[Federal Register Volume 65, Number 59 (Monday, March 27, 2000)]
[Rules and Regulations]
[Pages 16294-16296]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7366]



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Part V





Department of Housing and Urban Development





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24 CFR Parts 5 and 266



Uniform Financial Reporting Standards for HUD Housing Programs; Revised 
Report Filing Date; Final Rule

  Federal Register / Vol. 65, No. 59 / Monday, March 27, 2000 / Rules 
and Regulations  

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DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

24 CFR Parts 5 and 266

[Docket No. FR-4321-F-07]
RIN 2501-AC49


Uniform Financial Reporting Standards for HUD Housing Programs; 
Revised Report Filing Date

AGENCY: Office of the Assistant Secretary for Housing--Federal Housing 
Commissioner, HUD.

ACTION: Final rule.

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SUMMARY: This final rule amends HUD's regulations on Uniform Financial 
Reporting Standards to provide for certain entities subject to these 
standards an annual financial report filing date that is no later than 
90 days after the end of the entity's fiscal year. This amendment 
provides these entities with an additional 30 days to prepare and 
submit their annual financial reports. This rule also makes certain 
technical corrections to these regulations.

EFFECTIVE DATE: April 26, 2000.

FOR FURTHER INFORMATION CONTACT: For further information contact 
Beverly Miller, Office of Housing, Department of Housing and Urban 
Development, 451 Seventh Street, SW, Washington, DC 20410, telephone 
(202) 708-1320 (this is not a toll free number). Persons with hearing 
or speech impairments may access that number via TTY by calling the 
Federal Information Relay Service at 1-800 877-8399.

SUPPLEMENTARY INFORMATION: HUD's Uniform Financial Reporting Standards 
regulations, codified at 24 CFR part 5, subpart H (issued by final rule 
on September 1, 1998 at 63 FR 46582), establish uniform annual 
financial reporting standards for HUD's Public Housing, Section 8 
housing, and multifamily insured housing programs. The regulations 
provide that the financial information required to be submitted to HUD 
on an annual basis under these programs must be submitted 
electronically and prepared in accordance with generally accepted 
accounting principles (GAAP).
    The move to uniform financial reporting standards in HUD programs 
was part of Secretary Cuomo's HUD 2020 Management Reform Plan. The 
requirement for electronic submission of the financial report responds 
to the Vice President's call to all federal agencies to expand the use 
of new technologies and telecommunications to create an electronic 
government (September 7, 1993, Report of the Vice President's National 
Performance Review, pp. 113-117, Ref. 2).
    Since issuance of the September 1, 1998 final rule, HUD believes 
that the transition to electronic reporting of financial information, 
using uniform accounting principles is proceeding well. HUD has worked 
closely with the entities subject to these standards (covered entities) 
to assist them in becoming familiar with GAAP and reporting information 
electronically. Additionally, given the introduction of a new uniform 
and electronic financial reporting system, HUD has been sensitive to 
transition difficulties and HAS provided additional time and assistance 
where additional time and assistance was needed. For example, in 
January 1999, at the request of covered entities for more time to file 
their first financial reports, HUD changed the filing due date for the 
first financial report from April 30, 1999, to June 30, 1999 (see final 
rule issued on January 11, 1999 at 64 FR 1504). In June 1999, HUD again 
responded to a request by entities for additional time to submit first 
financial reports under the Uniform Financial Reporting Standards (see 
final rule issued on June 24, 1999 at 64 FR 33755).
    With a little over a year's experience with this new reporting 
system, HUD has determined that for certain entities the annual 
financial report due date should be changed from 60 days after the end 
of the entity's fiscal year to 90 days after fiscal year end. These 
entities are owners of housing assisted under any Section 8 project-
based housing assistance payments program, as described in 24 CFR 
801.1(a)(3), and owners of certain multifamily projects receiving 
direct or indirect assistance from HUD, or with mortgages insured, 
coinsured or held by HUD under the programs listed in 24 CFR 
801.1(a)(4). Experience to date has shown that 90 days after fiscal 
year end is a more reasonable period of time for these owners to 
prepare and submit their financial reports to HUD.
    Public housing agencies and owners assisted under section 8 
project-based assistance are also covered by the Uniform Financial 
Reporting Standards regulations in 24 CFR part 5, subpart H (see 24 CFR 
801.1(a)(1), (2) and (3). This rule does not revise the reporting due 
date for these entities. HUD recently amended the Public Housing 
Assessment System regulations on January 11, 2000 (65 FR 1712). The 
PHAS regulations are applicable to public housing agencies (PHAs) and 
adopt the uniform financial reporting requirements in 24 CFR part 5, 
subpart H. Although the PHAs provides some additional time without 
penalties for PHAs to submit their fiscal year end financial reports, 
the PHAS did not change the reporting due date for PHAs. In accordance 
with 902.33, PHAs must submit their financial reports no later than two 
months after the end of the PHA's fiscal year end. (See 24 CFR 902.33 
of PHAS Amendments final rule at 65 FR 1744.)
    Therefore, the revised due date is only applicable to those 
multifamily housing entities listed in 24 CFR 5.801(a)(4). In addition 
to revising the reporting due for multifamily housing covered entities, 
HUD is removing the provisions in 24 CFR 5.801(c) that were applicable 
only to the first year reports. Those reports have been submitted and 
the regulatory language is no longer applicable.
    This rule makes three technical corrections in addition to the 
amendments made to Sec. 5.801, discussed above. HUD is removing from 
the list of multifamily programs subject to the Uniform Financial 
Reporting Standards, the reference to HUD's Housing Finance Agency Risk 
Sharing Program. This rule was inadvertently included in these 
regulations, and these regulations are not applicable to this program. 
The regulations for the Housing Finance Agency Risk Sharing Program in 
24 CFR part 266 are corrected to remove the cross reference to the part 
5, subpart H regulations. The cross reference is found in 
Sec. 266.505(b). Also, HUD's rule implementing OMB Circular A-133 
(Administrative Requirements for Grantees to Reflect the Single Audit 
Act Amendments of 1996), published November 18, 1997 (62 FR 61616) 
removed parts 44 and 45 of HUD's regulations. (These regulations 
addressed, respectively, Non-Federal Audit Requirements for State and 
Local Governments, and Non-Federal Audit Requirements for Institutions 
of Higher Learning). This rule also will remove the cross-reference to 
part 44 in Sec. 266.510(c). The applicable cross reference to be made 
concerning non-federal audits is now found in 24 CFR 85.26.

Findings and Certifications

Justification for Final Rulemaking

    In general, the Department publishes a rule for public comment 
before issuing a rule for effect, in accordance with its own 
regulations on rulemaking at 24 CFR part 10. Part 10, however, does 
provide for exceptions from that general rule where the Department 
finds good cause to omit advance notice and public participation. The 
good cause

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requirement is satisfied when the prior public procedure is 
``impracticable, unnecessary, or contrary to the public interest'' (24 
CFR 10.1). The Department finds that good cause exists to publish this 
final rule for effect without first soliciting public comment, in that 
prior public procedure is unnecessary. Public procedure is unnecessary 
entities subject to HUD's regulations in 24 CFR part 5, subpart H, 
requested the change in the report filing date, which this rule 
provides, and seeks expeditious implementation of this change. The 
regulatory amendment made by this rule, therefore, alleviates a burden 
for these entities. In addition to extending the reporting due date, 
the rule makes three technical corrections. No policies or standards 
are changed by this rulemaking.

Regulatory Flexibility Act

    The Secretary, in accordance with the Regulatory Flexibility Act (5 
U.S.C. 605(b)), has reviewed and approved this final rule, and in so 
doing certifies that this rule will not have a significant economic 
impact on a substantial number of small entities. This rule is limited 
to changing the reporting filing date owners of multifamily housing who 
are subject to HUD's Uniform Financial Reporting Standards. Although 
this change alleviates a burdensome requirement for these entities, 
which include small entities, the rule does not result either adversely 
or beneficially in any significant economic impact on a substantial 
number of small entities.

Environmental Impact

    This final rule is exempt from the environmental review procedures 
under HUD regulations in 24 CFR part 50 that implement section 
102(2)(C) of the National Environmental Policy Act of 1969 (42 U.S.C. 
4332) because of the exemption under Sec. 50.19(c)(1). This final rule 
only amends the financial reporting deadline of existing regulations.

Executive Order 13132, Federalism

    This final rule does not have federalism implications and does not 
impose substantial direct compliance costs on State and local 
governments or preempt State law within the meaning of Executive Order 
13132 (entitled ``Federalism'').

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance numbers for the programs 
that would be affected by this rule are:

14.126--Mortgage--Insurance--Cooperative Projects (Section 213)
14.129--Mortgage--Insurance--Nursing Homes, Intermediate Care 
Facilities, Board and Care Homes and Assisted Living Facilities 
(Section 232)
14.134--Mortgage--Insurance--Rental Housing (Section 207)
14.135--Mortgage--Insurance--Rental and Cooperative Housing for 
Moderate Income Families and Elderly, Market Rate Interest (Sections 
221(d)(3) and (4))
14.138--Mortgage--Insurance--Rental Housing for Elderly (Section 231)
14.139--Mortgage--Insurance--Rental Housing in Urban Areas (Section 220 
Multifamily)
14.157--Supportive--Housing for the Elderly (Section 202)
14.181--Supportive--Housing for Persons with Disabilities (Section 811)
14.188--Housing--Finance Agency (HFA) Risk Sharing Pilot Program 
(Section 542(c))
14.850--Public Housing
14.851--Low Income Housing--Homeownership Opportunities for Low Income 
Families (Turnkey III)
14.852--Public Housing--Comprehensive Improvement Assistance Program
14.855--Section 8 Rental Voucher Program
14.856--Lower Income Housing Assistance Program--Section 8 Moderate 
Rehabilitation
14.857--Section 8 Rental Certificate Program
14.859--Public Housing--Comprehensive Grant Program

List of Subjects

24 CFR Part 5

    Administrative practice and procedure, Aged, Claims, Drug abuse, 
Drug traffic control, Grant programs--housing and community 
development, Grant programs--Indians, Individuals with disabilities, 
Loan programs--housing and community development, Low-and moderate-
income housing, Mortgage insurance, Pets, Public housing, Rent 
subsidies, Reporting and recordkeeping requirements.

24 CFR Part 266

    Aged, Fair housing, Intergovernmental relations, Low-and moderate-
income housing, Mortgage insurance, Risk-sharing, Reporting and 
recordkeeping requirements.

    Accordingly, for the reasons stated in the preamble, title 24 of 
the CFR is amended as follows:

PART 5--GENERAL HUD PROGRAM REQUIREMENTS; WAIVERS

    1. The authority citation for 24 CFR part 5 continues to read as 
follows:

    Authority: 42 U.S.C. 3535(d), unless otherwise noted.


    2. In Sec. 5.801, paragraph (a)(4)(xiv) is removed and paragraph 
(c) is revised to read as follows;


Sec. 5.801  Uniform financial reporting standards.

* * * * *
    (c) Annual financial report filing dates. (1) For entities listed 
in paragraphs (a)(1) and (2) of this section, the financial information 
to be submitted to HUD in accordance with paragraph (b) of this 
section, must be submitted to HUD annually, no later than 60 days after 
the end of the fiscal year of the reporting period, and as otherwise 
provided by law (for public housing agencies, see also 24 CFR 903.33).
    (2) For entities listed in paragraphs (a)(3) and (4) of this 
section, the financial information to be submitted to HUD in accordance 
with paragraph (b) of this section, must be submitted to HUD annually, 
no later than 90 days after the end of the fiscal year of the reporting 
period, and as otherwise provided by law.
* * * * *

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PART 266--HOUSING FINANCE AGENCY RISK-SHARING PROGRAM FOR INSURED 
AFFORDABLE MULTIFAMILY PROJECT LOANS

    3. The authority citation for 24 CFR part 266 continues to read as 
follows:

    Authority: 12 U.S.C. 1707, 42 U.S.C. 3535(d).


    4. Paragraph (b)(7) of Sec. 266.505 is revised to read as follows;


Sec. 266.505  Regulatory agreement requirements.

* * * * *
    (b) * * *
    (1) * * *
* * * * *
    (7) Maintain complete books and records established solely for the 
project.
* * * * *

    5. Paragraph (c) of Sec. 266.510 is revised to read as follows;


Sec. 266.510  HFA Responsibilities.

* * * * *
    (c) HFA's annual financial statement. The HFA must provide HUD with 
annual audited financial statement in accordance with the requirements 
of 24 CFR part 85.26.

    Dated: March 20, 2000.
William C. Apgar,
Assistant Secretary for Housing-Federal Housing Commissioner.
[FR Doc. 00-7366 Filed 3-24-00; 8:45 am]
BILLING CODE 4210-27-P