| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
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| #6883 | Closed | public | Multifamily | Les Sparks |
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My client closed on their HUD loan on 10/29/2015 and is getting their first audit as of 12/31/2016. They appropriately applied for the extended period audit. However, they made distributions in February of 2016. The amount of the distributions would not have exceeded surplus cash if it were calculated as of 12/31/2015, but it wasn’t. Did they have the option of calculating surplus cash as of 12/31/2015 and doing distributions during 2016, or should they have waited until their first audit period was over. The guidance seems to suggest to me that HUD is looking at fiscal periods, not necessarily audit periods. Please help. |
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From Les Sparks: According to our contacts at REAC, the client absolutely has the right to take a distribution after 12/31/15. Since, the template only allows for 2 periods of calculations, the client will have to disclose the 12/31/2015 calculation in the footnotes. that is the only option available. Les |