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Launch of the new Financial Standard and Assessment Framework by the Housing Agency Regulation Office in Ireland

Yesterday saw an important step in the development of the Approved Housing Body sector in Ireland with the launch of the new Financial Standard and Assessment Framework by the Regulation Office.
Centrus welcomes the introduction of the Financial Standard, which will provide further assistance in enabling the sector to borrow public and private finance in order to provide more social housing.

A pilot will be initiated in 2015 with a select group of Tier 3 AHBs in respect of the 2014 financial year.

A summary of two important areas contained in the standard (and the link to the full publication) is below:

Summary of the Objectives
The Financial Standard has been developed with six key objectives in mind:

a) To provide the Regulation Office and AHBs with the earliest possible warnings of emerging risks which may cause financial problems for AHBs and put the social housing asset at risk
b) To detail the financial governance and management disciplines which will support AHBs in delivering their services and in potentially engaging in development and loan finance
c) To monitor key financial ratios such as current ratios, interest cover, gearing, etc. which should be maintained where borrowings have been undertaken
d) To provide a basis from which summarised aggregated data for the sector can be developed which will result in important sector-wide information
e) To build the confidence of funders and other stakeholders that the Regulatory process has the visibility and tools to provide appropriate oversight and act where issues arise
f) To safeguard long-term viability of housing assets in the interest of tenants and residents

Summary of the Assessment Process
Under the new standard once an AHB has signed up to regulation, the Regulation Office will review all of the submitted data including the Annual Return Form, the Annual Financial Return (where applicable) and audited accounts. In addition to this quantitative data, and in conjunction with it, they will consider:

  • the history and management of each AHB
  • the markets the AHB works in, and consequently the risks it faces, and
  • how management responds and adapts strategically to markets and risk.

In forming their assessment opinion they are concerned with both short term and longer term viability and they will also consider key indicators including, but not limited to, those set out below:

Source: The Financial Standard published by the Housing Agency Regulation Office July 2015.

The full standard can be found at http://www.housing.ie/getattachment/Our-Publications/AHB-Regulation/2015-Financial-Standard-and-Assessment-Framework.pdf

Commenting on the new Financial Standard, Jason Murphy, Co-Founder and Managing Director of Centrus in Ireland said “Centrus wishes to congratulate all involved in the work completed to date which is a another positive development in an exciting and challenging year for our sector”.