| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
|---|---|---|---|---|---|
| #7536 | Closed | public | Multifamily | Les Sparks |
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In returning from the AHACPA conference last week and sending out the information that I learned during the conference, I have two questions that came back to me about two situations that we are encountering with our clients. If you could so kindly help me in answering these, that would be great. First, with the UGG changing the audit threshold from $500,000 to $750,000 for a nonprofit organization, we have a client that has a loan of about $550,000 and HAP payments of about $100,000 during the year. With that being noted, they are under the new threshold for a Single Audit. Would they still need to be audited under the HUD Audit Guide? My second question is about a sale of a HUD-insured mortgaged property and subsequent dissolution of a non-profit organization. The organization sold the property in September 2015 and are set to dissolve the nonprofit in the coming months. We are questioning what the date of the fiscal period would be that we would audit. If they sold on September 10, 2015 and dissolved as of January 15, 2016, would be do an audit for the period of January 1, 2015 through September 10, 2015 or would it just be for the calendar year? Thank you for all your help on the questions above and for putting on the informative conference. |
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From Les Sparks: Let’s get to the first and easier question. If the audit threshold is $750,000 and the client goes below it, then the client is required to submit an owner-certified submission. This submission includes a full set of statements and supplemental data. The only missing components are the reports and the schedules of findings and questioned costs and prior audit findings. The SEFA is still included. There is not audit under the HUD Audit Guide. In the second question the answer depends on whether the buyer acquired the HUD loan or assumed the HAP contract. If the buyer did acquire the mortgage or the HAP contract, then an audit will be required. The ending date will be the day before the sale. HUD will not be concerned about the dissolution of the entity itself. If the buyer did not assume or get a HUD mortgage, nor assume a HAP contract, then no audit is required for HUD nor for A-133 as there are not enough expenditures at the end of the year. If the sale had happened in 2016, it could still be audited as the expenditures are determined at the beginning of the year while for A-133 they are determined at the end of the year. I hope this helps. |