hud regulatory and compliance issues presented by: susan g. wilson, cpa
DESCRIPTION
Occupancy Requirements of Subsidized Multifamily Housing Programs (4350.3) Financial Operations and Accounting Procedures for Insured Multifamily Programs (4370.2) The Management Agent Handbook (4381.5) Policies and Procedures HandbooksTRANSCRIPT
HUD Regulatory and Compliance Issues
PRESENTED BY:SUSAN G. WILSON, CPA
• HUD Insured Mortgage• HUD Regulatory Agreement
• Project-Based Section 8• HAP Contract
• Other• Use Agreement/Operating Agreement
HUD Governing Documents
• Occupancy Requirements of Subsidized Multifamily Housing Programs (4350.3)
• Financial Operations and Accounting Procedures for Insured Multifamily Programs (4370.2)
• The Management Agent Handbook (4381.5)
Policies and Procedures Handbooks
COMPLIANCE ISSUES
WITH ALL PROJECTS
Relating to fair housing and internal controls
• Missing or non-current Affirmative Fair Housing Marketing Plan
• Failure to maintain waiting list
• Inadequate documentation of rejected applicants and evictions
Fair Housing
• Ineffective controls or lack of controls over cash receipts and/or disbursements
• Failure to comply with established internal control procedures for cash receipts and/or disbursements
• Lack of adequate documentation of internal control procedures being correctly followed
• Failure to deposit cash on a timely basis
Internal Controls
COMPLIANCE ISSUES
WITH SECTION 8
Regulations target protecting tenants
• Missing applicant waiting list
• Missing tenant file documentation
• Missing signatures
• Improper tenant selection plan
Tenant and Applicant Documentation
• Underfunded Security Deposit Cash Account
• Borrowing money from Security Deposit Account to fund operations
Security Deposit Account
• Overpayment of Property Management Fees
• No “Employee Dishonesty” Insurance
• Improper Tenant Charges
Management Functions
COMPLIANCE ISSUES
WITH HUD INSURED MORTGAGES
Regulations target protecting the assets and shielding lender from risk
• Late payments
Mortgage Payments
• Bad books mean unrecorded liabilities and missing assets
Poor Recordkeeping
• Generally, distributions are only allowed twice a year• Project must be in surplus cash position• Includes related parties• Includes advances to fund operations
Distributions to Owners
• Distributions when no surplus cash is available• Loans of project funds (including “due
from…”)• Payments on related party and “other” loans• Commingling of funds among projects
Perceived “Equity Skimming”
QUESTIONS ??