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Be among the first to know if HUD extends the submission deadline!  

Today, OMB released in the Federal Register a proposal to revise specific requirements to several Circulars, including A-133. As the President outlined in Executive Order 13563 on Improving Regulation and Regulatory Review, each Federal agency must tailor its regulations to reduce regulatory burden. To that end, OMB is also considering the development of an integrated set of guidelines that would be contained in one consolidated Circular. Particular changes contained in the proposal related to A-133 include the following:

1. Concentrate audit resolution and oversight resources on higher dollar, higher risk rewards.
   • Entities that expend less than $1 million in Federal awards will not be required to conduct a Single Audit.
   • Entities that expend between $1 million and $3 million in Federal awards will undergo a more focused Single Audit, differing from current requirements in that major program review would focus on only two compliance requirements. Allowable and unallowable costs will always be one of the compliance requirements, while the responsible Agency would have discretion to select the second requirement that would best target the risk of improper payments, waste or fraud and abuse.
   • Entities expending more than $3 million in Federal awards would undergo a complete Single Audit
2. Streamlining the universal compliance requirements in the Circular A-133 Compliance Supplement - compliance requirements could be combined and streamlined to those elements focusing on proper stewardship of Federal funds.

Other proposed changes focus on guidelines for audit follow-up and for reduction of burdens on pass-through entities and subrecipients. The proposal also contains guidance on Cost Principles (Circulars A-21, A-87 and A-122) as well as other requirements.

The entire proposal can be found here.

AHACPA will be preparing comment on the proposal. Such comments are due March 29, 2012.

HUD OIG's recent release of Chapter One of the HUD Audit Guide required the following :

"Any management letter must be submitted directly to the HUD office providing funding/services to the auditee as part of the reporting process. When reporting through an electronic system is available, such management letter should be included in the filing. When electronic filing is not available, management letters should be sent to the local program office in hardcopy format. The auditor should determine the program office responsible for monitoring the auditee from the review of correspondence during the audit and in discussion with the client."

However, there is no guidance on how to send this management letter to REAC. We contacted REAC and requested guidance on how to implement this requirement. The following was subsequently posted to REAC's Multifamily webpage here.

Management Letters

Chapter 1 of the latest Office of Inspector General Audit Consolidated Audit Guide for Audits of HUD Programs (Handbook IG2000.04, Rev. 2, Chg. 10, pg. 1-2) states:

Any management letter must be submitted directly to the HUD office providing
funding/services to the auditee as part of the reporting process. When reporting through an
electronic system is available, such management letter should be included in the filing.

The FASS-MF system currently does not have an account/data field specifically designated to transmit the management letter. Until REAC is able to modify the system and create a new account, submitters are asked to transmit the management letter in one of the following accounts:

S2200-040 Comments on Internal Controls
S2300-040 Comments on Noncompliance (major programs)
S2400-040 Comments on Noncompliance (non-major programs)

These accounts are part of the schedules for Report on Internal Controls, Report on Compliance - Major Programs, and Report on Compliance - Non-major Programs respectively. The submitter should use the account most applicable to the issues discussed in the letter (e.g. if the letter primarily discusses compliance issues related to major programs then it should be submitted in account S2300-040).

Supervised lenders and mortgagees seeking FHA lender approval or renewal are required to electronically submit audited financial statements to FHA within 90 days of their fiscal year end pursuant to Mortgagee Letter 2010-20. 

On April 7, 2011, the requirement that supervised lenders and mortgagees submit audited financial statements for FHA lender approval or renewal was waived for one calendar year for supervised lenders and mortgagees that possess less than $500 million in assets.  This reporting threshold is derived from Federal Deposit Insurance Corporation (FDIC), Office of the Comptroller of the Currency (OCC) formerly the Office of Thrift Supervision (OTS), and National Credit Union Administration (NCUA) regulatory requirements which can be found at 12 CFR § 363.1(a), 12 CFR § 562.4(b)(2), and 12 CFR § 715.4(c), respectively.  The original waiver is due to expire on April 7, 2012.  The Acting FHA Commissioner has signed an extension of this waiver good for one additional calendar year through April 7, 2013. 

In lieu of submitting audited financial statements, supervised lenders and mortgagees that qualify for this waiver must submit a copy of their unaudited regulatory report that aligns with their fiscal year end (i.e., Report of Condition and Income, also known as the "Call Report" on Federal Financial Institutions Examination Council forms 031 and 041; a consolidated or fourth quarter Thrift Financial Report; or a consolidated or fourth quarter NCUA Call Report, submitted on NCUA Form 5300 or 5310) within 90 days of their fiscal year end.  The unaudited regulatory report must be signed by a corporate officer.

Supervised lenders and mortgagees that qualify for this waiver must complete all other approval and renewal requirements, including submitting the online certification and paying the renewal fee.  As with the original waiver, the extension of the waiver only applies to the submission of audited financial statements and does not apply to the additional financial reporting requirements in 24 CFR § 202.5(g).

FHA-approved lenders and mortgagees must submit required documentation through the Lender Assessment Subsystem (LASS) at https://entp.hud.gov/clas/.  However, as the LASS system is currently unable to collect unaudited regulatory reports, small supervised lenders and mortgagees who qualify for the waiver will not be required to submit their annual recertification documentation through LASS.  Instead, the information should be e-mailed to small.supervised.lenders@hud.gov   For more information please see these Frequently Asked Questions (FAQs) at: http://portal.hud.gov/hudportal/documents/huddoc?id=Lendfaqswaiver.pdf

AHACPA has submitted several requests for clarification regarding this notice. In particular, we have asked whether the requirements from last year to continue to submit internal control and compliance reports are still in place. LASS has only indicated that they are working on a revision to chapter 7 of the Consolidated Audit Guide and that they plan to issue new guidance at some point in the future. AHACPA believes that such reporting requirements remain in place despite a complete lack of guidance on how to submit those reports.

Planet Hollywood Resort
3667 Las Vegas Blvd, South
Las Vegas, NV 89109

June 7, 2012 8:00 am - 5:00 pm
June 8, 2012 8:00 am - 3:10 pm

Course Fee: $625 ($575 for AHACPA Members)  

    Click here to pay by credit card - Regular registration
Click here to pay by credit card - AHACPA Member registration (member ID required)

**NEW LOCATION**

The Cosmopoitan of Las Vegas
3708 Las Vegas Boulevard South
Las Vegas, NV 89109

December 4, 2012 8:00 am - 5:00 pm
December 5, 2012 8:00 am - 3:10 pm

Course Fee: $625 ($575 for AHACPA Members)  

    Registration will be open at the beginning of April.

The Multifamily and Lender Update courses have not yet been scheduled.  As these course dates and locations are determined the information will be posted here.

AHACPA is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.learningmarket.org