HUDs Contingency Plan for Potential Government Shutdown

 HUDs Contingency Plan for Potential Government Shutdown

*This article is provided by NAHRO Washington Update - September 30, 2013

With a federal government shutdown still a very real possibility, on Friday HUD posted to its website a document titled “FY2013 Contingency Plan for Possible Lapse in Appropriations.” The document provides information on those HUD employees who will be expected to report to full-time duty “during a hiatus in appropriations” and also details the “excepted activities” that the Department will continue to perform during a potential shutdown.

Public and Indian Housing: HUD’s contingency plan states that the Department will keep open the line of credit control system (LOCCS) “for the purposes of disbursing funds for public housing (operating subsidies and capital funds) that were appropriated in prior years or necessary to support an exempted activity.”  Furthermore, “[f]unds that have already been obligated in the system and which can be drawn down without further action or review by HUD employees may also be accessed.” Similarly, HUD will keep LOCCS open for section 8 tenant-based rental assistance.

The plan indicated that most HUD IT systems utilized by PHAs have been classified as “excepted activities” and will remain operational and accessible during any shutdown.  These systems include:  The systems below are considered to be excepted activities that are necessary to protect property and records:

  •     Enterprise Income Verification
  •     Inventory Management System
  •     Voucher Management System
  •     Financial Assessment Sub-System
  •     Financial Assessment Sub-System
  •     Physical Assessment Sub-System
  •     Integrated Assessment Sub-System
  •     Management Assessment Sub-System
  •     Technical Assistance Center
  •     Customer Assessment Sub-System

HUD previously informed PHA Executive Directors via email that “final 2013 Obligations for the Operating Fund should be available in eLOCCS by Friday, September 27, 2013, but not later than Monday, September 30th 2013.” According to the Department, these obligations will cover the October through December period and will provide for a final proration of approximately 82 percent. Additional information should become available shortly on HUD’s Calendar Year 2013 Subsidy Processing webpage.

Regarding Section 8 voucher programs, HUD’s Financial Management Center is working to schedule and secure approval of October 2013 payments by the end of the day today.  For Housing Assistance Payment (HAP) disbursements, the Department continues to use its cash management methodology by using PHAs’ April – June 2013 Voucher Management System data as validated by HUD, adjusted upward by three percent.

Approximately 240 of the 2,350 PHAs that administer Section 8 voucher programs received a letter from HUD’s Financial Management Division on September 13 alerting those agencies to a two-part staggered payment (scheduled for October 1 and October 7), along with a spreadsheet enclosure showing HUD’s calculations of each applicable PHA’s estimated Net Restricted Asset (NRA) balances.  For these agencies, the combination of direct HAP funding and available NRA should prove sufficient to meet HAP check obligations to participating property owners for October 2013.

Community Planning and Development: The contingency plan states that the Department will
“[c]ontinue to provide for the delivery of essential housing and emergency services for homeless persons and persons with AIDS to protect against imminent threats to the safety of human life.” During any shutdown, HUD will:

  •     Continue to disburse CDBG, HOME funds and other block grant funds in cases where failure to address issues result in a threat to safety of life and protection of property.
  •     Continue Disaster Recovery Assistance Programs funded through multi-year appropriations.
  •     Continue to maintain the CACI contract for the systems (e.g., IDIS, DRGR, eSNAPs) that support excepted activities.

The plan notes that a long term shutdown could potentially result in the automatic approval of submitted consolidated plans, since the review of the consolidated plans does not fall under an excepted activity and plans are automatically deemed approved if not disapproved within 45 days of submission. The plan also alerts CPD-funded technical assistance providers that they may continue to carry out activities on previously approved work plans.

For information on HUD’s contingency plans for other offices, including the Office of Housing, please refer to the posted document.

At Press Time: As has been widely reported over the weekend, the House early Sunday morning rejected the Senate’s so-called “clean CR” in favor of a CR placing a one-year delay on the implementation of the Affordable Care Act (ACA).    The House also rejected the deadline for the CR proposed by the Senate (November 15) and retained their original end date of December 15.  The House bill would also end a tax on medical devices.  The House bill passed shortly after midnight Sunday morning.

The House action now forces the Senate to either accept or reject the House-approved alternative to the CR.  Reports this morning indicate that there were no new negotiations between the House, Senate and White House to remedy the current impasse, fueling further speculation surrounding the likelihood of a shut-down this morning.  We caution however that this situation remains fluid.

At press time, the Senate is expected to convene at 2 p.m. and is reportedly planning to once again send back a “clean CR.” If the Senate sends back another “clean” CR, the House may send back to the Senate a one-week CR to buy time for further negotiations on the ACA.  Additionally, some sources are reporting that the House may send back to the Senate a CR containing smaller changes to the Affordable Care Act (ACA) that the Senate could otherwise accept.  There are no indications what the changes might be.   The situation remains fluid, with some reports indicating that a last minute “deal” to avoid a government shut-down is not out of the question.  NAHRO will continue to monitor the situation closely, and will send further reports as more definitive information is made available.