HOUSING ASSISTANCE PAYMENTS

PROGRAM ACCOUNTING HANDBOOK 7420.6

CHAPTER 2

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CHAPTER 2. CLASSIFICATION AND DESCRIPTION OF ACCOUNTS

6\. CLASSIFICATION OF ACCOUNTS. These are the accounts prescribed for

the classification of transactions in connection with the PHA\'s

administration of Housing Assistance Payment Program projects

(Section 8 and Section 23) pursuant to the provisions of the Annual

Contributions Contract. Unless otherwise specified, all accounts

will apply to both Section 8 and Section 23 programs.

a\. Assets

Cash

1111.1 General Fund

1117 Petty Cash Fund

Accounts Receivable

1125 HUD

1127 Advance for Security and Utility Deposits 1/

1129 Other

Advances

1156 Unlimited Revolving Fund

1157 Other

Investments

1162 General Fund

Deferred Charges

1211 Prepaid Insurance

1290 Other

Property Assets

1400.4 Land, Structures, and Equipment

Undistributed Debits

1620 Ineligible Expenditures

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1 Applicable only to Section 23 HAP projects.

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USING ASSISTANCE PAYMENTS

7420.6 PROGRAM ACCOUNTING HANDBOOK

CHAPTER 2

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b\. Liabilities and Surplus.

Accounts Payable

2111 Vendors and Contractors

2117 Payroll Deductions and Contributions

2118 HUD

2119 Other

Accrued Liabilities

2135 Salaries and Wages

2139 Other

Trust and Deposit Liabilities

2168 Annual Contribution for Security and Utility

Deposits 1

Deferred Credits

2210 Prepaid Annual Contributions

2290 Other

Undistributed Credits

2690 Undistributed Credits

Surplus

2810 Unreserved Surplus

2825 Reserved Surplus - Contingency Reserve - Unfunded

Section 23 HAP

2826 Reserved Surplus - Operating Reserve - HAP Projects

2827 Reserved Surplus - Project/ACC Reserve Account

\- Unfunded - Section 8 HAP

2840 Cumulative HUD Annual Contributions

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1 Applicable only to Section 23 HAP Projects

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HOUSING ASSISTANCE PAYMENTS

PROGRAM ACCOUNTING HANDBOOK

7420.6 CHG 2

Chapter 2

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2850 Cumulative Donations

c\. Income.

3000 Income (Control)

\* 3300 Interest on Reserved Surplus Operating Reserve

\- HAP Projects \*

Subsidiary Accounts to Account 3000, Income (Control)

3610 Interest on General Fund Investments

3690 Other Income

d\. Expenses.

4000 Expenses (Control)

Subsidiary Accounts to Account 4000, Expenses (Control)

4010 Preliminary Administrative Expense - Prior to ACC

4012 Preliminary Administrative Expense - After ACC

4110 Administrative Salaries

4130 Legal Expense

4150 Travel

4170 Accounting and Auditing Fees

4180 Office Rent

4190 Sundry Administrative Expense

4400 Maintenance and Operation (Nonexpendable Equipment

Only)

4510 Insurance Expense

4530 Terminal Leave Payments

4540 Employee Benefit Contributions

4590 Other General Expense

4715 Housing Assistance Payments

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HOUSING ASSISTANCE PAYMENT

PROGRAM ACCOUNTING HANDBOOK

7420.6 CHG 2

Chapter 2

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Surplus Credits and Charges

\* 6010 Prior Year Adjustments - Affecting Residual Receipts \*

or Prior Year Adjustments - Affecting Deficit

6120 Gain or Loss From Disposition of Nonexpendable

Equipment

Provision for Reserves

7016 Provision for Operating Reserve - HAP Projects

7025 Provision for Contingency Reserve - Section 23 HAP

Projects

7027 Provision for Project/ACC Reserve Account

\- Section 8HAP Projects

Operating Expenditures for Property

7520 Replacement of Nonexpendable Equipment

7530 Receipt From Nonexpendable Equipment Not Replaced

7540 Property Betterments and Additions

7590 Operating Expenditures for Property - Contra

Annual Contributions Earned

8026 Annual Contributions Earned - HAP Projects

7\. DESCRIPTION OF ACCOUNTS.

A. Assets.

1111.1 Cash - General Fund. The debit balance of this account

represents General Fund cash on deposit or to be

deposited with a bank or banks which are covered by a

General Depositary Agreement, for the administration of

projects in accordance with an ACC with HUD.

1117 Cash - Petty Cash Fund. The debit balance of this

account represents the amount of cash set aside, not in

excess of the amount authorized by PHA resolution, as

an imprest fund for the payment of minor expenses.

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HOUSING ASSISTANCE PAYMENTS

PROGRAM ACCOUNTING HANDBOOK

7420.6

CHAPTER 2

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1125 Accounts Receivable - HUD. The debit balance of this

account represents amounts due from HUD.

1127 Accounts Receivable - Advances for Security and Utility

Deposits. The debit balance of this account represents

the unpaid balances of security and utility deposits

advanced by the PHA on behalf of Families participating

in the Section 23 HAP program. This account shall be

supported by a subsidiary ledger showing the balance due

from each Family. A separate subsidiary ledger shall be

maintained for each project.

1129 Accounts Receivable - Other. The debit balance of this

account represents accounts receivable due from others

than HUD or Families for advances made for security and

utility deposits. This account shall be subdivided or a

subsidiary ledger shall be maintained to segregate the

amount due from each debtor.

1156 Advances - 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 PHA.

1157 Advances - 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 PHA. 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.

1162 Investments - General Fund. This account shall be

debited with the cost of securities purchased from monies

on deposit in the General Fund, with the amount of such

funds deposited in time or savings accounts and with

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HOUSING ASSISTANCE PAYMENTS

7420.6 PROGRAM ACCOUNTING HANDBOOK

CHAPTER 2

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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. This account shall be credited with the cost

of securities sold and with the amount withdrawn from

time and savings accounts.

1211 Deferred Charges - Prepaid Insurance. The debit balance

of this account represents the unexpired portion of

stock and mutual company insurance premiums. Prior to

the end of the fiscal year, an adjusting entry shall be

made to transfer the cost of insurance expired to the

appropriate expense account.

1290 Deferred Charges - Other. The debit balance of this

account represents the amount of prepaid expenses other

than prepaid insurance.

1400.4 Land, Structures, and Equipment. This account shall be

debited with the acquisition cost of nonexpendable

equipment and property betterments and additions. The

cost of property purchased from cash donations and the

value of donations in kind shall also be charged to this

account and credited to Account 2850, Cumulative

Donations. This account shall be supported by a

property ledger.

1620 Undistributed Debits - 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.

b\. Liabilities and Surplus.

2111 Accounts Payable - Vendors and Contractors. The credit

balance of this account represents amounts payable on

open accounts including contract billings for housing

assistance payments rendered by housing owners. A

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HOUSING ASSISTANCE PAYMENTS

PROGRAM ACCOUNTING HANDBOOK 7420.6

CHAPTER 2

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subsidiary ledger shall be maintained to identify the

accounts payable to vendors and contractors.

2117 Accounts Payable - 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, 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.

2118 Accounts Payable - HUD. This account shall be credited

with any amounts which become due and payable to HUD

with respect to projects under an ACC.

2119 Accounts Payable - Other. The credit balance of this

account represents sundry payable items not applicable to

other specific accounts.

2135 Accrued Liabilities - Salaries and Wages. The credit

balance of this account represents the amount of

salaries and wages accrued and unpaid.

2139 Accrued Liabilities - Other. The credit balance of this

account represents the amount of accrued liabilities not

applicable to other specific accounts.

2168 Trust and Deposit Liabilities - Annual Contributions for

Security and Utility Deposits. This account shall be

credited with annual contribution payments received from

HUD which are to be used exclusively for making advances

on behalf of eligible Families for security and utility

deposits in Section 23 HAP Projects. This account shall

be debited (and Account 1127 credited) with the unpaid

balances of accounts due from Families on account of

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HOUSING ASSISTANCE PAYMENTS

7420.6 PROGRAM ACCOUNTING HANDBOOK

CHAPTER 2

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advances for security and utility deposits which are

subsequently determined to be uncollectible after all

means of collection have been exhausted. The amounts

charged to this account as uncollectible 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.

A separate account shall be maintained for each Section

23 HAP project, and the account for each such project

shall be subdivided as follows:

Account 2168.1, Security and Utility Deposit Funds

Provided. The credit balance of this subaccount

represents total annual contribution payment received

from HUD to be used exclusively for making advances on

behalf of eligible Families for security and utility

deposits.

Account 2168.2, Security and Utility Deposits

\- Uncollectible Advances. The debit balance of this

account represents the aggregate amount of unrecovered

advances for security and utility deposits which have

been written off as uncollectible.

2210 Deferred Credits - 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 annual contributions for HAP projects and

with the amount of advances, if any, received from HUD

on account of other annual contributions for which the

PHA is eligible. At the end of each fiscal year, this

account shall be debited (and Account 8026 credited)

with the amount of annual contributions earned during

the fiscal year. 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 received for

the year. If partial payments received for the fiscal

year exceeds the amount of the earned annual

contributions, this account shall be debited (and Account

2118 credited) with the amount of unearned annual

contributions to be refunded to HUD.

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HOUSING ASSISTANCE PAYMENTS

PROGRAM ACCOUNTING HANDBOOK 7420.6

CHAPTER 2

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2290 Deferred Credits - Other. The credit balance of this

account represents sundry receipts which are applicable

to a future period.

2690 Undistributed Credits. The credit balance of this

account represents sundry receipts, the nature of which

cannot be immediately 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. In any event, all credits to

this account must be distributed prior to the end of the

fiscal year.

2810 Surplus - Unreserved Surplus. The credit or debit

balance of this account represents the amount of surplus

(or deficit) from the administration of the HAP projects.

At the close of each fiscal year, the balances of

the accounts in the 3000, 4000 groups of accounts and

the balances in Accounts 6120, 7016, 7025, and 7027,

shall be closed into this account.

2825 Reserved Surplus - Contingency Reserve - Unfunded

\- Section 23 HAP. This account shall be credited (and

Account 7025 debited) with the amount of the annual

contribution approved by HUD for the contingency 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 - HAP Projects.

This account shall be credited (and Account 7016

debited) with the amount by which total project receipts

of the HAP projects exceed the total expenditures for

the administration of such projects for the fiscal year.

If the total expenditures exceed the total project

receipts for a fiscal year, the amount of the excess

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

7016 credited), to the extent of the credit balance in

this account. The credit balance in this account shall

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HUD-Wash., D. C.

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HOUSING ASSISTANCE PAYMENTS

PROGRAM ACCOUNTING HANDBOOK

7420.6 CHG 2

Chapter 2

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be available for use by the PHA for projects other

than HAP projects and for other enterprises of the

PHA. If this reserve is used for purposes not

related to the HAP projects, this account shall be

debited (and Account 1111.1 credited) for the

amount of cash withdrawn for such other purposes.

\* Not less than once each quarter, this account shall

be credited (Account 3300 debited) with investment

income on Operating Reserve funds. \*

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

the Annual Contributions Contract. If the amount

of the annual contributions required for any fiscal

year exceeds the maximum annual contributions set

forth in 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 7027), provided such excess does not exceed

the credit balance in this account. A separate

account shall be maintained for each Section 8

project under an Annual Contribution Contract. See

Chapter 1, paragraph 3, for definition of project.

2840 Surplus - 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 HAP projects

under Annual Contributions Contracts.

2850 Surplus - Cumulative Donations. The credit balance

of this account represents cash donated and the

reasonable value of property donated to the project,

as determined by the PHA with the approval of HUD.

c\. Income.

\* 3000 Income (Control). This account shall be credited

with the aggregate amount of income derived from

all sources for the administration of the project

and shall control the detail entries recorded in

accounts 3610 and 3690, subsidiary income accounts. \*

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HOUSING ASSISTANCE PAYMENTS

PROGRAM ACCOUNTING HANDBOOK

7420.6 CHG 2

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\* 3300 Interest on Reserved Surplus - Operating Reserve

HAP Projects. This account shall be credited with

interest income on Operating Reserve funds,

including interest on time and savings accounts.

This account shall also be credited with any gain

and debited for any loss on securities sold. The

gain or loss represents the difference between the

total cost of securities sold, exclusive of accrued

interest at the date of purchase and the net amount

received from the sale of such securities, exclusive

of accrued interest at the date of the sale. For

purpose of determining the gain or loss on the sale

of securities, \"cost\" includes brokerage and costs

of acquisition, plus any premium paid or less any

discount received at time of purchase of the

securities. 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 each HAP project

under an Annual Contributions Contract. See Chapter

1, paragraph 3, for definition of a project. This

account is not a subsidiary to Account 3000. \*

Subsidiary Accounts to General Ledger Account 3000, Income

(Control)

3610 Interest on General Fund Investments. This account

shall be credited with interest on General Fund

\* investments (except for interest on operating

reserve funds, which shall be credited to account

3300), including interest on time and savings \*

accounts. This account shall also be credited with

any gain and debited for any loss on securities

sold. The gain or

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HOUSING ASSISTANCE PAYMENTS

PROGRAM ACCOUNTING HANDBOOK 7420.6

CHAPTER 2

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loss represents the difference between the total cost of

securities sold, exclusive of accrued interest at the

date of purchase and the net amount received from the

sale of such securities, exclusive of accrued interest

at the date of sale. For purpose of determining the

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

brokerage and costs of acquisition, plus any premium

paid or less any discount received at time of purchase

of the securities. Separate accounts shall be

maintained for each HAP project under an Annual

Contributions Contract. See Chapter 1, paragraph 3, for

definition of project.

3690 Other Income. This account shall be credited with

income from the administration of the project which

cannot be otherwise classified. Separate accounts shall

be maintained for each HAP project under an Annual

Contributions Contract. See Chapter 1, paragraph 3, for

definition of project.

d\. Expenses.

4000 Expenses (Control). This account shall be charged with

the aggregate amount of all expenses incurred in the

administration of the project and shall control the

detail entries recorded in the 4000 group of subsidiary

expense accounts.

Subsidiary Accounts to General Ledger Account 4000, Expenses

(Control).

4010 Preliminary Administrative Expense-Prior to ACC. This

account shall be charged with administrative expense

incurred by the PHA prior to the execution of the Annual

Contributions Contract to the extent approved by HUD.

This account shall be limited to PHA direct expenses and

shall not include any PHA overhead expense. This

account shall be subdivided to classify administrative

expense as follows:

4010/4110 Administrative Salaries

4010/4130 Legal Expense

4010/4150 Travel

4010/4190 Sundry Administrative Expense

4010/4540 Employee Benefit Contributions

Separate accounts shall be maintained for each project.

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HOUSING ASSISTANCE PAYMENTS

7420.6 PROGRAM ACCOUNTING HANDBOOK

CHAPTER 2

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4012 Preliminary Administrative Expense - After ACC. 1/

With respect to all New Construction and Substantial

Rehabilitation projects, this account shall be

charged with the administrative expenses incurred

by the PHA during the period commencing on the date

the Annual Contributions Contract (Part 1) is

executed and ending on the last day of the month

preceding the beginning of the first fiscal year

for the project. 2/ For the PHA\'s Section 8

Existing program, this account shall be charged

with the preliminary expenses incurred by the PHA

and approved by HUD, for the period commencing on

the date the Annual Contributions Contract is

executed. No costs shall be charged to this

account after the term of the approved leasing

schedule has ended. (See Paragraph 4-9b of Handbook

7420.3 REV.)

This account shall be subdivided to classify these

preliminary administrative expenses as follows:

4012/4110 Administrative Salaries

4012/4130 Legal Expense

4012/4150 Travel

4012/4170 Accounting and Auditing Fees

4012/4180 Office Rent

4012/4190 Sundry Administrative Expense

4012/4400 Maintenance and Operation

(Nonexpendable equipment only)

4012/4510 Insurance

4012/4540 Employee Benefit Contributions

4012/4590 Sundry General Expense

4110 A separate account shall be maintained for each

project.

Administrative Salaries. This account shall be

charged with gross salaries earned by PHA personnel

engaged in administrative work.

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1/ This account shall not be used for Section 23 Existing

projects.

2/ The first fiscal year begins on the effective date of the

HAP Contract.

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HOUSING ASSISTANCE PAYMENTS

PROGRAM ACCOUNTING HANDBOOK 7420.6

CHAPTER 2

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4130 Legal Expense. This account shall be charged with

retainers and fees paid to attorneys for legal services

relating to the PHA\'s administration of the projects.

This account shall be charged with the gross salaries or

applicable portion thereof earned by staff attorneys for

legal work relating to the administration of the

projects.

4150 Travel. This account shall be charged with travel

expenses of officials and employees of the PHA traveling

on official business in connection with HAP projects.

4170 Accounting and Auditing Fees. This account shall be

charged with fees to accountants or computer service

firms for maintenance of the PHAs books of account and

fees to independent public accountants for periodic

audit of the PHA\'s books of account.

4180 Office Rent. 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 PHA is used for any program

other than the HAP program, then the HAP program shall

only be charged with its allocable share of the cost.

If the PHA is utilizing facilities for the administration

of its HAP program which are a part of the

PHA\'s other low-income housing program, this account

shall be charged with a reasonable amount, as

determined by the PHA, which is sufficient to cover the

costs of maintenance, utilities, etc., of the space

provided for use in administering the PHA\'s HAP program.

4190 Sundry Administrative Expense. This account is provided

for recording the cost of all items of administrative

expense for which no specific account is prescribed in

the 1400 group of accounts.

4400 Maintenance and Operation (Nonexpendable Equipment

Only). This account shall be charged with the costs

incurred for maintenance and repair of office furniture

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HOUSING ASSISTANCE PAYMENT

PROGRAM ACCOUNTING HANDBOOK

7420.6 CHG 2

Chapter 2

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and equipment and with the maintenance and operating

cost of automobiles, if any, being used in connection

with the PHA\'s HAP program.

4510 Insurance. This account shall be charged with the

applicable amount of all insurance and fidelity bond

premiums, including workmen\'s compensation insurance.

4530 Terminal Leave Payments. This account shall be charged

with payments to employees for unused leave, pursuant

to the PHA\'s established personnel policy, due upon

termination of employment with the PHA.

4540 Employee Benefit Contributions. This account shall be

charged with the PHA\'s contributions to employee benefit

plans such as pension, retirement, and health and

welfare plans. It shall include employer contributions

for FICA taxes, unemployment insurance, taxes, etc.

4590 Other General Expense. This account is provided for

recording costs of all items of general expense for

which no specific account is provided in this 4500

group of account.

4715 Housing Assistance Payments. This account shall be

charged with housing assistance payments paid or

accrued to the owners of dwelling units leased to

eligible families and for housing assistance payments

paid or accrued to owners for vacancies during and

after rent-up pursuant to the provisions of the Housing

Assistance Payments Contract with the PHA and the

owner. This account shall also be charged with housing

assistance payments paid or accrued to owners for

reimbursement, pursuant to the Housing Assistance

Payment Contract, of any unpaid rent or damage caused

by the tenant.

e\. Surplus Credits and Charges.

\* 6010 Prior Year Adjustments - Affecting Residual Receipts or

Prior Year Adjustments - Affecting Deficit. This

account shall be debited or credited, as applicable,

for adjustments affecting the income or expense accounts

(accounts in the 3000 and 4000 group except account

3600\) of a prior year for on-going administration cost

and preliminary cost. This account should be maintained

to differentiate the adjustments to preliminary cost

and the adjustments to on-going cost. A separate

Account 6010 shall be maintained for each project or

each group of projects for which a separate Form \*

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HOUSING ASSISTANCE PAYMENT

PROGRAM ACCOUNTING HANDBOOK

7420.6 CHG 2

Chapter 2

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\* HUD-52682, Statement of Operating Receipts and

Expenditures, is required. \*

6120 Gain or Loss From Disposition of Nonexpendable Equipment.

This account shall be used to record the gain or

loss from the disposition of nonexpendable equipment

purchased from project receipts of a HAP project. 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.

\*U.S. GOVERNMENT PRINTING OFFICE: 1981-0-341-215/56

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USING ASSISTANCE PAYMENTS

PROGRAM ACCOUNTING HANDBOOK 7420.6

CHAPTER 2

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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.

f\. Provision for Reserves.

7016 Provision for Operating Reserve - HAP Projects. This

account shall be debited (and Account 2826 credited)

with the net income from the administration of HAP

projects. If at the end of the fiscal year, there is an

operating deficit 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

HAP projects.

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 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 Section 23 HAP 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

contributions approved by HUD, for the reserve, pursuant

to the Annual Contributions Contract. If the amount of

the annual contribution required for any fiscal year

exceeds the maximum annual contribution available under

the ACC, the amount of such excess, to the extent

approved by HUD,

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HOUSING ASSISTANCE PAYMENTS

7420.6 PROGRAM ACCOUNTING HANDBOOK

CHAPTER 2

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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. Separate accounts shall be

maintained for each Section 8 project under an Annual

Contributions Contract. See Chapter 1, paragraph 3,

for definition of project.

g\. Operating Expenditures For Property. These memorandum accounts

are provided for the purpose of accumulating, throughout the

fiscal year, the operating receipts and expenditures arising

from the disposition or acquisition of nonexpendable equipment

which is purchased specifically for use in the administration of

the PHA\'s HAP program as approved by HUD. Separate accounts

shall always be maintained by project.

7520 Replacement of Nonexpendable Equipment. This account

shall be debited with the acquisition cost of nonexpendable

equipment purchased as a replacement 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 description of Accounts 7530 and 7540).

7530 Receipts From Nonexpendable Equipment Not Replaced.

This account shall be credited with the proceeds from

disposition of nonexpendable equipment which is not to

be replaced.

7540 Property Betterments and Additions. This account shall

be debited with the acquisition cost of capitalized

property classified as a property betterment or

addition. \"Acquisition Cost\" means the cost of

expendable and nonexpendable equipment, and contract

costs incurred in connection with the betterment or

addition. This account 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.

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HOUSING ASSISTANCE PAYMENTS

PROGRAM ACCOUNTING HANDBOOK 7420.6

CHAPTER 2

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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 accounts. 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 of this group. After preparation

of all financial reports at the end of each fiscal

year, the balances in Accounts 7520, 7530, and 7540

shall be closed out against this account.

h\. Annual Contributions Earned.

8026 Annual Contributions Earned - HAP Projects. This

account shall be credited (and Account 2210 debited)

with the amount of annual contributions earned with

respect to each HAP project. Annual contributions

earned represent the sum of the amounts paid or

payable for housing assistance payments, administrative

fee, and for such other purposes as specifically

approved by HUD, less the total of all project

receipts, if any, such as interest on general fund

investment, other income, and receipts from

non-expendable 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 and shall

be maintained in such a way that the annual contributions

earned for Housing Assistance Payments, Preliminary

Costs and the Administrative Fee can be

determined at any time.

8-9. RESERVED.

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