehensive approach to solving any problems identified and tap into the resources of the entire team. 

Pre-Site Planning and Review

An on-site review provides the ability to physically observe the PHA’s program operations and management to improve the overall performance of each MTW program, and monitor PHA compliance with program requirements/MTW agreement, the law, and other directives.  The value and importance of taking sufficient time to thoroughly prepare for an on-site review cannot be overemphasized.  The first step in the monitoring review process is to conduct in-office preparations for the on-site visit.  These preparations will ensure that the review team becomes familiar with each PHA’s MTW program, the impact of the MTW program’s structure on the standard review of HUD regulations, and the potential strengths and weaknesses of each PHA's specific MTW program.

These preparations include:

1.      Review PHA MTW program information and general PHA background to become more familiar with program requirements, implementation trends, and key areas for in-depth review.  Relevant sources of program information include, but are not limited to:

2.      Analyze the MTW Compliance and Monitoring Tools and the supplied program information to define focus areas for review (i.e.: rent policies, time limits, financial and/or asset management). The Review Team should review the existing program documentation for gaps and areas requiring further confirmation.  This will ensure that the review captures the most important issues.   This is also an opportunity for each monitoring team to develop supplementary review tools, such as interview guides (for Board members, specific staff and tenants) and lists of data needs.  The Review Team should use multiple and diverse means of information collection and analysis prior to arrival on-site to maximize on-site time.  Such methods might include:

• Pre-review telephone interviews with PHA staff; and

• Review of PHA policies, as appropriate.

3.      Maintain a file on important MTW program review data, official documents from HUD Headquarters, REAC, the Field Office, FCM and other pertinent information (e.g., correspondence, etc.).

4.      Arrange on-site review. In advance of the site visit, the Review Team should schedule the review and interviews and obtain documents, in advance, to maximize time spent on site.  To set up the on-site review, the Review Team should perform the following tasks:

a.          Contact the MTW Program Contact at the site, with as much advance notice (approximately 30 days) of the pending review as possible. Request assistance in making arrangements for interviews, data collection, document review, and visits to individual developments, as appropriate. Examples of information to include in the notice are:  

• Review dates – beginning and ending
  
  
• Time period covered by the monitoring
  
  
• Introduction of the Review Team
• Purpose of the review and planned review activities
  
  
• Who (if anyone) outside the PHA will be contacted during review (both pre-site visit preparation and the site-visit) to discuss the support, performance, etc., of the PHA
  
  
• A list of data and documents to be reviewed and PHA developments to be visited
  
  
• A copy of the cover letter and enclosures to the PHA's Board of Commissioners

b.          Prepare a list of requested PHA data and documentation needed while on site; e.g., PHA files, copies of pertinent policies and procedures, audit reports, minutes of Board meetings, tenant files, wait lists, financial reports, etc.

c.          Prepare a list of requested PHA staff to be interviewed, which might include:  PHA Executive Director; PHA management staff; PHA Board members; PHA line staff (Family Self Sufficiency, MTCS); Duly elected resident representatives; and/or PHA Counsel.

d.          Schedule appointments, as needed, with non-PHA representatives; e.g., tenants, supportive service providers, or other community representatives.  Since these individuals' schedules may be more constrained than those of PHA employees, it is wise to schedule these appointments significantly in advance of the review.

Entry Meeting

An entry meeting between the Review Team and the PHA Executive Director, management, and others as appropriate (e.g., Board of Commissioners, resident and community leadership) is an essential first step in the on-site review.  The purposes of the meeting are to:

Introduce the review team members and their areas of expertise

• Obtain the cooperation and support of the PHA leadership and commitment for staff involvement in the process

• Meet the PHA's staff/other attendees and respond to any questions about the review

• Explain the objective and scope of the review (this should be a specific list of topics)

• Describe the review methodology, including the cooperative HUD/PHA problem solving approach

• Confirm the review schedule and the availability of requested interviewees, data, and documentation

Discussion of Roles

Each of the major MTW stakeholders that will participate in the monitoring review brings a unique perspective about the program implementation – its successes and challenges.  Their full participation in the review is critical to present a balanced review of the PHA’s compliance and performance, as well as to develop a complete understanding of the context in which the program operates.  In addition, each stakeholder group will learn from each other’s experience during the visit and become better positioned to carry out their respective role in the MTW program following the site visit.

Open communication with the Executive Director and key PHA staff throughout the review is important in order to facilitate a cooperative problem solving approach, and to obtain any additional information and clarifications that may affect potential findings or observations.

The expectations for each participant group during the review are:

Review Team

The Review Team will:

• Conduct interviews

• Collect and analyze data

• Review site documents

• Consult with PHA staff on any areas of noncompliance

• Review results to identify areas of noncompliance

• Identify actions needed to resolve potential problems

• Recommend resources to address areas of concern

• Maintain work paper files for thorough and up-to-date documentation

• Draft the final deliverable report

Review Team members should be aware that information that is contradictory or unavailable might indicate other operational problems, such as inadequate record-keeping procedures, faulty automated systems, or lack of PHA internal coordination.

During the site visit, the Review Team will draw upon historical information regarding the PHA, as necessary, to include:  their performance in the traditional public housing and Section 8 programs, organizational and management issues, areas of concern and community perspective that may be relevant to the implementation of the MTW program. HUD Field Office staff should also obtain any HUD generated data, such as MTCS or REAC data, and serve as a key resource to resolve any MTW program implementation and compliance issues. 

The Review Team will meet briefly at the end of the first day to summarize the results and findings of the review activities.  At this meeting the team will explore possible interrelationships among PHA strengths and weaknesses, identify inconsistencies and areas for further investigation; and determine whether additional interviews, data collection, or document review will be needed beyond those already arranged.

PHA

For a review to be successful, it must have the participation and support of the PHA Executive Director and key staff, such as the MTW Coordinator. We recommend that the Executive Director perform an internal assessment prior to monitoring or as a function of the monitoring and provide his/her own views on areas for improvement, areas of noncompliance and technical assistance needs.  The Director should also probe and test the validity of any and all findings and recommendations identified by the monitoring team on a continuous basis.

The need for PHA staff involvement in the monitoring will depend upon the nature of the review being conducted.  Active involvement of the PHA staff in the review offers two distinct benefits.  Staff is often aware of implementation problems and a key source for recommendations for improvement.  The staff is also most keenly aware of what strategies have worked or failed in the past.  The results, and particularly the reasons for failure, can be very instructional in formulating corrective actions.  The involvement of front-line and key staff throughout the monitoring process is critical to the ultimate success of any recommendations.  In most cases, front-line and key staff will be responsible for carrying out any actions deemed necessary to correct the deficiencies noted in the monitoring review.

Residents

Duly elected PHA resident councils and Resident Management Corporations should be notified by the PHA of the subject of the review and the specific dates the review will take place.  The monitoring team should meet with representatives of the resident organization at the outset to orient the group regarding the review process, the desired input from the resident organization(s) and the process by which recommendations will be made and implemented. 

Local Officials staff and others

Elected officials, locality staff (e.g., City Planning Director, Chief of Police, etc.), supportive service agencies and others may be involved in reviews depending on the subjects to be addressed.  Interviews should be scheduled with local officials, during which they are provided an orientation on the purpose of the review and coverage, as well as the process for follow-up on review findings. 

Exit Meeting        

At the conclusion of the site visit, the monitoring team will conduct an exit meeting with the PHA's Executive Director, top management staff, and others who will be needed to ensure that any recommendations are implemented.  The exit meeting should be facilitated by the Review Team leader and attended by all members of the monitoring team.  Members from the Board of Commissioners, resident and community leadership should be included as appropriate.  The exit meeting is designed to:

• Acknowledge the PHA's assistance and cooperation during the review.

• Outline the team's preliminary findings, with appropriate documentation, causes, observations and recommendations

• Acknowledge any positive aspects of the PHA's operation that were identified prior to, as well as during, the review

• Provide the PHA with an opportunity to comment, correct or clarify, and to make suggestions regarding ways to improve PHA performance

• Reach mutual agreement, to the extent possible, on the findings, causes, actions needed, and whether the issuance of a preliminary report is necessary. (A preliminary report should only be necessary in cases in which findings may be appealed or disputed.)  Any disagreements should be clearly recorded in the exit meeting notes.

Meeting notes will be included in the work papers, but not issued as a part of the final report.

Final Report Preparation

The Review Team will prepare a final report, documenting how the review was conducted, the findings and recommendations. The purpose of the final report is to present the review team's final conclusions about the PHA's MTW program, and to provide recommendations to bring about improved MTW program implementation. Because the final report documents the PHA compliance with HUD requirements, its findings, causes, and recommended actions should be clear, persuasive, and well documented.  The analysis of findings and discussions with other HUD staff should accurately present the views of the PHA, particularly where there are disagreements between the monitors and the PHA.

If the Review Team finds that a PHA program is in non-compliance, HUD will provide written notification of this finding and the corrective action(s) required.  Non-compliance from the MTW program requirements include:

• Use of MTW funds for non-MTW purposes

• Non-compliance with legislative, regulatory or other requirements applicable to the MTW Agreement

• Material breach of the MTW Agreement

• Material misrepresentation of the MTW Plan

In cases of non-compliance, the PHA and the Review Team will work collaboratively to structure workable solutions. The review team should work with the PHA to identify specific actions to be taken, specify the persons responsible for the actions and the specific time frames to address each finding and recommendation.  The Review Team and the PHA should focus on the desired results. What tasks need to be done? Who is responsible for doing them? What time frames should be established? What resources are available?

The MTW Review Team will ensure that the final report is distributed to the appropriate contacts, within the HUD Field Office and HUD Headquarters.