Hello everyone and welcome to this week's Navigate Tuesday Tip. I'm Pam and today we're gonna be talking briefly about rounding reminders. We've increasingly seen out in the field that people are rounding at different times and sometimes this can result in an error that makes your subsidy payment or your tenant rent inaccurate. So we wanna make sure that everybody is following HUD guidelines on which numbers to round and when we do it.

Consistency is key when you're doing your calculations. You wanna be consistent across staff members, everybody should be doing the same thing. You wanna be consistent across your processes, everyone should use the same calculation sheet, should round at the same time and round the same figures. And you wanna be following HUD guidelines.

Also, be sure to check the formulas on any owner-agent generated forms. A lot of us use forms that are made by owners and agents, so they're Excel forms or they're handwritten forms. All of that is fine. You just want to be making sure that it's rounding up and down at the appropriate times and that you're rounding appropriate items.

Generally speaking, HUD is going to round up at a five and down at anything else. So 16.52, if rounded, becomes either 17 or 16.5, depending on what you're doing. 109.335 is gonna be 109, or 109.34, depending on what you're doing. Generally, when you're doing the math, so while you're doing all the calculations before you write something,

Pam Kazlauskas (01:49.472)
down on the 5-9, keep the numbers as they are. So if I were working with a pay rate of $19.342 an hour, I would keep that $19.342 while I'm doing my calculation of their income for the year and round that final number.

So again, you're gonna be rounding that final number, any number that goes on the five, nine form. You're going to follow HUD guidelines and how your owner agent tells you to do calculations on any sheets that you have.

So if we take a look at this and we're gonna calculate the 3 % of annual income, we have an annual income of $25,352.78. That is gonna be a number that goes into item 86 on the 59, so we're gonna round that. 0.78 is higher than 0.5, so it's gonna go up to $25,353.

Later on we're going to have to calculate 3 % of annual income. 25,353 times 3 % gives us $760.59. That's another number that goes on the 5-9 form. That's .59. That's going to go up so it becomes 761.

Here's what it looks like on the actual 5-9 form. This is the section that deals with that. And you can see that item number 86 is that 25,353 and item 100 is $761.

Pam Kazlauskas (03:34.029)
With rent calculations, this is the Section 8 rent calculation. Generally speaking, we're only using three of those. Welfare rent is pretty rare, but it does exist. And when you calculate these numbers, when you do 30 % of monthly income, all of those numbers in that sheet are rounded. So if you do 12,000 divided by 12 to get that monthly income, that monthly income amount is listed on the calculation sheet.

so that can be rounded. And then you round your final answer, obviously, because people don't pay pennies for rent. So why does this matter?

Rounding at the wrong time can lead you to be off by a dollar. And if you're off by a dollar and then you do further calculations, you can compound that error so that it becomes more of an issue. It can result in a subsidy or rent error. And even if it's not a finding, you may need to correct it because tenants are not gonna pay more than they're supposed to pay. So here's how you can find this leading to an error that can get bigger.

When we do that, 3%. If I'm checking somebody's pay, their income, and their pay rate is $19.67 an hour.

1967 times 40 times 52 gives me 40,813 and 60 cents. Okay, so 3 % of that rounded number becomes 1224. If I round too early and I make it $20 times 40 times 52, and then I take 3 % of that, that becomes 1248. So I've just made a pretty significant error as calculations.

Pam Kazlauskas (05:26.256)
in what that 3 % is and that can compound later on. So remember, you're gonna round up at a five, down at a four, nine. You're gonna round numbers that are written on the five, nine form or the worksheet. And you're also gonna follow your owner agent procedures for what numbers are rounded and how.

Here are some resources. In HUD clips, you can pull up the 50059 and the 50059A and the instructions, which go through how to calculate each of the items. The HUD 4350.3 Occupancy Handbook, paragraphs 5-25 through 5-31, Deal with Calculations, and any of your owner agent calculation forms that have instructions on them.

That is gonna do it for today. We'd love to know what you would like to see on the next Tuesday Tips. You can email Vicki or myself at the email addresses on their screen and we'll see you next time on the Tuesday Tips.