| ID | Status | Date | Public/Private | Industry | AHACPA Contact |
|---|---|---|---|---|---|
| #7803 | Closed | public | PHA | Les Sparks |
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I recently came across Accounting Brief #18 – Reporting portability transactions for the HCV program. Section 1.6 states that “it is HUD’s position that federal funds involved in both port-in and port-out activity should be included in each PHA’s SEFA.” Our interpretation of port-in revenues/expenses was that they’re considered a ‘vendor’ payments rather than ‘subrecipient’. However, based on the Accounting Brief#18 it appears that HUD thinks they should be classified as subrecipient receipts and subject to single audit. Is this correct? In practice, are PHA’s reporting the voucher payments from port-in’s as their own federal expenditures on their SEFA? If so, are PHA’s required to report on the SEFA each PHA they received port-in money from and the dollar amount expended from each? Also, should a PHA identify the expenditures from their port-outs and report the total amount as passed through to subrecipients in the footnotes to the SEFA. Does it also trigger than the requirement to test Subrecipient Monitoring compliance requirements? |
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From Les Sparks: Of course the brief indicate the following: 1.6 PORTABILITY AND SCHEDULE OF EXPENDITURE OF FEDERAL AWARDS (SEFA) However, with the implementation of Uniform Guidance, we get the following language: Listed below is the new Uniform Guidance <with my comments> Subrecipient Monitoring and Management The non-Federal entity may concurrently receive Federal awards as a recipient, a subrecipient, and a contractor, depending on the substance of its agreements with Federal awarding agencies and pass-through entities. < This is really the case here> Therefore, a pass-through entity must make case-by-case determinations whether each agreement it makes for the disbursement of Federal program funds casts the party receiving the funds in the role of a subrecipient or a contractor. The Federal awarding agency may supply and require recipients to comply with additional guidance to support these determinations provided such guidance does not conflict with this section. <Of course, the following may be of specific interest.> (b) Contractors. A contract is for the purpose of obtaining goods and services for the non-Federal entity’s own use and creates a procurement relationship with the contractor. See § 200.22 Contract. Characteristics indicative of a procurement relationship between the non-Federal entity and a contractor are when the non-Federal entity receiving the Federal funds: <In the end it may be that the following factor on judgment is the most important issue> (c) Use of judgment in making determination. In determining whether an agreement between a pass-through entity and another non-Federal entity casts the latter as a subrecipient or a contractor, the substance of the relationship is more important than the form of the agreement. All of the characteristics listed above may not be present in all cases, and the pass-through entity must use judgment in classifying each agreement as a subaward or a procurement contract. <In conclusion, I think most port-ins are awards and that the agency performing the eligibility calculations is the one that should record the award. I believe that HUD’s position is one based on ease of use and convenience, not a strict interpretation of the rules. I can go either way. My sole requirement is to indicate in a note to the SEFA which path was followed.> Les |