AHACPA sent an email blast on 11/04/2024, a summary is below. This page will be updated with additional Questions and Answers.

HUD-92466-ORCF Regulatory agreements after July 12, 2013, state: “Surplus Cash shall be calculated semi-annually, at the end of the first six months of the Borrower’s annual fiscal year, and at the end of the Borrower’s annual fiscal year. Each Surplus Cash calculation
shall be submitted to Lender and HUD with the filing of Borrower’s Annual Financial Reports, unless otherwise required by HUD.”

REAC/FASSUB has been archiving (deleting) FYE 2023 Borrower Financial Statements submitted through REAC/FASSUB if a mid-year computation of surplus cash was not included. The person with a coordinator ID for the entity in question will receive an email from REAC stating:

Since the financial statements for the subject project fail to adhere to HUD and ORCF requirements, we are archiving (deleting) this submission. Please notify the owner immediately that the submission has been archived (deleted) and that he/she must resubmit the financial statements to REAC. The owner will receive an email stating that the submission is overdue. If the owner fails to resubmit the financial statements within 30 days of the date of the overdue email, the owner will be referred to the Departmental Enforcement Center (DEC) as a Non-Filer.

FREQUENTLY ASKED QUESTIONS:

Question: How do I know if this is applicable to my submission?
Answer: If the submission is NOT for a Section 232 leased nursing home this rule doesn’t apply. If the submission is for a Section 232 leased nursing home and if the borrower’s firm commitment was issued on or after July 12, 2013, a mid-year computation of surplus cash
must be included. If you aren’t sure if the rule applies to the specific entity, and you have access to the regulatory agreement:

• Look at the footer of the regulatory agreement. If the form says HUD-92466-ORCF it is the new agreement
• If the agreement is over 30 pages long, it is the new agreement

Question: How can I check if the submission has already been deleted?
Answer: Go to the FASSUB menu and select “View Prior Year AFS Data Submission”. If a copy of the submission is not available, it has been deleted and will need to be resubmitted.

Question: We haven’t received a message from HUD. Should we request a resubmission in order to add the mid-year surplus cash to the submission or should we wait and see if HUD deletes the submission?
Answer: If HUD deletes the submission it will need to be re-entered in its entirety. If you preemptively request a resubmission, the previously entered information should still be in the system. After the resubmission request is approved you go to FASSUB and create a new submission template. You should only need to enter the mid-year computation of surplus cash.

Question: We didn’t have any surplus cash, nor did we have any mid-year distributions. Is the computation still required?
Answer: If the borrower’s firm commitment was issued on or after July 12, 2013, you
must include a mid-year computation of surplus cash. Even if the mid-year surplus cash is less than $1, it must be included.

Question: We have a stub period filing – not filing for a full year. Do we still need to include this calculation?
Answer: If the borrower’s firm commitment was issued on or after July 12, 2013, AND if the reporting period is greater than 6 months the calculation must be included.

Question: We have the old regulatory agreement. What should we do?
Answer: Les Sparks suggests adding a note to the financial statement indicating you are not subject to the requirements of the new regulatory agreement.

When in doubt, don’t leave it out.