CHAPTER 1

1-1. PURPOSE. This Handbook implements procedures for Public

Housing Agencies (PHAs)/Indian Housing Authorities (IHAs)

designed to improve the collection of Public Housing (PH)

receipts by wire transfer.

1-2. BACKGROUND.

a\. The use of a check as a vehicle of payment delays the

availability of funds to the Government by 4 to 14 days.

b\. HUD\'s management of receipts can be improved by requiring

that all remittance exceeding \$2,000 be deposited directly

in the Treasury Department by having all PHAs and IHAs

make their payments by wire transfer.

1-3. REASONS FOR REMITTANCE. PHAs and IHAs under the PH Program

may, on occasion, make payments to the Department of Housing

and Urban Development (HUD) for the following reasons:

a\. Disposition is the repayment of obligations of net

disposition proceeds and net proceeds of sales/recaptures

under homeownership programs or net proceeds from the sale

of dwelling or non-dwelling structures and/or excess land.

b\. Excess financing is the amount of development or

modernization funds advanced above the approved actual

development cost or the approved actual modernization

cost.

c\. Audit findings are sustained costs due and payable to HUD

resulting from audit findings in reports issued by the

Office of the Inspector General or Independent Auditors

(IAs). The sustained cost can be disallowed or questioned

cost which may be applicable to development or

construction type expenditures, operating or

administrative type expenditures, fund reserves,

distribution of project equity, or revenue activities that

could cause higher net expenses.

d\. Residual Receipts are the amounts of a PHA/IHA\'s operating

reserve which are over and above the maximum operating

reserve level approved by HUD in the Operating Budget

which covers the PHA/IHA\'s fiscal year immediately

following the year for which the Form HUD-52599, Statement

of Operating Receipts and Expenditures, is prepared.

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e\. HUD Technical Services Fee is the amount charged the

PHA/IHA for HUD providing representatives in connection

with the construction of project(s) which is computed at

0.2% of total development cost (excluding estimated amount

of this fee) as shown in the approved Development Cost

Budget submitted at the time of award of Main Construction

Contract or upon execution of contract of sale.

f\. Principal and/or interest repayments include reasons not

specifically covered by any other category.

1-4. REMITTANCE PROCEDURES.

a\. A remittance of \$2,000 or less must be sent to the

following location:

Department of Housing and Urban Development

Office of Finance and Accounting

Cash and Securities Section

451 7th Street SW

Washington, DC 20410

b\. A remittance over \$2,000 shall be wired in accordance with

the instructions in Exhibit 1. These instructions have

been provided by the Treasury Department and are presently

being used by the banking industry. When remitting funds,

the PHA/IHA is to request its financial institution to

wire the funds using the appropriate formats on Exhibits

2, 3, 4, 5, 6, 7, 8, 9, and 10.

c\. The following exhibits are to be used for a specific

reasons for remittance:

Exhibit 2 - Principal and/or interest repayment

Exhibit 3 - Excess Financing

Exhibit 4 - Residual Receipts

Exhibit 5 - Audit/Excess Financing

Exhibit 6 - Audit/HUD Technical Service Fees

Exhibit 7 - Audit/Residual Receipts

Exhibit 8 - Audit/Multi Findings

Exhibit 9 - HUD Technical Service Fees

Exhibit 10 - Disposition

d\. After funds have been remitted by wire transfer, the

PHA/IHA will write a letter to the Director, Regional

Office of Public Housing or the Director, Regional Office

of Indian Programs detailing all funds remitted.

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1-5. WIRE TRANSFER PROCESS.

a\. The Treasury Department has established a computer

interface with the Federal Reserve Bank which offers a

secure instantaneous transfer mechanism between Treasury

and the commercial banking industry. The Treasury

Financial Communications System (TFCS) provides the

Treasury with \"online\" access to the Federal Reserve Bank

of New York computer and utilizing the Federal Reserve

Communication System (FRCS or Fedwire System) with access

to all other Federal Reserve Banks, their branches, member

banks and correspondents of member banks.

b\. When remitting funds, PHAs/IHAs shall indicate under Field

10, Third Party Information the reason for the remittance,

the appropriation number, the project number, and the PHA/

IHA name.

c\. The following is a step-by-step explanation of the actual

TFCS deposit transaction:

\(1\) The PHA/IHA notifies its general depository to wire

funds to the Department of Treasury, supplying the

bank with the specific information required by HUD.

\(2\) If the general depository is an on-line member of

the Federal Reserve System, it prepares the standard

funds transfer wire message noting HUD\'s

requirements, and enters this message into the

Fedwire System. Off-line members would initiate the

funds transfer by contacting a servicing Federal

Reserve Bank. If the general depository is not a

member of the Federal Reserve System, the bank can

make the transfer through a correspondent bank that

is a member.

\(3\) Via a computer-to-computer link, information on all

TFCS fund transfers is transmitted from the New York

Federal Reserve Bank\'s computer to a computer

maintained by the Treasury Department in Washington,

D.C.

\(4\) As deposit data is received by the Treasury

computer, it is categorized and maintained according

to the Agency Location Code for HUD and all other

receiving agencies as indicated on the wire message.

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\(5\) When accessed, the complete deposit message for each

transaction is immediately transmitted from the

Treasury computer to a teleprinter located at HUD on

the day of funds transmission.

\(6\) At the end of each day, Treasury prepares a computer

listing, which details each deposit message. This

listing is sent to HUD Headquarters the following

work day.

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