Question 1

What is a HUD financial statement audit?

Accepted Answer

A HUD financial statement audit is an independent audit of a HUD-financed property's annual financial statements performed under the HUD Consolidated Audit Guide and Government Auditing Standards. It includes required schedules such as the surplus-cash calculation and is submitted electronically to HUD. HUD-insured and HUD-assisted owners generally must file these audited statements each year to remain in compliance with their financing.

Question 2

Who has to submit audited financial statements to HUD?

Accepted Answer

Owners and operators of HUD-insured and HUD-assisted properties generally must submit audited financial statements to HUD each year. This commonly includes Section 232 healthcare properties, Section 223(f) and other multifamily housing, and FHA-approved lenders. The specific requirement depends on your program, loan type, and level of federal awards, which we confirm during engagement scoping.

Question 3

What are REAC and FASS submissions?

Accepted Answer

REAC and FASS are HUD's electronic systems for receiving audited financial statements from housing owners and operators. The financial data must be formatted to HUD's templates and filed through the FASS system by the applicable deadline. We prepare the statements in the required electronic format and handle the submission so filings are complete, accurate, and on time.

Question 4

What is a Section 232 audit?

Accepted Answer

A Section 232 audit is the annual financial statement audit required for healthcare properties financed with an FHA-insured Section 232 mortgage, such as skilled nursing and assisted living facilities. It follows HUD's audit guide and includes post-closing reporting obligations for owners and operators. Section 232 audits are typically due within a set window after the fiscal year end, which is why early planning matters.

Question 5

How is surplus cash calculated for HUD properties?

Accepted Answer

Surplus cash is calculated as a HUD-financed property's cash and cash-equivalent assets minus its current obligations and required reserves, following the definitions in HUD's audit guide and regulatory agreement. It determines the funds an owner may distribute. Because the calculation drives allowable distributions and is closely reviewed, we prepare it as part of the audited financial statements.

Question 6

What is a LIHTC cost certification?

Accepted Answer

A LIHTC cost certification is an independent CPA verification of the eligible development costs of a Low-Income Housing Tax Credit project. It supports the schedules required by the state housing agency and tax-credit investors and helps establish the credit basis. We verify costs against supporting documentation and prepare the certification in the format your agency and investors require.

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Services: HUD