| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
|---|---|---|---|---|---|
| #11229 | Closed | public | Multifamily | _General Support |
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I have a question on behalf of our firm regarding the supplemental information required to be presented with HUD multifamily financial statements. The question at hand is whether it is advisable to present any of the of the HUD schedules, such as the balance sheet, profit and loss data, or statement of cash flows in place of the main financial statements. Our opinion on the financial statements currently includes the supplemental information, so it doesn’t seem that there would be any change in liability in order to do so, and preparing fewer statements would potentially allow us to streamline the reporting process. Can you please offer some guidance whether this would be an advisable move, and whether we would expose ourselves to any issues with GAAP? |
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I do see financial statements that do not repeat the information, but they are wrong. Here is a little blurb Les Sparks sent to someone last fall regarding the same question: From the description of the actual supplemental data in Uniform Financial Reporting Standards and the HUD Audit Guide, supplemental data include the REAC formatted financial statements and the 4 possible supplemental schedules (R4R, Surplus cash, PP&E and Residual Receipts, if any). I would not include all of the submission itself. Here is the description from the HUD Audit Guide. B. Issue an independent auditor’s report (refer to chapter 2, example A) on the supplemental information. A paragraph may be added to the auditor’s report on the basic financial statements, or a full report may be issued separately.2 *Supplemental information includes the REAC financial data templates, which essentially include support and detail for specific accounts included in the basic financial statement data and certain other information as required by HUD Handbook 4370.2, chapter 3, and as further described in REAC’s Guidelines on Reporting and Attestation Requirements of Uniform Financial Reporting Standards (UFRS) located on REAC’s Web site. The Web address is In reality, the balance sheets and cash flows are almost always the same. However, the P&L is much more condensed in the basic financial statements. Ninety percent of all reports contain a normal set of real estate financial statements – especially a condensed P&L. No REAC account numbers nothing else. Then the footnotes. After the footnotes, we then include the REAC financial data schedules described above. Yes, this does tend to include the data twice. However, that is the nature of the supplemental data requirements of AU-C 725. That is how it was designed by the AICPA. Yes, that is why these reports are so big. |