Rural Development to Increase Management Fees in Fiscal Year 2016

BROADCAST EMAIL – Regulatory Update

June 25, 2015

This afternoon, the national Rural Development (RD) office informed CARH and other industry groups that they have approved an increase in the management fee limits for Fiscal Year (FY) 2016. While not official until a Procedural Notice (PN) is issued by RD, these increased fees should be used in the budgets currently being prepared for FY 2016. Management fees will vary from state to state because RD has based on the increase on HUD’s Operating Cost Adjustment Factor (OCAF) which varies based on location in the country and is applied to each state’s current maximum fee.  (Click here for a chart that provides states’ fee adjustment for FY 2016.) RD expects the Procedure Notice to be posted by their Regulations Branch in the near future.

As CARH members know from multiple advisories and past meetings over the last four years, CARH has been advocating an increase in fees and has met with various national RD office staff to lay out justification for the increase. The proposal submitted by CARH and developed by CARH’s past presidents, Bill Shumaker and Kevin Flynn, with input from CARH’s management committee and supported by other industry groups, supports the use of an OCAF adjustment for the base fee rather than a survey that the agency used for several years. CARH was successful in obtaining a management fee increase for FY 2015, after no increase for four years. The increase was based on OCAF, as would be the case in FY 2016. In addition to the use of OCAF, CARH also proposed that OCAF should be the base and that additional add-on fees should also be part of the management fee calculation. Further we suggested that a survey be conducted every five years to determine if the OCAF needed some further adjustment. Although the increase in fees for FY 2016 is based on OCAF, CARH will continue to work with RD to advocate for CARH’s entire proposal – including Add-on Fees.

Please contact the CARH national office at or 703-837-9001 should you have questions or concerns.

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