capital fund financial reporting 1 pacific southwest nahro fall workshop scottsdale arizona...
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CAPITAL FUND FINANCIAL REPORTING1
Pacific Southwest NAHRO Fall WorkshopScottsdale ArizonaSeptember 23-25, 2012
presented by
Pete Koziol, HUD Financial Analyst, Phoenix Offfice
Cap Fund Reporting: FDS2
Financial Data Schedule (FDS) Reporting Cap Fund expenditures are reported at the Project
level Each Project has two income statements- one for Low
Rent Public Housing and one for Capital Fund. The two income statement are combined for the Project income statement.
There is one balance sheet for each Project that combines the financial activity of both the Low Rent Public Housing and CFP program
Refer to Capital Fund Reporting Accounting Brief #15:
http://portal.hud.gov/hudportal/HUD?src=/program_offices/public_indian_housing/reac/products/fass/pha_briefs
EXPENSE OR CAPITALIZE3
The general guideline for accounting for expenditures made after acquisition is that if the expenditures provide additional service potential beyond the current period they should be capitalized. An entity may produce future services potential by making current expenditures that:1. Extend the useful life of an asset2. Increase the quantity of services of an asset3. Increase the quality of services provided by an
asset If an expenditure causes one or more of these
results, then, according to GAAP the entity should capitalize.
Avoiding the additional record-keeping for fixed asset accounts is not a good reason to expense.
Cap Funds for Capitalized Expenditures
4
Reported as Revenue in the Cap Fund Income Statement, FDS line item 70610
Equity transfer from Cap Fund to Low Rent for related amount (FDS line item 11040)
Memo accounts in CFP column (FDS #11610 to 11660) must be completed to match amount in line 70610
Project Balance Sheet: The amount in 70610 must also be distributed to asset accounts on the Project Balance Sheet. Additions to FDS accounts for Fixed Assets (#161 to 165) and Construction in Progress (#167) should equal the amount in 70610
CAP FUNDS FOR OPERATIONS (BLI 1406)
5
Large PHA’s (250 +) limited to 20% of Cap Fund Award
Small PHA’s (non-troubled) : 100% of award as long as capital needs are being met
CFP funds used to supplement operations are reported as revenue on the Cap Fund portion of the income statement on FDS line 70600 with a corresponding Operating Transfer Out (#10020) entry
CFP funds for administrative expenses/management fee of CFP are also reported as 70600 (CFP Income Statement) with matching amount under administrative expenses of Cap Fund Income Statement
COCC cannot receive Cap Funds for Operations
CAP FUNDS FOR MANAGEMENT IMPROV. ( BLI 1408)
6
Cap Funds for Management that are capitalized: Cap Fund Inc Statement: Revenue listed on FDS
line 70610 Memo accounts on Income Statement to be
completed Equity transfer to Low Rent and amount added to
Fixed Assets Cap Funds for Management that are expensed:
Treated as transfers to operations Revenue on 70600, Amount transferred to Low Rent Expensed with other expenses in Low Rent Column
Management Improvements are limited to Project uses
Cap Fund Income Statement
7
The only operating expenses that should be showing on the Capital Fund Income Statement are administrative expenses such as: Management Fee Expense (COCC- fee for
service PHA) Admin Salaries and Admin Benefits (non-fee
for service PHA) Audit fee (allocation to Cap Fund)
Force Account Labor8
Force Account Labor refers to the use of PHA employees to capital and modernization work on its projects Capitalized Force Account Labor. Is used to support capital
works, the cost of such labor is capitalized and becomes an asset on the balance sheet of the project. From an FDS reporting standpoint, force account labor should be reported in the same way as other hard costs.
Non-Capitalized Force Account Labor. Is used to support capital-type work that does not meet a PHA’s Capitalization threshold. Is treated like Cap Fund transfers to Operations. Because Cap Fund transfers to operations lose their identity these expenses will be included as maintenance expenses in the Low Rent income statement and will lose their distinction as CFP funds or force account labor.
Projects: Dual Income Statements
9
Audited/A-133 03/31/2011Project Name:
Low Rent Capital Fund Total Project
$406,427 $406,427
$69,544 $69,544
$475,971 $0 $475,971
$1,039,047 $191,452 $1,230,499
$400,000 $400,000
Submission Type:
70300 Net Tenant Rental Revenue
70400 Tenant Revenue - Other
70500 Total Tenant Revenue
70600 HUD PHA Operating Grants
70610 Capital Grants
70710 Management Fee
Income Statement Memo Accounts
10
Low Rent Capital Fund Total Project
$0 $0 $0
$0 $400,000 $400,000
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
$0 $0 $0
11610 Land Purchases
11620 Building Purchases
11630 Furniture & Equipment - Dwelling Purchases 11640 Furniture & Equipment - Administrative Purchases 11650 Leasehold Improvements Purchases 11660 Infrastructure Purchases
13510 CFFP Debt Service Payments 13901 Replacement Housing Factor Funds
Equity Transfer from Cap Fund to Low Rent
11
Low Rent Capital Fund Total Project
$2,923,562 $0 $2,923,562
$400,000 ($400,000) $0
11030 Beginning Equity
11040 Prior Period Adjustments, Equity Transfers and Correction of Errors
INCOME STATEMENT: ACCOUNTS AFFECTED BY CAP FUND
12
INCOME STATEMENT: CAPITAL FUND IMPACTS
Low Rent Capital Fund Total Project
$1,039,047 $191,452 $1,230,499
$400,000 $400,000
$155,000 $40,000 $195,000
$151,452 $151,452
($151,452) ($151,452)
$400,000 ($400,000) $0
$0 $400,000 $400,000
91300 Management Fee Exp
11620 Building Purchases
70600 HUD PHA Operating Grants
70610 Capital Grants
10010 Operating Transfer In
10020 Operating Transfer Out
11040 Prior Period Adjustments, Equity Transfer, and Correction of Errors
FIXED ASSET ACCOUNTS
13
BALANCE SHEET ACCOUNTS 2010 PROJ ECT #3
161 Land $167,657
162 Buildings $8,548,375
163 Furniture, Equipment & Machinery - Dwellings 164 Furniture, Equipment & Machinery - Administration
$87,504
165 Leasehold Improvements
BALANCE SHEET ACCOUNTS 2011 PROJ ECT #3
161 Land $167,657
162 Buildings $8,948,375
163 Furniture, Equipment & Machinery - Dwellings 164 Furniture, Equipment & Machinery - Administration
$87,504
165 Leasehold Improvements
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