HUD Regulatory and Compliance Issues PRESENTED BY: SUSAN G. WILSON, CPA.
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Transcript of HUD Regulatory and Compliance Issues PRESENTED BY: SUSAN G. WILSON, CPA.
![Page 1: HUD Regulatory and Compliance Issues PRESENTED BY: SUSAN G. WILSON, CPA.](https://reader035.fdocuments.net/reader035/viewer/2022070611/5a4d1bb27f8b9ab0599cd242/html5/thumbnails/1.jpg)
HUD Regulatory and Compliance Issues
PRESENTED BY:SUSAN G. WILSON, CPA
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• HUD Insured Mortgage• HUD Regulatory Agreement
• Project-Based Section 8• HAP Contract
• Other• Use Agreement/Operating Agreement
HUD Governing Documents
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• 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
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COMPLIANCE ISSUES
WITH ALL PROJECTS
Relating to fair housing and internal controls
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• Missing or non-current Affirmative Fair Housing Marketing Plan
• Failure to maintain waiting list
• Inadequate documentation of rejected applicants and evictions
Fair Housing
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• 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
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COMPLIANCE ISSUES
WITH SECTION 8
Regulations target protecting tenants
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• Missing applicant waiting list
• Missing tenant file documentation
• Missing signatures
• Improper tenant selection plan
Tenant and Applicant Documentation
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• Underfunded Security Deposit Cash Account
• Borrowing money from Security Deposit Account to fund operations
Security Deposit Account
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• Overpayment of Property Management Fees
• No “Employee Dishonesty” Insurance
• Improper Tenant Charges
Management Functions
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COMPLIANCE ISSUES
WITH HUD INSURED MORTGAGES
Regulations target protecting the assets and shielding lender from risk
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• Late payments
Mortgage Payments
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• Bad books mean unrecorded liabilities and missing assets
Poor Recordkeeping
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• 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
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• 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”
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QUESTIONS ??