| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
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| #19368 | Closed | public | Multifamily | Les Sparks |
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I have three related entities. Two are multifamily – one has a HUD guaranteed loan ALN 14.135 – The Section 202 property is struggling. They’ve not requested a base rent increase in some time. The other two entities are “loaning” money (unrestricted funds) to the complex to help it sustain operations. There is a material payable to the other two entities at 12.31.2023. Management is hesitant to show the amounts paid to the 202 property as a contribution because they believe it will hurt the 202 Property with HUD and requesting a rent increase. My issue, from an audit perspective, is that there is a payable on the 202 property and receivables on the other two that have no basis by which they will be repaid at the moment. The rent increase paperwork hasn’t been started, so there is no evidence of ability to repay the other entities. The amount is material on the 202 property, borderline on the PHA, and immaterial on the third one with the guaranteed loan. If management is adamant, and will not show the funds as contributed to the 202 property and insists on keeping this as a receivable, what are my options? |
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[Auto-Reply] The last two weeks of March I am very busy with Multifamily Audit submissions to HUD. In order to give priority to our submission clients, I will be focusing on email sent to SUBMIT@ahacpa.org. **I will only be checking kathy@ahacpa.org twice a day.** ShareFile uploads are automatically sent to submit@ahacpa.org. * If you are contacting me about a submission, please forward the email to submit@ahacpa.org Thank you! |
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Lori, I am sure you already know your options… 😉
Look at the end of the day you can always leave it as a receivable, then just allow for it. Use the footnote to just describe management’s position and why it is allowed and by how much. That allowance should not hurt the project in HUD’s REAC – it already is pathetic, and it will still be sitting there. I am sure management will then say that once it is allowed for, HUD will not give them a rent increase…
I do not believe for one minute that the allowance will matter to HUD. Rent increases are based on budgets and comparisons to FMRs of surrounding projects. That is likely your best option for this situation.
Les Sparks
From: Support <support@ahacpa.org> |