Q and A: Understanding the Period of Income

Question:  In early July 2015, I pulled an Income Detail Report and an Income Discrepancy Report for one of my residents with an upcoming November 2015 Annual. There was a discrepancy on the November 2014 Annual. I don’t understand why the Period of Income (8/1/2013 to 7/31/2014) is so historical? Why am I needing to review income that is almost two years old?

Josie-Georgia

Answer:  This is a very common question and source of confusion for the industry.

It is important to recognize that, as a database, EIV can only make historical comparisons of income. It cannot estimate or project future income values. When you initiated the November 2014 AR by sending the First Reminder Notice on July 1, 2014, EIV assumes the resident reported to his/her recertification appointment in a timely manner (on or about August 1). At that time, the prior 12-month timeframe that you would have used to project income for the coming year would have been 8/1/2013 to 7/31/2014 (the Period of Income listed on the discrepancy). In reality, we know that residents do not always respond to the First Reminder Notice. However, the EIV System doesn’t consider these delays when determining the historical reference to base its comparison.

This discrepancy serves to notify management that there may be a discrepancy in how the income was reported on the 2014 AR and thus, a correction to prior certifications may be necessary. During the tenant interview, management should discuss the variances between what was actually earned versus what was reported on the November 2014 Annual to determine if corrections are necessary and/or if there are circumstances to consider when determining the most accurate method of projecting income for the upcoming Annual.