U.S. Department of Housing and Urban Development

H O U S I N G

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Special Attention of: Notice H 92-63 (HUD)

All Regional Directors of

Housing Issued: August 12, 1992

All Regional Contracting Expires: August 31, 1993

Officers
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All Field Office Managers Cross References:

All Directors of Housing

Management Notices 91-12, 91-75, and 92-8

All Chief Property Officers Handbook 4210.5

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Subject: Single Family Accounting Management System

Internal Controls

Implementation of the Single Family Accounting

Management System (SAMS) has greatly enhanced the ability of

various levels of management to track and monitor single

family property disposition activities. It has provided

on-line information regarding the performance of the many

closing agents, property managers, and vendors with whom the

Department conducts business. However, a good automated

system needs equally good associated procedures and internal

controls if the Department\'s exposure to fraud is to be

minimized.

To determine the adequacy of procedures and internal

controls associated with SAMS, an audit was conducted by the

Office of Inspector General. The Federal Housing

Administration Comptroller also commissioned the auditing

firm of Peat Marwick to conduct an internal control review.

Their reports indicate several areas where additional

internal controls and improved procedures are needed.

This Notice announces the requirements for

implementation of these internal controls and procedures as

follows:

o Revised policy and procedures effective

October 1, 1992, for disbursements processed

through SAMS (Attachment I):

\- Each form SAMS-1106, Invoice Transmittal,

including those prepared by Area Management

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HFMPR : Distribution: W-3-1, W-2(H), W-3(A)(H)(OGC)(ZAS), W-4(H), R-1,
R-2,

R-3, R-3-1(H), R-3-2, R-3-3, R-6, R-6-1, R-6-2,

R-7-1, R-7-2, R-8

Previous Editions Are Obsolete HUD 21B(3-80)

GPO 871 902

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Brokers (AMBs), must be approved by the Chief

Property Officer (CPO) or designee before it

is submitted to Data Prompt, Inc. (DPI).

\- Each form SAMS-1106 must be reviewed in

accordance with revised instructions

contained in Attachment I, including the new

requirement for the full signature of the CPO

or designee on each form submitted.

o The establishment of procedures, effective

October 1, 1992, for the separation of duties in

relation to the maintenance of SAMS vendor files

(Attachment II):

\- To prevent the fraudulent creation of vendors

in SAMS, the Field Office Manager or designee

must verify and approve the identification

information provided by vendors who wish to

conduct business with HUD.

\- The individual responsible for adding,

changing, or deactivating vendors in the SAMS

Global Subsystem is the Field Office Manager

or designee. It must not be the CPO or an

employee who reports to the CPO.

\- The Field Office Manager or designee must

verify the accuracy of any additions or

changes to vendor information in SAMS

submitted the previous month and also certify

to the accuracy of the vendor file on an

annual basis. After the receipt and review

of the SAMS Payee/Payor report (GB RP EO)

scheduled for distribution in early October,

the Field Office Manager or designee will

submit a certification of accuracy to

Headquarters to be received no later than

November 30, 1992. Detailed instructions

will be included with the report.

o Revised guidelines effective immediately for Field

Office\'s review and closing agent\'s preparation of

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3

the Settlement Statement, HUD-1 (Attachment III):

\- A letter will be sent to all closing agents

no later than August 31, 1992, reminding them

of their responsibility (1) to certify and

sign the HUD-1 and require the purchaser to

sign that document; and (2) to enter sales

information on the proper designated lines of

the HUD-1.

In addition to the new policy directives, this Notice

includes six revised and two new forms to be implemented on

or before October 1, 1992. All previous versions must be

discontinued after that date. The forms attached hereto

are:

SAMS-1106 (Rev. 8/92) Invoice Transmittal

SAMS-1111 (Rev. 8/92) Trade/Service Vendor\'s

Information

SAMS-1112 (New 8/92) Non-vendor Payment Information

SAMS-1115 (Rev. 8/92) Property Manager/Closing Agent

Information

SAMS-1116 (Rev. 8/92) Selling Broker Information and

1116A Certification

SAMS-1117 (New 8/92) Information for Vendor

Deactivation

SAMS-1120 (Rev. 8/92) Funds Reclassification

SAMS-1204 (Rev. 8/92) Authorized Signatures (for

vendor file maintenance)

Camera-ready copies of these forms will be provided to

each Field Office no later than September 1, 1992.

This Notice is issued to communicate the urgent and

essential nature of implementing the policy and procedures

contained herein. Information on the topics contained in

this Notice will be incorporated in the revised Property

Disposition Handbook, One to Four Family Properties, 4310.5.

Please ensure this information is immediately

distributed to all appropriate staff. If you have any

questions or require additional information about processing

invoices for payment through SAMS or reviewing the HUD-1,

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4

Settlement Statement, please contact the Real Property

Branch of the Single Family Post Insurance Division on

FTS (202) 708-4029. Questions regarding vendor file

maintenance should be directed to the Systems Management

Branch of the Single Family Property Disposition Division on

FTS (202) 708-4012.

Arthur J. Hill

Assistant Secretary for Housing

\- Federal Housing Commissioner

Attachments

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Attachment I

SAMS DISBURSEMENT PROCESSING

Change in AMB Disbursement Procedures

Effective October 1, 1992, Area Management Brokers (AMB)

working under existing contracts must send all forms

SAMS-1106 to the Field Office for review and approval, and,

if appropriate, to the Contracting Officer. AMBs will no

longer be permitted to forward forms SAMS-1106 directly to

DPI to request payment. To avoid payment delays, Field

Offices must immediately inform AMBs still under contract to

HUD of the changes in procedure. Real Estate Asset Managers

(REAM) and Exclusive Listing Brokers (ELB) will continue to

send all forms SAMS-1106 to the Field Office, never directly

to DPI.

New CPO Signature Requirement

Also effective October 1, 1992, CPO or designee must SIGN,

not initial, all forms SAMS-1106 before they are sent to the

Certifying Officer for payment authorization. The signatures

should be written in blue ink to facilitate DPI\'s review of

the form. Both the form SAMS-1106 and the SAMS Transmittal

Created Report, AP RP TB, have been revised accordingly. Any

prompt payment penalties incurred as the result of a

transmittal being returned for lack of the CPO\'s signature

will be attributed to the Field Office.

Separation of Duties

Field Office Managers are reminded of existing requirements

for Departmental staff with regard to separation of duties

between contracting and payment functions. In accordance

with the Property Disposition Contracting Handbook, 4320.1

REV 1, \"In order to promote proper internal controls, Field

office and AMB/PM procurement actions must be processed in a

manner which ensures that persons who place purchase orders

are not also assigned responsibility for inspecting and

accepting delivery or performance.\" This requirement

includes the approval of the form SAMS-1106 payment package.

In addition, the Certifying Officer who signs the form

SAMS-1106 payment package must be an individual outside the

Property Disposition Branch. A Certifying Officer cannot

serve as the authorizing official.

Authorized Signature Cards

Field Office Certifying Officers will still be required to

have a current SF 210, Signature/Designation Card, on file

with DPI. In regard to form SAMS-1106 disbursements, the

form SAMS-1204, Authorized Signature Request, is NOT required

for AMBs as of October 1, 1992. Beginning on that date,

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Attachment I

Page 2

DPI\'s responsibility for validating signatures will be

limited to verifying the authenticity of the Field Office

Certifying Officer\'s signature and stamp and ensuring that a

signature appears on line 17.b., Reviewer\'s Signature (CPO or

designee), on the form SAMS-1106.

Review of Forms SAMS-1106

It is important that all information included on the

form SAMS-1106 be accurate, especially those items identified

with an asterisk on the list below. If any item is

inaccurately completed or if the form is not signed by both

the CPO or designee and the authorized Certifying Officer,

the form will be rejected by DPI and returned to the Field

Office for correction. A revised form SAMS-1106 completes

Attachment I of this Notice.

Before signing on line 17.b., the CPO or designee is

responsible for carefully reviewing each form SAMS-1106 to

verify:

\- the work was appropriate, acceptable, and

necessary;

\- the price was reasonable and customary for the

area;

\- the REAM\'s or AMB\'s (or ELB\'S, as appropriate)

non-system generated \"TRANSMITTAL NUMBER\" conformed to

the format required in HUD Notice H 91-75;

-\* the vendor\'s \"EO-NA\" identifier was noted on line

5, or a form SAMS-1111, Trade/Service Vendor\'s

Information; form SAMS-1112, Non-vendor Payment

Information; form SAMS-1115, Property

Manager/Closing Agent Information; or form SAMS-1116,

Selling Broker Information and Certification,

was attached to the form SAMS-1106. (Note: Field

Offices should remind AMBs/REAMs/ELBs of possible

delays in processing forms SAMS-1106 for new

vendors not yet established in SAMS. Vendor

verification procedures require HUD confirmation of

the vendor information submitted on forms

SAMS-1111, 1115, or 1116.);

-\* the payment was correctly designated \"PROMPT

PAYMENT\" and the start date was provided, \"NON-PROMPT

PAYMENT,\" or \"DISCOUNT\" and the due date and

percentage were provided. (Note: Payment requests

for AMB/REAM/ELB subcontractors should always be

designated \"NON-PROMPT PAYMENT.\" Payments to AMBs,

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Attachment I

Page 3

REAMs, or ELBs for contract fees authorized under

their contracting authority are \"PROMPT PAYMENT.\");

\- the \"INVOICE NO.\" is included if the invoice

contained such a number. If the invoice number is

a duplicate, the transmittal will be returned by

DPI;

-\* the \"PO/CO\" (purchase order/contract number), it

applicable, is associated with the vendor\'s EO-NA

identifier. (Note: A contract number is not

required and should not be included for the

disbursement of earnest money. This includes

earnest money refunds, negative sales proceeds, or

refund of excess wire transfers.);

-\* the \"POST CODE\" is correct;

the \"FHA CASE NUMBER\" is correct and, if a case

specific post code is used, established in SAMS;

-\* The \"AMOUNT PER POST CODE\" equals the sum of all

items charged to the post code;

-\* the \"TRANSMITTAL TOTAL\" equals the sum of all

invoices referenced in and attached to the

transmittal;

\- the preparer signed and dated the transmittal;

-\* original invoices (or certified copies) and/or

other appropriate documents were attached.

Invoices/attachments must state:

o Name and correct business address of vendor

o Invoice number preferred, but not required

o Specific case numbers or property addresses

(when applicable)

o Amount per post code, per case number/address

o Description of goods or services provided

o Applicable purchase order or contract number

NOTE: As an alternative to the form

SAMS-1106-C, Continuation Form, it is

acceptable to specify the applicable

information on a separate listing. Original

invoices (or certified copies) to support each

item must be submitted.

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Attachment I

Page 4

\- repairs were inspected and found acceptable by the

appropriate party, e.g., REAM, HUD Fee Inspector.

\- If applicable, form HUD-9519, Acquired Property

Inspection Report, was completed and included with

the payment package for the Field Office\'s review.

NOTE: While most AMB contracts already require use

of the form HUD-9519, its use may be optional under

REAM contracts. Unless Service Item 22 of the REAM

contract was included in the executed contract, it

may be necessary to contact the Contracting Officer

to take appropriate action to modify contract terms

to require a REAM to furnish form HUD-9519.

Inspection reports are for Field Office use only.

Do not forward them to DPI.

\- Pursuant to Paragraph G.7(c) of Notice H 92-8, the

REAM included a certification that the work was

necessary, the price was reasonable, there was

sufficient competition, and the work was completed

satisfactorily. REAMs are expected to inspect

subcontracted repairs within 24 hours of completion

and prior to submitting the form SAMS-1106 for

payment. A sample format is included at the end of

this Attachment. This certification is for Field

Office review only. Do not include it with the

payment package to DPI. For repairs conducted

directly by the REAM, the Government Technical

Representative or Government Technical Monitor

shall perform the required inspection upon

completion of the work. (Note: The REAM contract

requires completion of the referenced Certification

Statement; this same requirement is not included in

either AMB or ELB contracts.)

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Attachment I

Page 5

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SAMPLE FORMAT

This is not an approved Departmental form. Its use is not

prescribed, nor is it available from any Departmental

administrative source. The required information may be

collected in any desired format.

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REAM CERTIFICATION STATEMENT:

In accordance with Service Item 35 of the REAM contract, this

Certification must accompany every form SAMS-1106, Invoice

Transmittal, prepared by the REAM for Field Office review and

approval. Select the appropriate statement which pertains to

the type of payment being submitted.

REPAIRS (Including Services and Materials) SUBCONTRACTED

BY THE REAM:

This will certify that the work for which I am attaching

a SAMS-1106 Invoice Transmittal request for payment was

necessary, the price was reasonable, there was

sufficient competition, and the work was completed

satisfactorily. This Certification is relevant to the

following invoices/purchase orders or contracts:

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Signature Date

Real Estate Asset Manager

REPAIRS (including Services and Materials) COMPLETED BY

THE REAM FOR REIMBURSEMENT:

This will certify that the work for which I am attaching

a SAMS-1106 Invoice Transmittal request for payment was

necessary, and the price was reasonable. The work has

been inspected and accepted by a HUD employee authorized

to do so (copy attached).

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Signature Date

Real Estate Asset Manager

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SAMS - 1106 INVOICE TRANSMITTAL

Rev. 08/92

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SAMS-1106 INVOICE TRANSMITTAL

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SAMS - 1106

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SAMS - 1106 INVOICE TRANSMITTAL (Continued)

Rev. 08/92

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INSTRUCTIONS FOR COMPLETION OF FORM SAMS-1116

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SAMS - 1106

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Attachment II

PROCEDURES FOR UPDATING VENDOR INFORMATION FILES IN SAMS

I. ROLES AND RESPONSIBILITIES

A. Requests

All requests for adding or changing vendor

master records in SAMS must be initiated by

completion of a form SAMS-1111, Trade/Service

Vendor\'s Information, or a form SAMS-1115,

Property Manager/Closing Agent Information, or

a form SAMS-1116/1116A, Selling Broker

Information and Certification. Copies of

revised forms complete Attachment II of this

Notice.

These forms are, in most cases, completed by

the vendor, property manager, closing agent,

or selling broker and forwarded to the Field

Office Manager or designee to verify

information contained on the form, as detailed

below. Note: Some items on these forms must

be completed by the Field Office Manager or

designee, i.e., the FO-NA/Field Office name,

the applicability of Internal Revenue Service

1099 reporting requirements to the vendor,

contract information (on the form SAMS-1115),

and the Selling Broker\'s recertification due

date (on the form SAMS-1116). Requests for

deactivations are initiated by the CPO using

form SAMS-1117, Information for Vendor

Deactivation, and also forwarded to the Field

Office Manager or designee for signature.

NOTE: A new form, SAMS-1112 Non-vendor

Payment Information, has been created to

facilitate those payments, usually made on a

one-time basis, to payees such as purchasers

or tenants. Because these payments are made

to non-vendors, procedures for establishing

the entity in SAMS differ from those required

for vendor definition. Refer to Page 4,

Paragraph (4) of this Attachment for

processing instructions.

B. Authorization and Processing

The Field Office Manager or designee will

review the SAMS vendor update request, perform

all necessary verifications of the data, as

detailed below, and authorize the processing

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Attachment II

Page 2

of the request within three (3) business days.

In addition, this individual will be

responsible for verifying the accuracy of

additions, changes, or deactivations to vendor

information in SAMS submitted the previous

month, as noted in Section VII.

C. Authorized Signature Requests

The Field Office Manager or designee must have

a form SAMS-1204, Authorized Signature

Request, on file at DPI. A copy of form

SAMS-1204 and instructions for its completion

are at the end of Attachment II. The

completed form must be sent to DPI (address is

on the form) to be received not later than

September 15, 1992. DPI will not process

vendor additions, changes, or deactivations

without a form SAMS-1204 to validate the

signature shown on the forms SAMS-1111, 1115,

1116, or 1117.

II\. VENDOR ADDITIONS

A. Required Documentation

The CPO or designee will be responsible for

supplying the vendor with appropriate SAMS forms.

Vendors will be responsible for completing the

forms, attaching the required documentation as set

forth below, and returning the package to the Field

Office for processing. Required forms are:

SAMS-1111 Trade/Service Vendor\'s

Information

SAMS-1115 Property Manager/Closing Agent

Information

SAMS-1116/ Selling Broker Information and

1116A Certification

B. Verification Documentation

Documentation to be attached to the SAMS form will

vary depending upon the type of vendor to be

approved and that vendor\'s relationship to HUD.

Vendors under formal contract to HUD have already

been through a review and verification process.

Therefore, documentation to be attached to the SAMS

form is different than for non-contracted vendors.

However, other vendors not under direct contract to

HUD (even if they are third parties paid by HUD)

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Attachment II

Page 3

will be required to supplement their SAMS form with

additional documentation. Refer below to the

applicable vendor type for a description of

required attachments to the SAMS forms.

\(1\) NONCONTRACT VENDORS (excluding Selling

Brokers)

These vendors can be either repair or

miscellaneous service vendors using the

form SAMS-1111 or closing agents or property

managers not yet under contract using the form

SAMS-1115. Request copies of verification

documentation as follows:

o Federal tax identification certificate

OR

o Driver\'s license AND Social Security

Card;

\* NOTE: If the vendor is a company (including

a partnership), a Federal tax identification

number should be provided. If the vendor is a

sole proprietorship, i.e., a company owned or

operated by a single individual, the Federal

tax identification number will be the social

security number of the owner.

o COVER SHEET of a recent telephone bill or

other alternate documentation, i.e.,

utility bill or bank statement, showing

vendor\'s name, address, and phone number;

and

o A copy of local or state business license

for vendor\'s trade, if applicable.

\(2\) CONTRACT VENDORS (excluding Selling Brokers)

Vendors who are under formal contract to HUD

have already been through a verification

process during the contracting process. These

vendors include service vendors using the form

SAMS-1111 and REAMs/ELBs/Closing Agents using

the form SAMS-1115. These vendors will

complete their own form SAMS-1111/1115, as

applicable, and submit this form with the

required attachments to the Field Office.

Required attachments are:

o Copy of Page 1 of the formal HUD contract

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Attachment II

Page 4

evidencing authorization by the

appropriate contracting official; and

o COVER SHEET of a recent telephone bill or

other alternate documentation, i.e.,

utility bill or bank statement, showing

vendor\'s name, address, and phone number.

\(3\) SELLING BROKERS

Selling brokers are required to complete form

SAMS-1116/1116A and attach the following for

verification purposes:

o Federal tax identification certificate

OR

Driver\'s license AND Social Security

Card;

o Copy of broker\'s state license;

o Signed Selling Broker Information and

Certification, form SAMS 1116A, appended

to form SAMS 1116; and

o COVER SHEET of a recent telephone bill or

other alternate documentation, i.e.,

utility bill or bank statement, showing

vendor\'s name, address, and phone number.

\(4\) NON-VENDOR PAYMENT INFORMATION - Using the

form SAMS-1112:

In those instances where HUD must either

refund or reimburse funds to payees who are

NOT vendors performing any service or

providing any goods or materials to HUD, the

form SAMS-1112 will be used to define the

non-vendor in SAMS. This newly created form is

used in all instances where payments or

refunds to purchasers or tenants must be made.

It will also apply to any other disbursement

to a non-vendor as approved by the Chief

Property Officer (CPO).

Defining a non-vendor in SAMS involves

different processing procedures from those

discussed above for HUD vendors. Procedures

applicable to the form SAMS-1112 only are as

follows:

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Attachment II

Page 5

o The form must be completed by either the

REAM/AMB/ELB, field office staff, or the

closing agent;

o It is approved or rejected by the CPO

(not Field Office Manager);

o There is no supporting documentation

required with the non-vendor payment

form. However, the form SAMS-1112 cannot

be submitted to DPI unless it is attached

to a properly prepared form SAMS-1106,

Invoice Transmittal.

As was discussed in Attachment I, the

form SAMS-1106 must include acceptable

supporting documentation to substantiate

the payment to the non-vendor. Copies of

sales contracts and/or addenda, the HUD-1

Settlement Statement, repair/deposit

agreements, lease agreements, etc., are

examples of acceptable documentation.

NOTE: Anyone performing a service or

supplying materials to HUD, even if paid on a

one-time basis, is classified as a \"vendor\"

and must be defined in SAMS using the SAMS

1111, 1115, or 1116 forms and applicable

procedures discussed in paragraphs (1) through

\(3\) above.

C. Authorization and Processing

Processing and authorization decisions must be made

by the Field Office Manager or designee within

three (3) business days of receipt of the

documentation package from the vendor.

During the processing and verifying process, the

Field Office Manager or designee must ensure that

the vendor does not already exist in SAMS for the

indicated vendor type/category by reviewing SAMS

report GB RP EO or, at their option, search screen

GB SR EO.

For all noncontracted vendors, including Selling

Brokers, the Field Office Manager or designee must

make a check against the GSA list of DEBARRED,

SUSPENDED OR INELIGIBLE VENDORS and the LIMITED

DENIAL OF PARTICIPATION lists.

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Attachment II

Page 6

The Field Office Manager or designee must also

perform a review of the forms SAMS-1111, 1115, or

1116, as applicable, to ensure the following:

\(1\) All sections of the form have been accurately

completed. NOTE: Some items on these forms

are completed by the Field Office.

\(2\) All required documentation has been attached

in accordance with items set forth in

paragraph B above;

\(3\) All representations made by the vendor on

attached documentation are complete and

accurate, as detailed below.

\(a\) The verification will be made by

comparing the vendor\'s name and tax

identification number on the form with

the corresponding information on:

\* the Federal tax identification

certificate or driver\'s license AND

Social Security Card;

\* the applicable licensing information

or broker\'s license, if applicable;

and

\* the telephone bill or other

alternate documentation specified in

paragraph B above.

\(b\) If any contracts or agreements are

provided, compare the vendor\'s name,

address, phone number, and names of the

vendor\'s principal(s) as noted on the

document(s) with those on the SAMS form.

\(c\) For all contracted vendors, ensure that

the appropriate contracting official\'s

signature is evident on the first page of

the contract attached as documentation.

\(d\) Review the response regarding whether the

vendor has any relationships with local

property disposition staff. Unallowed

relationships are discussed in Federal

Register sections 0.735-203 (\"Outside

Employment and Other Activities\") and

0.735-204 (\"Financial Interests\").

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Attachment II

Page 7

III\. APPROVED FORMS

Approved forms should be signed by all required

parties and forwarded to DPI for processing.

Facsimile (FAX) copies are not acceptable.

Supporting documentation is for Field Office use

only and should be retained in Field Office files.

Do not forward supporting documents to DPI. A copy

of all approved forms should be forwarded to the

CPO.

IV\. REJECTED FORMS

Rejected forms should be returned to the vendor

with a reason for the rejection. The Field Office

Manager or designee, at his/her option, may work

with the vendor to cure the deficiency, provided

the rejection may be overcome. However, problems

relative to missing documentation and/or adverse

opinions of Field Counsel generally cannot be

resolved in the vendor\'s favor. A copy of all

rejected forms should be forwarded to the CPO.

V. VENDOR CHANGES

A. Requests

All requests for vendor changes must have a

completed form SAMS-1111, 1115, or 1116, as

appropriate, indicating the information to be

changed, e.g., phone number, address, etc.

B. Authorization and Processing

1\. Verify, by phone confirmation with the

vendor\'s principal owner, the information

which is being revised.

2\. Upon verifying all relevant

documentation, sign the form and send the

approved original to DPI for processing.

FAX copies are not acceptable.

VI\. VENDOR DEACTIVATIONS

All requests for vendor deactivations must be

initiated by the CPO or designee on a form

SAMS-1117 and forwarded to the Field Office

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Attachment II

Page 8

Manager or designee for signature. The form shall

provide a brief explanation for the deactivation,

e.g., discontinuation of service, duplicate entry

in SAMS, unsatisfactory performance, etc. Original

signed forms shall be sent to DPI for processing.

FAX copies are not acceptable.

VII\. ACCURATE INPUT TO SAMS

On a monthly basis, DPI will provide a SAMS vendor

file report (GB RP EO) to the CPO for distribution

to the Field Office Manager or designee. The Field

Office Manager or designee is responsible for

ensuring the accuracy of the data on the report.

This verification will be made by comparing the

forms submitted for additions, changes, or

deactivations since performing the last monthly

review of the GB RP EO received from DPI. If

discrepancies are noted, this individual must

notify DPI by referring to the form in question and

ensure that corrections are made. In cases of data

entry error by DPI, no additional form need be

submitted.

VIII\. ANNUAL REVIEW AND CERTIFICATION OF VENDOR FILES

In early October each year, DPI will send the SAMS

report GB RP EO to the CPO for forwarding to the

Field Office Manager or designee to verify the

accuracy of the vendor file. The Field Office

Manager or designee is responsible for ensuring the

accuracy of the data on the report. Where

additions, changes, or deactivations are necessary,

the appropriate SAMS vendor forms must be completed

by the Field Office Manager or designee and

confirmed by telephone, as described above. He/she

is required to certify to its accuracy on the last

page of the report, as indicated, and forward this

last page to the Systems Management Branch, Single

Family Property Disposition Division, no later than

November 30 of each year. Detailed procedures for

carrying out the annual review and certification

will accompany the GB RP EO. If monthly

verification of additions, changes, and deletions

is performed as instructed in Paragraph VII above,

the annual review and certification of the vendor

files requires minimal effort.

NOTE: While in the past it was acceptable to

submit an annotated copy of the vendor report to

DPI to authorize such changes, internal controls

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SAMS - 1115 PROPERTY MANAGER/CLOSING AGENT INFORMATION

Rev. 08/92

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SAMS - 1115 PROPERTY MANAGER/CLOSING AGENT INFORMATION

Rev. 08/92

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INSTRUCTIONS FOR COMPLETION OF FORM SAMS-1115

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SAMS - 1115

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SAMS - 1116 SELLING BROKER INFORMATION AND CERTIFICATION

Rev. 08/92

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SAMS - 1116

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SAMS - 1116 SELLING BROKER INFORMATION AND CERTIFICATION

Rev. 08/92

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INSTRUCTIONS FOR COMPLETION OF FORM SAMS-1116

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SAMS - 1116

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SAMS - 1116A SELLING BROKER INFORMATION

(Attachment) AND CERTIFICATION

08/92

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SAMS - 1116A

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SAMS - 1117 INFORMATION FOR VENDOR DEACTIVATION

08/92

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SAMS - 1117

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SAMS - 1117 INFORMATION FOR VENDOR DEACTIVATION

08/92

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INSTRUCTIONS FOR COMPLETION OF FORM SAMS - 1117

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SAMS - 1204 AUTHORIZED SIGNATURE(S)

Rev. 08/92 (FOR VENDOR FILE MAINTENANCE)

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SAMS - 1204 AUTHORIZED SIGNATURE(S)

Rev. 08/92 (FOR VENDOR FILE MAINTENANCE)

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INSTRUCTIONS FOR COMPLETION OF FORM SAMS - 1204

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SAMS - 1112 NON-VENDOR PAYMENT INFORMATION

08/92

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SAMS - 1112 NON-VENDOR PAYMENT INFORMATION

08/92

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INSTRUCTIONS FOR COMPLETION OF FORM SAMS - 1112

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SAMS - 1111 TRADE/SERVICE VENDOR\'S INFORMATION

Rev. 08/92

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SAMS - 1111

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SAMS - 1111 TRADE/SERVICE VENDOR\'S INFORMATION

Rev. 08/92

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INSTRUCTIONS FOR COMPLETION OF FORM SAMS - 1111

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SAMS - 1111

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Attachment II

Page 9

require that an audit trail of appropriate

verifications and authorizations be maintained as

described in this Attachment. Therefore,

regardless of the number of changes being

requested, each change must be submitted on the

appropriate SAMS form as previously described.

IX\. VENDOR UPDATE FILES

A copy of all requests and related supporting

information for vendor additions, changes, or

deactivations shall be filed alphabetically by

vendor name or numerically by tax identification

number and retained by the Field Office Manager or

designee for 1 year. A copy of the entire report

reviewed for the annual certification should also

be retained in Field Office files for 1 year.

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Attachment III

REVIEW GUIDELINES FOR SALES CLOSING (HUD-1) PACKAGES

For several months, the Regional Accounting Directors

have been reviewing the HUD-1, Settlement Statements,

resulting from the sales of acquired single family

properties. These reviews have found two major processing

deficiencies: 1) many forms do not contain the

certifications or signatures of the purchaser, closing agent,

and/or HUD official; and 2) many forms reflect sales

information on the wrong line.

Certification Signatures on the HUD-1

Closing agents must be reminded of their responsibility

to certify and sign the HUD-1 for each case closed and to

require the purchaser to sign that document. The submitted

closing package shall be considered unacceptable without both

signatures and will be returned to the closing agent for

correction. The certification can be added to the bottom of

the HUD-1, or attached as an addendum (a sample form is

included in this Attachment). If an addendum is used, a copy

of it must be included with the copy of the HUD-1 being

forwarded to the Regional Accounting Division for review.

The CPO or a designated senior Realty Specialist must certify

and sign the HUD-1 when conducting the mandatory review of

that document. Also, if an addendum is issued, that fact

should be noted on the bottom of the HUD-1. All signatures

must be original; signature stamps are not acceptable.

Line Item Accuracy on the HUD-1

Closing agents must be reminded that the completion of

the HUD-1 must be in accordance with instructions provided by

HUD. Accurate information in SAMS relies upon accurate

information reflected on the designated lines of the HUD-1.

Inaccurate data in SAMS impacts adversely on Departmental

accounting records and distorts FHA profit and loss

reporting. The CPO is responsible for monitoring closing

agents\' performance to ensure that all documents are

completed accurately and that any deficiency is brought to

the closing agent\'s attention and corrected. A guide to

assist Field Office staff responsible for reviewing the

closing documents is included in this Attachment.

Notification to Closing Agents

Headquarters will notify all closing agents of these

requirements by letter no later than August 31, 1992. A copy

of the letter is included in this Attachment. The review

guide and the HUD-1 certification addendum form in this

Attachment also accompanied the letter to the agent. The

Field Office may choose to send a follow-up letter with other

comments or appropriate instructions.

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Attachment III

Page 2

To all HUD Closing Agents

Subject: HUD-1 completion and certification

Dear Closing Agent:

This is to remind you of your responsibility to certify

and sign the HUD-1 for each case closed, and to also require

the purchaser to sign that document. The submitted closing

package shall be considered unacceptable without the

certification and signature by both you and the purchaser.

The Department of Housing and Urban Development (HUD) will

return any uncertified documents to you for resubmission.

Also, the completion of the HUD-1 must be in accordance

with instructions provided by HUD. The accuracy of

information in the Department\'s automated system for managing

single family property disposition activity relies upon

information being reflected accurately on the designated

lines of the HUD-1. HUD will monitor each closing agent\'s

performance to ensure that all documents are completed

accurately and any deficiencies will be brought to your

attention for correction.

Repeated failure to comply with these requirements can

result in the termination of your contract with HUD. The

enclosed guide, used by HUD staff to review the closing

package, should be helpful to you in preparing the HUD-1

properly. A pro forma Settlement Statement illustrating the

line items discussed in the guide and a HUD-1 certification

form as an alternative to completing the bottom of the HUD-1

are also included. If you have any questions, you may

contact the Government Technical Representative in the local

HUD Office.

Sincerely,

Government Technical

Representative

Enclosures

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Attachment III

Page 3

REVIEW GUIDELINES FOR SALES CLOSING DOCUMENTS

In conducting the review, the reviewer shall verify the

following:

A. All applicable closing documents show the correct

(old) FHA case number and, if the property was sold

with FHA insurance, new FHA case number.

B. Wire transfer receipt. The wire transfer receipt

is the actual (original) transfer document; the

amount shown as wired is equal to that indicated on

Line 603; and the proceeds were wire transferred

under the correct (old) FHA case number.

(Note: When funds were incorrectly deposited and

must be reclassified in order to reconcile the

case, Field staff must submit a Funds

Reclassification (SAMS-1120) form to Headquarters.

A copy of the revised form, which is effective

immediately, is included in this Attachment.)

C. Sales contract price. The amount shown on Lines

101 and 401 is identical to the amount shown on

Line 3 of HUD-9548, Sales Contract.

D. Settlement charges to borrower. The amount shown

on Lines 103 and 1400 (Borrower\'s column) is

identical.

E. Extension fees collected by closing agent. The

amount shown on Lines 104 and 404 is identical and

the amount agrees with approved extension

request(s) in the case file. (Note: Make no entry

on Line 404 if the extension fee was collected by

the Field Office and deposited to the lockbox.)

F. Rent collected by the closing agent. The amount

shown on Lines 105 and 405 is identical and the

amount agrees with the terms of the lease and

outstanding rental balance records.

G. All taxes and assessments prepaid by seller. The

amounts shown on Lines 106 and 406 were prorated

accurately, i.e., on a 365 day basis to the date of

settlement, and the amount of taxes is reasonably

consistent with that paid for the same term in

prior years. (Note: The sum of all taxes and

assessments must be shown on lines 106 and 406

only. The closing agent must submit a copy of the

proration calculation for HUD\'s verification.)

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Attachment III

Page 4

H. Condominium/home owner association fees. The

amounts shown on Lines 109 and 409 were prorated

accurately, i.e., on a 365 day basis to the date of

settlement, and the fee is reasonably consistent

with that paid for the same term in prior years.

(Note: The closing agent must submit a copy of the

proration calculation for HUD\'s verification.)

I. Other amounts due seller. The amounts shown on

Lines 110-112 and Lines 410-412 are identical and

were appropriately authorized for the specific

sale. (Note: These lines must not be used as

substitutes for recording types of income specified

above.)

J. Earnest money deposit collected by the Field Office

and deposited to the lockbox. The amount shown on

Lines 201 and 501 is identical to the amount shown

on Line 3 of HUD-9548. (Note: Make no entry on

Line 501 if the earnest money was collected by the

closing agent and deposited with proceeds received

at closing.)

K. Settlement charges to seller. The amount shown on

Lines 502 and 1400 (Seller\'s column) is identical.

L. Extension fee refund credited to borrower. The

amount shown on Lines 206 and 506 is identical, was

accurately calculated, and was duly authorized by

HUD for the specific sale. (Note: Refund should be

shown only if extension fee was collected by

closing agent and entered on Line 404. If

extension fee was deposited to the lockbox, refund

should be made by form SAMS-1106.)

M. Marketing allowance(s) for sales incentives

credited to the borrower, i.e., early closing

bonus, cash rebate, move-in or moving expense, or

prepayment of HOA allowance. The amount shown on

Lines 207 and 507 is identical, was duly authorized

by HUD and agrees with the advertisement for the

specific sale. (Note: The closing agent must

specify the applicable sales incentive(s) and

amount for each on the HUD-1 or attachment.)

N. Utility escrow credited to the borrower. The

amount shown on Lines 208 and 508 is identical and

was duly authorized by HUD for the specific sale.

(Note: The closing agent must submit a copy of the

proration calculation, as applicable, for HUD\'s

verification.)

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Attachment III

Page 5

O. Repair escrow credited to the borrower. The amount

shown on Lines 209 and 509 is identical to the

amount shown on Line 4 of HUD-9548 and was duly

authorized by HUD for the specific sale.

P. All prorated taxes and assessments (less penalty

and interest) unpaid by seller. The amounts shown

on Lines 210 and 510 were prorated accurately,

i.e., on a 365 day basis to the date of settlement,

and the amount of taxes is reasonably consistent

with that paid for the same term in prior years.

The amount covers both delinquent taxes and

assessments (less penalty and interest) unpaid from

prior tax years as well as HUD\'s pro-rata share of

current year taxes and assessments (less penalty

and interest). (Note: The sum of all taxes and

assessments must be shown on Lines 210 and 510

only. The closing agent must submit a copy of the

proration calculation for HUD\'s verification.)

Q. Penalty and interest for failure to pay taxes on

time. The amount shown on Lines 213 and 513 was

accurately calculated. (Note: The closing agent

must submit a copy of the calculation for HUD\'s

verification.)

R. Condominium/home owner association fees. The

amounts shown on Lines 215 and 515 were prorated

accurately, i.e., on a 365 day basis to the date of

settlement and the fee is reasonably consistent

with that paid for the same term in prior years.

(Note: The closing agent must submit a copy of the

proration calculation for HUD\'s verification.)

S. Other adjustments. The amounts shown on Lines

216-219 and Lines 516-519 are identical and were

duly authorized by HUD for the specific sale.

(Note: These lines must not be used as substitutes

for recording types of expenses specified above.)

T. Total cash to seller. The amount shown on Line 603

was accurately calculated.

U. Sales commission, including any applicable bonus to

broker for hard to sell properties. The amount

shown on Line 703 is equal to the amount shown on

Line 6 of HUD-9548 and was duly authorized by HUD

for the specific sale.

V. Cash rebate to broker for early closing. The

amount shown on Line 704 was calculated correctly

and was duly authorized by HUD for the specific

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Attachment III

Page 6

sale. (Note: If an early closing bonus was paid

to the broker, the sum of Lines 703 and 704 must be

entered to the Broker\'s Commission field on the

upper half of the Sales Package, form HUD-1 (CM DS

SP) screen in order to ensure accurate reporting to

the IRS.)

W. Fees charged by lenders to process, approve and

make the mortgage loan. The amounts shown on Lines

801 through 811 are charges payable in connection

with the mortgage loan and paid by borrower or

seller. Verify that all costs were actual,

reasonable, and customary for the area, and any

costs charged to the seller (HUD) were paid only to

the extent that funds requested on Line 5 of the

HUD-9548 were available.

X. Items required by lender to be paid in advance.

The amounts shown on Lines 901-905 for items such

as interest, mortgage insurance, hazard insurance,

flood insurance, etc., are customary and reasonable

for the area and are paid by the borrower. (Note:

Such expenses may not be charged to HUD.)

Y. Reserve deposits with lender, i.e., initial charges

paid by the borrower to establish the escrow

account with the lender. The amounts shown on

Lines 1001-1008 for recurring items such as hazard

insurance, mortgage insurance, city/county taxes,

assessments, etc., are customary and reasonable for

the area and are paid by the borrower. (Note:

Such expenses may not be charged to HUD.)

Z. Title charges. The amounts shown on Lines 1101-1110

cover various services and fees directly

related to the transfer of title and are those most

frequently incurred at settlement. They may be

paid by either the borrower or seller. Except for

the fee payable to seller\'s closing agent (see BB.

below), verify that all costs were actual,

reasonable, and customary for the area, and any

costs charged to HUD were paid only to the extent

that funds requested on Line 5 of the HUD-9548 were

available.

AA. Closing agent fee. The amount shown on Line

1101 (Seller\'s column) is consistent with the

amount specified in the closing agent\'s contract.

If there is a third party closing agent, the fee is

shown on Line 1111 as an expense to the borrower.

(Note: Third party closing agent fees may not be

charged to HUD.)

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Attachment III

Page 7

BB. Government recording and transfer charges. The

amounts shown on Lines 1201-1205 are charges

payable in connection with the transfer of title to

the property. Verify that any costs charged to HUD

were actual, reasonable, and customary for the

area, and were paid only to the extent that funds

requested on Line 5 of the HUD-9548 were available.

CC\. Termite/pest inspection. The amount shown on Line

1302 is an expense chargeable to either the

borrower or seller. This fee is not automatically

charged as an expense to seller, but may be paid by

HUD to the extent that funds requested on Line 5 of

the HUD-9548 were available.

DD. Wire transfer fee (for sales proceeds). The amount

shown on Line 1305 (Seller\'s column) is identical

to the fee shown on the wire transfer receipt, if

shown on the document, and is reasonable for the

area.

EE. Total amount of closing expenses the borrower

requested seller to pay. Except for any additional

expenses HUD agreed to pay at closing, e.g., HUD\'s

closing agent\'s fee, wire transfer fee, etc., the

amount shown on Line 1400 may not exceed the dollar

amount indicated on Line 5 of HUD-9548. In

addition, all expenses included in this amount must

be actual, reasonable, and customary for the area.

FF. Certifications. The HUD-1 is properly certified by

the borrower, closing agent, and the CPO.

Field staff are reminded that only financial information

from the Seller\'s column of Blocks J-L of the Settlement

Statement (HUD-1) is to be entered to the SAMS Sales Package

(HUD-1) Received screen (CM DS SP). Financial information

from the Borrower\'s column is not to be entered to SAMS.

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Attachment III

Page 8

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Settlement Statement

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HUD-1 (3-86)

RESPA, HB 4305.2

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Attachment III

Page 9

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Settlement Statement (continued)

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Attachment III

Page 10

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Settlement Statement (continued)

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SAMS - 1120 FUNDS RECLASSIFICATION

Rev. 08/92

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SAMS - 1120

1 of 2 8/92

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SAMS - 1120 FUNDS RECLASSIFICATION

Rev. 08/92

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INSTRUCTIONS FOR COMPLETION OF FORM SAMS - 1120

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SAMS - 1120

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