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The Tenant Services Authority (TSA) has written to all Housing associations about what action they should take to ensure that they are managing the risks posed by the problems in the financial markets

The TSA advices associations – and by that lets be clear they mean the boards - to ensure that they are:

• regularly reviewing their market  exposures, in order to ensure that they can meet their obligations under the terms of all their finance agreements on a timely basis.
• monitoring compliance with their loan agreements including responsibility for notification, supply of information and financial covenants.

Any association that anticipates having any difficulty in meeting the terms of their loan or derivative agreements should ensure that they inform their lenders and the TSA as soon as possible.

Claire Miller of the TSA says ‘the TSA continues to expect associations to be pro-active in identifying their own risk exposures and taking corrective action where required. .�

My advice is that boards should proactively review their treasury management policies now including regularly updating and reviewing their financial forecasts; assessing their exposure to the housing and finance markets including the consideration of alternative uses/disposal of assets; arranging new private finance facilities on a timely basis and monitoring compliance with financial covenants.

BDA can provide inhouse training to boards on its treasury management policy  so that boards understand the issues. More information

View copy of the letter from the TSA.