[Federal Register Volume 65, Number 178 (Wednesday, September 13, 2000)]
[Notices]
[Pages 55267-55268]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-23521]


-----------------------------------------------------------------------

DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

[Docket No. FR-4456-N-12]


Privacy Act of 1974; Establishment of a New System of Records

AGENCY: Office of the Chief Information Officer, HUD.

ACTION: Notification of the Establishment of a New System of Records.

-----------------------------------------------------------------------

SUMMARY: Pursuant to the provisions of the Privacy Act of 1974 (5 
U.S.C. 552a), as amended, the Department of Housing and Urban 
Development (HUD) is giving notice that it proposes to establish a new 
system of records entitled Independent Public Accountant Quality 
Assurance Files which will be used in performing quality assurance 
reviews on the audited Financial Data Sheets and Automated Financial 
Submissions submitted to the Real Estate Assessment Center (REAC) 
either directly, or by the Independent Public Accountants (IPAs) of 
certain Public Housing Authorities (PHAs) and FHA-insured, direct loan, 
HUD-held or assisted multifamily property owners.

DATES: Effective Date: This proposal shall become effective without 
further notice on October 13, 2000, unless comments are received on or 
before that date which would result in a contrary determination.
    Comments Due By: October 13, 2000.

ADDRESSES: Interested persons are invited to submit comments regarding 
this notice to the Rules Docket Clerk, Office of General Counsel, Room 
10276, Department of Housing and Urban Development, 451 7th Street, 
SW., Washington, DC 20410-0500. Communications should refer to the 
above docket number and title. Comments submitted by facsimile (FAX) 
will not be accepted. A copy of each communication submitted will be 
available for public inspection and copying between 7:30 a.m. and 5:30 
p.m. weekdays at the above address.

FOR FURTHER INFORMATION CONTACT: For Privacy Act information: Jeanette 
Smith, Departmental Privacy Act Officer, Telephone Number (202) 708-
2374. For REAC, Financial Assessment Subsystem Quality Assurance 
information, Peter Bell, Director, Telephone Number (202) 708-4932, 
x3135. (These are not toll-free numbers). A telecommunications device 
for hearing and speech-impaired persons (TTY) is available at 1-800-
877-8339 (Federal Information Relay Services). (This is a toll-free 
number).

SUPPLEMENTARY INFORMATION: Pursuant to the Privacy Act of 1974 (5 
U.S.C. 552a), as amended, notice is given that HUD proposes to 
establish a new system of records identified as HUD/REAC-2, Independent 
Public Accountant Quality Assurance Files. REAC is responsible for 
evaluating the physical and financial condition of over 3,000 PHAs and 
over 30,000 Federal Housing Administration (FHA) multifamily insured, 
direct loan, HUD-held, and Section 8 project-based subsidized 
properties. To track the performance of these properties, certain PHAs 
are required to submit a Financial Data Sheet (FDS) and certain 
multifamily properties are required to submit an Automated Financial 
Submission (AFS) to REAC, which contains financial, audit, and 
compliance data. PHAs and multifamily property owners who are required 
to submit an FDS or AFS are also required to have an independent audit 
performed by an independent public accountant. The IPA is then required 
to express an opinion as to the accuracy of the data contained on the 
FDS or AFS.
    REAC performs a Quality Assurance Review (QAR) of the audited 
financial statements submitted by IPAs. This QAR provides HUD with the 
assurance that the information contained in the audited financial 
statements is accurate by independently reviewing the work of the IPAs 
performing the audits. The QAR process will also assure that the audits 
performed by these IPAs are being conducted in accordance with the 
auditing standards of the American Institute of Certified Public 
Accountants (AICPA) and government auditing standards issued by the 
General Accounting Office.
    Title 5 U.S.C 552a(e)(4) and (11) provide that the public be 
afforded a 30-day period in which to comment on the new record systems. 
The new system report was submitted to the Office of Management and 
Budget (OMB), the Senate Committee on Governmental Affairs and the 
House Committee on Government Reform pursuant to paragraph 4c of 
Appendix l to OMB Circular No. A-130, ``Federal Responsibilities for 
Maintaining Records About Individuals,'' July 25, 1994; 59 FR 37914.
    Accordingly, this notice establishes a new system of records and 
accompanying routine uses to be created during the financial quality 
assurance review process at HUD's Real Estate Assessment Center.

    Authority: 5 U.S.C. 552a:88 Stat. 1896; 342 U.S.C. 3535(d).

    Dated: August 23, 2000.
Susan K. Cooch,
Special Assistant, Office of Chief Information Officer.
HUD/REAC-2

SYSTEM NAME:
    Independent Public Accountant Quality Assurance Files.

SYSTEM LOCATION:
    Headquarters.

CATEGORIES OF INDIVIDUALS COVERED BY THE SYSTEM:
    All independent public accountants who have conducted audits of 
PHAs or FHA-insured, direct loan, HUD-held or assisted multifamily 
properties under HUD programs. An independent public accountant is 
defined as (a) a licensed, certified public accountant or a person 
working for a licensed certified public accounting firm, or (b) a 
public

[[Page 55268]]

accountant licensed on or before December 31, 1970, or a person working 
for a public accounting firm licensed on or before December 31, 1970. 
The system also contains information by individual name of the REAC 
auditors conducting the QAR, and may contain memorandums of the QAR 
results sent to HUD program officials.

CATEGORIES OF RECORDS IN THE SYSTEM:
    The system contains the names and ID numbers of REAC auditors, and 
of IPAs who perform audits of PHAs or FHA-insured, direct loan, HUD-
held, or assisted multifamily properties under HUD programs. Records 
consist of materials generated in connection with quality assurance 
reviews of the working papers of IPAs including information from the 
FDS and the AFS submitted to HUD. These materials include QAR 
checklists, documentation of work performed by REAC auditors in 
evaluating the work of the IPA, interviews with IPAs, correspondence 
between REAC auditors and the IPA, and copies of work papers from IPA 
files and other documents used in evaluating an IPA's work performance 
to assure compliance with government and AICPA auditing standards. 
Other records include information regarding the planning, conduct and 
results of the QAR, trend analyses, internal legal assistance requests, 
information requests, responses to such requests, reports of findings, 
etc.

AUTHORITY FOR MAINTENANCE OF THE SYSTEM:
    OMB Circular A-133 (the Single Audit Act) requires that PHAs and 
non-profit organizations receiving federal funds obtain an IPA-
performed audit. The AICPA has issued Statements of Position (SOP) 98-3 
``Audits of States, Local Governments, and Not-for-Profit Organizations 
Receiving Federal Awards'' to address the additional requirements of 
government auditing standards. Additional guidance is offered in the 
HUD Consolidated Audit Guide for Audits of HUD Programs, HUD Handbook 
2000.04 REV-2.

PURPOSE(S):
    REAC performs a quality assurance review of the audited financial 
statements submitted by IPAs in order to assure that the information 
contained in the financial statements is accurate and reliable and that 
the IPA's work was performed in accordance with government and AICPA 
auditing standards. In the event that records generated during the QAR 
process indicate a violation or potential violation of law, the 
relevant records may be disclosed to the appropriate federal, state or 
local disciplinary forum, or the AICPA, for investigation or 
enforcement of the applicable laws.

ROUTINE USES OF RECORDS MAINTAINED IN THE SYSTEM, INCLUDING CATEGORIES 
OF USERS AND THE PURPOSES OF SUCH USES:
    In addition to those disclosures generally permitted under 
subsection (b) of the Privacy Act of 1974, 5 U.S.C. 552a(b), records 
may also be disclosed routinely to other users under the following 
circumstances:
    1. In the event that records indicate a violation or potential 
violation of law, whether criminal, civil or regulatory in nature, the 
relevant records may be disclosed to the appropriate federal, state, or 
local agency charged with the responsibility for investigating or 
prosecuting such violation or enforcing or implementing such statute, 
rule or regulation.
    2. Records may be disclosed to a congressional office in response 
to an inquiry from that congressional office made at the request of the 
individual who is the subject of the records.
    3. Records may be disclosed to HUD contractors, PHAs or management 
agents of HUD-assisted housing properties, in order to assist such 
entities in taking action to recover money or property, where such 
recovery serves to promote the integrity of the programs or operations 
of HUD.
    4. Records may be disclosed during the course of an administrative 
proceeding where HUD is a party to the litigation and the disclosure is 
relevant, reasonable and necessary to adjudicate the matter.
    5. Records may be disclosed to appropriate state boards of 
accountancy, or the AICPA, for possible administrative or disciplinary 
sanctions such as license revocation. These referrals will be made only 
after the IPA has been notified that HUD is contemplating disclosure of 
its findings to an appropriate state board of accountancy, or the 
AICPA, and the IPA has been provided with an opportunity to respond in 
writing to HUD's findings.
    6. Records may be disclosed to the Department of Justice for 
litigation purposes associated with the representation of HUD before 
the courts.
    7. Records may be disclosed to any source, either private or 
governmental, to the extent necessary to elicit information relevant to 
an Office of Inspector General investigation.
    8. Records may be disclosed to the auditee to evaluate the 
contractual relationship between the IPA and the PHA, owner or 
management agent of a FHA-insured, direct loan, HUD-held or assisted 
multifamily property.

POLICIES AND PRACTICES FOR STORING, RETRIEVING, ACCESSING, RETAINING, 
AND DISPOSING OF RECORDS IN THE SYSTEM:
STORAGE:
    Records are stored electronically in office automation equipment 
and manually in file jackets.

RETRIEVABILITY:
    Records may be retrieved by computer search using the AutoAudit 
software, and/or by reference to a particular file number, or by name, 
address, tax identification number or social security number of the 
IPA.

SAFEGUARDS:
    Records are maintained in a secure computer network, and in locked 
file cabinets or in metal file cabinets in rooms with controlled 
access.

RETENTION AND DISPOSAL:
    The records are retained and disposed of in accordance with the 
General Records Schedule contained in HUD Handbook 2228.2, appendix 14, 
item 25.

SYSTEM MANAGER AND ADDRESS:
    Peter Bell, Real Estate Assessment Center, 1280 Maryland Avenue, 
S.W., Suite 800, Washington, D.C. 20024.

NOTIFICATION PROCEDURE:
    For information, assistance, or inquiry about the existence of 
records, contact the Privacy Act Officer at HUD, 451 7th Street, SW, 
Room P8001, Washington, DC 20410, in accordance with the procedures in 
24 CFR part 16.

RECORD ACCESS PROCEDURES:
    The procedures for requesting access to records appear in 24 CFR 
parts 16 and 2003.

CONTESTING RECORD PROCEDURES:
    The procedures for requesting amendment or correction of records 
appear in 24 CFR part 16.

RECORD SOURCE CATEGORIES:
    Information may be collected from a wide variety of sources, 
including from HUD, program participants, subject individuals, 
complainants, witnesses and other non-government sources.

EXEMPTIONS FROM CERTAIN PROVISIONS OF THE ACT:
    None.

[FR Doc. 00-23521 Filed 9-12-00; 8:45 am]
BILLING CODE 4210-01-P