HUD Update: For-Profit Entities Subject to the HUD ...

12/14/2016

HUD Update: For-Profit Entities Subject to the HUD Consolidated Audit Guide

A Governmental Audit Quality Center Web Event

December 15, 2016

Administrative Notes

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Continuing Professional Education

You must answer at least 75% of the random, attendance checks to earn CPE credit.

Please respond to the attendance checks during the live presentation.

You are not eligible to earn CPE by watching the archive of this event.

At the end of today's presentation we will provide steps for obtaining your CPE certificate

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Presenters

Chris Stanz, CPA

CliftonLarsonAllen LLP

Denise Toomey, CPA

Wolf & Company, P.C.

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What We Will Cover

Multifamily

? Program Updates ? HUD Requirements to be Familiar With

Lender Program Update An Update on the U.S. Department of Housing and Urban Development (HUD) Consolidated Audit Guide for Audits of HUD Programs (HUD Guide) Planning Considerations for December 31, 2016, Year-End Audits

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Multifamily Program Updates

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Multifamily Programmatic Changes and Other Updates

Updated User Guide, Industry User Guide for the

Financial Assessment Subsystem ? Multifamily

Housing (FASSUB)

Financial Accounting Standards Board (FASB) Update No. 2015-03, Simplifying the Presentation of Debt Issuance Costs (ASU 2015-03): Accounting and HUD/FASSUB system requirements

Real Estate Assessment Center (REAC) Quality Assurance Subsystem

HUD to reinstate Management and Occupancy Reviews (MORs)

Other Multifamily Updates

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Updates to FASSUB Systems and Industry User Guides

Updated Industry User Guide issued in July 2016

New version (7.3.3.0) of Financial Assessment of Federal Housing Administration (FHA) Housing (FASS-FHA) submission templates changed to require additional details for accounts 1330, Other Reserves, and S1200-255, Net Deposits to Other Reserves, if account values are $1,000 or more

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ASU 2015-03 Accounting Requirements

Assets - amortized over life of the loan

Liability ? discount to debt

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ASU 2015-03 Accounting Requirements

Effective for financial statement periods beginning after December 15, 2015

Applied retrospectively to all prior periods presented

Amortization of debt discount

? Effective interest method vs. straight line

? Reported as a component of interest expense

? Present amount of unamortized costs (face of balance sheet or in notes)

Effect of adoption

? Considered a change in accounting principle ?

- disclosure,

- emphasis of matter paragraph in report,

- governance communication.

? Change in debt presentation footnote

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ASU 2015-03 HUD Reporting Requirements

FASSUB System Release ? October 6, 2016

? Modified FASSUB system to align with ASU 2015-03 - Several changes will be made to the current chart of accounts as a result

? Two options allowed: Discounts on each debt obligation reported either individually or in the aggregate

? Added ? - Account 2340, Debt Issuance Costs - Account 1200-486, Amortization of Debt Issuance Costs (indirect method section of cash flow statement)

? Updated definitions for certain accounts

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REAC Quality Assurance Subsystem (QASS)

Ensures financial data received are free of material misstatements Identifies high risk audit firms Performs Quality Control Reviews (QCRs) Makes referrals to oversight bodies

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Management and Occupancy Reviews

Letter issued to contract administrators regarding initiating MORs on higher-risk projects MORs covered by HUD Handbook 4350.1, Multifamily Asset Management and Project Servicing

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Other Multifamily Housing Program Updates ? What's New!

Updated Chapter 9 of Section 8 Renewal Guide

Implementation of Housing Protections Authorized in Violence Against Women Reauthorization Act of 2013

Rental Assistance Demonstration (RAD) Fair Housing, Civil Rights and Relocation Notice

Special and Add-on Management Fees Now Available for Properties that Implement a Homeless Preference

Amended and Restated Low-Income Housing Preservation and Resident Homeownership Act Use Agreement Notice

Draft Chapters of HUD Handbook 4350.1, Multifamily Asset Management and Project Servicing, Released

FY 17 Project Assistance Contracts (PAC) Renewals Oct. 5Dec. 5, 2016

Previous Participation Final Rule

FY 2017 Utility Adjustment Factors Effective February 11, 2017

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Other Multifamily Housing Program Updates ? What's New!

Operating Cost Adjustment Factors Effective February 11, 2017 HUD Launches Utility Benchmarking in an Effort to Increase Energy and Water Efficiency and Save Costs Reminder of Requirements for Lead-Based Paint Inspection Eligibility of Independent Students for Assisted Housing Under Section 8 HUD Publishes Evaluation of Rental Assistance Demonstration Family Self-Sufficiency Program Expanded to Privately Owned Multifamily Properties

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