| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
|---|---|---|---|---|---|
| #7742 | Closed | public | Multifamily | Les Sparks |
|
The project has a 202 direct loan and HAP contract (both awarded pre Dec 2014) and after reading the 2CFR 200 Uniform Guidance FAQs it seems that the HAP contract is not considered an incrementally funded award since “adding new funds to an existing award to support the continuation of a current/previously funded project (i.e. same project for another year) is NOT an incrementally funded award….this would mean that the admin requirements and cost principles will be the same as under A-133, no change. Is my understanding of the situation correct so far? However,the reports issued will reference the Uniform Guidance not A-133 and use the new $750,000 thresholds for Type A and B, percentage of coverage etc….. (in my case the mortgage balance is $690,000 and HAP at $555,000 so neither is a major program but I will select the mortgage as my major program to comply with percentage completion). Is that correct ?? This was all very confusing to me…….I just wanted a second opinion to see if I was even close to the mark ! |
|
|
From Les Sparks: This is part of an ongoing discussion regarding HUD and the application of the new rules under each of the programs. My first question, is what are the differences? If you remain on the old rules, what happens and if you change, what happens? After many discussions with many firms, I can tell the that the consensus is that there is no real issue with just going to Uniform Guidance. The cost principles do not really apply in any significant manner so that is not an issue. Internal control is an issue as is protecting personally identifiable information. Not going there on those rules will not really excuse your client if they have a problem as they will be expected to control those issues even if they are not a recent award. The main issue that we see is purchasing and the client will be much better off under Uniform Guidance. There is no penalty for adopting them. At the end, our recommendation is to simply adopt UG and move on. It will be virtually impossible to continue under the old rules until the HAP contract renews (if it is a 20-year HAP contract). The reality is that the HUD components found in multifamily are seldom affected by Uniform Guidance. IT is easier to just go to UG rater than trying to justify whether or not it applies. I know that the reason most people ask me this is in relation to completing a PPC planning form. There will be very few changes, if any in the audit approach by adopting UG as you are still covered by your client’s business requirements. |