1. HUD Regulatory and Compliance Issues PRESENTED BY: SUSAN G. WILSON, CPA

2. HUD Insured Mortgage HUD Regulatory Agreement Project-Based Section 8 HAP Contract Other Use Agreement/Operating Agreement HUD Governing Documents

3. 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

4. COMPLIANCE ISSUES WITH ALL PROJECTS Relating to fair housing and internal controls

5. Missing or non-current Affirmative Fair Housing Marketing Plan Failure to maintain waiting list Inadequate documentation of rejected applicants and evictions Fair Housing

6. 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

7. COMPLIANCE ISSUES WITH SECTION 8 Regulations target protecting tenants

8. Missing applicant waiting list Missing tenant file documentation Missing signatures Improper tenant selection plan Tenant and Applicant Documentation

9. Underfunded Security Deposit Cash Account Borrowing money from Security Deposit Account to fund operations Security Deposit Account

10. Overpayment of Property Management Fees No “Employee Dishonesty” Insurance Improper Tenant Charges Management Functions

11. COMPLIANCE ISSUES WITH HUD INSURED MORTGAGES Regulations target protecting the assets and shielding lender from risk

12. Late payments Mortgage Payments

13. Bad books mean unrecorded liabilities and missing assets Poor Recordkeeping

14. 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

15. 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”

16. QUESTIONS ??