| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
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| #10511 | Closed | public | Multifamily | _General Support |
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I’m preparing an audit of a for-profit property where use of the HUD Consolidated Audit Guide is required. We have determined that the only major program is the Project-Based Section 8 Housing Assistance Payments. Historically, we have performed testing of several compliance areas including equity skimming, cash receipts, and cash disbursements. After reviewing the HAP contract, I’m questioning whether these compliance areas are applicable. We’ve been doing it that way for so long that our team doesn’t recall the reason we are testing these areas. What are your thoughts on this? Do you think these areas should be considered direct and material for a typical Section 8 program? If so, could you help me understand where the requirements would be coming from? |
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From Les Sparks: If the HAP contract is silent as to distributions, then no cash disbursement are required. Cash receipts was likely never required as a Section 8 project is not subject to Handbook 4370.2, which is where the requirement comes from. Likewise, if the original HAP had no surplus cash requirements, it is highly likely that there is no requirement for distributions or equity skimming. It all depends on that original HAP.
Les Sparks
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