Guidebook 7510.1

CHAPTER 4

IV\. HUD Chart of Accounts

IV\. Chart of Accounts

INTRODUCTION TO THE HUD CHART OF ACCOUNTS

Prescribed Accounts

The account categories prescribed in this chapter apply to a variety

of assisted Public and Indian Housing (PIH) programs and reflect

those accounts which are used on approved program budgets and on the

HUD reporting forms in Chapter 3. It is important that consistency

be maintained in these accounts to allow HUD to review and evaluate

budget proposals for compliance with regulatory requirements and to

monitor actual expenditures against approved budget estimates.

The HA must use the prescribed account categories for the source and

application of funds related to transactions for operating income

and expense, and for development and modernization programs. If the

HA establishes additional accounts for recording transactions for

these activities, the accounts must be established as subdivisions

of prescribed accounts and must be maintained in such a manner that

they can readily be combined into the prescribed classifications for

uniform reporting purposes.

Organization of the Chart of Accounts

The Chart of Accounts uses the following account categories:

A. 1000 ASSET ACCOUNTS

1100-1200 CURRENT ASSETS

1400 FIXED ASSETS

1400.2: Modernization & Development Cost

B. 2000 LIABILITY & SURPLUS ACCOUNTS

2100-2600 LIABILITY ACCOUNTS

2800 SURPLUS ACCOUNTS

2820-2827: Operating/Program Reserves

2900 MUTUAL HELP CAPITAL CONTRIBUTIONS

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IV\. Chart of Accounts

C. NOMINAL ACCOUNTS

3000 OPERATING INCOME ACCOUNTS

4000 OPERATING EXPENSE ACCOUNTS

5000 CREDITS AND CHARGES ON LONG-TERM DEBT

6000 CREDITS AND CHARGES AFFECTING SURPLUS

7000 MEMORANDUM ACCOUNTS

7500 Operating Expenditures for Property

8000 HUD ANNUAL CONTRIBUTIONS

8100 HOMEBUYER PAYMENTS FOR PROPERTY ACQUISITION

Although over 200 accounts are included in the Chart of Accounts,

no HA will use all of the accounts listed.

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IV\. Chart of Accounts

CHA RT OF ACCOUNTS

ASSETS

Cash

1111.1 General Fund (Development and/or Operation)

1114 Security Deposit Fund

1117 Petty Cash Fund

1118 Change Fund

Accounts Receivable

1122 Tenants

1123 Mutual-Help Homebuyers

1124 Homebuyers (Turnkey III Projects)

1125 HUD

1125.P Accounts Receivable, HUD Portability (Section 8)

1129 Other

1129.P Accounts Receivable, Issuing HA - Portability (Section 8)

Notes and Mortgages Receivable

1130 Notes and Mortgages Receivable

Accrued Receivables

1145 Accrued Interest Receivable

Advances

1155 Limited Revolving Fund

1156 Unlimited Revolving Fund

1157 Other

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IV\. Chart of Accounts

Investments

1162 General Fund and Security Deposit Fund

1163 Homeownership Reserve Funds

1163.1 Homebuyers Earned Home Payments 1/

1163.2 Homebuyers Nonroutine Maintenance Reserve 1/

1163.3 Mortgagors/MH Homeowners Maintenance Reserve

1163.4 MH Homebuyers Monthly Equity Payments

1163.5 MH Homebuyers Voluntary Equity Payments

Debt Amortization Funds

1171 Debt Service Fund

1172 Advance Amortization Fund

1173 Investments

1176 HUD Annual Contributions Receivable

1177 Deposits with HUD

Deferred Charges

1211 Prepaid Insurance

1212 Insurance Deposits

1255 Maintenance Work in Process

1260 Inventories - Materials

1270 Inventories - Equipment

1290 Other

Land, Structures, and Equipment

1400.2 Development/Modernization Cost

1400.3 Development/Modernization Cost - Contra

1400.4 Land, Structures, and Equipment

1/ Applicable only to Turnkey III Homeownership Projects.

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IV\. Chart of Accounts

Subsidiary Accounts to Ac count 1400.2

Administrative Expense

1408 Management Improvements

1410.1 Nontechnical Salaries

1410.2 Technical Salaries

1410.3 Work - MH Contributions

1410.4 Legal Expense

1410.9 Employee Benefit Contributions

1410.10 Travel

1410.12 Publications

1410.14 Membership Dues and Fees

1410.16 Telephone and Telegraph

1410.18 Equipment Expended

1410.19 Sundry

1415 Liquidated Damages

1418 Counseling and Training Costs

1420.1 Interest to HUD

1420.7 Interest - Income from Investments

1425 Initial Operating Deficit

Planning

1430.1 Architectural Engineering Fees

1430.2 Consultant Fees

1430.6 Permit Fees

1430.7 Inspection Costs

1430.9 Housing Surveys

1430.19 Sundry Planning Costs

Site Acquisition

1440.1 Property Purchases

1440.2 Condemnation Deposits

1440.3 Excess Property

1440.4 Survey and Maps

1440.5 Appraisals

1440.6 Title Information

1440.7 Site-MH Contribution

1440.8 Legal Cost - Site

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IV\. Chart of Accounts

1440.10 Option Negotiations

1440.12 Current Tax Settlements

1440.19 Sundry Site Costs

1440.20 Site Net Income

1450 Site Improvement

1450.1 Work-MH Contributions

1450.2 Materials and Equipment - MH Contributions

1450.3 Other MH Contributions

1460 Dwelling Structures

1460.1 Work - MH Contributions

1460.2 Materials and Equipment - MH Contributions

1460.3 Other MH Contributions

1465 Dwelling Equipment - Expendable and Nonexpendable

1465.1 Dwelling Equipment - Nonexpendable

1465.2 Dwelling Equipment - Expendable

1465.3 Dwelling Equipment - MH Contributions

1470 Nondwelling Structures

1470.1 Work-MH Contributions

1470.2 Materials and Equipment - MH Contributions

1470.3 Other MH Contributions

1475 Nondwelling Equipment - Expendable And Nonexpendable

1475.1 Office Furniture and Equipment

1475.2 Maintenance Equipment

1475.3 Community Space Equipment

1475.4 Computer Equipment

1475.7 Automotive Equipment

1475.9 Expendable Equipment

1475.10 MH Contributions

1480 Contract Work in Process

1482 Developer\'s Contract Price (Turnkey) Work in Process

1485 Demolition Costs

1495 Relocation Costs

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IV\. Chart of Accounts

Undistributed Debits

1620 Ineligible Expenditures

1640 Payrolls

1660 Other Administration Expense

1690 Other

Contracts

1800 Uncompleted Contracts

1810 Contract Awards - Contra

Bid Guaranties

1820 Undeposited Bid Guaranties

1830 Returnable Bid Guaranties - Contra

Annual Leave

1840 Earned Annual Leave

1850 Allowance for Annual Leave - Contra

\-\-\-- Compensated Absences

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IV\. Chart of Accounts

LIABILITIES

Accounts Payable

2111 Vendors and Contractors

2112 Contract Retentions

2112.1 Contract Retentions - Fixed

2112.2 Contract Retentions - Payroll Noncompliances

2112.3 Contract Retentions - Liquidated Damages

2113 Performance Deposits

2114 Tenants Security Deposits

2115 Unclaimed Salaries and Wages

2115.P Section 8 Portable Vouchers

2116.P Section 8 Portable Certificates

2117 Payroll Deductions and Contributions

2118 HUD

2119 Other

Notes Payable

2122 Project Loan Notes - HUD

2123 Administrative Notes - HUD

2126 Project Notes - Non-HUD

2129 Sundry Notes

Accrued Liabilities

2131.1 Interest Payable - Development Notes - HUD

2131.2 Interest Payable - Administrative Notes - HUD

2131.3 Interest Payable - Other Notes (Deferred Payment) - HUD

2132 Interest Payable - Notes - Non-HUD

2133 Interest Payable - Bonds - Non-HUD

2134 Utilities

2135 Salaries and Wages

2136 Insurance

2137 Payments in Lieu of Taxes

2139 Other

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IV\. Chart of Accounts

Trust and Deposit Liabilities

2161 Homebuyers Earned Home Payments 2/

2162 Homebuyers Nonroutine Maintenance Reserve 2/

2164 Unapplied Payments on Resale of Dwellings 2/

2165 Mortgagors or MH Homeowners Taxes and Insurance

2166 Mortgagors or MH Homeowners Maintenance Reserve

2171 MH Homebuyers Monthly Equity Payments

2172 MH Homebuyers Voluntary Equity Payments

2180 Family Self-Sufficiency (FSS) Escrow Account

Deferred Credits

2210 Prepaid Annual Contributions

2240 Tenants Prepaid Rents

2241 Prepaid Monthly Payments - Homebuyers - Turnkey III

Projects

2245 Prepaid Monthly Payments - MH Homebuyers

2250 Investment Income - Homebuyers Earned Home Payments -

Unapplied 2/

2251 Investment Income - Homebuyers Nonroutine Maintenance

Reserve Unapplied 2/

2252 Investment Income - MH Homebuyers Equity Payments -

Unapplied

2260 Land MH Contribution

2261.1 MH Homebuyers Non-land MH Contribution

2261.2 Tribal Non-land MH Contribution

2290 Other

Fixed Liabilities

2311 Permanent Notes - HUD

2312 Permanent Notes - F.F.B.

2341 New Housing Authority Bonds - Issued

2342 New Housing Authority Bonds - Retired

2351 Other Notes Payable to HUD (Deferred Payment)

2/ Applicable only to Turnkey III Homeownership Projects.

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IV\. Chart of Accounts

Undistributed Credits

2690 Undistributed Credits

Income and Expense Clearing Account

2700 Income and Expense Clearing Account

SURPLUS

2810 Unreserved Surplus

2820 Reserved Surplus - Operating Reserve - Locally Owned

Projects

2821 Reserved Surplus - Operating Reserve - Leased Projects

2822 Reserved Surplus - Operating Reserve - MH Projects 3/

2823 Reserved Surplus - Operating Reserve - Turnkey III

Homeownership Projects

2824 Reserved Surplus - Operating Reserve - Section 23 HAP

Projects

2825 Reserved Surplus - Contingency Reserve - Unfunded -

Section 23 HAP Projects

2826 Reserved Surplus - Operating Reserve - Section 8 HAP

Projects

2827 Reserved Surplus - Project/ACC Reserve Account - Unfunded

\- Section 8 HAP Projects

2840 Cumulative HUD Annual Contributions

2845 Cumulative HUD Grants For Development/Modernization

2850 Cumulative Donations

2854 Replacement Reserve - Proceeds from Sale of Dwellings

(Retained by HA) 4/

2855 Cumulative Proceeds from Sale of TK III Dwellings

(Remitted to HUD)

2857.1 Cumulative Proceeds from Sale off Dwellings (Remitted to

HUD)

2857.2 Cumulative MH Unfunded Reserves Applied to Purchase Price

of Dwellings

2860 Book Value of Projects Conveyed by HUD

2870 Contract Payments to HUD - Conveyed Projects

2880 Development Cost - Undeveloped Projects

2890 Surplus - Cost of Dwellings Conveyed to Homebuyers 4/

3/ New MH: The comparable account for old MH is Account 2815,

Cumulative Residual Receipts.

4/ Applicable to Turnkey III and MH Projects, and to Section 5h.

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IV\. Chart of Accounts

Capital Contributions (New Mutual Help)

2912 Refundable MH Reserve

(Refundable Old MH Accounts: 2915.1; 2920)

2914 Unrefundable MH Reserve

(Unrefundable Old MH Accounts: 2910; 2915.2)

OPERATING INCOME

3000 Operating Income (Control)

Section 8 Income Accounts

3300 Interest on Reserved Surplus - Operating Reserve

3300.P Income-Portability

3300.1 Fraud Recovery Funds Retained

Subsidiary Accounts to Account 3000

Rental Income

3110 Dwelling Rental

3120 Excess Utilities

3190 Nondwelling Rental

Nonrental Income

3610 Interest on General Fund Investments

3680 Assessments - Homeowners

3690 Other Income

OPERATING EXPENSE

4000 Operating Expense (Control)

4000.P Section 8 Portability Expense (Control)

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IV\. Chart of Accounts

Subsidiary Accounts to Account 4000/4000.P

Administrative Expenses

4010 Preliminary Administrative Expenses (Section 8)- Prior to

ACC

4012 Preliminary Administrative Expenses (Section 8) - After

ACC

4012.P Preliminary Administrative Expenses (Section 8) -

Portability

4110 Administrative Salaries

4130 Legal Expense

4140 Staff Training

4150 Travel

4170 Accounting Fees

4171 Auditing Fees

4180 Office Rent - HAP

4190 Sundry - Other Administrative Expenses

Tenant Services

4210 Salaries

4220 Recreation, Publications, and Other Services

4230 Contract Costs, Training, and Other

Utilities

4310 Water

4320 Electricity

4330 Gas

4340 Fuel

4350 Labor

4390 Other Utilities Expense

Ordinary Maintenance and Operation

4410 Labor

4420 Materials

4430 Contract Costs

4431 Garbage and Trash Removal

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IV\. Chart of Accounts

Protective Services

4460 Labor

4470 Materials

4480 Contract Costs

General Expense

4510 Insurance

4520 Payment in Lieu of Taxes

4530 Terminal Leave Payments

4540 Employee Benefit Contributions

4570 Collection Losses

4580 Interest on Administrative and Sundry Notes

4590 Other General Expense

Nonroutine Maintenance

4610 Extraordinary Maintenance

4620 Casualty Losses Noncapitalized

Rent for Leased Dwellings

4710 Rent to Owners of Leased Dwellings

4715 Housing Assistance Payments (Section 8)

4715.P Housing Assistance Payments (Section 8) - Portability

Other Accounts Not Affecting Residual Receipts

5230 Interest on Debt Amortization Fund Investments

5240 Interest on Payments for Off-Site Utilities

5610 Interest on Notes and Bonds Payable

5640 Bond Redemption Premiums

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IV\. Chart of Accounts

Surplus Credits And Charges

6010 Prior Year Adjustments - Affecting Residual Receipts

6020 Prior Year Adjustments - Not Affecting Residual Receipts

6110 Gain or Loss from Disposition of Real Property

6120 Gain or Loss from Disposition of Nonexpendable Equipment

Provision For Reserves

7010 Provision for Operating Reserve - Locally Owned Projects

7011 Provision for Operating Reserve - Leased Projects

7012 Provision for Operating Reserve - MH Projects

7013 Provision for Operating Reserve - Turnkey III

Homeownership Projects

7014 Provision for Operating Reserve - Section 23 HAP Projects

7016 Provision for Operating Reserve - Section 8 HAP Projects

7025 Provision for Contingency Reserve - Section 23 HAP

Projects

7027 Provision for Project/ACC Reserve Account -Section 8 HAP

Projects

MEMORANDUM ACCOUNTS

Operating Receipts For Repayment of Off-Site Utilities

7110 Receipts From Off-Site Utilities

7190 Operating Receipts for Repayment of Off-Site Utilities -

Contra

Operating Expenditures For Property

7520 Replacement of Nonexpendable Equipment

7530 Receipts From Nonexpendable Equipment Not Replaced

7540 Property Betterments and Additions

7560 Casualty Losses - Capitalized

7580 Proceeds From Disposition of Property - Reserved

7590 Operating Expenditures For Property - Contra

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IV\. Chart of Accounts

Homebuyers Monthly Payments - Turnkey III Homeownership Projects

7710 Homebuyers Monthly Payments - Operating Expense

7712 Homebuyers Monthly Payments - Earned Home Payments

7714 Homebuyers Monthly Payments - Nonroutine Maintenance Reserve

7716 Homebuyers Monthly Payments - Excess (or Deficit) in Break-Even

7790 Homebuyers Monthly Payments - Contra

HUD Annual Contributions Earned

8010 Basic Annual Contribution Earned - Current Year - Leased Projects

8011 Basic Annual Contribution Earned - Prior Year Adjustments -

Leased Projects

8020 Contributions Earned - Operating Subsidy -Current Year

8025 Annual Contributions Earned - Section 23 HAP Projects

8026 Annual Contributions Earned - Section 8 HAP Projects

Grant Funds Received

8029.1 Development Grant Funds Received During Current Year

8029.2 Modernization Grant Funds Received During Current Year

Homebuyers Payments - Property Acquisition

8112 Proceeds from Sale of Dwellings 5/

8114 Homebuyers Payments on Resale Dwellings 5/

8116.1 Cash Applied to Purchase Price of MH Dwellings

8116.2 MH Unfunded Reserves Applied to Purchase Price of Dwellings

5/ Applicable only to Turnkey III Projects.

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IV\. Chart of Accounts

DESCRIPTION OF ACCOUNTS

This section provides a description of the accounts to be used in
recording

transactions involving planning, developing, and operating rental
programs

(both locally owned and leased) and homeownership programs assisted
under the

United States Housing Act of 1937 pursuant to the provisions of any
contract

for annual contributions or administration.

ASSETS

Cash

1111.1 General Fund (Development and/or Operation). The debit balance of

this account represents General Fund cash on deposit or to be

deposited with a bank or banks for the planning, development and

operation of projects in accordance with a contract with HUD.

1114 Security Deposit Fund. The debit balance of this account represents

the unapplied or uninvested security deposits held for the account

of tenants and deposited to this account. Where local laws or

ordinances do not require segregation of these funds, they may be

deposited in the General Fund.

1117 Petty Cash Fund. The debit balance of this account represents the

amount of cash set aside, not in excess of the amount authorized by

HA resolution, as an imprest fund for the payment of minor expenses

and for making refunds to tenants.

1118 Change Fund. The debit balance of this account represents the

amount of cash set aside, not in excess of the amount authorized by

HA resolution, for the purpose of making change.

Accounts Receivable - Tenants/Homebuyers

The tenant/homebuyer accounts receivable (1122-1124) shall be

supported by a subsidiary ledger showing the balance applicable to

each tenant/homebuyer. Monthly rental charges (i.e., tenant rent

charges, utility reimbursement amounts, required monthly payments

for homebuyers) shall be posted to the accounts receivable records

on the first, day of the month based on the monthly rent roll.

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IV\. Chart of Accounts

Accounts Receivable - Tenants/Homebuyers (continued)

Any other charges, such as retroactive rent, maintenance charges,

excess utility charges, or other adjustments, are also posted to

these accounts but separately from the monthly rent charge.

Tenant/homebuyer accounts receivable may be subdivided to collect

information by project or by type of charge (rent, maintenance

charges, etc.), but shall be reported as aggregate debit and credit

balances on the Balance Sheet. Accounts receivable may be written

off only for vacated accounts.

Charges due to tenant fraud or misrepresentation. Retroactive rent

charges due to tenant fraud or misrepresentation are charged to

Accounts 1122-1124 only at the time: (1) when the tenant/homebuyer

has acknowledged the debt by either (a) agreeing to immediately

make full payment, or (b) entering into a formal written repayment

agreement; or (2) when repayment by the tenant/homebuyer has been

ordered by the court. If the amount of the court order differs from

the amount of the HA calculated retroactive rent charge, the amount

of the court order is established as the receivable.

1122 Tenants. The balance of this account represents the net of the

debit and credit balances of the individual tenant accounts,

including retroactive rent charges and indebtedness evidenced by

notes. For reporting purposes, the sum of the individual debit

balances shall be reported in the annual financial statement under

this account in order to disclose the gross amount due from

tenants, and the sum of the individual credit balances shall be

reported under Account 2240, Deferred Credits - Tenants Prepaid

Rents. This account may be maintained by project or by any

combination of projects under the same contract.

1123 MH Homebuyers. This account shall be charged with all amounts due

from MH homebuyers, including the administration charge and the

monthly equity payments due from the homebuyer. The monthly charge

entry for MH Homebuyers consists of (a) a debit to Account 1123 for

the amount of the Required Monthly Payment due to the IHA on or

before the first day of the month; (b) a credit to operating income

Account 3110 for the amount of the Administration Charge; (c) a

credit to Account 2171 (MEPA) for the amount, if any, by which the

Required Monthly Payment exceeds the Administration Charge.

The balance of this account represents the net of the debit and

credit balances of the individual MH homebuyers accounts

receivable. For reporting purposes, the sum of the individual

credit balances shall be reported in the annual financial statement

under Account 2245, Deferred Credits-Prepaid Monthly Payments - MH

Homebuyers.

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IV\. Chart of Accounts

1124 Homebuyers (Turnkey III Projects). The balance of this account

represents the net total of the debit and credit balances of the

individual homebuyers accounts receivable. For reporting purposes,

the sum of the individual debit balances shall be reported on the

balance sheet under homebuyers, and the sum of the individual

credit balances shall be reported under Account 2241, Deferred

Credits - Prepaid Monthly Payments -Homebuyers. (For monthly charge

entry see preface to Accounts 7710-7790.)

Accounts Receivable - Other

1125 HUD. The debit balance of this account represents amount due from

HUD, including the basic annual contribution for leased projects,

if any, as a result of transactions for which specific accounts are

not provided.

1125.P Section 8 Accounts Receivable. HUD - Portability. The debit
balance

of this account represents amounts due from HUD for special

preliminary fees for Portability.

1129 Other. The debit balance of this account represents the amount of

receivables due from others than tenants, homebuyers, or HUD. The

debit balance in this account also includes accounts receivable due

for fraud recovery payments from Section 8 tenants and owners.

Account 1129 is debited (and Account 2690 credited) with the amount

of fraud recovery funds due from a Section 8 tenant/owner and

credited with the amount of a collection received from a

tenant/owner. This account shall be subdivided or a subsidiary

ledger shall be maintained to segregate the amount due from each

debtor.

1129.P Section 8 Accounts Payable. Issuing HA - Portability. The debit

balance of this account represents the amount of receivables due

from other (Issuing) HAs for HAP payments and administrative fees

for Portability participants whose assistance is administered by

the HA. A subsidiary ledger shall be maintained to segregate the

amounts due from each debtor HA.

Notes and Mortgages Receivable

1130 Notes and Mortgages Receivable. The debit balance of this account

represents the amounts due the HA as evidenced by notes, mortgages,

or contracts of sale. It shall include amounts due the HA as

evidenced by other formal instruments of indebtedness, such as

loans to local off-site facilities not included in the development

cost of the project. This account shall be subdivided or a

subsidiary ledger shall be maintained to segregate the amount due

from each debtor.

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IV\. Chart of Accounts

Accrued Receivables

1145 Accrued Interest Receivable. The debit balance of this account

represents accrued interest receivable on notes, mortgages, and/or

contracts of sale. It shall also include accrued interest

receivable on HA investments and on loans to local governing bodies

or local taxing bodies for financing the construction of off-site

facilities not included in the development cost of the project. The

accrued interest paid on securities purchased shall be charged to

this account. This account shall be subdivided or a subsidiary

ledger shall be maintained to segregate the amount due from each

debtor or for each type of investment.

Advances

1155 Limited Revolving Fund. The debit balance of this account

represents the amount advanced to a revolving fund not covered by

a General Depositary Agreement, for the purpose of payment of items

chargeable to projects or enterprises of the HA, within

limitations. An example of such a revolving fund is a payroll

account which is used solely to disburse paychecks and to remit

payroll taxes. The use of such an account is limited to the payment

of costs proratable to two or more contracts. Advances may not

exceed the prorata share ofa reasonable estimate of one month\'s

expenditures.

1156 Unlimited Revolving Fund. The debit balance of this account

represents the amount advanced to a revolving fund, which is

covered by a General Depositary Agreement, for the purpose of

payment of items chargeable to any or all projects or enterprises

of the NA. (See Chapter II, Pooling of Funds.)

1157 Other. This account shall be debited with the amount advanced from

the General Fund to a \"Master Account\" for the purpose of payment

of items chargeable to any or all projects or enterprises of the NA

(See Chapter II, Pooling of Funds). This account shall also be

debited with the amount advanced from the General Fund to a state

agency or to a special account as security for payment of FICA

taxes, when required by state law, and with the amount of other

advances for which no specific account is provided. This account

shall be subdivided to segregate the advances made for different

purposes.

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IV\. Chart of Accounts

Investments

This account shall be debited with the cost of securities purchased

from monies on deposit in the General Fund or the Security Deposit

Fund. This account shall also be debited with the amount of such

funds deposited in time or savings accounts and with the increment

in value of U.S. Savings Bonds if the HA elects to record such

increments (see also the description of Account 3610). This Account

shall also be debited with the interest earned on time or savings

accounts at the time such interest is credited to the account by

the depositary.

For purposes of this description, the \"cost\" of securities includes

brokerage, fees, and other costs of acquisition, plus premiums paid

or less discounts received, but excludes accrued interest at date

of purchase.

If the HA elects to amortize periodically premiums paid and

discounts received on the purchase of securities in accordance with

the option in the description of Account 3610, this account shall

be debited with the periodic amortization of discounts received and

credited with the periodic amortization of premiums paid.

This account shall be credited with the cost of securities sold and

with the amounts withdrawn from time or savings accounts.

This account shall be subdivided to segregate and identify

investment securities and/or savings accounts representing the

investment of tenant security deposits and for which investment

income will be paid to or credited to the tenant\'s account.

When the funds invested are pooled from various sources, the

investment income debited to this account shall be credited on an

allocated basis to the appropriate program account.

1163 Homeownership Reserve Funds. 6/ This account shall be debited with

the cost of securities specifically purchased from homeownership

reserve funds on deposit in the General Fund, with the amount of

such reserve funds deposited in time or savings accounts with Banks

or other institutions, and with the increment in value or U.S.

Savings bonds if the PHA elects to record such increments. This

account shall also be debited with the interest earned on time or

savings accounts at the time such interest is credited to the

account by the depositary.

6/ Homeownership reserve account funds may also be held in pooled

investments recorded in Account 1162.

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IV\. Chart of Accounts

1163 Homeownership Reserve Funds (continued)

For the purposes of this description, the \"cost\" of securities

includes brokerage fees, and other costs of acquisition, plus

premiums paid or less discounts received, but excludes accrued

interest at date of purchase.

This account shall be credited with the cost of securities sold

and with the amounts withdrawn from time or savings accounts.

This account shall be subdivided to segregate and identify

investments specifically held by the HA for homeownership reserve

accounts. (See descriptions of Accounts 2250, 2251, and 2252.)

1163.1 Investments -TK III Homebuyers Earned Home Payment. The

debit balance of this account represents total

investments being held for the homebuyers earned home

payments accounts (sometimes called the \"homebuyers

ownership reserve\").

1163.2 Investments - TK III Homebuyers Nonroutine Maintenance

Reserve. The debit balance of this account represents

total investments being held for the homebuyers

nonroutine maintenance reserve.

1163.3 Investments - Mortgagors/MH Homeowners Maintenance

Reserve. The debit balance of this account represents

total investments being held for the mortgagors or MH

Homeowners maintenance reserve.

1163.4 Investments - MH Homebuyers Monthly Equity Payments.

The debit balance of this account represents total

investments being held for the MH homebuyers monthly

and voluntary equity payments account.

1163.5 Investments - MH Homebuyers Voluntary Equity Payments.

The debit balance of the account represents investments

being held for the MH homebuyers voluntary equity

payments account.

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IV\. Chart of Accounts

Debt Amortization Funds

1171 Debt Service Fund. The debit balance of this account represents

the amount of funds on deposit with the fiscal agent for the

payment of interest on and principal of obligations of

permanently financed projects, the accumulated bond service

carry-over, and for such other purposes as may be provided in the

Annual Contributions Contract. When all obligations have been

fully paid, any funds remaining in this account shall be remitted

to HUD.

1172 Advance Amortization Fund. The debit balance of this account

represents the amount of funds on deposit with the fiscal agent

for advance retirement of debt or for such other purposes as

provided in the Annual Contributions Contract. When all

obligations have been fully paid, any funds remaining in this

account shall be remitted to HUD.

1173 Investments. This account shall be debited with the cost of

securities purchased by the fiscal agent from funds on deposit in

any of the debt amortization fund accounts (Debt Service Fund,

Advance Amortization Fund, Annual Contributions Reduction

Account, etc.). This account shall also be debited with the

amount of debt amortization funds deposited by the fiscal agent

in a time or savings account in a bank or other institution and

with the amount of interest earned and credited to such time or

savings account by the depository bank or institution.

This account shall be credited with the cost of securities sold

and with amounts transferred by the fiscal agent from a time or

savings account to the appropriate debt amortization fund

account.

For purposes of this description, the \"cost\" of securities

includes brokerage and other costs of acquisition, plus premiums

paid or less discounts received, excluding accrued interest at

date of purchase.

This account shall be subdivided to segregate investments

purchased by the fiscal agent from each debt amortization fund

account, such as Debt Service Fund, Advance Amortization Fund,

Annual Contributions Reduction Account, etc.

1176 HUD Annual Contributions Receivable. The debit balance of this

account represents the amount of the Debt Service Annual

Contribution due from HUD pursuant to the terms and conditions of

the Annual Contributions Contract. An accrual shall be made to

this account only for those amounts required annually for the

payment of interest and principal on bonds, and/or notes sold to

the Federal Financing Bank (FFB). Annual Contributions need not

be accrued on HUD Permanent Notes (Account 2311) subject to debt

forgiveness.

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IV\. Chart of Accounts

1177 Deposits With HUD. The debit balance of this account represents

funds remitted to HUD (by the HA or by the fiscal agent).

This account shall be credited (and the appropriate account

debited) upon notification by HUD that the funds have been

applied.

Deferred Charges

1211 Prepaid Insurance. The debit balance of this account represents

the unexpired portion of stock and mutual company insurance

premiums. The unexpired portion of mutual company premiums shall

be based on the difference between the amount of deposit premium

and the estimated amount of returnable premium.

1212 Insurance Deposits. The debit balance of this account represents

the estimated amount returnable on mutual company premium

deposits upon expiration of the policies. The debit balance shall

also include advance premium payments on workmen\'s compensation

and employer\'s liability insurance policies which may be applied

against premium accruals at the end of the policy year.

1255 Maintenance Work in Process. This account shall be debited with

all costs incurred by the HA for routine and nonroutine

maintenance of homebuyers\' dwellings pending allocation of such

costs to the applicable reserve or equity account of each

homebuyer for whom work was performed.

1260 Inventories - Materials. If a perpetual inventory method of

accounting for materials and supplies and expendable equipment is

followed, this account shall be debited with the cost of

materials and supplies and expendable equipment purchased and

stored in a stockroom or warehouse pending issuance to projects

as needed. This account shall be credited with the cost of

materials and supplies and expendable equipment issued to

projects.

If a perpetual inventory method of accounting for materials and

supplies and expendable equipment is not used, this account shall

be debited with the cost of unused materials and supplies and

expendable equipment on hand at the end of the initial operating

period and at the end of each fiscal year. The entry

establishing the inventory at the end of a period may be reversed

as of the beginning of the next period, or it maybe allowed to

remain in this account until the end of the next period. If the

latter method is used, the account shall, at the end of the next

period, be debited or credited for the net increase or decrease,

as applicable, in the cost of unused materials and supplies and

expendable equipment on hand at the close of such period.

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1270 Inventories - Equipment. This account shall be debited with the

cost of items of nonexpendable equipment and with the cost of all

other items of a capital nature, such as water heaters, motors,

and bathroom equipment which are normally considered real

property when attached or installed in a fixed position,

purchased and held in warehouses or stockrooms pending issuance

to projects as needed.

The cost of nonexpendable equipment and the cost of other items

of a capital nature purchased and charged to this account shall

not be recorded in the 7500 or 4000 groups of accounts,

respectively, nor shall the cost of nonexpendable equipment be

charged to Account 1400.4, Land, Structures, and Equipment, until

the items are placed in use.

1290 Inventories - Materials. The debit balance of this account

represents the amount of prepayments of expenses not specifically

chargeable to other accounts.

Land, Structures, and Equipment

These accounts reflect the cost of the fixed assets of the HA projects

covered by an Annual Contributions Contract (ACC).

Capital asset expenditures for development and modernization are funded
by

specifically designated HUD resources. These expenditures are recorded
in

Account 1400.2 and subsequently capitalized in Account 1400.4. Capital

asset expenditures paid for from operating funds are recorded in Account

1400.4 and also in the Account 7500 series.

The prescribed accounts for fixed assets record the expenditure of
funds;

the HUD accounting system does not provide for the depreciation of fixed

assets for projects under an ACC.

1400.2 Development/Modernization Cost. This control account shall be

debited with all costs incurred in connection with the

development or modernization of a project. The charges to this

account shall include the value of donations in kind and

development costs paid from cash donations. The account shall be

supported by a development or modernization cost ledger which

provides detailed cost information in subsidiary account

classifications which correspond to the HUD approved budget for

the individual development or modernization program.

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IV\. Chart of Accounts

Subsidiary Accounts to Account 1400.2: 1408 to 1495

A development or modernization cost ledger is maintained for each

development or modernization program for the purpose of

establishing a basis of HA accountability for HUD funding. The

prescribed subsidiary account classifications in the cost ledger

(Accounts 1408 - 1495) correspond to the HUD approved budgets for

the capital expenditures and allow HUD to monitor the HA

compliance with the authorized development or modernization

program. After issuance of the Actual Development or

Modernization Cost Certificate, the development/modernization

cost ledger shall be retained as a permanent record of the

development/modernization cost of the project.

A description of the 1400.2 subsidiary accounts follows Account

1400.4.

1400.3 Development/Modernization Cost - Contra. The purpose of this

account is to offset (for reporting purposes) the total cost of

the development or modernization project as approved by HUD in

the Actual Development or Modernization Cost Certificate, and as

capitalized in Account 1400.4.

This account is credited (and Account 1400.4 debited) for the

total development or modernization costs for each project in the

amount charged to Account 1400.2 and reported on the Actual

Development or Modernization Cost Certificate.

1400.4 Land, Structures, and Equipment. This control account is debited

(and Account 1400.3 credited) with the capitalized cost of the

development and/or modernization of the HA projects charged to

Account 1400.2 and approved by HUD in the Actual Development or

Modernization Cost Certificate. The capitalized amount includes

not only the direct cost of the fixed asset itself, but also any

ancillary costs (e.g. administrative costs, site improvements,

legal fees, interest costs, etc.) associated with the

development/modernization program as approved by HUD.

This account is also debited with the acquisition cost of

capitalized equipment and property betterments and additions

which are paid from Operating Receipts; and with the cost, when

paid from Operating Receipts or from insurance proceeds, of the

reconstruction, restoration, or replacement of property destroyed

or damaged by casualty when the book value of the project is

considered to have been materially affected by the loss and

subsequent restoration.

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1400.4 Land, Structures, and Equipment (continued)

This account is credited with the actual (or estimated or

allocated) cost of land, structures, and equipment sold, traded-

in, or otherwise disposed of alter the Date of Full Availability

(DOFA), except for property destroyed or damaged by casualty when

such loss and subsequent restoration is considered not to have

materially affected the book value of the project.

Subsidiary Accounts to Account 1400.4: 1405-1475

Account 1400.4 shall be supported by subsidiary accounts

(Accounts 1405-1475) in a Property Ledger as described in

Appendix A.

SUBSIDIARY ACCOUNTS TO ACCOUNT 1400.2

A development or modernization cost ledger is maintained for each

individual development or modernization program for the purpose of

establishing a basis of HA accountability for HUD funding. The
prescribed

subsidiary account classifications (Accounts 1408- 1495) correspond to
the

HUD approved budgets for the capital expenditures and allow HUD to
monitor

the HA compliance with the authorized development or modernization
program.

The development/modernization cost ledger is the source of information
for

the periodic cost data reported to HUD and for the Actual Cost
Certificate

issued at the completion of the program.

The account descriptions provided below may be modified by specific
program

requirements in budgets approved by HUD. The current program reference

sources (HUD handbooks, guidebooks, and notices) for development and

modernization should be consulted for current information on allowable

costs and reporting requirements.

The account descriptions for the subsidiary accounts to Account 1400.2
are

also the account descriptions for the capitalized subsidiary accounts to

Account 1400.4.

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IV\. Chart of Accounts

Administrative Expense

1408 Management Improvements. This account shall be charged with all

costs incurred by the HA for management improvements alter

modernization program approval, including nontechnical salaries,

technical salaries, employee benefit contributions, and

consultant fees. This account shall be charged only in connection

with the modernization of a project. Non-expendable equipment

shall not be charged to this account, but to Account 1475.

1410.1 Nontechnical Salaries. This account shall be charged with the

gross salaries, or applicable portions thereof, earned by HA

personnel engaged in nontechnical administrative work relating to

the planning and development of the project. It shall include the

salaries of the executive director, assistant executive director,

accountants, accounting clerks, secretaries, stenographers,

clerks, typists, purchasing agents, file clerks, switchboard

operators, office janitors, and the salaries of all other HA

personnel assigned to administrative work in connection with the

planning and development of the project.

Terminal leave payments to terminated employees shall be charged

to this account in the same ratio as the salary of such

terminated employees was chargeable to this account as of the

termination date of employment.

1410.2 Technical Salaries. This account shall be charged with the gross

salaries, or applicable parts thereof, earned by HA employees

engaged in architectural, engineering, or other technical work

relating to the planning and development of the project. It shall

include the salaries of architects, engineers, amen, and the

salaries of all other personnel engaged in such technical work.

If the entire architectural and engineering work is performed by

HA employees, the salaries of such employees shall be charged to

this account and not to Account 1430.1.

Terminal leave payments to terminated employees shall be charged

to this account in the same ratio as the salary of such

terminated employees was chargeable to this account as of the

termination date of employment.

This account shall not be charged with the salaries of

secretaries, stenographers, or typists assigned to technical

employees; such salaries shall be charged to Account 1410.1. The

salaries of personnel assigned to full-time inspection work

during construction shall not be charged to this account, but to

Account 1430.7.

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1410.3 Work - MH Contribution. This account shall be charged with the

value of work furnished as mutual help contributions by

homebuyers engaged in administrative work for the IHA, relating

to the planning and development of the project.

1410.4 Legal Expense. This account shall be charged with retainers and

fees paid to attorneys for general legal advice and assistance

and for the handling of litigation in connection with the

planning and development of the projects. This account shall also

be charged with the gross salaries earned by staff attorneys 7/

for legal work relating to the planning and development of the

projects, including title information and other legal work

relating to site acquisition. The salaries earned by secretaries,

stenographers, or typists assigned to such staff attorneys shall

not be charged to this account; such salaries shall be charged to

Account 1410.1.

Terminal leave payments to terminated employees shall be charged

to this account in the same ratio as the salary of such

terminated employees was chargeable to this account as of the

termination date of employment.

This account shall not be charged with:

o legal fees and expenses awarded by a court to the owner of

property acquired by condemnation; such amounts shall be

charged to Account 1440.1,

o legal fees and expenses for obtaining title information;

such amounts shall be charged to Account 1440.6,

o legal fees and expenses in connection with site acquisition;

such amounts shall be charged to Account 1440.8,

o any part of the salary of an attorney employed in an

administrative position, such as executive director,

assistant executive director, etc., although such attorney

may perform certain legal work incidental to his

administrative duties; such salary shall be charged to

Account 1410.1., and

o costs for obtaining opinion of counsel in connection with

financing the project; such cost shall be charged to Account

1410.19.

7/ The term \"staff attorney\", as used in this description, means an

attorney employed at a fixed salary for the primary purpose of

furnishing general legal advice and assistance and/or for handling

litigation relating to the planning, development, and operation of

HUD-aided projects and any other program being administered by the HA.

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IV\. Chart of Accounts

1410.9 Employee Benefit Contributions. This account shall be charged

with HA contributions, or the applicable parts thereof, to

employee benefit plans, such as pension, retirement, and health

and welfare plans. This account shall also be charged with

administrative expenses paid to the state or other public agency

in connection with a retirement plan, if such payment is required

by state law, and with trustee\'s fees paid in connection with a

private retirement plan, if such payment is required under the

retirement plan contract.

This account shall also be charged with unemployment compensation

expenses, as required by state law, related to costs of

terminating employees hired on a temporary basis for

modernization.

Deductions from compensation of employees for pension,

retirement, and health and welfare plans shall not be charged to

this account, but shall be considered a part of their gross

earnings and charged to the appropriate salary account.

1410.10 Travel. This account shall be charged with travel expenses of

officials and employees of the HA traveling on official business;

including travel expenses and registration fees incurred in

connection with attending conventions and meetings of

organizations which the HA determines will be useful in the

conduct of its business. The charges to this account shall

include the cost of automobile hire, allowances paid to employees

for use of privately owned automobile or other transportation

costs, taxi fares, subsistence allowances, etc.

This account shall also be charged with travel expenses of HA

officials and employees traveling on official business in

connection with HUD approved Comprehensive Improvement Assistance

Program (CIAP) training. Prior approval must be obtained from HUD

before CIAP training can be charged to this account.

1410.12 Publications. This account shall be charged with the cost (other

than the cost of services of regular staff employees and the cost

of supplies withdrawn from stock) incurred by the HA in the

preparation, printing, and distribution of its annual reports,

exhibits, and other informational literature relating to its

housing program. This account shall also be charged with the cost

of periodicals, books, and any other literature which the HA

deems useful in the conduct of its business.

1410.14 Membership Dues and Fees. This account shall be charged with
dues

and fees for membership in, and payment for the services of,

organizations supplying technical or professional information or

material concerning the low-rent housing program.

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1410.16 Telephone and Telegraph. This account shall be charged with the

cost of telephone and telegraph services, including rental of

equipment and long distance toll charges.

1410.18 Equipment Expended. This account shall be charged immediately

when the transaction occurs with the difference between the

acquisition cost and the proceeds. from disposition of personal

property during the period for which proceeds from the sale of

personal property are credited to the development cost of the

project. When the physical inventory of equipment is taken as of

the end of the initial operating period, this account shall also

be charged with the acquisition cost of equipment which has been

lost, stolen, destroyed, abandoned, expended, etc.

1410.19 Sundry. This account shall be charged with all items of

administrative and general expense incurred in connection with

the planning and development of the project for which a specific

account is not provided in the 1410 group of accounts. Charges to

this account include, but are not limited to, the following:

o rental of office space and cost of minor alterations; rental

of office furniture and equipment; utilities services; and

janitorial supplies,

o the cost of report and accounting forms; fees for accounting

and auditing services; printing of forms and other

documents, except annual reports and other informational

literature; stationery and office supplies; postage;

messenger service; and incidental express, freight, and

drayage not identified with and charged to the same account

as the article shipped,

o operating cost of motor vehicles, such as gasoline, oil,

grease, batteries, tires, and repairs,

o insurance expense for workmen\'s compensation, automobile

liability, public liability, fire coverage on furniture and

fixtures, and fidelity bonds. When authorized in the

development budget, insurance expense shall include the

initial three year insurance premium for fire and extended

coverage, public liability and fidelity bond coverage,

o advertising costs in connection with procuring bids for

demolition, construction, landscaping, and other contracts

for development work,

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IV\. Chart of Accounts

1410.19 Sundry (continued)

o cost of obtaining the opinion of counsel in connection with

financing the project, and

o the cost of preparing the development program beyond that

which is required as basic services under the architect\'s

contract when such work is not performed by HA personnel.

This account shall not be charged with any of the following types

of cost:

o purchase of office furniture and equipment; such purchases

shall be charged to Account 1475.1,

o blueprints, duplicating specifications, or other printing

related to planning; such costs shall be charged to Account

1430.19, and

o travel expenses of architects and engineers or their

authorized agents which are reimbursable to them under their

contracts; such cost shall be charged to Account 1430.1.

Liquidated Damages

1415 Liquidated Damages. This account shall be credited with the

amount of liquidated damages collected from the contractor

pursuant to the terms and conditions of the contract. (see Public

Housing Development Handbook 7417.1, Rev. 1).

Counseling and Training

1418 Counseling and Training Costs. This account shall be charged with

costs incurred in connection with (a) the counseling and training

services provided applicants and homebuyers in Turnkey III and MH

Homeownership Projects and (b) the organization and initial

operation of the homebuyers association in a Turnkey III Project.

The costs chargeable to this account shall be limited to the

items and amounts approved by HUD in the project\'s development

cost budget. The charges to this account may include:

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1418 Counseling and Training Costs (continued)

o Salaries earned by HA personnel (including homebuyers

employed by the HA) engaged solely in providing counseling

and training services. If the employee\'s normal duties

include other duties besides providing counseling and

training services, the salary of such employee shall be

prorated on an equitable basis between this account and the

other appropriate account(s) reflecting salaries.

o Materials, supplies and expendable equipment used in

connection with counseling and training services. Non-

expendable equipment is charged to Account 1475.

o Contract costs for counseling and training services (labor,

materials and supplies) furnished by an organization or by

persons other than HA personnel. It may also include other

contract costs directly related to the counseling and

training program which is generally incurred when the HA

undertakes to carry out its own counseling and training

program, such as the rental and servicing of equipment and

the fees of a professional consultant or recognized expert

engaged to develop a counseling and training program for the

HA. If the Bureau of Indian Affairs (BIA) Homebuyer Training

Program is used in the counseling of MH homebuyers, the BIA

shall not be reimbursed for utilization of its staff or

facilities.

o Other costs directly related to a counseling and training

program provided by the HA staff, such as employee benefit

contributions applicable to employee salaries, the rental of

space when the HA does not have space available for training

sessions, telephone services, etc.

o Homebuyers association costs directly related to the

organization and initial operation of the homebuyers

association for Turkey III Homeownership Projects only.

For budgetary control purposes, subaccounts shall be maintained

for each of the above categories of costs.

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IV\. Chart of Accounts

Interest Expense - Net

1420.1 Interest to HUD. This account shall be charged with interest

accruing on development loan notes payable to HUD through the

Date of Full Availability (DOFA). Interest shall be charged only

when specifically required by HUD. No interest is charged by HUD

on grant funds.

1420.7 Interest - Income From Investments. This account shall be

credited with interest earned on development funds up to the date

of full availability (DOFA). Interest Income earned between DOFA

and the end of the initial operating period is credited to

Account 1425/3610.

Initial Operating Period

1425 Initial Operating Deficit. Income earned and expenses incurred in

connection with the initial operation of a project shall be

debited or credited to this account as applicable. Income to be

credited includes income from rental of structures constructed on

the site, charges to tenants for excess utilities and services ,

and interest earned on General Fund investments. Expenses to be

debited include administrative and general expense applicable to

the initial operation of the project, and cost of labor,

materials and supplies, utilities, and contract costs incurred in

connection with ordinary maintenance and operation of that part

of a project available for occupancy.

The initial operating period usually begins with the date of

initial occupancy of a project, around the time of DOFA. However,

some costs incurred prior to initial occupancy may be debited to

this account. These costs include but are not limited to salaries

of persons responsible for selecting tenants and/or handling

tenant accounts, cost of stationery, forms, and office supplies

used in operation of a project.

All income and expense items shall be classified according to

income and expense accounts prescribed for use during the

operations period, e.g., dwelling rental income shall be recorded

as 1425/3110.

The End of the Initial Operating Period (EIOP) is a time defined

in the applicable program development handbook or regulation. The

EIOP is always at the end ofa calendar quarter. A debit balance

in this account at EIOP is a cost to the development program. A

credit balance at EIOP remains in the account to reduce the

development cost.

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Planning

1430.1 Architectural and Engineering Fees. This account shall be charged

with all fees for architectural and engineering work under lump-

sum or fixed-fee-plus-reimbursable-cost contracts, including all

amounts reimbursable to the architect except:

o reimbursable costs for inspection; such costs shall be

charged to Account 1430.7,

o reimbursable costs for soil tests and site surveys when the

architect is authorized to contract for this service; the

cost of soil tests shall be charged to Account 1430.19 and

the cost of site surveys shall be charged to Account 1440.4,

and

o reimbursable costs for preparation of the development

program beyond that which is required as basic services

under the contract; such costs shall be charged to Account

1410.19.

This account shall also be charged with the cost of blueprints

and specifications furnished by the architect whether such costs

are or are not reimbursable to the architect under his contract.

Should the entire architectural and engineering work be performed

by employees of the HA, the cost thereof shall not be charged to

this account, but to Account 1410.2.

1430.2 Consultant Fees. This account shall be charged with any planning

consultant fees and with reimbursable expenses incurred by the

architect for special services not provided for under the terms

of his contract.

1430.6 Permit Fees. This account shall be charged with any building

permit fees or similar fees which are paid by the HA.

1430.7 Inspection Costs. This account shall be charged with amounts

reimbursable to the architect for the cost of inspection pursuant

to the terms of the architect\'s contract, and with inspection

costs incurred in connection with a turnkey project pursuant to a

contract for inspection services. This account shall also be

charged with all other costs incurred for inspection, including

costs for test of materials, and the gross salaries earned by HA

personnel assigned to inspection work on a full-time basis.

Terminal leave payments to employees shall be charged to this

account if the salaries of such terminated employees are

chargeable to this account as of the date of termination of

employment.

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1430.7 Inspection Costs (continued)

This account shall not be charged with any part of the salaries

of administrative or technical personnel who may perform a

certain part of the inspection of the project incidental to their

regularly assigned duties; such salaries shall be charged to

Account 1410.1 or Account 1410.2, as applicable.

1430.9 Housing Surveys. This account shall be charged with all costs

approved by HUD for housing surveys, including costs of printing

reports.

1430.19 Sundry Planning Costs. This account shall be charged with the

costs incurred for borings and soil test pits, models,

miscellaneous blueprints, photostats, photographs, and other

planning costs not allocable to specific accounts. This account

shall be credited with monies received by the HA from the sale of

blueprints.

This account shall not be charged with the cost of blueprints or

specifications furnished by the architect (whether such costs are

or are not reimbursable to the architect under his contract);

such amounts shall be charged to Account 1430.1.

Site Acquisition

1440.1 Property Purchases. This account shall be charged with all

amounts paid for land and existing improvements, including any

amounts disbursed for prior-year taxes and deducted from the

purchase price, and amounts disbursed for current taxes prorated

to the date of acquisition. The proportionate share of current

taxes applicable to the period after the date of acquisition

shall not be charged to this account, but shall be charged to

Account 1440.12. Account 1440.1 shall also be charged with all

amounts paid for property acquired by condemnation, including all

amounts awarded by the court in connection therewith. This

account shall be charged with the reasonable value of property

donated, as determined by the HA with the approval of HUD. A

memorandum notation shall be made on the ledger sheet for this

account to show the area of land acquired and disposed of and the

remainder.

This account shall be credited, and Account 1440.3 shall be

debited, with an amount equal to the actual or allocated cost of

any land, together with structures remaining thereon, which is

determined prior to the issuance of the Actual Development Cost

Certificate to be excess to the needs of the project. This

account shall be credited with any amounts received from the sale

of structures, equipment, and other appurtenances included on the

site at time of acquisition. The proceeds from the sale of scrap

and salvage resulting from the demolition and clearing of the

site shall be credited to Account 1450.

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1440.1 Property Purchases (continued)

If any of the structures or other improvements existing on the site

at the time of acquisition are used for dwelling or nondwelling

purposes, this account shall be credited, and Accounts 1450, 1460,

and 1470, as applicable, shall be debited with the reasonable value

of the property so used, as determined by the HA with the approval

of HUD.

1440.2 Condemnation Deposits. This account shall be charged with the

amount of any deposits placed with a court pending completion of

condemnation proceedings. At such time as an award is made on any

parcel, the amount of the deposit applied on the purchase price

thereof shall be transferred to Account 1440.1. This account shall

be credited (and the applicable account in the 1440 group debited)

with the amount of any fees, court costs, etc., which are paid from

the deposit made with the court. At the conclusion of all

condemnation proceedings, no amount should remain in this account

except court awards, if any, in connection with properties which

are not finally acquired.

1440.3 Excess Property. This account shall be charged, and Account
1440.1

shall be credited, with an amount equal to the actual or allocated

cost of any land, with structures remaining thereon, which is

determined to be excess to the needs of the project when such

determination is made prior to the issuance of the Actual

Development Cost Certificate (ADCC).

This account shall be credited with the proceeds from sale of

excess property sold prior to the issuance of the ADCC. The

difference between the actual or allocated cost of the property and

the proceeds of sale credited to this account shall be transferred

to Account 1440.1.

1440.4 Surveys and Maps. This account shall be charged with the cost of

boundary, property line, topographical, and utility surveys,

including maps and perimeter descriptions; the cost of monuments

and landmarks; and the cost of all blueprints and photostats

furnished by the surveyor.

1440.5 Appraisals. This account shall be charged with costs incurred for

appraisals of land and improvements and for the appraisals, if any,

ordered by the HA for condemnation proceedings. This account shall

also be charged with costs incurred for obtaining appraisals of

site(s) for a project to be acquired by the turnkey method. If the

HA employs full-time appraisers on its staff, the salaries paid to

such employees shall be charged to this account.

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1440.5 Appraisals (continued)

Terminal leave payments to employees shall be charged to this

account if the salaries of such terminated employees are chargeable

to this account as of the date of termination of employment.

This account shall not be charged with:

o expert witness fees awarded by a court to the owner of

property acquired by condemnation; such costs shall be charged

to Account 1440.1 or

o any part of the salaries paid to administrative or technical

personnel assigned as part-time appraisers; such salaries

shall be charged to Account 1410.1 or Account 1410.2, as

applicable.

1440.6 Title Information. This account shall be charged with costs

incurred for securing title information, including legal services,

abstracts, title certificates, title guarantee policies and other

costs in connection therewith. This account shall not be charged

with any part of the salaries of staff attorneys; such salaries

shall be charged to Account 1410.4.

1440.7 Site - MH Contribution. This account shall be charged with the

value of land and existing improvements furnished as mutual help

contributions for the development of the project.

1440.8 Legal Cost - Site. This account shall be charged with legal costs

incurred in connection with site acquisition, except for salaries

paid to staff attorneys (see Account 1410.4). The charges to this

account shall include legal and court costs in connection with

condemnation and eviction proceedings, process service fees, and

similar costs.

This account shall not be charged with:

o legal fees and expense for securing title information; such

amounts shall be charged to Account 1440.6, or

o legal fees and expense awarded by a court to the owner of

property acquired by condemnation; such amounts shall be

charged to Account 1440.1.

1440.10 Option Negotiations. This account shall be charged with fees or

other costs incurred for negotiating the purchase of property or

options to purchase property. This account shall also be charged

with the nominal consideration, if any, paid for options.

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IV\. Chart of Accounts

1440.10 Option Negotiations (continued)

If the HA employs full-time option negotiators on its staff, the

salaries paid to such employees shall be charged to this account.

Terminal leave payments to employees shall be charged to this

account if the salaries of such terminated employees are chargeable

to this account as of the date of termination of employment.

This account shall not be charged with any part of the salaries of

administrative or technical personnel assigned as part-time option

negotiators; such salaries shall be charged to Account 1410.1 or

Account 1410.2, as applicable.

1440.12 Current Tax Settlements. This account shall be charged with the

proportionate share of current taxes applicable to the period after

the date of acquisition.

1440.19 Sundry Site Costs. This account shall be charged with recording

fees and any other costs of site acquisition not allocable to

specific accounts.

1440.20 Site Net Income. This account shall be credited with income, to
the

end of the initial operating period, from the rental of structures

existing on the site at the time of acquisition and from the rental

of land for parking lots or other purposes. This account shall be

charged with all expenses, to the end of the initial operating

period, in connection with the rental, operation, and maintenance

of such existing structures.

All items of income credited to this account and all items of

expense charged to this account shall be classified according to

the income and expense accounts (accounts in the 3000 and 4000

groups) prescribed for use during the operations period. A ledger

shall be maintained as a subsidiary ledger to Account 1440.20 in

the development cost ledger for recording income and expense

relating to the rental, operation, and maintenance of existing

structures and land.

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IV\. Chart of Account

Site Improvement

1450 Site Improvement. This account shall be charged with all costs

incurred by the HA for demolition and site improvements, including

the cost of offsite utilities, if any. This account shall be

credited with the proceeds received from the sale of scrap and

salvage resulting from demolition and clearing of the site, and

with the amount of cash repayments made by the local governing body

in connection with the cost of offsite utilities included in the

development cost of the project which are received prior to the

date of full availability (DOFA) of the project.

The principal charges to this account will cover parts of the main

construction contract or related contracts which will be determined

and distributed to this account at the time of approval of the

final billing under the contract. Other costs which are not

included under a contract shall be charged directly to this account

when incurred.

The principal charges to this account will include, but are not

limited to, the following costs:

o Demolition. See Account 1485.

o Grading. The cost of stripping top soil, and the cutting,

filling, back filling, and grading necessary to bring the

entire area outside of the buildings to the subgrade levels of

paved, surfaced, and planted areas.

o Sanitary Sewers. The cost of sanitary sewers, including the

cost of normal excavation, backfilling, piping, manholes,

cleanouts, sewage pumping, and disposal facilities, etc. This

account shall also include the cost of branches and

connections up to but outside of building walls, and the cost

of carrying such branches and connections through buildings in

route to other buildings, but shall exclude the cost of

connections to the buildings through which such branches pass.

o Storm Sewers. The cost of storm sewers, including normal

excavation and backfill, piping, manholes, street catch basins

and inlets, yard catch basins and inlets, cleanouts, etc.

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IV\. Chart of Accounts

1450 Site Improvement (continued)

o Water Distribution System. The cost of water distribution

systems, including normal excavation and backfill, piping,

valves and boxes, hydrants, curb cocks and boxes, yard

drinking fountains, manholes, master meter installation, etc.

Individual meters shall not be charged to this account, but

shall be charged to Account 1460.

o Gas Distribution System. The cost of gas distribution systems,

including normal excavation and backfill, piping, valves and

boxes, curb cocks and boxes, drip pots; regulators, master

meter installations, etc. Individual meters shall not be

charged to this account but shall be charged to Account 1460.

o Electric Distribution System. The cost of electric

distribution systems, including normal excavation, backfill,

overhead lines and poles, underground lines, transformers,

transformer vaults, yard lights, master meter installations,

etc. This account shall also include the cost of branches and

connections up to but outside of building walls, and the cost

of carrying such branches and connections through buildings in

route to other buildings, but shall exclude the cost of

connections to the buildings through which such branches pass.

Individual meters shall not be charged to this account, but

shall be charged to Account 1460. This account shall also

include any costs of street lighting and fire and police alarm

systems.

o Allowance for Abnormal Subsoil Conditions. The cost of

abnormal excavation resulting from unusual subsoil conditions,

such as rock, muck, water, quicksand, etc., over and above the

cost for normal rough grading and excavation work.

o Excess Dwelling and Nondwelling Foundations. The cost of

excess foundation work in connection with buildings,

utilities, and other site improvements where the unusual

character of the subsoil or site topography requires piling,

caissons, underpinnings, or very unusual depth of footings.

The term \"very unusual depth of footings\" is not applicable to

conditions ordinarily encountered, such as old basements,

cesspools, and the like, and insecure pockets of earth of

moderate extent, but is applicable only where such conditions

are clearly of an extraordinary extent. The cost of normal

excavations and foundations for structures shall be charged to

Account 1460, Dwelling Structures, in the case of dwelling

structures; or to Account 1470, Nondwelling Structures, in the

case of nondwelling structures. Pile caps and beams supporting

structures between pileclusters or caissons shall be

considered as normal foundations, but the piles and caissons

in places shall be considered excess dwelling or nondwelling

foundations.

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IV\. Chart of Accounts

1450 Site Improvement (continued)

o Paved Areas. The cost of streets and alleys, including the

cost of subgrading, paving, curbs, curb and gutters; the cost

of walks; the cost of constructing driveways, parking areas,

playgrounds, and other similar surfaced areas.

o Finished Grading, Lawns, and Planting. The cost of subgrade

preparation, top soiling, seeding, sodding, and planting.

o Miscellaneous. The cost of building retaining walls and

bulkheads, structural playground facilities (such as spray-

pools), fences, garbage stations, and other similar

appurtenances, and cost of benches, clothes poles, flag poles,

etc., when permanently installed. All nonexpendable playground

equipment, as distinguished from structural playground

facilities, shall be charged to Account 1475.), Community

Space Equipment.

If any of the improvements existing on the site at the time of

purchase are to be used, this account shall be charged with an

amount equal to a reasonable value (as determined by the HA with

the approval of HUD) of such improvements plus the cost of

renovation, if any, necessary to prepare the improvements for use.

For Mutual Help Projects, this account shall be subdivided to

segregate the various elements of costs to the following accounts:

1450.1 Work - MH Contributions. This account shall be charged

with the value of work furnished as mutual help

contributions in connection with site improvement.

1450.2 Materials and Equipment - MH Contributions. This account

shall be charged with the value of all materials and

equipment furnished as mutual help contributions in

connection with site improvement.

1450.3 Other MH Contributions. This account shall be charged

with all costs incurred for site improvement, exclusive

of the value of work, materials and equipment furnished

as mutual help contributions and charged to Accounts

1450.1 and 1450.2.

1460 Dwelling Structures. This account shall be charged with the cost of

dwelling structures as more specifically defined in the following

paragraphs.

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IV\. Chart of Accounts

1460 Dwelling Structures (continued)

The principal charges to this account will cover parts of the main

construction contract and related contracts which will be

determined and distributed to this account at the time of approval

of the final billing under the contract. Other costs which are not

included under a contract shall be charged directly to this account

when incurred. The principal charges to this account will include,

but are not limited to, the following costs.

o General. The cost of normal excavation and backfill, normal

foundations and other structural costs of dwelling buildings

and spaces, including incinerators, laundry facilities, closet

spaces, halls, corridors, entrance lobbies, equipment spaces,

perambulator and other tenant storage spaces, etc. Also, the

cost of fixed cabinets, cupboards, shelving, and other built-

in facilities.

o Plumbing. The cost of all interior plumbing, gas, and domestic

hot and cold water installations within dwelling building

walls; piping, fixtures, bathroom accessories, domestic hot

water heaters, circulating pumps. Individual gas and water

meters should also be charged to this account.

o Heating. The cost of all heating installations within dwelling

building walls or in group or central plants; piping, ducts,

radiators, vents, grills, fans, fixed heating units (such as

floor furnaces, panel type wall heaters, or other heating

units built into the structure) and all accessories, except

individual space heaters (i.e., space heating equipment not

connected to ducts or pipes for distribution of heat, which

shall be charged to Account 1465, Dwelling Equipment). If a

central heating plant is provided, include the entire cost of

plant structure, equipment, heating mains, domestic hot water

mains, and pipe tunnels. The cost of pipe tunnels carrying

several types of utility lines shall be prorated in the same

proportion as the cost of the lines carried. Thus, the portion

of the cost ofa pipe tunnel (carrying both a cold water line

and a heating line serving dwelling units only) applicable to

the cost of the cold water line would be included in Account

1450, Site Improvement (Water Distribution System), and the

portion of tunnel cost applicable to the heating line would be

included in Account 1460, Dwelling Structures.

o Electrical. The cost of interior dwelling electrical

installation (from service drops); conduits, wiring devices,

boxes, receptacles, mastermeter, switches, finished electrical

hardware, circuit breakers, lights, fixtures, and all other

appurtenances. Individual electric meters shall also be

included in this account.

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IV\. Chart of Accounts

1460 Dwelling Structures (continued)

o Elevators. The cost of elevators and related equipment. If any

of the structures existing on the site at the time of purchase

are to be used for dwelling purposes, this account shall be

charged with an amount equal to a reasonable value (as

determined by the HA with the approval of HUD) of such

structures plus the cost of renovation, if any, necessary to

prepare the structures for dwelling use.

For Mutual Help Projects, this account shall be subdivided to

segregate the various elements of costs to the following

accounts:

1460.1 Work - MH Contributions. This account shall be charged with

the value of work furnished as mutual help contributions in

connection with the construction of dwelling structures.

1460.2 Materials and Equipment - Mutual Help Contributions. This

account shall be charged with the value of all materials and

equipment (except items of equipment chargeable to the

accounts in the 1465 group) furnished as mutual help

contributions in connection with the construction of dwelling

structures.

1460.3 Other MH Contributions. This account shall be charged with

all costs incurred for dwelling structures, exclusive of the

value of work, materials, and equipment furnished as mutual

help contributions and charged to accounts 1460.1 and 1460.2.

Dwelling Equipment

1465 Expendable and Nonexpendable. This account shall be charged with

the cost of all ranges, refrigerators, individual space heaters

which are not connected to ducts or pipes for the distribution of

heat, shades, screens, and other similar equipment. The cost of

space heaters or other heating units built into the structures,

such as floor furnaces and panel type wall heaters, shall not be

charged to this account, but to Account 1460.

The principal charges to this account will generally result from

special equipment contracts, but may also arise from portions of

the main construction contract or related contracts; when dwelling

equipment is included in the main construction contract or related

contracts the cost of such equipment will be determined and

distributed to this account at the time of the final billing under

the contract.

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IV\. Chart of Accounts

1465 Expendable and Nonexpendable (continued)

The account shall be credited with the cost of dwelling equipment

sold prior to the date of full availability (DOFA) of the project;

the difference between the cost of equipment sold and the proceeds

from sale shall be charged to Account 1410.18. When the physical

inventory of equipment is taken as of the end of the initial

operating period, this account shall be credited and Account

1410.18 shall be debited with the cost of dwelling equipment which

has been lost, stolen, abandoned, destroyed, or expended.

This account shall be subdivided as follows:

1465.1 Dwelling Equipment - Nonexpendable, shall be used for

recording the cost of dwelling equipment classified as

\"nonexpendable\" pursuant to established criteria for

capitalization of property.

1465.2 Dwelling Equipment - Expendable, shall be used for

recording the cost of dwelling equipment classified as

\"expendable\" pursuant to established criteria for

capitalization of property.

1465.3 Dwelling Equipment-MH Contributions, shall be used for

recording the value of all items of dwelling equipment

furnished as MH contributions, provided such items of

equipment would otherwise be purchased by the HA. The

charges to this account shall not include the cost of any

equipment furnished because the homebuyer desired more or

better equipment than the HA would furnish. Ownership of

the equipment furnished by a homebuyer as a MH

contribution shall be vested with the HA.

Nondwelling Structures

1470 Nondwelling Structures. This account shall be charged with the

cost of nondwelling construction, including administration,

maintenance, and community buildings and spaces, as more

specifically defined in the following paragraphs.

The principal charges to this account will cover portions of the

main construction contract and related contracts which will be

determined and distributed to this account at the time of approval

of the final billing under the contract. Other costs of nondwelling

construction shall be charged directly to this account when

incurred.

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IV\. Chart of Accounts

1470 Nondwelling Structures (continued)

Generally, the main construction contract and related contracts will

include charges to be distributed to this account for the following

expenditures.

o Administration Building or Spaces. The cost of structures,

plumbing, heating, ventilating, and electrical installation for

administration buildings and spaces.

o Community Buildings or Spaces. The cost of structures, plumbing,

heating, ventilation, and electrical installation for all buildings

and space used for health, educational, and recreational purposes.

If any of the structures existing on the site at the time of purchase

are to be used for nondwelling purposes, this account shall be charged

with an amount equal to a reasonable value (as determined by the HA with

the approval of HUD) of such structures plus the cost of renovation, if

any, necessary to prepare the structures for use.

For Mutual Help Projects, this account shall be subdivided to segregate

the various elements of costs to the following accounts.

1470.1 Work - MH Contributions. This account shall be charged with

the value of work furnished as mutual help contributions in

connection with the construction of nondwelling structures.

1470.2 Materials and Equipment-MH Contributions. This account shall

be charged with the value of materials and equipment furnished

as mutual help contributions in connection with the

construction of nondwelling structures.

1470.3 Other MH Contributions. This account shall be charged with

all costs incurred for nondwelling structures, exclusive of

the value of work, materials and equipment furnished as mutual

help contributions and charged to Accounts 1470.1 and 1470.2.

Nondwelling Equipment

1475 Expendable and Nonexpendable. This account shall be charged with
the

cost of all movable nondwelling equipment including equipment for

administration, maintenance, and community buildings and spaces, both

expendable and nonexpendable, acquired during the development period.

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IV\. Chart of Accounts

1475 Expendable and Nonexpendable (continued)

The principal charges to this account will generally result from

special equipment contracts, but may also arise from portions of

the main construction contract or related contracts; when

nondwelling equipment is included in the main construction contract

or related contracts, the cost of such equipment will be determined

and distributed to this account at the time of the final billing

under the contract.

Equipment purchased solely for use by a specific project and

located thereon shall be charged to that project. The cost of

equipment purchased for the use of two or more projects or programs

(for example, office or maintenance equipment) should be charged to

a single project/program whenever possible in order to facilitate

the reconciliation of equipment inventory records with the physical

inventory.

This account shall be credited with the cost of nondwelling

equipment sold prior to the date of full availability (DOFA), the

difference between the cost of equipment sold and the proceeds from

sale shall be charged to Account 1410.18. When the physical

inventory of equipment is taken as of the end of the initial

operation period, this account shall be credited and Account

1410.18 shall be debited with the cost of nondwelling equipment

which has been lost, stolen, abandoned, destroyed, or expended.

1475.1 Nondwelling Equipment - Office Furniture and Equipment.

This account shall be used for recording the cost of

office furniture and equipment classified as

\"nonexpendable\" pursuant to established criteria for

capitalization of property.

1475.2 Nondwelling Equipment - Maintenance Equipment. This

account shall be used for recording the cost of

maintenance equipment classified as \"nonexpendable\"

pursuant to established criteria for capitalization of

property.

1475.3 Nondwelling Equipment - Community Space Equipment. This

account shall be used for recording the cost of community

space equipment classified as \"nonexpendable\" pursuant to

established criteria for capitalization of property.

1475.4 Nondwelling Equipment - Computer Equipment. This account

(or Account 1475.1) shall be used for recording the cost

of computers and peripheral equipment classified as

\"nonexpendable\" pursuant to established criteria for

capitalization of property. Computer equipment is defined

to include central processing, and peripheral equipment

such as input and output machines, data preparation

machines, data storage machines, and major components

which \"upgrade\" the processing of computers and/or

peripheral equipment.

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IV\. Chart of Accounts

1475.7 Nondwelling Equipment - Automotive Equipment. This

account shall be used for recording the cost of

automotive equipment, such as automobiles, trucks, and

snow plows. All automotive equipment is normally

classified as nonexpendable equipment.

1475.9 Nondwelling Equipment - Expendable. This account shall be

used for recording the cost of all items of nondwelling

equipment (purchased prior to DOFA) classified as

\"expendable\" pursuant to established criteria for

capitalization of property.

1475.10 Nondwelling Equipment - MH Contributions. This account

shall be used for recording the value of all items of

nondwelling equipment furnished as mutual help

contributions. Ownership of the equipment furnished by a

homebuyer as mutual help contributions shall be vested

with the IHA.

Work in Process

1480 Contract Work in Process. This account shall be charged with all

approved contract billings on the main construction contract or

other construction contracts where the total cost is chargeable to

two or more of the subsidiary development cost accounts and where

payments are to be in two or more periodic installments. if more

than one contract is involved, this account may be subdivided by

contract.

Contracts for other than construction and equipment, such as

contracts for architectural and engineering services, shall not be

charged to this account.

Contracts for construction and equipment, the total cost of which

is chargeable to only one of the construction and equipment

accounts, shall be charged directly to such account and not to this

account.

The balance in this account with respect to each contract shall be

distributed to the appropriate subsidiary development cost accounts

promptly after approval of the final billing under the contract.

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IV\. Chart of Accounts

1482 Developer\'s Contract Price (Turnkey) Work in Process. This account

shall be debited with the costs incurred for the developer\'s price

under a development program for turnkey construction. The

developer\'s price will normally be broken down as follows: site,

site improvement, dwelling construction and equipment (nonelderly),

dwelling construction and equipment (elderly), nondwelling

construction, architectural and engineering services, other.

Upon completion of construction and final payments of the

Developer\'s Price, the balance of this account shall be allocated

to the subsidiary development cost accounts 1440, 1450, 1460, and

1470\.

1485 Demolition Costs. This account shall be charged with all costs

incurred by the HA for demolishing and clearing existing structures

and other improvements, disconnecting utilities, and clearing the

site.

1495 Relocation Costs. This account shall be charged with all costs

incurred for the relocation of individual, families, business

concerns, or nonprofit organizations from the site of a low-income

housing project in connection with development or modernization.

Charges to this account include amounts paid or payable to

displaced site occupants for costs such as the following:

o Individuals and families for moving expenses and direct losses

of property, and for additional relocation payments to assist

such persons to acquire decent, safe, and sanitary dwellings;

o Small business concerns for moving expenses and direct loss of

property and other authorized displacement payments;

o HA direct expenses for the cost of services incident to the

relocation of site occupants, including the salaries of

administrative personnel assigned full-time duties related to

the relocation of site occupants;

o Settlement costs to displaced occupants for reasonable and

necessary expenses incurred in connection with the HA

acquisition of property (e.g., recording fees, transfer taxes,

mortgage prepayment penalties, pro rata portion of real

property taxes); and

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IV\. Chart of Accounts

1495 Relocation Costs (continued)

Replacement Housing Payments for an owner-occupant of a single or

two-family dwelling acquired by the HA.

Undistributed Debits

1620 Ineligible Expenditures. The debit balance of this account

represents the amount of expenditures which have been determined by

HUD to be ineligible pending settlement or determination of

responsibility.

1640 Payrolls. This account may be charged with the gross salaries and

wages paid pending distribution to the applicable cost or expense

accounts. Charges to this account must be distributed not less

frequently than at the end of each accounting period.

1660 Other Administration Expense. This account may be charged with

unallocated items of other administration expense pending

distribution to the applicable contract cost or expense account.

This account may be used also for the accumulation of other

administration expense for proration to the projects or other

management entities under a single contract with HUD. Charges to

this account must be distributed not less frequently than at the

end of each accounting period.

1690 Other. This account may be charged with expenditures which are not

applicable to other specific undistributed debit accounts pending

determination as to the appropriate account or accounts to be

charged. The charges to this account shall be transferred promptly

upon determination of the appropriate account or accounts to be

charged. In any event, all charges must be transferred before the

end of an accounting period.

Contracts

1800 Uncompleted Contracts. The debit balance of this account

represents the amount of the uncompleted portion of development and

management contracts (contra to Account 1810) as shown in the

contract register.

1810 Contract Awards - Contra. The credit balance of this account

represents the amount of the uncompleted portion of development and

management contracts (contra to Account 1800).

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Bid Guaranties

1820 Undeposited Bid Guaranties. Guaranties submitted with bids for

contracts in the form of certified checks, bank drafts, U.S.

Government Bonds, or other negotiable securities or instruments,

which are not deposited in a bank, shall be charged to this account

(and credited to Account 1830) pending award of the bid and the

return or other disposition of such guaranties. (See description of

Account 21 13 for recording bid guaranties deposited in a bank.)

1830 Returnable Bid Guaranties - Contra. This is a contra account in

which to record the offsetting credit or debit of all amounts

debited or credited to Account 1820. The net credit balance of this

account shall be in agreement with the net debit balance in Account

1820\.

Annual Leave

1840 Earned Annual Leave. The use of this account is optional. if the

account is used, the debit balance at the close of an accounting

period should represent the value of the accumulated leave of

employees at the end of such period (contra to Account 1850). The

amount recorded is reported as a footnote on the Balance Sheet,

Form HUD 52595.

1850 Allowance for Annual Leave - Contra. The use of this account is

optional. if the account is used, the credit balance at the close

of an accounting period should represent the value of the

accumulated leave of employees at the end of such period (contra to

Account 1840). No funds may be set aside for this purpose.

Compensated Absences

Compensated absences are vacation, sick leave, and other leave

benefits accrued by employees. The HA may elect to accrue a

current liability for future compensated absences at the end of the

fiscal year in lieu of using Account 1840. Account 1840 may be used

to record an amount for either the current or long-term portion of

accumulated leave. However, an expenditure accrual must be limited

to the amount of probable payment to be made with available

resources within 60 days following the end of the fiscal year.

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IV\. Chart of Accounts

LIABILITIES

Accounts Payable

2111 Vendors and Contractors. The credit balance of this account

represents amounts payable on open accounts and contract billings

for materials received or services rendered. Contract retentions

and indebtedness evidenced by formal instrument, such as a note,

shall not be included in this account.

2112 Contract Retentions. The credit balance of this account represents

the amount withheld by the HA from contractors\' billings. This

account shall be subdivided as follows to segregate the amounts

withheld according to the purpose for which the withholding was

made.

2112.1 Contract Retentions - Fixed. The credit balance of this

account represents the amount withheld from contractors\'

billings (usually a percentage of the amount filled),

pending acceptance of the work and final settlement

therefor.

2112.2 Contract Retentions - Payroll Noncompliances. The credit

balance of this account represents the amount withheld

from contractors\' billings on account of payroll

noncompliances (underpayments to workers).

2112.3 Performance Deposits. The credit balance of this account

represents the amount of liquidated damages withheld from

contractors\' billings for the use and benefit of the

United States on account of violations of the Contract

Work Hours Standards Act.

2113 Performance Deposits. The credit balance of this account represents

the amount of deposits placed with the HA, and deposited in the

General Fund, pending refund or other disposition. This account

includes items such as earnest money, good faith deposits by

contractors and bond purchasers, deposits on blue print, etc. (See

description of Accounts 1820 and 1830 for recording deposits which

are not deposited in the bank.) Tenant security deposits are not

included in this account but are credited to Account 2114.

2114 Tenants Security Deposits. The credit balance of this account

represents the amount of deposits which are held for tenants and

are to be returned on the termination of their leases after

deducting therefrom rent due and charges for property damages for

which tenants are held responsible. This account may be maintained

by project or by any combination of projects under the same

contract or it may be further subdivided as desired by the HA.

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IV\. Chart of Accounts

2115 Unclaimed Salaries and Wages. The credit balance of this account

represents the amount of unclaimed salaries and wages due former

employees.

2115.P Section 8 Accounts Payable - Portable Vouchers. The credit
balance

of this account represents the amount due to other (Receiving) HAs

for HAP payments and administrative fees for Portability

participants whose Rental Voucher assistance is administered for

the HA by those receiving HAs. A subsidiary ledger shall be

maintained to segregate the amounts due to each creditor HA.

2116.P Section 8 Accounts Payable - Portable Certificates. The credit

balance of this account represents the amount due to other

(Receiving) HAs for HAP payments and administrative fees for

Portability participants whose Rental Certificate assistance is

administered for the HA by those receiving HAs. A subsidiary ledger

shall be maintained to segregate the amounts due to each creditor

HA.

2117 Payroll Deductions and Contributions. The credit balance of this

account represents the amount of payroll deductions and

contributions which have not been disbursed and applied to the

purpose for which such deductions and contributions were made. This

account shall include payroll deductions for income taxes, Federal

Insurance Contributions Act (FICA) taxes, unemployment insurance

taxes, pension funds, and deductions for purchase of U.S. Savings

Bonds, etc. It shall also include employer contributions for

pension funds, FICA taxes, unemployment insurance taxes, etc. This

account may be subdivided for the purpose of maintaining separate

accounts for each classification of payroll deduction and

contribution, such as income tax withholdings, employee savings

bond deductions, pension fund deduction and contributions, FICA

deductions and contributions, etc. In preparing financial

statements, however, the total of the credit balances of the sub-

accounts shall be included in Account 2117.

2118 HUD. This account shall be credited with any amounts which become

due and payable to HUD with respect to projects under an

administration contract or an annual contributions contract.

2119 Accounts Payable, Other. The credit balance of this account

represents sundry payable items not applicable to other specific

accounts.

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IV\. Chart of Accounts

Notes Payable

2122 Project Loan Notes - HUD. The credit balance of this account

represents development loans payable to HUD. Grant funds received

from HUD for development and modernization are not recorded to

Account 2122, but to Account 8029.

2123 Administrative Notes-HUD. The credit balance of this account

represents the amount of outstanding administrative notes payable

to HUD. 8/

2126 Project Notes - Non-HUD. The remaining balance of all private

market project notes issued for development and modernization

funding were purchased by HUD in 1985-86 and converted to HUD

Permanent Notes, Account 2311.

2129 Sundry Notes. The credit balance of this account represents the

amount of outstanding notes not allocable to other specific

accounts. 8/

Accrued Liabilities

2131.1 Interest Payable - Development Notes - HUD. The credit balance of

this account represent the accrued interest payable to HUD on

project loan or permanent notes. Interest on HUD Permanent Notes

subject to forgiveness (see Account 231 1) need not be accrued

alter an actual development or modernization cost certificate has

been approved by HUD.

2131.2 Accrued Liabilities - Interest Payable -Administrative Notes -
HUD.

The credit balance of this account represents the accrued interest

payable to HUD on Administrative Loan Notes.

2131.3 Interest Payable - Other Notes deferred Payment) - HUD. The
credit

balance of this account represents accrued interest payable to HUD

on notes for which payment has been deferred until payment in full

of all obligations for which any annual contributions are pledged

(see description of Account 2351).

8/ This account shall be subdivided or a subsidiary ledger shall be

maintained to show the amount of the note applicable to each

Homeownership Project.

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IV\. Chart of Accounts-

2132 Interest Payable - Notes Non-HUD. The credit balance of this

account represents the accrued interest on notes payable to others

than HUD.

2133 Interest Payable - Bonds, Non-HUD. The credit balance of this

account represents accrued interest payable on Bonds, Non-HUD. The

accrued interest received on the sale of Bonds shall be credited to

this account.

2134 Utilities. The credit balance of this account represents the

amount of accrued utility expense, such as water, electricity, gas,

etc. Separate accounts for the several kinds of utilities may be

established, if desired.

2135 Salaries and Wages. The credit balance of this account represents

the amount of salaries and wages accrued and unpaid.

2136 Insurance. The credit balance of this account represents the

amount of accrued insurance expense.

2137 Payments in Lieu of Taxes. The credit balance of this account

represents the amount of accrued expense for payments in lieu of

taxes.

2139 Accrued Liabilities. Other. The credit balance of this account

represent the amount of accrued liabilities not applicable to other

specific liability accounts.

Trust and Deposit Liabilities

2161 Homebuyers Earned Home Payments, TK III. This account shall be

credited with (1) that part of the homebuyer\'s monthly payment

designated for the homebuyer\'s earned home payments account, (2)

all voluntary payments made by the homebuyer, (3) the income

derived from the investment of earned home payments, and (4) any

other funds which may become available for credit to this account.

This account shall be debited with (1) costs incurred by the HA for

routine maintenance of the homebuyer\'s dwelling, (2) amounts

applied to the payment of unpaid monthly payments due the HA, (3)

the amount refunded to the homebuyer upon termination of the

Agreement, and (4) the amount applied to the purchase price of the

dwelling. This account shall be supported by a subsidiary ledger

showing the balance applicable to each homebuyer.

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IV\. Chart of Accounts

2162 Homebuyers Nonroutine Maintenance Reserve, TK III. This account

shall be credited with that part of the homebuyer\'s monthly payment

designated for the nonroutine maintenance reserve and with income

derived from the investment of the nonroutine maintenance reserve.

This account shall be debited with (1) costs incurred by the HA for

nonroutine maintenance of the homebuyer\'s dwelling, (2) the amount,

if any, applied to the purchase price of the dwelling, and (3) the

amount, if any, refunded to the homebuyer following acquisition of

the dwelling. This account shall be supported by a subsidiary

ledger showing the balance applicable to each dwelling.

2164 Unapplied Payments on Resale of Dwellings, TK III. The credit

balance of this account represents unapplied payments received by

the HA from former homebuyers (in Homeownership Projects) on

account of the resale or their dwellings at a profit within 5 years

of actual residence in their dwellings alter becoming homeowners.

This account shall be supported by a subsidiary ledger showing the

amount received from each former homebuyer and its application.

2165 Mortgagors or MH Homeowners Taxes and Insurance. This account

shall be credited with payments received from mortgagors or MH

homeowners for taxes and insurance. This account shall be debited

with payments made by the HA for mortgagors or MH homeowners taxes

and insurance. This account shall be supported by a subsidiary

ledger showing the balance applicable to each mortgagor or MH

homeowner.

2166 Mortgagors or MH Homeowners Maintenance Reserve. This account

shall be credited with payments received from mortgagors or MH

homeowners utilizing HA homeownership financing for a maintenance

reserve. This account shall also be credited with the income

derived from the investment of the reserve. This account shall be

debited with costs incurred by the HA for the maintenance of

mortgaged property and with the amount, if any, refunded to the

mortgager or MH homeowner. This account shall be supported by a

subsidiary ledger showing the balance applicable to each mortgagor

or MH homeowner.

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2171 MH Homebuyers Monthly Equity Payments. This account shall be

credited (and Account 1123 debited) with (1) the amount by which

each required monthly payment exceeds the Administration Charge,

and (2) the amount of any retroactive rent charges. This account

shall also be credited (and Account 2252 debited) with the amount

of investment income applied from the investment of monthly equity

payments. This account shall be debited with (1) costs incurred by

the IHA for maintenance of the homebuyer\'s dwelling, (2) the amount

applied to the payment of unpaid monthly payments to the authority,

\(3\) the amount applied to payment of settlement costs and to the

purchase price of the dwelling upon conveyance of the home, (4) the

amount needed to establish the homeowners maintenance reserve in

cases where IHA Homeownership financing is used to purchase the

home and (5) the amount payable to HUD for application to project

debt and/or refundable to the homebuyer upon termination of the

homebuyer\'s Mutual Help and Occupancy Agreement.

If at the end of the fiscal year there is a debit balance in this

account, such debit balance shall be charged to the MH Homebuyer\'s

Voluntary Equity Payments Account (debit Account 2172) to the

extent of the credit balance in Account 2171. Any remaining debit

balance in this account may be charged first to the homebuyer\'s

Refundable MH Reserve (Account 2912) and second to the homebuyer\'s

Unrefundable MH Reserve (Account 2914).

This account shall be supported by a subsidiary ledger showing the

balance applicable to each homebuyer

2172 MH Homebuyers Voluntary Equity Payments. This account shall be

credited with the periodic or occasional voluntary payments made by

the homebuyer over and above his required monthly payments. This

account shall also be credited (and Account 2252 debited) with the

amount of investment income applied from the investment of the

homebuyer\'s voluntary equity payments. This account shall be

debited with (1) the amount refunded to the homebuyer, (2) the

amount applied to the payment of settlement cost and to the

purchase price of the dwelling, (3) the amount needed to establish

the homeowners maintenance reserve, in cases where IHA

Homeownership financing is used to purchase the home, and (4) the

amount of the debit balance in the homebuyer\'s monthly equity

payments account (Account 2171) to be charged to this account at

the end of the fiscal year.

This account shall be supported by a subsidiary ledger showing the

balance applicable to each homebuyer.

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2180 Family Self-Sufficiency (FSS) Escrow Account. This account shall be

credited monthly with the portion of the total tenant payments set

aside in the FSS Escrow Account for families participating in the

FSS program as authorized in 24 CFR Part 962 and 24 CFR Part 905,

Subpart R.

The funds must be placed in an interest bearing account (funds may

be pooled with other investments). Account 2180 shall be credited

at least annually with the interest earned on (or allocated to) the

FSS funds.

This account shall be supported by a subsidiary ledger showing the

balance applicable to each participating FSS family. The individual

family subsidiary account will be credited at least annually with

the interest earned on the FSS funds. Interest will be credited in

the same proportion as (a) the amount invested for the individual

family at the time of interest allocation is to (b) the total FSS

funds invested.

This account shall be debited with FSS escrow funds paid to

eligible families. If a family is terminated from the FSS program,

or forfeits FSS escrow, the amount of escrow funds retained by the

HA shall be debited to this account and credited to Account 3690,

Other Income.

Deferred Credits

2210 Prepaid Annual Contributions. This account shall be credited (and

Account 1111.1 debited) with the amount of partial payments

received from HUD on account of the basic annual contribution for

leased Section 23/10(c) projects and with the amount of advances

received from HUD on account of annual contributions for Section 8.

Periodically, but not less often than the end of each fiscal year,

this account shall be debited (and the appropriate account in the

8000 group of accounts credited) with the amount of annual

contributions earned.

At the end of each fiscal year, this account shall be credited (and

Account 1125 debited) with the excess of the amount of annual

contributions earned over the amount of partial payments (or

advances) received for the year. If partial payments (or advances)

received for the fiscal year exceed the amount of the earned annual

contribution, this account shall be debited (and Account 21 18

credited) with the amount of unearned annual contribution to be

refunded to HUD.

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2210 Prepaid Annual Contributions (continued)

The periodic payments received from HUD on account of operating

subsidies for HA-owned/leased units are not prepayments and should

not be credited to this account unless such payment is received

prior to the beginning of the fiscal year for which such subsidies

for operations are approved; such periodic payments, when received

during the fiscal year for which such subsidies are approved, shall

be credited to Account 8020.

This account may be subdivided to segregate partial payments

received on account of the basic annual contribution for leased

projects and the contributions received for Section 8.

2240 Tenants Prepaid Rents. This credit account is used only in

preparing annual financial statements and will consist of the total

of individual credit balances of tenants accounts recorded in

Account 1122. Such credit balances need not be recorded in this

account.

2241 Prepaid Monthly Payments-Homebuyers-Turnkey III Projects. This

credit account is used only in preparing annual financial

statements and will consist of the total of individual credit

balances of homebuyers accounts receivable (Account 1124). Such

credit balances need not be recorded in this account.

2245 Prepaid Monthly Payments - MH Homebuyers. This credit account is

used only in preparing annual financial statements and will consist

of the total of individual credit balances of MH homebuyers

accounts receivable (Account 1123). Such credit balances need not

be recorded in this account.

2250 Investment Income - Homebuyers Earned Home Payments (EHPA)-

Unapplied. This account shall be credited with interest earned on

the investment of the Turnkey III homebuyers EHPA (held in either

Account 1163 or as part of a pooled investment in Account 1162),

and debited or credited, as applicable with the gain or loss of

securities specifically purchased from EHPA funds.

The account shall be debited with the amount of investment income

allocated and credited to the homebuyer\'s EHPA (Account 2161). The

credit balance of this account represents investment income not yet

allocated. 9/

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IV\. Chart of Accounts

2251 Investment Income - Homebuyers Nonroutine Maintenance Reserve

(NRMR) - Unapplied. This account shall be credited with interest

earned on the investment of the Turnkey III homebuyers NRMR (held

in either Account 1163 or as part of a pooled investment in Account

1162), and debited or credited, as applicable with the gain or loss

of securities specifically purchased from NRMR funds.

The account shall be debited with the amount of investment income

allocated and credited to the homebuyer\'s NRMR (Account 2162). The

credit balance of this account represents investment income not yet

allocated. 9/

2252 Investment Income - MH Homebuyers Equity Payments - Unapplied. This

account shall be credited with interest earned on the investment of

the MH homebuyer\'s monthly and voluntary equity payments

(MEPA/VEPA) (held in either Account 1163 or as part of a pooled

investment in Account 1162), and debited or credited, as applicable

with the gain or loss of securities specifically purchased from

equity funds.

The account shall be debited with the amount of investment income

allocated and credited to the homebuyer\'s MEPA (Account 2171), or

VEPA (Account 2172). The credit balance of this account represents

investment income not yet allocated. 9/

2260 Land MH Contributions. This account shall be credited (and Account

1400.2 debited) with the approved value, for land contributed by

the MH homebuyers, or by the tribe on behalf of the homebuyers

towards the development of the project. This account shall be

debited (and Account 2914 credited) for the homebuyers\' equal

shares of the MH land contribution. If the Mutual Help and

Occupancy Agreement of a homebuyer who contributed land is

terminated before the Date of Occupancy, and if the IHA returns the

land or reimburses the homebuyer, this account shall be debited

with the amount previously credited for the land contribution.

This account shall be supported by a subsidiary ledger showing the

balance applicable to each homebuyer.

9/ Periodically, but not less often than annually, the net amount of

investment income credited to this account shall be prorated and

credited to each homebuyer\'s applicable reserve account. The credit

proration may be based on the balance in the homebuyer\'s account at the

end of the period for which the investment income is prorated reduced by

the amount of the homebuyer\'s accounts receivable, if any.

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2261.1 MH Homebuyers Non-land MH Contribution. This account shall be

credited with the sum of the values, as determined by the PHA and

approved by HUD, for work, cash, materials and equipment

contributed by the homebuyers toward the development of the

project, in accordance with their MHO Agreements. The amounts of

each respective form of MH contributions shall be credited at the

following times: (1) in the case of MH work when all the homebuyers

have completed their MH work obligations and (2) in the case of

cash, materials or equipment, when such contributions are actually

received. The account shall be (1) debited upon termination of a

homebuyer\'s MHO Agreement before the date of occupancy, with the

amount reimbursed to the homebuyer for contributed cash, materials

or equipment, (2) debited (and Account 2912 credited) as of the

homebuyer\'s date of occupancy for the amount of MH work, cash,

materials and equipment contributed by the homebuyer and (3)

debited (and Account 2914 credited) as of the homebuyer\'s date of

occupancy, with the homebuyer\'s equal share of the credit for non-

reimbursed non-land contributions of homebuyers whose MHO

Agreements were terminated before the date of occupancy.

This account shall be supported by a subsidiary ledger showing the

balance applicable to each homebuyer. The subsidiary ledger shall

be maintained in such a way that will show at all times the value

of the different types of contributions, i.e., work, cash,

materials and equipment.

2261.2 Tribal Non-land MH Contribution. This account shall be credited

with the sum of the values, as determined by the PHA, and approved

by HUD, for cash, materials and equipment contributed by the tribe

on behalf of the homebuyers toward the development of the project,

in accordance with the MHO Agreement. Upon each homebuyer\'s date of

occupancy, this account shall be debited (and Account 2914

credited) for the homebuyer\'s share of the tribal non-land MH

contribution.

This account shall be supported by a subsidiary ledger showing the

balance applicable to each homebuyer. If the homebuyer\'s MHO

Agreement is terminated, the balance in this account shall be

transferred to the subsidiary ledger established for the substitute

homebuyer. The subsidiary ledger shall be maintained in such a way

that will show at all times the value of the different types of

contributions furnished by the tribe, i.e., cash, materials and

equipment.

2290 Deferred Credits, Other. The credit balance of this account

represents sundry receipts which are applicable to a future period,

including investment income derived from investment of security

deposits pending distribution to the individual tenants.

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IV\. Chart of Accounts

Fixed Liabilities

2311 Permanent Notes - HUD. The credit balance of this account

represents the unpaid balance of permanent notes issued. This

account shall be subdivided or a subsidiary record shall be

maintained to show the amount of the note applicable to each

homeownership project.

Provisions of Public Law 99-272, enacted April 7, 1986, authorized

the Secretary to forgive outstanding principal and interest on HUD-

held notes and loans made to HAs. Debt service annual contributions

on HUD-held notes ceased as of April 1986. Notes are forgiven

periodically by HUD principal plus interest less any excess

financing) for projects for which there is a record of an approved

actual development or modernization certificate. 10/

2312 Permanent Notes - F.F.B. The credit balance of this account

represents the unpaid balance of notes which have been issued to

the Federal Financing Bank (F.F.B.).

2341 New Housing Authority Bonds -Issued. The credit balance of this

account represents the face amount of New Housing Authority Bonds

issued.

2342 New Housing Authority Bonds -Retired. The debit balance of this

account represents the face amount of New Housing Authority Bonds

retired.

2351 Other Notes Payable to HUD (Deferred Payment). The credit balance

of this account represents the unpaid principal balance of

promissory notes, including mortgage and deed of trust notes,

relating to projects for which the preliminary planning ore

development program has been canceled, for which payment has been

deferred until payment in full of all obligations for which any

annual contributions are pledged or until funds are otherwise

available. The credit balance of this account shall also include

the unpaid principal balance of any note payable to HUD for any

other type of obligation for which payment has been deferred until

payment in full of all obligations for which any Annual

contributions are pledged.

10/ Debt forgiveness does not extend to debt financing through the sale
of

Bonds, or notes sold to the Federal Financing Bank, or to HA notes to

HUD which are not retired using debt service annual contributions.

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Undistributed Credits

2690 Undistributed Credits. The credit balance of this account

represents sundry receipts, the nature of which cannot immediately

be identified pending distribution to the appropriate account or

accounts. The credits to this account shall be distributed

immediately upon determination of the account or accounts to which

such credits are applicable.

Section 8 Fraud Recovery. This account shall be credited (and

Account 1 129 debited) with the total amount of fraud recovery

funds due from a Section 8 tenant or owner resulting from either

HA-initiated litigation (including settlement of a lawsuit), a

court-ordered restitution, or a signed administrative repayment

agreement. This account shall be debited with the amount collected

after a determination is made of the accounts (Account 3300.1 or

Account 4715) to which the collection is applicable.

All credits to this account shall be distributed prior to the end

of the fiscal year except for the unpaid balance of Section 8 fraud

recovery funds still due.

Income and Expense Clearing Account (Optional)

2700 Income and Expense Clearing Account. This account may be used as a

clearing account to which the balances of all nominal accounts

(except Accounts in the 7000-8000 series) may be transferred at the

end of each fiscal year. After these entries have been made, the

net balance shall be closed into Account 2810, Unreserved Surplus.

SURPLUS

2810 Unreserved Surplus. This account is debited or credited at Fiscal

Year-end with the balance of all nominal accounts in the 3000-6000

series of accounts (or the net balance closed from Account 2700),

and debited or credited with the Provision for Reserve amounts

(Accounts 7010-7027) transferred to the individual

Operating/Program Reserve Accounts.

The Account 2810 balance (usually a debit) has no significance for

audit purposes.

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IV\. Chart of Accounts

2820-2827 Operating/Program Reserves

Each Operating or Program Reserve account represents the cumulative net

balance of the Provision for Reserve amounts (Accounts 7010-7027) of the

particular HUD assisted program as calculated on either the annual HUD
52599

(Statement of Operating Receipts and Expenditures) or the HUD 52681
(Year-end

Settlement Statement for Section 8).

2820 Reserved Surplus - Operating Reserve - Locally Owned Projects. This

account shall be credited (and Account 7010 debited) with the

amounts reserved from operating receipts of locally owned Federally

aided low-rent projects to cover future operating deficits

applicable to such projects. If, at the end of any fiscal year,

there is a deficiency in residual receipts applicable to these

projects, this account shall be debited (and Account 7010 credited)

with the amount of such deficiency to the extent of the credit

balance in this account.

2821 Reserved Surplus - Operating Reserve - Leased Projects. This

account shall be credited (and Account 7011 debited) with the

amounts reserved from operating receipts of leased low-income

projects to cover future operating deficits applicable to such

projects. If, at the end or any fiscal year, there is a deficiency

in residual receipts applicable to these projects, this account

shall be debited (and Account 7011 credited) with the amount of

such deficiency to the extent of the credit balance in this

account.

2822 Reserved Surplus - Operating Reserve - MH Projects. At the end of

each fiscal year this account shall be (1) credited (and Account

7012 debited) with the amount by which operating receipts of a MH

project exceed the operating expenses of the project or (b) debited

(and Account 7012 credited) with the amount by which the operating

expenses exceed the operating receipts of the project to the extent

of the credit balance in this account.

2823 Reserved Surplus - Operating Reserve - Turnkey III - Homeownership

Projects. This account shall be credited (and Account 7013 debited)

with the amounts reserved from operating receipts of a

homeownership project (locally owned or leased) to cover future

operating deficits applicable to such project If, at the end of any

fiscal year, there is a deficiency in residual receipts applicable

to a project, this account shall be debited (and Account 7013

credited) with the amount of such deficiency to the extent of the

credit balance in this account.

A separate account shall be maintained for each Turnkey III

Homeownership Project.

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2824 Reserved Surplus - Operating Reserve - Section 23 HAP Projects.

This account shall be credited (and Account 7014 debited) with the

amount by which total operating receipts of Section 23 HAP Projects

exceed total operating expenditures of such projects for the fiscal

year. If total operating expenditures exceed total operating

receipts for a fiscal year, the amount of such excess (deficit)

shall be debited to this account (and credited to Account 7014), to

the extent of the credit balance in this account.

A single account may be maintained for all Section 23 HAP Projects.

2825 Reserved Surplus - Contingency Reserve - Unfunded - Section 23 HAP-

Projects. This account shall be credited (and Account 7025 debited)

with the amount of the annual contribution approved by HUD for the

project reserve pursuant to Section 1.3 (c) of the annual

contributions contract. If the amount of the annual contribution

required for any fiscal year exceeds the maximum annual

contribution stated in Section 1.3a of the annual contributions

contract, the amount of the excess to the extent approved by HUD,

shall be debited to this account (and credited to Account 7025)

provided such excess does not exceed the credit balance in this

account.

A separate account shall be maintained for each project.

2826 Reserved Surplus - Operating Reserve - Section 8 HAP Projects. This

account shall be credited (and Account 7016 debited) with the

amount by which total operating receipts of Section 8 HAP Projects

exceed the total operating expenditures of such projects for the

fiscal year. If the total operating expenditures exceed the total

operating receipts for a fiscal year the amount of such excess

(deficit) shall be debited to this account (and Account 7016

credited), to the extent of the credit balance in this account. A

single account shall be maintained for all Section 8 HAP Projects.

2827 Reserved Surplus - Project/ACC Reserve Account - Unfunded -Section

8 HAP Projects. This account shall be credited (and Account 7027

debited) with the amount of the annual contributions approved by

HUD for the Project/ACC Reserve Account pursuant to Section 1.4 (c)

of the annual contributions contract. If the amount of the annual

contributions required for any fiscal year exceeds the maximum

annual contributions set forth in Section 1.4 (a) of the annual

contribution contract, the amount of the excess, to the extent

approved by HUD, shall be debited to this account (and credited to

Account 7027), provided such excess does not exceed the credit

balance in this account. A separate account shall be maintained for

each Section 8 New and Rehab Project. One account shall be

maintained for all the HA\'s Section 8 Existing Projects.

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IV\. Chart of Accounts

2840 Cumulative HUD Annual Contributions. The credit balance of this

account represents the cumulative amount of annual contributions

made available by HUD with respect to all Federally-aided projects

under an annual contributions contract, including locally-owned

low-income projects, locally owned homeownership projects, MH

projects, leased low income projects, and leased homeownership

projects. The credit balance of this account shall include (1)

annual contributions for debt service, (2) the basic annual

contributions for leased projects, (3) annual contributions for

operating subsidies and (4) any additional annual contributions

made available for any other purpose.

2845 Cumulative HUD Grants for Development/Modernization. The credit

balance in this account represents the total amount of funds

received from HUD for development or modernization of HA property

covered by an ACC. This account may be subdivided to accumulate

data as to the cumulative amount of HUD funding applicable to the

various projects.

2850 Cumulative Donations. The credit balance of this account

represents the reasonable value of property donated to the project,

as determined by the HA with the approval of HUD. An analysis of

this account shall be maintained to show, by project, the value of

donated property and the cost of property purchased from cash

donations to development classified according to the subsidiary

development cost accounts to which such property is charged. Cash

donations received for operations from State and/or local

governments, individuals, or private corporations are not recorded

to this account; such donations are recorded to Account 3690, Other

Income.

2854 Replacement Reserve - Proceeds from Sale of Dwellings: Retained by

HA. The credit balance in this account represents the proceeds from

sale of HA-owned dwelling units that are eligible funds for

retention by the HA. Funds that are not eligible for retention by

the HA, and that are remitted to HUD for reduction of the project

debt, are recorded in Account 2855 (Turnkey III), or Account 2857.1

(MH). (For more information on accounting procedures see the

preface to Accounts 8112-8116).

Funds in Account 2854 can be transferred, with HUD approval, to the

Operating Reserve or Replacement Reserve of another HA-owned

program within the same ACC or in another ACC. In addition, funds

in this account may, in accordance with terms and conditions of use

approved by HUD, be used for lower income housing purposes not

covered by a specific ACC.

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2854 Replacement Reserve - Proceeds from Sale of Dwellings: Retained by

HA (continued)

Account 2854 may be credited with proceeds from sale eligible for

retention by the HA only alter title conveyance to the homebuyer.

This account will be credited with interest income earned on funds

in the Replacement Reserve, and debited with the amount of funds

transferred to other Reserve accounts for use in accordance with

applicable HUD approved waivers and ACC amendments and/or Use

Agreements.

A single Account 2854, Replacement Reserve - Proceeds from Sale of

Dwellings may be maintained for all homeownership projects within

an ACC. The account may be subdivided to segregate funds applicable

to a specific HUD-approved homeownership plan.

The HA must maintain adequate records to track the receipt,

retention, and expenditure of sale proceed funds in sufficient

detail to allow monitoring of compliance with the HUD-approved

homeownership plan, to prepare any reports required by HUD, and to

meet its audit responsibilities.

2855 Cumulative Proceeds from Sale of Dwellings: Remitted to HUD. 11/

The credit balance of this account represents the cumulative

proceeds which have been remitted to HUD from the sale of dwellings

in Turnkey III projects to homebuyers, plus the cumulative payments

received from former homebuyers on account of the resale of

dwellings at a profit.

2857.1 Cumulative Proceeds from Sale of MH Dwellings: Remitted to HUD.
The

credit balance of this account represents the cumulative proceeds

which have been remitted to HUD from the sale of dwellings to MH

homebuyers, including that portion of the homebuyers monthly equity

payments and voluntary equity payments applied to the purchase

price of the home but not the application of the homebuyers

unfunded reserves to the purchase price (see Account 2857.2). This

account shall also be credited with the mortgage payments received

from homeowners subject to IHA financing.

2857.2 Cumulative MH Unfunded Reserves Applied to Purchase Price of

Dwellings. The credit balance in this account represents the

cumulative amount of MH unfunded reserves (refundable and

unrefundable) applied to the purchase price of the dwellings.

11/ The balance, if any, of Account 2856, which has been deleted in this

guidebook, may be combined with Account 2855.

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2860 Book Value of Projects Conveyed by HUD. The credit balance of this

account represents the book value (acquisition cost less cumulative

depreciation to date of conveyance) of all land, structures, and

equipment of former Federally owned PWA and Public War Housing

Projects conveyed to the HA for low-income use. The net book value

to be recorded in this account will be furnished by HUD as of the

date of conveyance. This account shall not be debited or credited

for cost of property acquisitions or dispositions subsequent to the

conveyance of the project.

2870 Contract Payments to HUD - Conveyed Projects. The debit balance of

this account represents the cumulative amount of residual receipts

from operations, proceeds from the disposition of nonexpendable

equipment not replaced, and proceeds from disposition of excess

real property which have been paid or are payable to HUD for former

Federally owned PWA and Public War Housing Projects conveyed to the

HA for low-income use.

2880 Development Cost - Undeveloped Projects. The debit balance of this

account represents the development cost incurred in connection with

projects for which the preliminary planning or development program

has been canceled, exclusive of cost of any personal property

acquired and on hand at the time of cancellation. This account

shall be charged directly with the quarterly or annual accrual of

interest on the notes payable to HUD in connection with such

canceled projects (see description of Account 2351).

2890 Surplus - Cost of Dwelling Conveyed to Homebuyers. This account

shall be debited (and Account 1400.4, credited) with the cost of

dwellings conveyed to homebuyers. For the purpose of writing off

the cost of dwellings conveyed, an estimate of the unit share of

development cost may be used, or the initial purchase price

established for the initial homebuyer (if known) may be considered

the cost of such dwelling when it is conveyed. No entry is required

to the Property Ledger subsidiary accounts.

Capital Contributions (New Mutual Help)

2912 Refundable MH Reserve. Upon occupancy of the dwellings this account

shall be credited (and Account 2261.1 debited) for the homebuyer\'s

non-land MH contribution. At the end of each fiscal year, this

account may be charged with the debit balance, if any, in the

homebuyer\'s Monthly Equity Payments Account (Account 2171) after

first charging the homebuyer\'s Voluntary Equity Payment Account

(Account 2172).

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2912 Refundable MH Reserve (continued)

Upon purchase or the home by the homebuyer, this account shall be

debited and Account 8116.2 credited with the amount applied to the

purchase price of the dwelling and Account 2166 shall be credited

with the amount needed, if any, to establish the MH homeowner\'s

maintenance reserve. The balance in this account may also be used

for percent of settlement costs upon purchase of the home.

If the homebuyer terminates his MHO Agreement, the balance in this

account after paying amounts owed to the IHA shall be refunded to

the homebuyer.

This account shall be supported by a subsidiary ledger showing the

balance applicable to each homebuyer.

2914 Unrefundable MH Reserve. The account shall be credited (1) with

the homebuyer\'s equal share of the land MH contribution (Account

2260\) and with equal shares of the non-land MH contributions

(Account 2261.1) of homebuyers whose MHO Agreements were terminated

before their dates of occupancy and (2) with the amount of any

tribal non-land MH contribution (Account 2261.2) made on behalf of

the homebuyers.

This account may be charged with the debit balance, if any, in the

homebuyer\'s Monthly Equity Payments Account (Account 2171) alter

first charging the homebuyer\'s Voluntary Equity Payments (Account

2172\) and the homebuyer\'s Refundable MH Reserve (Account 2912).

Upon purchase of the home by the homebuyer, this account shall be

debited and Account 8116.2 credited with the amount applied to the

purchase price of the dwelling; and Account 2166 shall be credited

with the amount needed, if any, to establish the homeowners

maintenance reserve. The balance in this account is not refundable

to the homebuyer.

This account shall be supported by a subsidiary ledger showing the

balance applicable to each homebuyer.

Operating Income

3000 Operating Income (Control). This account shall be credited with the

aggregate amount of operating income derived from all sources and

shall control the detail entries recorded in the 3000 group of

subsidiary operating income accounts.

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IV\. Chart of Accounts

Section 8 Income Accounts

3300 Section 8 Interest on Reserved Surplus - Operating Reserve. This

account is credited with interest income on Operating Reserve

funds. This account is also credited with any gain and debited with

any loss on securities sold.

Not less than once each quarter, this account shall be debited (and

Account 2826 credited) for the investment income received. Separate

accounts shall be maintained for Rental Vouchers, Rental

Certificates, and each Moderate Rehabilitation increment. This

account is not a subsidiary to Account 3000.

3300.P Section 8 Income - Portability. The credit balance of this
account

represents the amount earned as administrative fees for Portability

participants whose assistance is administered by the HA on behalf

of other (Initial) HAs.

3300.1 Section 8 Fraud Recovery Funds Retained. This account shall \'be

credited (and Account 2860 debited) with the portion of Section 8

fraud recovery funds collected from tenants/owners that are to be

retained by the HA. (See PIH Notice 94-46, July 1994). This account

is not a subsidiary to Account 3000.

SUBSIDIARY ACCOUNTS TO GENERAL LEDGER ACCOUNT 3000

Rental Income

3110 Dwelling Rent. This account shall be credited monthly with the net

amount of dwelling income payable by the tenants/homebuyers to the

HA as indicated below. This account is also credited with the

amount of retroactive rent due from tenants in HA-owned/leased

rental and homebuyers in Turnkey III projects (see also Account

6010).

HA-owned rental. For rental projects, this account shall he

credited with the total monthly tenant rent. When utilities are

supplied by the HA, the tenant rent charged by the HA includes the

cost of those utilities. When utilities are the responsibility of

the tenant, the HA deducts a utility allowance for the unit when

calculating the amount of rent due to the HA. If the rent

calculation, after deducting the utility allowance, results in a

utility reimbursement due to the tenant, the amount of such utility

reimbursement is included on the rent roll and is debited to this

account. (The HA will pay the utility reimbursement amount to the

tenant or to the utility company on behalf of the tenant.)

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3110 Dwelling Rent (continued)

Turnkey III. For TK III homeownership projects, this account shall

be credited with the amount by which total monthly payments charged

to homebuyers exceeds the total of the monthly amounts required for

\(i\) the homebuyers earned home payments account (Account 2161) and

\(ii\) the homebuyers nonroutine maintenance reserve (Account 2162).

In the event total monthly payments charged to homebuyers is less

than the sum of the amounts required for items (i) and (ii) above,

the amount of such deficiency shall be debited to this account.

Mutual Help. For MH homeownership projects, the amount credited to

this account is the administration charge portion of the required

monthly payment. If the required monthly payment exceeds the

administration charge, the excess is credited to the homebuyer\'s

Monthly Equity Payments Account (Account 2171). Utility

reimbursements do not apply to MH projects; retroactive rent

charges are credited to Account 2171 and not to Account 3110.

3120 Excess Utilities. This account shall be credited with charges to

tenants or to homebuyers for excess utility consumption for HA

supplied utilities.

3190 Nondwelling Rental. This account shall be credited with the rent,

including charges for utilities and equipment, billed to lessees of

nondwelling facilities and of dwelling units rented for nondwelling

purposes. This account shall not be credited with charges to other

projects or programs for central office management and maintenance

space (see Account 3690).

Nonrental Income

3610 Interest on General Fund Investments. This account shall be

credited with interest earned after the End of the Initial

Operating Period on general fund investments (see description of

Account 1162, Investments - General Fund). If the HA elects to

record the periodic increment in value of U.S. Savings Bonds, the

amount of such increment shall, alter the End of the initial

operating period, be credited to this account. Interest earned on

the investment of tenant security deposits shall be credited to

this account if such interest is not credited and paid to the

tenant.

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IV\. Chart of Accounts

3610 Interest on General Fund Investments (continued)

This account shall also be credited with any gain and debited with

any loss on the sale of securities alter the end of the initial

operating period, representing the difference between the total

cost of securities sold, exclusive of accrued interest at date of

purchase, and the net amount received from the sale of securities,

exclusive of accrued interest at date of sale. For purposes of

determining the gain or loss on the sale of securities, \"cost\"

includes brokerage and other costs of acquisition, plus any premium

paid or less any discount received at time of purchase of the

securities (also see Account 1162). If preferred, the premium paid

may be amortized by a periodic charge to this account and a

corresponding credit to Account 1162; and the discount received may

be amortized by a periodic charge to Account 1162 and a

corresponding credit to this account. Prior to the Date of Full

Availability, interest earned on General Fund investment of

development funds, or the gain or loss on the sale of such

securities, shall be recorded in Account 1420.7; alter the Date of

Full Availability, interest on such investments shall be recorded

in Account 1425/3610, up to the End of the Initial Operating

Period. (See also the description of Accounts 1420.7 and 1425/3610)

This account shall not be debited with accrued interest paid on the

purchase of securities; such interest shall be debited to Account

1145\. This account shall not be credited with income derived from

the investment of homeownership reserve funds (see Account 1 163);

such interest will be credited to Accounts 2250, 2251, or 2252.

3680 Assessments - Homeowners. This account shall be credited with the

monthly assessments charged to the homeowners of homeownership

projects for services provided such homeowners by the HA. Such

services would include, but are not limited to, the maintenance and

operation of community facilities, including utility facilities, if

any, the maintenance of grounds and other utility facilities, if

any, the maintenance of grounds and other common areas, and for

such other purposes as may be determined by the homeowners

association, including provision for reserve.

3690 Other Income. This account shall be credited with income from the

operation of the project which cannot be otherwise classified.

Income credits to this account include, but not limited to,

penalties for delinquent payments; sales and services to tenants;

rental of equipment; receipts from telephone pay stations; charges

for use of community space; charges to other projects or programs

for the use of central office management and maintenance space;

commissions and profits from vending machines (except when vending

machines are operated by tenant groups), including washing machines

and rental of space in community or administration buildings for

laundry equipment on a contractual or other basis; income received

from oil leases, including royalties; and premiums on project

notes.

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3690 Other Income (continued)

This account shall also be credited with cash donations for

operations received from State and/or local governments,

individuals, or private corporations, and with amounts received

from the Bureau of Indian Affairs (BIA) pursuant to a contract

providing financial assistance to an IHA for management purposes.

This account may be subdivided to segregate amounts which are

excluded from the projection of \"other income\" used in the

calculation of Performance Funding System (PFS) operating subsidy,

or for other purposes.

Operating Expense

4000 Operating Expense (Control). This account shall be charged with the

aggregate amount of all operating expense and shall control the

detail entries recorded in the 4000 group of subsidiary operating

expense accounts.

4000.P Section 8 Portability Expense (Control). This account is charged

with the aggregate amount of all Portability operating expenses and

controls the detail entries recorded in the 4000.P group of

subsidiary accounts.

SUBSIDIARY ACCOUNTS TO GENERAL LEDGER ACCOUNT 4000/4000P

4010 & Preliminary Administrative Expenses (Section 8.) See Handbook

4012 7420.6, Housing Assistance Payments Program Accounting, for

descriptions of these accounts.

4012.P Section 8 Preliminary Administrative Expense - Portability. This

account is debited by the amount of eligible preliminary expenses

incurred for Portability and is credited by the amount of special

preliminary portability fees requisitioned from HUD. It is a

subsidiary to Account 4000.P.

4110 Administrative Salaries. This account shall be charged with the

gross salaries earned by HA personnel engaged in administrative

duties and in the supervision, planning, and direction of

maintenance activities and operating services during the operations

period. It shall include the salaries of the executive director,

assistant executive director, accountants, accounting clerks,

clerks, secretaries, switchboard operators, project managers,

management aides, purchasing agents, engineers, draftsmen,

maintenance superintendents, and all other employees assigned to

administrative duties and/or maintenance supervision in the central

office, project offices, or other organizational units of the HA.

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4110 Administrative Salaries (continued)

This account shall not be charged with any part of the gross

salaries earned by architectural and engineering personnel employed

for the sole purpose of preparing plans and specifications for an

extraordinary maintenance job or for a property betterment and

addition job; such salaries shall be considered a part of the cost

of the job and charged to Account 4610 or 7540, as applicable.

Also, the salaries earned by personnel whose duties are primarily

to provide resident families with services that contribute to

achieving the social goals of the low-income housing programs shall

not be charged to this Account 4110; such salaries shall be charged

to Account 4210. The salaries of personnel engaged in both the

performance of maintenance and the supervision of a maintenance

crew (such as a maintenance foreman) shall not be charged to this

account, but to Account 4410.

An HA with a very small program which has an employee whose normal

duties include both administrative duties and the performance of

actual maintenance and operating services shall prorate the salary

of such employee to this Account 4110 and to Account 4410 on an

equitable basis.

4130 Legal Expense. This account shall be charged with retainers and

fees paid to attorneys for legal services relating to the operation

of the projects. This account shall also be charged with the gross

salaries earned by staff attorneys for legal work relating to the

operation of the projects. The salaries earned by secretaries,

stenographers, or typists assigned to such staff attorneys shall

not be charged to this account, but to Account 4110. 12/

This account shall not be charged with:

o legal fees paid to attorneys in connection with the eviction

of tenants or the collection of amounts due from tenants; such

fees, if not legally chargeable to tenants, shall be charged

to Account 4190, or

o any part of the salary of an attorney employed in an

administrative position, such as executive director, assistant

executive director, etc., although such attorney may perform

certain legal work incidental to his administrative duties;

such salary shall be charged to Account 4110.

12/ The term \"staff attorney,\" as used in this description, means an

attorney employed at a fixed salary for the primary purpose of

furnishing general legal advice and assistance and for handling

litigation relating to the planning, development, and operation of HUD-

aided low-income projects and any other program being administered by

the HA.

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4140 Staff Training. This account shall be charged with all costs

incurred by the HA for staff training. Costs chargeable to this

account may include:

o tuition and fees, books, materials, supplies, and other

expenses directly related to employee training,

o travel, subsistence or per diem, and registration fees for

attendance at special meetings or seminars or for visits to

neighboring HAs to study procedures and techniques of the low-

rent program,

o contract costs or fees for visiting instructors or consultants

for short term training program where the size of the staff

warrants such method, and

o the cost of developing training manuals or other training

aids.

This account shall not be charged with the cost of training

incurred in connection with tenant services or protective services;

such costs shall be charged to Account 4230 or Account 4480, as

applicable.

4150 Travel This account shall, except as otherwise provided below, be

charged with travel expenses of officials and employees of the HA

traveling on official business. Travel expenses include all

transportation costs (such as, bus, train and plane fares; taxi

fares; allowances paid to employees for use of privately owned

automobiles), subsistence allowances, etc. Travel expenses may also

include registration fees incurred in connection with attending

conventions and meetings of organizations which the HA determines

will be useful to the conduct of its business.

This account shall not be charged with:

o travel expenses incurred in connection with an employee

training program; such expenses shall be charged to Account

4140,

o the cost of automobile hire or allowances paid to employees

for use of privately owned automobiles when such vehicles are

used in connection with the performance of maintenance and

operating services; such costs shall be charged to Account

4430,

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4150 Travel (continued)

o the cost of automobile hire or allowances paid to employees

for use of privately owned automobiles when such vehicles are

used in connection with tenant service activities; such costs

shall be charged to Account 4230, or

o the cost of automobile hire or allowances paid to employees

for use of privately owned automobiles when such vehicles are

used in connection with protective services; such costs shall

be charged to Account 4480.

4170 Accounting Fees. This account shall be charged with fees to

accountants or computer service firms for maintenance of the HA\'s

books of account.

4171 Auditing Fees. This account shall be charged fees paid to

independent public accountants for periodic audit of the HA\'s books

of account.

4180 Office Rent - HAP. This account shall be charged with the rent of

office space leased for the administration of the HAP program,

including the cost of utilities and janitorial services provided

for such space. If the office space leased by the HA is used for

any program other than the HAP program, the HAP program shall only

be charged with its allocable share of the cost.

4190 Sundry - Other Administrative Expenses. This account is provided

for recording the cost of all items of administrative expense for

which no specific account is prescribed in this 4100 group of

accounts. It includes, but is not limited to, the cost of items

such as reports and accounting forms; stationery and other office

supplies, postage; telephone and telegraph services; messenger

services; armored car service; rental of office space; advertising

for bids; fiscal agent fees; and the like. This account shall also

be charged with:

o costs incurred for publications (i.e., preparation, printing

and distribution of annual reports and other informational

literature relating to low-income program),

o the cost of periodicals, books, and other literature deemed

useful to the low-income housing program,

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4190 Sundry - Other Administrative Expenses (continued)

o dues and fees for membership in, and payment of services of,

organizations supplying technical or professional information

and/or services concerning the housing program,

o fees paid to attorneys or collection agents and court costs

incurred in connection with the collection of amounts due from

tenants which are not chargeable to tenants, and

o incidental express, freight, or other shipping charges not

identified with the charged to the same account as the article

shipped.

Tenant Services

4210 Salaries. This account shall be charged with the gross salaries of

HA personnel whose duties are primarily to provide resident

families with services that contribute to achieving the social

objectives of the low-income housing program. Such services would

include community agency referrals on family welfare, health, and

other problems; counseling on household management, housekeeping,

budgeting, child care; advice as to resources for job training and

placement. Such employees would include, but not be limited to, the

social services advisor, community services coordinator, social

services aides\--which may be residents and clerical and other

employees assigned to the tenant services staff. This account shall

be charged with wages, if any, paid to residents participating in

HA training programs authorized and approved under Sections 903 and

904 of the Housing and Urban Development Act of 1970. Upon

completion of training, if the resident is hired on a full-time or

part-time basis, the salary shall be charged to the appropriate

account reflecting salaries (i.e., administration, maintenance,

tenant services, etc.).

In the event work in connection with tenant services activities is

performed by HA personnel on a casual basis (e.g., on their day

off, holidays, Saturdays, Sundays), this account shall be charged

with the gross amount earned by such employees for such period.

This account shall not be charged with any part of the salaries

earned by the executive director, assistant executive director,

project managers, staff attorneys, or any other HA personnel whose

duties are not directly or principally related to tenant services

even though they may perform certain of these services incidental

to their regular assigned duties. Such salaries shall be charged to

the account(s) to which they would normally be charged.

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4220 Recreation, Publications, and Other Services. This account shall be

charged with costs incurred for services directly related to

meeting resident needs and supporting a wholesome living

environment. Such costs include, but are not limited to, resident

transportation and admission fees to recreation sites and places of

interest; materials and expendable equipment for games; arts and

crafts materials; resident newspapers or similar publications. This

account shall also be charged with the cost of resident

transportation to health clinics, job training programs, and

similar community resources not within walking distance; and all

other costs directly attributed to providing tenant services for

which no other specific account is prescribed.

This account shall not be charged with the cost of any item of non-

expendable equipment, property betterments and additions. Such cost

are chargeable to the appropriate account(s) in the 7500 group of

accounts.

4230 Contract Costs, Training, and Other. This account shall be charged

with contract costs (the cost of services for labor, materials, and

supplies furnished by a firm or persons other than HA employees) in

connection with tenant services activities; and the payment of fees

or reimbursements to the other HA or public bodies, for furnishing

personnel and/or services to implement tenant-serving activities.

Contract costs for training HA employees and residents in the

techniques of providing services to residents are likewise charged

to this account.

This account shall also be charged with the cost of automobile

rental or with allowances paid employees for the use of privately

owned automobiles when such vehicles are used in connection with

tenant services activities.

This account shall not be charged with travel costs incurred by HA

personnel in connection with travel to conventions, workshops, or

out-of-town travel; such costs shall be charged to Account 4150.

This account shall not be charged with the cost of any item of non-

expendable equipment, property betterments and additions. Such cost

are chargeable to the appropriate account(s) in the 7500 group of

accounts.

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Utilities

4310 Water. This account shall be charged with the cost of water

purchased for HA use.

4320 Electricity. This account shall be charged with the cost of

electricity purchased for all purposes.

4330 Gas. This account shall be charged with the cost of gas (natural,

artificial, or liquefied) purchased for all purposes.

4340 Fuel. This account shall be charged with the cost of coal, fuel

oil, steam purchased, and any other fuels (except electricity and

gas) used in connection with HA operation of plants for the heating

of space or water supplied to tenants as a part of rent.

4350 Labor. This account shall be charged with the gross salaries and

wages, or applicable portions thereof, of HA personnel engaged in

the operation of water supply plants, liquefied gas plants, heating

plants, and sewage disposal plants owned and operated by the HA.

This account shall not be charged with the salaries or wages of

employees engaged in the maintenance of utility plants owned by the

HA; such costs shall be charged to Account 4410.

This account shall be charged with the cost of utilities for which

other accounts are not specifically provided including, but not

limited to, sewer charges and all costs for materials and supplies,

expendable equipment, and contracts for the operation (but not the

repair and maintenance) of heating plants, water supply plants,

liquefied gas plants, and sewerage disposal plants, owned and

operated by the HA, including any portion of such costs which is

applied as a reimbursement of payment for off-site utilities.

The charges to this account shall include the cost of materials and

supplies used, and contracts for (1) boiler water treatment, such

as chemicals for filtration, chlorination, water softening, or

sedimentation processes; (2) cleaning tanks and disposal of sludge;

\(3\) testing heating and hot water plant operation, water

purification, or sewerage effluent; and (4) the operation of

pumping plant.

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4390 Other Utilities Expense (continued)

The cost of materials and supplies used, and contracts for the

repair and maintenances of utility plants shall not be charged to

this account, but shall be charged to Account 4420 or Account 4430,

as applicable.

Ordinary Maintenance and Operation

4410 Labor. This account shall be charged with the gross salaries and

wages, or applicable portions thereof, of HA personnel engaged in

the routine maintenance of the project. It shall also be charged

with the salaries and wages of personnel engaged in operating

services, such as janitorial services, elevator service,

extermination of rodents and household pests, and rubbish and

garbage collection.

If any of the normal maintenance staff of the HA are detailed to

jobs other than routine maintenance, the salaries and wages of such

employees while so engaged shall not be charged to this account,

but to the account or accounts to which such costs are chargeable,

such as extraordinary maintenance, Account 4610; casualty losses,

Accounts 4620 or 7560; or property betterments and additions,

Account 7540.

4420 Materials. 13 This account shall be charged with the cost of

materials, supplies, and expendable equipment used in connection

with the routine maintenance of the project, including the

operation and maintenance of automotive and other movable

equipment, (such as gasoline, oil, grease, batteries, and tires

etc.). This account shall also be charged with the cost of

materials, supplies, and expendable equipment used in connection

with operating service, such as janitorial services, elevator

services, extermination of rodents and household pests, and rubbish

and garbage collection.

The cost of materials, supplies, and expendable equipment furnished

by a contractor (firm or individual) in connection with the

performance of routine maintenance or operating services shall not

be charged to this account, but to Account 4430.

13 The term \"cost of materials\" as used in this description shall
include

the cost of items of equipment ofa capital nature (but not nonexpendable

equipment), such as water heaters, motors, and bathroom equipment, which

are normally considered a part of the cost of real property when

attached or installed in a fixed position.

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4430 Contract Costs. This account shall be charged with contract costs

(i.e., the cost of services for labor, materials, and supplies

furnished by a firm or by persons other than HA employees) incurred

in connection with the routine maintenance of the project,

including the maintenance of automotive and other movable equipment

(such as washing, greasing, polishing, and repair services). This

account shall also be charged with contract costs incurred in

connection with operating services, such as janitorial services,

elevator service, extermination of rodents and household pests, and

rubbish and garbage collection.

This account shall also be charged with the rental of automotive

equipment including mileage and/or allowances paid to the HA

employees for use of their privately owned vehicles, used in

connection with the performance of maintenance and operating

services.

4431 Garbage and Trash Removal. This account shall be charged with the

cost of removing garbage and rubbish from the project. It also

includes the cost (on-site, off-site, or through fees or

assessments) of complying with local recycling requirements. The

account does not include salaries paid to janitors who collect the

trash as part of routine project maintenance.

Protective Services

4460 Labor. This account shall be charged with the gross salaries and

wages earned by HA personnel, including tenants, engaged solely or

primarily in providing protective services to the projects and

tenants. Such employees would include personnel engaged in project

police, guard and watchman duties. This account shall not I:\'e

charged with any part of the salaries earned by the executive

director, project manager, or other HA personnel whose duties are

not directly or principally related to providing protective

services.

4470 Materials. This account shall be charged with the cost of

materials, supplies, and expendable equipment used in connection

with providing protective services. This includes such cost as

uniforms and other personal equipment and the operation and

maintenance of electronic detection equipment and devices, alarm

systems, communication equipment (e.g., walkie-talkie), and

operation and maintenance of automotive and other movable equipment

used solely or primarily for providing protective services.

4480 Contract Cost. This account shall be charged with costs incurred in

connection with contracts entered into with tenant organizations;

municipal entities; and private security services for providing

protective services.

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IV\. Chart of Accounts

4480 Contract Cost (continued)

This account shall be charged with other contract costs, including

servicing of equipment and devices, rental of automotive equipment,

and mileage and/or other allowances paid to HA personnel for use of

their privately owned vehicles in connection with providing

protective services.

This account shall also be charged with the contract costs of a

professional consultant or recognized expert in crime control

engaged to develop protective services plans for the HA.

This account shall not be charged with travel costs incurred by HA

personnel in connection with travel to conventions, workshops,

trips to local HUD offices, or other out-of-town travel; such costs

shall be charged to Account 4150.

This account shall not be charged with the cost of any item of non-

expendable equipment of property betterments and additions; such

costs are chargeable to the appropriate account(s) in the 7500

group of accounts.

General Expense

4510 Insurance. This account shall be charged with the applicable

amount of all insurance and fidelity bond premiums including

insurance for workman\'s compensation.

4520 Payments in Lieu of Taxes. This account shall be charged with all

payments in lieu of taxes accruing to a municipality or other local

taxing body, including that portion of payments in lieu of taxes

which is to be applied as a reimbursement of payments of off-site

utilities.

4530 Terminal Leave Payments. This account shall be charged with

payments to employees for unused leave, pursuant to the HA\'s

established personnel policy, due upon termination of employment

with the HA.

If a former employee is reemployed prior to the expiration of the

annual leave for which payment has been made, the portion of the

terminal leave payment refunded to the HA upon re-employment shall

be credited to this account.

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4540 Employee Benefit Contributions. This account shall be charged with

HA contributions to employee benefit plans such as pension,

retirement, and health and welfare plans. It shall also be charged

with administrative expenses paid to the state or other public

agency in connection with a retirement plan, if such payment is

required by state law, and with trustee\'s fees paid in connection

with a private retirement plan, if such payment is required under

the retirement plan contract.

Insurance expense for workman\'s compensation shall not be charged

to this account, but shall be charged to Account 4510.

Deductions from compensation of employees for pension, retirement,

and health and welfare plans shall not be charged to this account,

but shall be considered a part of their gross earnings and charged

to the appropriate salary or labor account.

4570 Collection Losses. This account shall be charged with the amount of

past-due accounts of tenants who are no longer occupying a dwelling

unit in a project under the jurisdiction of the HA after all means

of collection have been exhausted. Accounts to be charged to

collection losses shall be approved by resolution of the Board of

Commissioners or by a designated official to whom such authority

has been delegated by resolution of the Board of Commissioners.

Collection loss amounts for MH and Turnkey III are accounts

receivable balances after offset of applicable homebuyer reserves.

This account shall be credited with collections made on accounts

previously charged to collection losses.

Allowance for Doubtful Tenant Accounts. As an option to expensing

annually in Account 4570 only uncollectible amounts for vacated

accounts, the HA (with Board approval) may estimate the amount of

uncollectible tenant accounts receivable at the end of the

reporting period and record an offsetting credit for the expensed

amount to an Allowance for Doubtful Tenant Accounts. If this option

is used, the Allowance for Doubtful Tenant Accounts (rather than

Account 4570) is debited, and Tenants Accounts Receivable (Account

1122\) credited, when the unit is vacated and all collection efforts

have failed. The Balance Sheet must reflect separately the total

balance in Account 1122 for all tenants accounts receivable not

formally written off and the offsetting amount of Allowance for

Doubtful Tenant Accounts.

Regardless of which method is used, tenants accounts receivable

(Account 1122) may not be formally written off unless the unit is

vacant and the amount due from the former tenant is considered

uncollectible.

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IV\. Chart of Accounts

4580 Interest on Administrative and Sundry Notes. This account shall be

charged with interest accruing on administrative notes payable to

HUD. It shall also be charged with interest accruing on sundry

notes other than off-site facility notes payable to HUD; interest

accruing on off-site facility notes is chargeable to Account 5610.

This account shall also be charged with that portion of the

interest on monies borrowed for development of the project which,

with the approval of HUD, is to be paid from operating receipts.

4590 Other General Expenses. This account is provided for recording the

cost of all items of general expense for which no specific account

is provided in this 4500 group of accounts. It shall include (I)

costs arising from personal injury to persons and damages to

property other than that of a locally owned or leased project, and

\(2\) the loss of cash and/or securities resulting from robbery or

theft, which is not covered by insurance, to the extent that such

cash and/or securities are not recovered. Unaccountable

differences in inventories of materials, supplies, and expendable

equipment shall be charged or credited to this account, as

appropriate.

Nonroutine Maintenance

4610 Extraordinary Maintenance. This account shall be charged with all

costs (labor, materials and supplies, expendable equipment, and

contract work) of repairs, replacements (but not replacements of

nonexpendable equipment), and rehabilitation of such substantial

nature that the work is clearly not a part of the routine

maintenance and operating program. Examples of this would be

replacement of all or a substantial portion of gas and heating

lines, regrading and rehabilitation of the grounds, and the

replacement of substantial portion of roof structures. Any item

budgeted as extraordinary maintenance shall be charged to this

account.

A HA may not find it necessary to use this account in a particular

year, since with an adequate preventive routine maintenance program

and proper design and construction, the need to undertake

extraordinary maintenance projects may never develop.

Whenever extraordinary maintenance work is undertaken, it is likely

that the HA will find it necessary to have the work done either by

contract or by employing a special labor crew, in order not to

neglect routine maintenance functions. However, if any of the

normal maintenance staff of the HA are detailed to an extraordinary

maintenance job, the wages of such employees while so engaged shall

be charged to this account.

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4610 Extraordinary Maintenance (continued)

This account shall also be charged with the gross salaries earned

by architectural and engineering employees who are employed for the

sole purpose of preparing plans and specifications for an

extraordinary maintenance job, but shall not be charged with any

part of the time of the regular technical and nontechnical

administrative staff of the HA.

This account shall be subdivided or maintained in such a manner as

to segregate costs for each extraordinary maintenance job.

This account shall not be charged with the replacement cost of

nonexpendable equipment nor with the cost of property betterments

and additions (see the descriptions of Accounts 7520 and 7540).

4620 Casualty Losses - Noncapitalized. This account shall be charged

with all costs (labor, materials and supplies, expendable

equipment, and contract work) of the restoration of property, such

as costs of restoration of site improvements, structures, or

equipment (but not replacement of nonexpendable equipment) damaged

by fire, tornado, earthquake, hail-storm, or other casualty, in all

cases where it is considered that the book value of the project has

not been materially affected by such loss and subsequent

restoration.

The cost of restoration of property occasioned by casualty losses,

in cases where it is considered that the book value of the project

has been materially affected by such loss and subsequent

restoration, shall not be charged to this account but shall be

charged to Account 7560, Casualty Losses - Capitalized.

This account shall be credited with the proceeds of claims against

insurers or others, arising from damage to property, when such

damage is considered not to have materially affected the book value

of the project.

In borderline cases, where there is a question whether the damage

to and subsequent restoration of property results in a change in

the book value of the project, preference shall be given to

considering that no change has occurred and to recording the

transaction in this account.

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IV\. Chart of Accounts

Rent for Leased Dwellings

4710 Rent to Owners of Leased Dwellings. This account shall be charged

with the rent paid or accrued to the owners of dwelling units

leased by the HA for low-income use in the Section 23 or Section 10

\(c\) programs.

4715 Housing Assistance Payments. This account shall be charged with

housing assistance payments for the Section 8 program paid or

accrued to the owners of dwelling units leased to eligible families

and for housing assistance payments paid or accrued to the owners

for vacancies during and after rent-up pursuant to a housing

assistance payments contract. This account shall also be charged

with housing assistance payments paid or accrued to owners for

reimbursement pursuant to the provisions of the housing assistance

payments contract of any unpaid rent or damages caused by the

tenant.

This account shall be credited (and Account 2690 debited) with the

portion of fraud recovery funds collected that are to be refunded

to HUD through reduction of the housing assistance payments.

A separate account shall be maintained for each housing assistance

payments project.

4715.P Section 8 Housing Assistance Payments - Portability. This account

is debited by the amount of HAP payments issued by the HA on behalf

of other HAs. The account is credited by the amount of NAP payments

for Portability participants that are billed to other HAs. It is a

subsidiary to Account 4000.P.

Other Accounts Not Affecting Residual Receipts

These accounts are provided for the purpose of recording items of

income and expense which are neither operating receipts nor

operating expenditures. These accounts are to be maintained for

each annual contributions contract and the transactions recorded

therein need not be segregated by project. These accounts are

closed to Account 2810 (or Account 2700) at fiscal year-end.

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5230 Interest on Debt Amortization Fund Investments. This account shall

be credited with interest received on investment securities

(including interest on time and savings accounts) purchased by the

fiscal agent from funds on deposit in the Debt Service Fund and

Advance Amortization Fund. This account shall also be credited with

any gain and debited for any loss on the sale of securities. The

gain or less on sale of securities represents the difference

between the total cost of securities sold, exclusive of accrued

interest at date of purchase, and the net amount received from the

sale, exclusive of accrued interest at date of sale.

For purposes of determining the gain or loss on the sale of

securities, the cost of securities includes brokerage and other

costs of acquisition, plus any premium paid or less any discount

received.

5240 Interest on Payments for Off-Site Utilities. This account shall be

credited (and Account 1145 debited) with the amount of interest

earned on loans to local governing or taxing bodies for financing

the construction of off-site facilities not included in the

development cost of the project.

5610 Interest on Notes and Bonds Payable. This account shall be charged,

after the latest date to which interest on borrowed monies is

chargeable to development cost (DOFA), with interest accruing on

outstanding Bonds, Permanent Notes, Project Loan Notes, and any

other notes for monies borrowed for development purposes. Prior to

such later date, the interest on notes and bonds shall not be

charged to this account, but to Account 1420.1. This account shall

also be charged with interest accruing on outstanding off-site

facility notes payable to HUD.

This account shall not be charged with that portion of the interest

on monies borrowed for development of the project which, with the

approval of HUD, is to be paid from operating receipts (See Account

4580).

5640 Bond Redemption Premiums. This account shall be charged with all

premiums on bonds purchased or redeemed by the HA in advance of

maturity.

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IV\. Chart of Accounts

Surplus Credits And Charges

6010 Prior Year Adjustments - Affecting Residual Receipts or Prior Year

Adjustments - Affecting Deficit. 14/ This account shall be used to

record adjustments affecting all income or expense accounts

(accounts in the 3000 and 4000 groups) of a prior fiscal year

which, in the judgment of the HA, distort current year operating

statements or might result in an overrun in the current year budget

if recorded in the current year expense accounts.

This account (in lieu of Account 3110) may be credited, when

Accounts 1122 or 1124 are debited, with the portion of retroactive

rent charges due to tenant fraud or misrepresentation which are

applicable to prior years. Retroactive rent charges for Mutual Help

projects are not credited to this account, but to Account 2171

(MEPA); retroactive rent charges for Section 8 tenants/owners are

not credited to this account, but to Account 2690.

A separate Account 6010 shall be maintained for each project or

group of projects for which a ate Statement of Operating Receipts

and Expenditures is required.

6020 Prior Year Adjustments-Not Affecting Residual Receipts. Adjustments

affecting any of the accounts in the 5000 group may be recorded in

this account.

6110 Gain or Loss From Disposition of Real Property. This account shall

be used to record the gain or loss arising from the disposition of

land or other real property after the date of full availability

(DOFA) or, in the case of projects conveyed for low-rent use, after

the date of conveyance. The amount to be recorded as a gain or loss

will be the aggregate of the actual or allocated cost of the

property disposed of and disposition expenses less the proceeds

derived from disposition.

6120 Gain or Loss From Disposition of Nonexpendable Equipment. This

account shall be used to record the gain or loss arising from the

disposition of nonexpendable equipment after the date of full

availability (DOFA) or, in the case of projects conveyed for low-

rent use, alter the date of conveyance. The amount to be recorded

as a gain or loss will be the difference between the acquisition

cost of the item disposed of and the proceeds derived from

disposition.

14/ The title \"Prior Year Adjustments - Affecting Residual Receipts\"
applies

to locally owned federally aided projects, whereas the title \"Prior
Year

Adjustments - Affecting Deficit\" is applicable to leased projects.

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IV\. Chart of Accounts

Provision For Reserves

The Provision for Reserve is the amount calculated at fiscal year end on
the

Statement of Operating Receipts and Expenditures (HUD 52599), or the
Year-End

Settlement Statement for Section 8 (HUD 52681), as the increase (or
decrease)

to the Operating/Program Reserve Accounts 2820-2827.

The following Provision for Reserve accounts (Accounts 7010-7027) are

provided for program identification purposes. The calculated amount from
the

HUD 52599 or HUD 52681 is recorded in the applicable Operating/Program

Reserve Account 2820-2827 (debit for decrease; credit for increase), and
the

offsetting entry may be made to the appropriate Provision for Reserve
Account

(which is then closed to Account 2810, Unreserved Surplus), or the
offsetting

entry may be made directly to Account 2810.

7010 Provision for Operating Reserve - Locally Owned Projects. This

account shall be debited (and Account 2820 credited) with the

amount of residual receipts of locally owned Federally aided low-

income projects set aside as an operating reserve. This account

shall be credited (and Account 2820 debited) with the amount of the

operating reserve applied toward the elimination of a deficiency in

residual receipts applicable to these projects or the amount by

which the operating reserve is to be reduced. At the close of each

fiscal year, the balance in this account shall be transferred to

Account 2810, Unreserved Surplus.

7011 Provision for Operating Reserve - Leased Projects. This account

shall be debited (and Account 2821 credited) with the amount of

residual receipts of leased low-income projects set aside as an

operating reserve. This account shall be credited (and Account 2821

debited) with the amount of the operating reserve applied toward

the elimination of a deficit applicable to these projects or the

amount by which the operating reserve is to be reduced. At the

close of each fiscal year, the balance in this account shall be

transferred to Account 2810, Unreserved Surplus.

7012 Provision for Operating Reserve - MH Projects. At the end of each

fiscal year this account shall be debited (and Account 2822

credited) with the amount by which operating receipts exceed the

operating expenses of the project. If the operating expenses

exceed the operating receipts of the project at the end of a fiscal

year then this account shall be credited (and Account 2822 debited)

for the amount of such excess to the extent of the credit balance

in Account 2822. At the close of each fiscal year, the balance in

this account shall be transferred to Account 2810, Unreserved

Surplus.

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IV\. Chart of Accounts

7013 Provision for Operating Reserve - Turnkey III - Homeownership. This

account shall be debited (and Account 2823 credited) with the

amount of residual receipts of a homeownership project (locally

owned or leased) set aside as an operating reserve. This account

shall be credited (and Account 2823 debited) with the amount of the

operating reserve applied toward the elimination ofa deficit

applicable to such project or the amount by which the operating

reserve is to be reduced. At the close of each fiscal year, the

balance in this account shall be transferred to Account 2810,

Unreserved Surplus.

A separate account shall be maintained for each Homeownership

Project.

7014 Provision for Operating Reserve - Section 23 HAP Projects. This

account shall be debited (and Account 2824 credited) with the net

income from the operation of HAP projects, that is, the amount by

which total operating receipts exceed total operating expenditures

for the fiscal year. If, at the end of any fiscal year, there is an

operating deficit (that is, the amount by which total operating

expenditures exceed total operating receipts for the fiscal year),

this account shall be credited (and Account 2824 debited) with the

amount of such deficit to the extent of the credit balance in

Account 2824. At the close of each fiscal year, the balance in this

account shall be transferred to Account 2810, Unreserved Surplus.

A single account may be maintained for all Section 23 HAP projects.

7016 Provision for Operating Reserves - Section 8 HAP Projects. This

account shall be debited (and Account 2826 credited) with the net

income from the operation of Section 8 HAP projects, that is, the

amount by which total operating receipts exceed total operating

expenditures for the fiscal year. If, at the end of the fiscal

year, there is an operating deficit (that is, the amount by which

total operating expenditures exceed operating income for the fiscal

year), this account shall be credited (and Account 2826 debited)

with the amount of such deficit to the extent of the credit balance

in Account 2826. At the close of each fiscal year the balance in

this account shall be transferred to Account 2810, Unreserved

Surplus. A single account shall be maintained for all Section 8 HAP

projects.

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IV\. Chart of Accounts

7025 Provision for Contingency Reserve - Section 23 HAP Projects. This

account shall be debited (and Account 2825 credited) with the

amount of the annual contribution approved by HUD for the project

reserve pursuant to Section 1.3 (c) of the annual contributions

contract. If the amount of the annual contribution required for any

fiscal year exceeds the maximum annual contribution stated in

Section 1.3a of the annual contributions contract, the amount of

the excess, to the extent approved by HUD, shall be credited to

this account (and debited to Account 2825), to the extent of the

credit balance in Account 2825. At the close of each fiscal year,

the balance in this account shall be transferred to Account 2810,

Unreserved Surplus.

A separate account shall be maintained for each project.

7027 Provision for Project/ACC Reserve Account - Section 8 HAP Projects.

This account shall be debited (and Account 2827 credited) with the

amount of annual contribution approved by HUD for the project

account pursuant to Section 1.4 (c) of the annual contributions

contract. If the amount of the annual contribution required for any

fiscal year exceeds the maximum annual contribution stated in

Section 1.4(a) of the annual contributions contract, the amount of

such excess, to the extent approved by HUD, shall be credited to

this account (and debited to Account 2827), to the extent of the

credit balance in Account 2827. At the close of each fiscal year,

the balance in this account shall be transferred to Account 2810,

Unreserved Surplus. A separate account shall be maintained for each

project.

MEMORANDUM ACCOUNTS

Operating Receipts For Repayment Of Off-site Utilities

This memoranda account is provided to accumulate, throughout a fiscal

year, the amount of cash received, payments remitted in lieu of taxes,

and utility charges remitted and applied after DOFA as reimbursement of

payments for off-site utilities or other facilities included in the

development cost of the project. Such reimbursements after DOFA

represent operating receipts or an offset to accrued operating

expenditures for payments in lieu of taxes or utility charges.

Reimbursements prior to DOFA are credited to Account 1400.2/1450. 15/

15/ This account shall not be used to record reimbursements received on

loans to local governing bodies for construction of off-site utilities

or other facilities not included in the development cost of the project.

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IV\. Chart of Accounts

7110 Receipts from Off-Site Utilities. This account shall be credited

(and Account 7190 debited) with the amount of cash received,

remitted payments in lieu of taxes, and remitted utility charges,

applied as reimbursement of payments for off-site utilities or

other facilities included in the Development Cost of the project.

This account balance is reported on the Form HUD 52599.

7190 Operating Receipts for Repayment of Off-Site Utilities - Contra.

The debit balance in this account shall, at all times, be equal to

the credit balance in Account 7110. After preparation of financial

statements at the end of each fiscal year, the credit balance in

Account 7110 shall be closed against the debit balance in this

Account 7190.

Operating Expenditures For Property

These memorandum accounts are provided to accumulate, throughout a

fiscal year, the operating receipts and expenditures arising from the

disposition or acquisition of real property and nonexpendable equipment.

These accounts are also used as a record of the proceeds from

disposition of property which are being reserved for subsequent

application as provided in the contract with HUD.

These account balances are reported on the forms HUD 52599 and HUD

52681\.

Separate accounts shall be maintained for each project or group of

projects for which a separate Statement of Operating Receipts and

Expenditures or Year-end Settlement Statement is required.

7520 Replacement of Nonexpendable Equipment. This account shall be

debited with the acquisition cost of nonexpendable equipment

purchased as a replacement of equipment of substantially the same

kind.

This account shall be credited with the trade-in allowance or the

proceeds from sale of equipment being replaced, if any.

This account shall not be credited with the proceeds from

disposition of nonexpendable equipment which is not to be replaced

or if the replacement constitutes a property betterment or addition

(see also the descriptions of Accounts 7530. 7540, and 7560).

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7530 Receipts From Nonexpendable Equipment Not Replaced. Except for

nonexpendable equipment constituting part of a former federally

owned project conveyed and operated for low-rent use under an

administration contract, this account shall be credited with the

proceeds from disposition of nonexpendable equipment which is not

to be replaced.

The proceeds from disposition of nonexpendable equipment, which

constitutes part of a former federally owned project conveyed and

operated for low-rent use under an administration contract and

which is not to be replaced shall be credited to Account 2118.

7540 Property Betterments and Additions. This account shall be debited

with the acquisition cost of capitalized property classified as a

betterment or addition. \"Acquisition cost\" means the cost of

labor, materials and supplies, expendable and nonexpendable

equipment, and contract costs incurred in connection with the

betterment or addition.

This section shall be credited with the proceeds from sale of

salvage materials, or the proceeds, including trade-in allowances,

from sale of nonexpendable equipment disposed of in connection with

a property betterment or addition, the cost of which is charged to

this account.

Property betterments and additions are defined below:

o Property betterments are capital expenditures for

extraordinary replacements which result in a substantial

betterment to structures, site, or non-expendable equipment.

A betterment is distinguished from repairs and maintenance in

that a betterment has the effect of extending the useful life

of a fixed asset, whereas repairs and maintenance have the

effect merely of keeping the asset in its customary state of

operating efficiency. Property betterments include such items

as replacement of manually fired heating boilers by mechanical

boilers, replacement of a shingle roof with a tile roof or

replacement of ice boxes with mechanical refrigerators. Minor

betterments to structures or site involving a total

expenditure of less than \$5000 need not be considered a

property betterment. The replacement of structural elements

due to normal wear and tear by items of substantially the same

kind represents repairs and maintenance and not a property

betterment. The replacement of nonexpendable equipment, due to

normal wear and tear, by items of substantially the same type

represents replacement costs and not a property betterment.

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IV\. Chart of Accounts

7540 Property Betterments and Additions (continued)

o Property additions are capital expenditures for additional

land, structures, and nonexpendable equipment, including

extensions, expansions, and enlargements. Minor additions to

real property, exclusive of land, involving a total

expenditure of less than \$5000 need not be considered a

property addition. Expenditures for expendable equipment,

regardless of cost, shall not be considered a property

addition except when items of expendable equipment are

purchased for and used - in connection with a property

addition.

7560 Casualty Losses - Capitalized. this account shall be debited with

the cost of reconstruction, restoration, or replacement of property

damaged or destroyed by fire, windstorm, tornado, accident, or

other casualty when such loss and subsequent reconstruction,

restoration, or replacement is considered to have materially

affected the book value of the project, except that the replacement

of nonexpendable equipment which has been damaged or destroyed

shall always be considered to materially affect the book value of

the project. \"Cost\" as used herein means the cost of labor,

materials and supplies, expendable and nonexpendable equipment, and

contract costs incurred in connection with the reconstruction,

restoration, or replacement.

When it is determined that the damage to and subsequent

reconstruction or restoration of property (other than nonexpendable

equipment) will not materially affect the book value of the

project, the cost of reconstruction or restoration and the proceeds

from claims against insurers or others shall not be recorded in

this account, but in Account 4620. In borderline cases, where there

is a question whether the damage to and subsequent reconstruction

or restoration or property results in a change in the book value of

the project, preference shall be given to considering that no

change has occurred and to record the transaction in Account 4620.

This account shall be credited with the proceeds of claims against

the insurers or others in connection with damaged or destroyed

property when the costs of reconstruction, restoration, or

replacement are charged to this account. If all or any part of the

damage to or destruction of a project is not reconstructed,

restored, or replaced, the proceeds of any claim against insurers

or others arising from such damage or reconstruction, to the extent

not used for reconstruction, restoration, or replacement, shall not

be credited to this account, but shall be applied in accordance

with the contract with HUD.

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IV\. Chart of Accounts

7580 Proceeds From Disposition of Property - Reserved. The credit

balance in this account represents the amount of cash in the

General Fund available for the replacement of nonexpendable

equipment, reserved for reconstruction or restoration of damaged

property, or pending other disposition as provided in the contract

with HUD.

This account shall be credited (and Account 7590 debited) with the

amount of proceeds from the disposition of property which is

eventually to be applied as an operating receipt (see description

of Account 7530); to be applied to the reduction of costs

chargeable to Accounts 7520, 7540, or 7560; or to be deposited in

the Advance Amortization Fund, paid to HUD, or such other

disposition as provided in the contract with HUD.

This account shall be debited and:

o account 7520 credited with the amount of proceeds from the

disposition of nonexpendable equipment applied to the cost of

a replacement at the time the replacement cost is recorded,

o account 7530 credited with the amount of proceeds from

disposition of nonexpendable equipment not replaced at the

time the determination is made not to purchase a replacement,

o account 7540 credited with the amount of proceeds from

disposition of nonexpendable equipment or salvage applied to

the cost ofa property betterment at the time such cost is

recorded,

o account 7560 credited with the amount of proceeds from claims

against insurers or others applied to the cost of

reconstruction, restoration, or replacement of damaged

property at the time such cost is recorded, and

o account 7590 credited with the amount of proceeds from the

disposition of property deposited in the Advance Amortization

Fund, paid to HUD, or otherwise applied pursuant to the

contract with HUD.

The credit balance in this account at the close of any period

represents cash in the General Fund available for replacement of

equipment, for reconstruction and restoration of damaged property,

for deposit in the Advance Amortization Fund, or for such other

purposes as provided in the contract with HUD. The credit balance

in this account at the end of each fiscal year shall be reported as

a footnote on the balance sheet submitted for such fiscal year.

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IV\. Chart of Accounts

7590 Operating Expenditures for Property - Contra. This account shall be

debited or credited as an offsetting entry to every credit or debit

entry made to any other one of this group of account. The debit or

credit balance of this account shall, at all times, be equal to the

net amount of the credit and debit balances in the other accounts

in this group. After preparation of all financial reports at the

end of each fiscal year, the balances in Accounts 7520,7530, 7540,

and 7560 shall be closed out against this account. After recording

these closing entries, the debit balance of this account, if any,

shall be equal to the credit balance in Account 7580.

Homebuyer Monthly Payment-Turnkey III Homeownership Projects

These memorandum accounts are used to accumulate the aggregate

amount of monthly payments charged to Turnkey III homebuyers and

the allocation of such payments as provided in 24 CFR 904.108 and

24 CFR 950.513. The entries are made in addition to the entries to

record monthly accounts receivable in Account 1124 and reflect the

relationship of the required monthly payment to the budgeted break-

even amount. At the close of the fiscal year, after preparing the

financial statements, the balances in Accounts 7710-7716 are closed

against the debit balance of Account 7790.

Recording the monthly Homebuyers Accounts Receivable is done by:

\(a\) crediting (or debiting for utility reimbursement) Account 1124

for the Homebuyers required monthly payment, (b) crediting Account

2161 (EHPA) for the budgeted EHPA amount, (c) crediting Account

2162 NRMR) for the budgeted NRMR amount, and (d) debiting or

crediting Account 3110 (Operating Income) for the net amount of

(a), (b),and (c).

The budgeted break-even amount is made up of (1) an amount for

operating expense, (2) the EHPA credit, and (3) the NRMR credit.

The monthly entry to record the memorandum accounts uses: (a) the

applicable per unit budgeted amount to credit Accounts 7710, 7712,

7714, (b) the Homebuyers required monthly payment (Account 1124) to

credit Account 7790, and (c) the difference between (a) and (b) to

debit or credit Account 7716.

7710 Operating Expense. This account shall be credited (and Account 7790

debited) with that part of the monthly break-even amount designated

on the operating budget for operating expense.

7712 Earned Home Payments. This account shall be credited (and account

7790 debited) with that part of the monthly break-even amount which

is to be credited to the homebuyers earned home payments account.

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IV\. Chart of Accounts

7714 Nonroutine Maintenance Reserve. This account shall be credited (and

Account 7790 debited) with that part of the monthly break-even

amount which is to be credited to the nonroutine maintenance

reserve for the homebuyer\'s home.

7716 Excess (or Deficit) in Break-Even. This account shall be credited

(and Account 7790 debited) with the amount by which the homebuyer\'s

required monthly payment exceeds the monthly break-even amount. In

the event the homebuyer\'s required monthly payment is less than the

monthly break-even amount, this account shall be debited (and

Account 7790 credited) with the amount of such deficiency.

7790 Contra. This is a contra account in which to record the offsetting

debit or credit entries to Accounts 7710, 7712, 7714, and 7716. At

the close of each fiscal year, the debit balance of this account

will represent the aggregate amount of monthly payments charged to

homebuyers during the fiscal year.

HUD Annual Contributions Earned

8010 Basic Annual Contribution Earned - Current Year-Leased

Projects. 16/ This account shall be credited (and Account 2210

debited) with the amount of the basic annual contribution earned

with respect to leased projects. At the close of each fiscal year,

the credit balance in this account shall be transferred to Account

2840, Surplus - Cumulative HUD Annual Contributions.

8011 Basic Annual Contribution Earned - Prior Year Adjustments - Leased

Projects. 16/ This account shall be used to record adjustments of

the basic annual contribution earned (Account 8010) for a prior

fiscal year. A debit balance in this account represents a reduction

in the amount of contributions earned for a prior fiscal year; a

credit balance represents an increase in the amount of

contributions earned for a prior fiscal year. At the close of each

fiscal year, the net debit or credit balance in this account shall

be transferred to Account 2840, Surplus - Cumulative HUD Annual

Contributions.

16/ A separate account shall be maintained for each project or group of

projects for which a separate Statement of Operating Receipts and

Expenditures is required.

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IV\. Chart of Accounts

8020 Contributions Earned - Operating Subsidy - Current Year. 16/ This

account shall be credited with the amounts received during the

fiscal year representing the annual contribution for operating

subsidy approved in the operating budget for such fiscal year. The

amount of approved operating subsidy received in the current fiscal

year, including amounts for year-end adjustments or special subsidy

distributions, must be reported on the Statement of Operating

Receipts and Expenditures (HUD 52599) as a single line item amount.

At the close of each fiscal year, the credit balance in this

account shall be transferred to Account 2840, Surplus - Cumulative

HUD Annual Contributions.

8025 Annual Contributions Earned - Section 23 HAP Projects. This

account shall be credited (and Account 2210 debited) with the

amount of annual contributions earned with respect to Section 23

HAP projects. Annual contributions earned represent the sum of the

amounts payable for HAP, administrative fee, and for such other

purposes as specifically approved by HUD, less the total of all

other items of operating receipts, if any, such as interest on

general fund investments, other income, and receipts from

nonexpendable equipment not replaced. For purposes of this

account, annual contributions earned do not include amounts

provided for security and utility deposits (see description of

Account 2168). At the close of each fiscal year, the credit balance

in this account shall be transferred to Account 2840, Surplus -

Cumulative HUD Annual Contributions.

A separate account shall be maintained for each project.

8026 Annual Contributions Earned - Section 8 HAP Projects. This account

shall be credited (and Account 2210 debited) with the amount of

annual contributions earned with respect to Section 8 HAP projects.

Annual contributions earned represent the sum of the amounts

payable for housing assistance payments, administrative fee, and

for such other purposes as specifically approved by HUD, less the

total of all items of operating receipts, if any, such as interest

on general fund investments, other income, and receipts from

nonexpendable equipment not replaced. At the close of each fiscal

year, the credit balance in this account shall be transferred to

Account 2840, Surplus - Cumulative HUD Annual Contributions.

A separate account shall be maintained for each project.

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IV\. Chart of Accounts

Grant Funds Received

8029.1 Development Grant Funds Received During Current Year. This
account

shall be credited with the amount of HUD funds received in the

current year for development of public and Indian housing projects

covered under an ACC.

8029.2 Modernization Grant Funds Received During Current Year. This

account shall be credited with the amount of HUD funds received in

the current year for modernization of projects as authorized in an

amendment to the ACC.

At the close of each fiscal year, the credit balances in these 8029

accounts shall be transferred to Account 2845, Cumulative HUD

Grants for Development/Modernization.

Homebuyers Payments - Property Acquisition

Under the terms of the homeownership agreements for the Turnkey III and

Mutual Help programs, the homebuyer can acquire homeownership either by

paying the balance due on the purchase price (calculated in accordance
with

the applicable regulations) or by financing the home through a mortgage
held

by the HA. The proceeds of sale are either remitted by the HA to HUD for

reduction of the project debt, or retained by the HA for use as
authorized by

HUD. Since proceeds of sale can be derived from a variety of
homeownership

sources (i.e., various homeownership reserves, homeownership credits,
and

cash at settlement), the amounts are aggregated in the Accounts 81
12-8116.2

(see below) prior to application by the HA.

Retention in Replacement Reserve. When the proceeds from the sale

of dwellings are eligible for retention by the HA as a result of

debt forgiveness, the credit balances in Accounts 8112-8116.1 are

transferred to Account 2854, Replacement Reserve-Proceeds from Sale

of Dwellings.

Reduction of notes. If the proceeds from sale of dwellings are not

eligible for retention, the funds are remitted to HUD. After the

close of the fiscal year, the HA shall pay to HUD the credit

balance of Accounts 8112-8116.1. Pending application of these funds

to the payment of the project debt, the remittance to HUD shall be

recorded as a debit to Account 1177, Deposits with HUD (credit

Account 1111.1, Cash - General Fund). Accounts 8112-8116.1 are

closed as indicated below.

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IV\. Chart of Accounts

Homebuyers Payments - Property Acquisition (continued)

Sale of units under Section 5h. When the HA sells HA-owned rental

units for the purposes of homeownership under the provisions of 24

CFR Part 906 or Part 950, Subpart P, proceeds of sale which are

eligible for retention shall be initially credited to Account 2854

pending implementation of the HUD-approved plan for use of

proceeds.

Property Ledger. The Land, Structures, and Equipment Account is

adjusted for the cost of dwellings sold by a debit to Account

1400.4 and a credit to Account 2890. Entries to the Property Ledger

are not required.

8112 Proceeds from Sale of Dwellings (TK III). This account shall be

credited with payments received on account of the purchase price of

dwellings acquired by homebuyers, including earned home payments

and/or nonroutine maintenance reserve funds applied to the purchase

price of the dwelling. A separate account shall be maintained for

each homeownership project.

At the close of each fiscal year, the portion of this account

balance which is to be remitted to HUD to be applied to the

reduction of the HA debt with respect to the project shall be

closed to Account 2855, Surplus-Cumulative Proceeds from Sale of

Dwellings. The credit balance of this account that represents funds

eligible for retention by the HA as a result of loan forgiveness

shall be transferred to Account 2854, Replacement Reserve-Proceeds

from Sale of Dwellings.

8114 Homebuyers Payments on Resale of Dwellings (TK III). This account

shall be credited (and Account 2164 debited) with those payments

received from former homebuyers on account of the resale of their

dwellings at a profit within 5 years of actual residence in their

dwellings alter becoming homeowners and for which such former

homebuyers are not eligible for a refund. A separate account shall

be maintained for each homeownership project.

At the close of each fiscal year, the credit balance of this

account shall be transferred to Account 2855, Surplus - Cumulative

Proceed from Sale of Dwellings.

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IV\. Chart of Account

8116.1 Cash Applied to Purchase Price off Dwellings. This account shall
be

credited with the amounts received for application to the purchase

price of dwellings acquired by MH homebuyers, including: (1) cash

payments received from the homebuyer at time of settlement; (2)

that portion of the homebuyer\'s monthly equity payment and

voluntary equity payments to be applied to the purchase price; and

\(3\) in the case of IHA Homeownership Financing, the mortgage

payments received by the IHA. The credit balance of this account

represents the proceeds from the sale of dwellings to be applied to

the reduction of the IHA\'s debt with respect to the project. This

account shall not be credited with the homebuyers unfunded reserves

applied to the purchase price of the dwellings. Such unfunded

reserves shall be credited to Account 8116.2.

At the close of each fiscal year, the portion of this account

balance which is to be remitted to HUD to be applied to the

reduction of the HA debt with respect to the project shall be

closed to Account 2855, Surplus-Cumulative Proceeds from Sale of

Dwellings. The credit balance of this account that represents funds

eligible for retention by the HA as a result of loan forgiveness

shall be transferred to Account 2854, Replacement Reserve-Proceeds

from Sale of Dwellings.

A separate account shall be maintained for each MH project.

8116.2 MH Unfunded Reserves Applied to Purchase Price of Dwellings. This

account shall be credited with the balances in the homebuyers (1)

Refundable MH Reserve (Account 2912), and (2) Unrefundable MH

Reserve (Account 2914) which are applied to the purchase price of

the dwellings.

At the close of each fiscal year, the credit balance of this

account shall be transferred to Account 2857.2, Surplus -

Cumulative MH Unfunded Reserves Applied to Purchase Price of

Dwellings. A separate account shall be maintained for each MH

project.

PIH Low-Rent Technical Accounting Guide January 1996 IV-101