Effective for fiscal years ending on or after December 31, 2013, HUD multifamily housing projects with less than $500,000 in combined federal assistance will no longer be required to submit audited financial statements.

HUD Notice H 2013-23 issued on August 8, 2013, clarifies that these projects will only be required to submit owner certified financial statements through HUD’s Real Estate Assessment Center (REAC) system. These owner certified financial statements must be submitted in accordance with U.S. generally accepted accounting principles and will contain all supplementary schedules and information that the audited statements included, but do not have to be certified by a public accounting firm or contain any auditor’s reports.

This change will affect over 2,100 projects and creates fairness and consistency with the audit requirements for not-for-profit projects that comply with OMB Circular A-133. HUD believes the cost savings annually could be up to $10,000 and anticipates these savings will be used towards additional maintenance, operating costs, or owner distributions.

If you have questions or need assistance with submission of owner certified financial statements, McKonly & Asbury would be happy to help. Contact Jennifer Keller at jkeller@macpas.com or (717)761-7910.