AYBR Program Administration

Lesson 12: Monitoring, common findings and full review

Module 5, Closeout and compliance · 20 practice questions

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Reading

Every step in this course is a step a monitor can check. This last lesson explains how monitoring works, what usually goes wrong, and how to run a program that holds up when the Department asks to see your files. It ends with a start-to-finish checklist you can keep next to the desk, and the practice questions cover all twelve lessons.

How monitoring starts

The Program Manual says all Administrators are subject to a monitoring review at any time. The Department chooses whom to review through an internal risk assessment, a citizen complaint, or prior findings. The rule lists the risk factors (10 TAC 20.14(c)): the number of Contracts, the funds awarded and expended, the time since the last monitoring, prior findings, single-audit issues, complaints, and fraud reports. The same assessment decides whether the review is a desk review or an on-site visit.

Written notice is sent by email to the chief executive officer, and in general it gives 30 calendar days (20.14(d)). Credible fraud complaints can lead to unannounced visits or shorter notice. That makes one habit important: keep your contact information current with the Department (10 TAC 1.22), so that a notice is not missed. On request you must make available all books and records the Department determines are reasonably relevant, and the Department may inspect assisted properties (20.14(e)).

What a review looks like

The manual describes two forms. A desk review is a letter, an analysis of what you send, and a report. An on-site visit adds an entrance interview, selection of files, accompanied physical inspections of homes, an exit interview and a report. The manual gives five objectives: performance, expenditure of HTF money, compliance, prevention of fraud and abuse, and quality workmanship. It reviews four areas: finance, administration, eligibility and construction quality. One checklist item is simply that a record keeping system is established, so the way you organize files is itself under review.

Monitoring runs from a notice through review, findings and a 30-day response to either a close-out letter or referral for sanctions.

Findings, corrective action and sanctions

If the review finds problems, you get a corrective action period of 30 days, which may be extended for good cause (20.14(g)). Ask for more time in writing, to the Compliance Division, within the period. The Department will in general approve or deny the request within three business days. Disallowed costs are to be repaid to the Department immediately.

When the findings are resolved, the Department sends a close-out letter. Findings can also be reported to the committee that handles Previous Participation (20.14(h)), which matters for future applications. If you disagree with a finding, the rule offers guidance from the federal officer where federal funds are involved, an appeal to the Executive Director under 10 TAC 1.7, or alternative dispute resolution under 1.17 (20.14(i)).

If there is no response, or a finding is not corrected, the matter goes to the Enforcement Committee, which considers administrative penalties, full or partial cost reimbursement, or suspension (20.14(j)). The manual adds suspension or termination of the Agreement, deobligation of remaining funds, and a recommendation for debarment. The sources used here do not give penalty amounts or the Agreement's termination clause, so read your RSP Agreement.

Why this matters

Monitoring does not test whether you worked hard. It tests whether the file proves you followed the rule at each step. A good household project with a thin file looks the same to a monitor as a bad one.

Worked example: a monitoring notice arrives

An email addressed to GCHS's chief executive officer announces an on-site review in 30 calendar days. GCHS does the following, in order: confirms the notice and contact address, pulls the Program File (agreement, accounting, policies, marketing records), lists every Activity File for approved and denied applicants, and checks each active file against the checklist below. It finds that one change order was approved by email only, and that a rental file lacks the owner's permission. It cannot fix the history, but it can disclose both, correct the file where possible and write down what changed in procedure.

The monitor accompanies GCHS to two homes, interviews staff at the exit, and issues a report with those two findings. GCHS has 30 days. It answers in writing, requests nothing further, and receives a close-out letter. The costs tied to the unapproved change order are disallowed and repaid immediately. The cheapest part of that story was the preparation.

Where programs fail

The Department has not published a list of common AYBR findings in the sources used for this course. The table below is a teaching list inferred from the requirements, tied to the lesson where each is prevented.

Likely problem	How to prevent it	Lesson
Change order started without written approval	Written Department approval first, on the Program form	10
Lump-sum or zero-line bid accepted	Line-item bid form built from the write-up	9
Hazards over 25 percent or 40 percent of Hard Costs	Check the cap on every scope and change order	8
Income or asset papers over 180 days old; disability form over 12 months	Date-check at submission	6
Rental without owner permission, lease, or hazards fixed first	Rental checklist in every file	6
Missing lien waivers, bills-paid affidavit or warranty evidence	Pre-submission walk-through	10, 11
Missing outreach, policy or conflict documentation	Program File sections kept current	4, 5, 7
Inspector or estimator also bids	Separation of duties; independent contractors	7, 9
Work started before Stage 3 approval and notice	Written authorization step	10
Late Audit Certification Form or lapsed IRS exemption	Calendar and diary dates	2, 11

Start-to-finish checklist

Use the list below in two ways. Before a household enters the program, walk down it to see what must already be true. During a file review, whether your own or a monitor's, walk down it again with the Activity File open and mark what you can prove with a document. Anything you cannot prove with a paper in the file is, for monitoring purposes, not done. Each item names the lesson that explains it, so you can go back for the detail.

Before you start

The IRS exemption is effective and its letter is in the Program File; renewal checks are on the calendar for the whole RSP Agreement term (Lesson 2).
Good standing, bond, Language Access Plan and audit filings are current (Lessons 2, 11).
Written procurement, conflict of interest, intake and selection, wait-list, denial and walk-away policies are adopted before the first applicant (Lessons 5, 7, 9).
Staff using the Reservation System are authorized and never share logins (Lesson 3).
The Program Rules, RSP Agreement, HAC, NOFA and manual have been read (Lesson 3). Note the 2026 reservation deadline, Friday, November 27, 2026, 5:00 p.m. Central Time.

Outreach, intake and selection

Outreach is documented in the Program File, with materials in English and Spanish (Lesson 4).
Applicants get written eligibility criteria, including how to ask for a reasonable accommodation; requests are answered within 14 calendar days (Lesson 4).
Every applicant, approved or denied, has an Activity File (Lessons 5, 7).
GCHS procedure: the draft intake policy uses a 21-day window, a neutral random drawing, then first-come for remaining funds, with written notices. It is draft pending attorney review, and who runs and witnesses the drawing is still being decided.
Denial letters give the specific reason and appeal or reapply instructions within 14 calendar days (Lesson 5).

Eligibility

Disability form is no more than 12 months old at submission; income and asset papers are no more than 180 days old (Lesson 6).
Income is at or under the limit, and liquid assets are $25,000 or less (Lesson 6).
Owner of record lives in the home, or a rental has owner permission and a lease and passes the rental rules (Lesson 6).
Taxes are current, there are no impairing liens, and any manufactured home meets the 1995 rule (Lesson 6).
GCHS procedure: citizenship or qualified-alien status is verified through SAVE under GCHS's Option 1 election by the designated SAVE Supervisor.
Applicant records stay in the Restricted SharePoint library; forms and policies stay in the AYBR Working-Files folder (Lesson 7).

Stages 1 through 3

Enter the reservation amount the User Guide calls for ($22,500 for AYBR); the default split at that amount is Hard $20,455 and Soft $2,045 (Lessons 3, 9).
Do not start a stage until the Department approves the one before; cure deficiencies within 14 calendar days (Lesson 3).
Initial inspection documents accessibility needs and hazards, with Before photos; the household signs the approved write-up (Lesson 8).
Hazard repairs stay within 25 percent of Hard Costs, with the 40 percent combined ceiling for listed items (Lesson 8).
Solicit bids only after Stage 2 approval, with an independent estimate, multiple bids and line items only (Lesson 9).
Inspectors and estimators never bid (Lessons 7, 9).

Construction, draw and closeout

Department notice, pre-construction conference, then GCHS's authorization to start (Lesson 10).
Written approval before any change order work (Lesson 10).
Construction is finished before the HAC expires; the draw is submitted within 60 calendar days after (Lessons 10, 11).
Final inspection signed; package complete; lien waivers and bills-paid affidavit in the file; warranty papers handed to the household (Lesson 11).
One final draw, plus an administrative draw of exactly 10 percent (Lesson 11).
Records are kept five years from completion (Lesson 11).

Every year

File the Audit Certification Form within two months after the fiscal year ends, and any required Single Audit on time (Lessons 2, 11).
Keep contact information current and keep the files in a state you would show a monitor (this lesson).

Open items to ask TDHCA about

Treat these as open, never as settled.

Whether the 21-day acceptance period and random selection in 10 TAC 20.8(c) apply to state-funded AYBR. Subsection (c) opens with Administrators receiving Federal funds, but paragraph (2) says only "An Administrator," so the text does not settle it. That is why GCHS's voluntary use of them is called a GCHS procedure.
Extension limits: the rule lets the Executive Director's designee approve up to three months for the term and for the draw period (26.24(h)), while one manual page says a one-time 30-day extension.
How long to keep records for denied applicants.
Who may sign the disability form.
Whether any citizenship verification is required of a private nonprofit Administrator, and which documents are acceptable. GCHS follows its own SAVE election in the meantime.

When in doubt, say so in writing to the Department and keep the answer in the Program File.

Practice questions

1. What is AYBR's funding source and the nature of its grants?

Federal National Housing Trust Fund money, awarded as a one-time grant of up to $22,500 per household
Federal HOME funds, awarded as ongoing assistance of up to $22,500 per year per household
State Texas Housing Trust Fund money, as a one-time grant of up to $22,500 per household
State general revenue only, with grants of up to $22,500 paid in two installments to each household

2. Which order of authority does the course teach, highest first?

Government Code Chapter 2306, the 10 TAC rules, the NOFA, the RSP Agreement and HAC, then the Program Manual and forms
The Program Manual, the NOFA, the 10 TAC rules, the RSP Agreement and HAC, then Government Code Chapter 2306 at the end
The 10 TAC rules, Government Code Chapter 2306, the Program Manual, the NOFA, then the RSP Agreement and HAC
The NOFA, Government Code Chapter 2306, the RSP Agreement and HAC, the 10 TAC rules, then the Program Manual

3. GCHS's IRS exemption was reinstated in June 2026. What does the rule require about it?

It need only be effective on the day the RSP application is submitted and checked once
A pending reinstatement application is acceptable while the new IRS letter is awaited by the Department
It matters only for the annual audit, when the Audit Certification Form is filed
It must stay effective for the whole RSP Agreement term, so GCHS diarizes checks and files the letter

4. Which is the correct order of the four Reservation System stages?

Reservation setup, procurement review, work write-up and cost estimate, then completion and the draw request
Reservation setup, work write-up and cost estimate, procurement review, then completion and draw
Work write-up and cost estimate, reservation setup, procurement review, then completion and the draw request
Reservation setup, work write-up and cost estimate, completion and the draw request, then procurement review

5. What is the 2026 NOFA deadline to reserve funds?

Monday, December 15, 2025, at 5:00 p.m. Central Time, when the first subregion phase of the year ended
Tuesday, February 10, 2026, when the statewide first-come, first-served phase began for the year
Tuesday, August 4, 2026, at 10:00 a.m., when the added funds were released to Administrators
Friday, November 27, 2026, at 5:00 p.m. Central Time, after which unreserved funds may be reprogrammed

6. The Department says a Stage request is administratively deficient. How long does GCHS have to cure it?

14 calendar days, counted from the first day after GCHS is notified
15 business days, counted from the date the Department receives the request
30 calendar days, counted from the date the stage was first submitted
7 calendar days, counted from the first day of the following month

7. An applicant asks for a reasonable accommodation. How quickly must GCHS respond, and in what languages is Fair Housing and accommodation information offered?

Within 30 calendar days, with the information in English only unless the applicant asks for another language
Within 14 business days, with the information in English only and a translator available on request
Within 14 calendar days, with the information offered in English and Spanish
Within 7 calendar days, with Fair Housing information in English and Spanish only for rental households

8. The Department denies a GCHS reservation request, and GCHS wants to appeal. By when must the written appeal reach the Executive Director?

Within 30 calendar days after the HAC would have been executed
Not later than the seventh calendar day after notice
Within 14 calendar days, the same period as a cure
At any time before unreserved funds may be reprogrammed on November 27

9. Which of these counts toward the $25,000 liquid asset limit?

A money market account balance
The balance of a 401(k) retirement account
The balance of a 529 education savings plan
The cash value of a whole life insurance policy

10. How old may a household's Certification of Disability be on the date of Reservation System submission?

No more than 180 days old
No more than 30 days before the Household Income Certification date
No more than 24 months old
No more than 12 months old

11. Where do GCHS applicant records that contain Social Security numbers, income details or citizenship documents live, and how many Activity Files are kept?

In the shared AYBR Working-Files folder, with Activity Files kept only for the applicants who are approved
Only in the Restricted SharePoint library, with one Activity File for every applicant, approved or denied
In the Program File on the shared drive, with one combined Activity File for all denied applicants together
Wherever the consultant works, because original documents may be moved to a consultant's place of business

12. A household's Hard Costs budget is $20,000. Hazard repairs are $4,800 of electrical and plumbing work plus $2,600 for egress openings and smoke alarms. Is this within the rule?

No, because $7,400 is above the 25% cap of $5,000 and no exception exists for any item
No, because the total is above 25% of the $22,500 maximum grant, which is $5,625
Yes, because the egress and alarm items may exceed 25% by their own cost, and the $7,400 total stays under the 40% combined ceiling of $8,000
Yes, because no cap applies to hazard repairs once the household approves the scope in writing

13. A county has no local building codes. Which code does the AYBR rule name for the work?

The 2021 International Residential Code without any appendices
The 2010 ADA Standards, treated as mandatory for every dimension
The 2018 International Building Code, applied to single-family homes
The 2015 International Residential Code, including Appendix J

14. A final draw is Hard Costs of $16,000 and Soft Costs of $1,400. What is the administrative fee?

$1,740, which is 10% of the $17,400 drawn
$1,600, which is 10% of the Hard Costs alone
$2,250, the maximum fee for any household
$1,400, which equals the Soft Costs claimed

15. Which bid would the rules require GCHS to reject?

One that is higher than the independent cost estimate but fully itemized by line
One from a contractor that has never worked in Region 6
One that shows a lump-sum price or a zero-dollar line item
One that includes a line for lead testing

16. A contractor proposes added work on a house under construction. When must the Department's written approval be in hand?

With the final draw, as long as the Inspector signed the change order
Before any work related to the proposed change begins
Within 14 days after the work is finished
Only if the change costs more than 10% of the Hard Costs

17. Which statement about draws is correct?

An interim draw at rough-in and a final draw at completion, each paying its own administrative fee of 10% of Hard Costs only, with both due within 90 days
A single draw with no separate administrative draw, because the fee is built into the $22,500 maximum grant amount for the household
A final draw within 90 calendar days after bid approval, and an administrative draw of 10% of the Hard Costs alone, created on any screen
One final draw within 60 calendar days after the HAC expires, plus an administrative draw of exactly 10% of the Hard plus Soft total

18. How much notice does the Department generally give before monitoring, and to whom is it sent?

In general 30 calendar days, by written notice emailed to the chief executive officer
Never; every monitoring visit is unannounced so that files cannot be prepared in advance
Seven calendar days, by telephone call to the Inspector who worked on the file
Sixty calendar days, by certified letter mailed to the board chair at the PO box

19. A monitoring report lists findings. How long is the corrective action period, and how can GCHS get more time?

14 calendar days, with no extension available once findings are issued
30 days, extendable for good cause by a written request to the Compliance Division made within the period, with a decision generally in three business days
60 days, extended automatically if GCHS says it needs more time
30 days, extendable by a telephone call to the monitor on the last day

20. GCHS does not respond to monitoring findings or fails to correct them. What can happen?

Nothing more than a second warning letter, because findings expire after 12 months
An automatic penalty of $500 per finding, deducted from the next draw
Referral to the Enforcement Committee for administrative penalties, cost reimbursement or suspension, and possibly termination, deobligation or a debarment recommendation
Loss of the IRS exemption and automatic dissolution of the corporation

Glossary

Monitoring: The Department's review of an Administrator's performance, finances, eligibility and construction quality; it can happen at any time.
Desk review: A monitoring review done from documents the Administrator sends, ending in a report.
On-site visit: A monitoring visit with an entrance interview, file selection, accompanied home inspections and an exit interview.
Finding: A compliance problem identified in a monitoring report that requires corrective action.
Corrective action period: The 30 days, extendable for good cause, to fix findings (10 TAC 20.14(g)).
Disallowed costs: Costs the Department will not accept; they are repaid to the Department immediately.
Close-out letter: The Department's letter ending a monitoring review once findings are resolved (10 TAC 20.14(h)).
Enforcement Committee: The Department committee that considers administrative penalties, cost reimbursement or suspension when findings are not corrected (10 TAC 20.14(j)).
Deobligation: Removal of remaining funds from an Administrator's agreement as a sanction.
Open item: A rule question not settled by the sources, to be confirmed with TDHCA and never taught as settled.

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