80_FR_47004 80 FR 46853 - Multi-Family Housing Program Requirements To Reduce Financial Reporting Requirements

80 FR 46853 - Multi-Family Housing Program Requirements To Reduce Financial Reporting Requirements

DEPARTMENT OF AGRICULTURE
Rural Housing Service

Federal Register Volume 80, Issue 151 (August 6, 2015)

Page Range46853-46855
FR Document2015-19342

The Rural Housing Service (RHS) is proposing to amend regulations to change program requirements regarding financial reporting to align RHS requirements with those of the Department of Housing and Urban Development (HUD) which will reduce the burden on the borrower to produce multiple financial reports.

Federal Register, Volume 80 Issue 151 (Thursday, August 6, 2015)
[Federal Register Volume 80, Number 151 (Thursday, August 6, 2015)]
[Proposed Rules]
[Pages 46853-46855]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2015-19342]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================


Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / 
Proposed Rules

[[Page 46853]]



DEPARTMENT OF AGRICULTURE

Rural Housing Service

7 CFR Part 3560

RIN 0575-AC98


Multi-Family Housing Program Requirements To Reduce Financial 
Reporting Requirements

AGENCY: Rural Housing Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Rural Housing Service (RHS) is proposing to amend 
regulations to change program requirements regarding financial 
reporting to align RHS requirements with those of the Department of 
Housing and Urban Development (HUD) which will reduce the burden on the 
borrower to produce multiple financial reports.

DATES: Written comments must be received on or before October 5, 2015 
to be assured for consideration.

ADDRESSES: You may submit comments to this rule by any of the following 
methods:
     Federal eRulemaking Portal: http://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Submit written comments via the U.S. Postal Service 
to the Branch Chief, Regulations and Paperwork Management Branch, U.S. 
Department of Agriculture, STOP 0742, 1400 Independence Avenue SW., 
Washington, DC 20250-0742.
     Hand Delivery/Courier: Submit written comments via Federal 
Express mail or other courier service requiring a street address to the 
Branch Chief, Regulations and Paperwork Management Branch, U.S. 
Department of Agriculture, 300 7th Street SW., 7th Floor, Washington, 
DC 20024.
     All written comments will be available for public 
inspection during regular work hours at 300 7th Street SW., 7th Floor, 
Washington, DC 20024.

FOR FURTHER INFORMATION CONTACT: Stephanie White, Director, Multi-
Family Housing Portfolio Management Division, Rural Housing Service, 
Room 1263S--STOP 0782, 1400 Independence Avenue SW., Washington, DC 
20250-0782, Telephone: (202) 720-1615.

SUPPLEMENTARY INFORMATION: 

Executive Order 12866, Classification

    This proposed rule has been determined to be non-significant and, 
therefore was not reviewed by the Office of Management and Budget (OMB) 
under Executive Order 12866.

Authority

    The Multi-Family Housing program is administered, subject to 
appropriations, by the U.S. Department of Agriculture (USDA) as 
authorized under Sections 514, 515 and 516 of the Housing Act of 1949, 
as amended (42 U.S.C. 1484, 1485, and 1486).

Environmental Impact Statement

    This document has been reviewed in accordance with 7 CFR part 1940, 
subpart G, ``Environmental Program.'' RHS has determined that this 
action does not constitute a major Federal action significantly 
affecting the quality of the environment. In accordance with the 
National Environmental Policy Act of 1969, Public Law 91-190, an 
Environmental Impact Statement is not required.

Regulatory Flexibility Act

    This proposed rule has been reviewed with regard to the 
requirements of the Regulatory Flexibility Act (5 U.S.C. 601-612). The 
undersigned has determined and certified by signature on this document 
that this rule will not have a significant economic impact on a 
substantial number of small entities since this rulemaking action does 
not involve a new or expanded program nor does it require any more 
action on the part of a small business than required of a large entity.

Executive Order 13132, Federalism

    The policies contained in this rule do not have any substantial 
direct effect on States, on the relationship between the National 
Government and the States, or on the distribution of power and 
responsibilities among the various levels of Government. This rule does 
not impose substantial direct compliance costs on State and local 
Governments; therefore, consultation with the States is not required.

Executive Order 12988, Civil Justice Reform

    This rule has been reviewed under Executive Order 12988. In 
accordance with this rule: (1) Unless otherwise specifically provided, 
all State and local laws that are in conflict with this rule will be 
preempted; (2) no retroactive effect will be given to this rule except 
as specifically prescribed in the rule; and (3) administrative 
proceedings of the National Appeals Division of the Department of 
Agriculture (7 CFR part 11) must be exhausted before bringing suit in 
court that challenges action taken under this rule.

Unfunded Mandate Reform Act (UMRA)

    Title II of the UMRA, Public Law 104-4, establishes requirements 
for Federal Agencies to assess the effects of their regulatory actions 
on State, local, and tribal Governments and on the private sector. 
Under section 202 of the UMRA, Federal Agencies generally must prepare 
a written statement, including cost-benefit analysis, for proposed and 
Final Rules with ``Federal mandates'' that may result in expenditures 
to State, local, or tribal Governments, in the aggregate, or to the 
private sector, of $100 million or more in any one-year. When such a 
statement is needed for a rule, section 205 of the UMRA generally 
requires a Federal Agency to identify and consider a reasonable number 
of regulatory alternatives and adopt the least costly, more cost-
effective, or least burdensome alternative that achieves the objectives 
of the rule.
    This rule contains no Federal mandates (under the regulatory 
provisions of title II of the UMRA) for State, local, and tribal 
Governments or for the private sector. Therefore, this rule is not 
subject to the requirements of sections 202 and 205 of the UMRA.

Paperwork Reduction Act of 1995

    The information collection requirements contained in this 
regulation have been approved by OMB and have been assigned OMB control 
number 0575-0189. This proposed rule contains no new reporting or 
recordkeeping requirements that would require approval under the 
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).

[[Page 46854]]

E-Government Act Compliance

    Rural Development is committed to complying with the E-Government 
Act to promote the use of the Internet and other information 
technologies to provide increased opportunities for citizen access to 
Government information and services and for other purposes.

Programs Affected

    The programs affected by this regulation are listed in the Catalog 
of Federal Domestic Assistance under number 10.405--Farm Labor Housing 
Loans and Grants; 10.415--Rural Rental Housing Loans; and 10.427--Rural 
Rental Assistance Payments.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    This executive order imposes requirements on RHS in the development 
of regulatory policies that have tribal implications or preempt tribal 
laws. RHS has determined that the proposed rule does not have a 
substantial direct effect on one or more Indian tribe(s) or on either 
the relationship or the distribution of powers and responsibilities 
between the Federal Government and the Indian tribes. Thus, the 
proposed rule is not subject to the requirements of Executive Order 
13175. If tribal leaders are interested in consulting with RHS on this 
proposed rule, they are encouraged to contact USDA's Office of Tribal 
Relations or Rural Development's Native American Coordinator at (720) 
544-2911 or AIAN@usda.gov to request such consultation.

Executive Order 12372, Intergovernmental Consultation

    These loans are subject to the provisions of Executive Order 12372 
which require intergovernmental consultation with State and local 
officials. RHS conducts intergovernmental consultations for each loan 
in accordance with 2 CFR part 415, subpart C.

Non-Discrimination Policy

    The U.S. Department of Agriculture (USDA) prohibits discrimination 
against its customers, employees, and applicants for employment on the 
bases of race, color, national origin, age, disability, sex, gender 
identity, religion, reprisal, and where applicable, political beliefs, 
marital status, familial or parental status, sexual orientation, or all 
or part of an individual's income is derived from any public assistance 
program, or protected genetic information in employment or in any 
program or activity conducted or funded by the Department. (Not all 
prohibited bases will apply to all programs and/or employment 
activities.)
    If you wish to file a Civil Rights program complaint of 
discrimination, complete the USDA Program Discrimination Complaint Form 
(PDF), found online at http://www.ascr.usda.gov/complaint_filing_cust.html, or at any USDA office, or call (866) 632-
9992 to request the form. You may also write a letter containing all of 
the information requested in the form. Send your completed complaint 
form or letter to us by mail at U.S. Department of Agriculture, 
Director, Office of Adjudication, 1400 Independence Avenue SW., 
Washington, DC 20250-9410, by fax (202) 690-7442 or email at 
program.intake@usda.gov.
    Individuals who are deaf, hard of hearing or have speech 
disabilities and you wish to file either an EEO or program complaint 
please contact USDA through the Federal Relay Service at (800) 877-8339 
or (800) 845-6136 (in Spanish).
    Persons with disabilities who wish to file a program complaint, 
please see information above on how to contact us by mail directly or 
by email. If you require alternative means of communication for program 
information (e.g., Braille, large print, audiotape, etc.) please 
contact USDA's TARGET Center at (202) 720-2600 (voice and TDD).

Background

    Section 515(z)(1) of the Housing Act of 1949, as amended states 
that the Secretary shall require that borrowers in programs authorized 
by this section maintain accounting records in accordance with 
generally accepted accounting principles for all projects that receive 
funds from loans made or guaranteed by the Secretary. Since RHS 
considers 514 loans to have similar risks as 515 loans, the regulatory 
accounting requirements apply to both types of loans. See 7 CFR 
3560.578.
    RHS published an interim rule on November 26, 2004, (69 FR 69032-
69176) to implement the consolidation of MFH's previous 14 separate 
regulations, with an effective date of February 24, 2005. As part of 
the interim rule, RHS required that engagement reports be submitted 
with the annual financial reports for borrowers with 16 or more units. 
Borrowers with less than 16 units in their housing project are required 
to submit annual financial reports using a limited scope engagement. 
Engagement is currently defined at 7 CFR 3560.11.
    RHS proposes to remove engagement requirements as well as unit-
based requirements from 7 CFR 3560.11, 3560.301, 3560.302, 3560.303 and 
3560.308 and replace it with risk-based requirements for audits 
utilizing a modified version of the HUD Office of Inspector General's 
(OIG's) Consolidated Audit Guide standard.
    This proposed change is a result of RHS's participation in the 
White House's Domestic Policy Council's Rental Policy Working Group 
(RPWG) on an initiative to reduce duplications of requirements on 
customers, eliminate conflicting administrative requirements, and align 
program requirements in the affordable rental housing industry. The 
RPWG believes high-risk properties, which consists of properties that 
have combined federal financial assistance of $500,000 or greater, 
should receive more stringent evaluation of financial performance. RHS 
agrees, and plans to implement a risk-based threshold to set the 
standard for audit guidelines. This will reduce the burden on project 
budgets, as multiple reports become unnecessary. Instead it will 
require financial reporting to include audits based on a modified 
version of the HUD OIG Consolidated Audit Guide, which are also 
acceptable to HUD.
    Combined Federal financial assistance is defined as a combination 
of any or all of the sources identified below:
     The outstanding principal balance of a USDA Mortgage, a 
mortgage insured by the Federal Housing Administration (FHA) or HUD-
held mortgages or loans (including flexible subsidy loans);
     Any USDA Rental Assistance or Project-based Section 8 
assistance received during the fiscal year;
     Interest reduction payments received during the year 
(interest subsidy) and/or;
     Federal grant funds received during the year.
    The Agency believes standardizing audit requirements is an 
important first step in aligning the financial reporting standards 
among various Federal and State agencies. The new policy eliminates a 
financial reporting burden by allowing owners who receive less than 
$500,000 in combined Federal assistance to submit owner certified 
financial statements instead of audited financial statements.
    Although the Agency is removing engagement requirements as it 
relates to the borrower's annual financial reporting requirements, 
Section 514 and 515 proposals for new construction are still subject to 
the agreed upon cost certification procedures set forth in 7 CFR 
3560.72(b).
    In addition to the changes in the annual reporting requirements 
outlined herein, the Agency is proposing two

[[Page 46855]]

additional certifications to the Performance Standards required under 7 
CFR 3560.308(c). The borrower will be asked to certify there have been 
no changes in project ownership other than those approved by the Agency 
and identified in the certification; and that, real estate taxes are 
paid in accordance with state and/or local requirements and are 
current.

List of Subjects in 7 CFR Part 3560

    Aged loan programs--Agriculture, Loan programs--Housing and 
Community Development, Low- and moderate-income housing, Public 
housing, Rent subsidies.

    For the reasons set forth in the preamble, chapter XXXV, Title 7 of 
the Code of Federal Regulations is proposed to be amended as follows:

PART 3560--DIRECT MULTI-FAMILY HOUSING LOANS AND GRANTS

0
1. The authority citation for Part 3560 continues to read as follows:

    Authority:  42 U.S.C. 1480.

Subpart A--General Provisions and Definitions

0
2. Amend Sec.  3560.11 by removing the definition of ``Engagement''.

Subpart G--Financial Management

0
3. Section 3560.301 is revised to read as follows:


Sec.  3560.301  General.

    This subpart contains requirements for the financial management of 
Agency-financed multi-family housing (MFH) projects, including 
accounts, budgets, and reports. Financial management systems and 
procedures must cover all housing operations and provide adequate 
documentation to ensure that program objectives are met.
0
4. Amend Sec.  3560.302 by revising paragraphs (a), (b)(1) and (2), and 
(e)(1) to read as follows:


Sec.  3560.302  Accounting, bookkeeping, budgeting, and financial 
management systems.

    (a) General. Borrowers must establish the accounting, bookkeeping, 
budgeting and financial management procedures necessary to conduct 
housing project operations in a financially safe and sound manner. 
Borrowers must maintain records in a manner suitable for an audit, and 
must be able to report accurate operational results to the Agency from 
these accounts and records.
    (b) * * *
    (1) Borrowers may use a cash, accrual, or modified accrual method 
of accounting, bookkeeping, and budget preparations as long as they are 
prepared in accordance with the standards identified in Sec.  3560.308.
    (2) Borrowers must describe their accounting, bookkeeping, budget 
preparation, and financial reporting procedures in their management 
plan.
* * * * *
    (e) * * *
    (1) Borrowers must retain all housing project financial records, 
books, and supporting material for at least three years after the 
issuance of their financial reports. Upon request, these materials will 
immediately be made available to the Agency, its representatives, the 
USDA Office of the Inspector General (OIG), or the General 
Accountability Office (GAO).
* * * * *
0
5. Amend Sec.  3560.303 by revising paragraph (b)(1)(vi)(Q) to read as 
follows:


Sec.  3560.303  Housing project budgets.

* * * * *
    (b) * * *
    (1) * * *
    (vi) * * *
    (Q) Professional service contracts (audits, owner-certified 
submissions in accordance with Sec.  3560.302(a)(2), tax returns, 
energy audits, utility allowances, architectural, construction, 
rehabilitation and inspection contracts, etc.)
* * * * *
0
6. Amend Sec.  3560.308 by:
0
a. Revising paragraphs (a)(1) and (2).
0
b. Removing paragraph (b).
0
c. Redesignating paragraphs (c) and (d) as (b) and (c) respectively.
0
d. Revising the newly designated (b) introductory text.
0
e. Adding paragraphs (b)(8) and (b)(9).
0
f. Revising the newly designated (c)(1).
    The revisions and additions read as follows:


Sec.  3560.308  Annual financial reports.

    (a) General. (1) Borrowers that receive $500,000 or more in 
combined Federal financial assistance must include an independent 
auditor's report, financial statements and notes to the financial 
statements, supplemental information containing Agency approved forms 
for project budgets and borrower balance sheets, report on internal 
controls and compliance, and a schedule of current and prior year 
finding and corrective actions (if applicable). Borrowers must include 
the audit with their annual financial reports submitted to the Agency. 
Federal Financial Assistance is defined in accordance with 2 CFR 
200.40.
    (2) Borrowers that receive less than $500,000 in combined Federal 
financial assistance must submit annual owner certified financial 
statements presented in accordance with Generally Accepted Accounting 
Principles (GAAP). Owner-certified submissions will not include an 
auditor's opinion or auditor's report on compliance or internal 
controls. Borrowers may use a CPA to prepare this report.
* * * * *
    (b) Performance standards. All Borrowers must certify that the 
housing meets the performance standards below:
* * * * *
    (8) There have been no changes in project ownership other than 
those approved by the Agency and Identified in the certification.
    (9) Real estate taxes are paid in accordance with state and/or 
local requirements and are current.
    (c) * * *
    (1) Non-profit and public borrower entities subject to OMB Circular 
A-133 requirements must submit audits in accordance with 2 CFR part 
200.
* * * * *

    Dated: July 9, 2015.
Tony Hernandez,
Administrator, Rural Housing Service.
[FR Doc. 2015-19342 Filed 8-5-15; 8:45 am]
 BILLING CODE 3410-XV-P



                                                                                                                                                                                                     46853

                                                    Proposed Rules                                                                                                Federal Register
                                                                                                                                                                  Vol. 80, No. 151

                                                                                                                                                                  Thursday, August 6, 2015



                                                    This section of the FEDERAL REGISTER                    Division, Rural Housing Service, Room                 Executive Order 12988, Civil Justice
                                                    contains notices to the public of the proposed          1263S—STOP 0782, 1400 Independence                    Reform
                                                    issuance of rules and regulations. The                  Avenue SW., Washington, DC 20250–
                                                    purpose of these notices is to give interested          0782, Telephone: (202) 720–1615.                         This rule has been reviewed under
                                                    persons an opportunity to participate in the                                                                  Executive Order 12988. In accordance
                                                    rule making prior to the adoption of the final          SUPPLEMENTARY INFORMATION:
                                                                                                                                                                  with this rule: (1) Unless otherwise
                                                    rules.                                                  Executive Order 12866, Classification                 specifically provided, all State and local
                                                                                                              This proposed rule has been                         laws that are in conflict with this rule
                                                    DEPARTMENT OF AGRICULTURE                               determined to be non-significant and,                 will be preempted; (2) no retroactive
                                                                                                            therefore was not reviewed by the Office              effect will be given to this rule except
                                                    Rural Housing Service                                   of Management and Budget (OMB)                        as specifically prescribed in the rule;
                                                                                                            under Executive Order 12866.                          and (3) administrative proceedings of
                                                    7 CFR Part 3560                                                                                               the National Appeals Division of the
                                                                                                            Authority                                             Department of Agriculture (7 CFR part
                                                    RIN 0575–AC98                                                                                                 11) must be exhausted before bringing
                                                                                                              The Multi-Family Housing program is
                                                    Multi-Family Housing Program                            administered, subject to appropriations,              suit in court that challenges action taken
                                                    Requirements To Reduce Financial                        by the U.S. Department of Agriculture                 under this rule.
                                                    Reporting Requirements                                  (USDA) as authorized under Sections                   Unfunded Mandate Reform Act
                                                                                                            514, 515 and 516 of the Housing Act of                (UMRA)
                                                    AGENCY:    Rural Housing Service, USDA.                 1949, as amended (42 U.S.C. 1484, 1485,
                                                    ACTION:   Proposed rule.                                and 1486).                                              Title II of the UMRA, Public Law
                                                                                                                                                                  104–4, establishes requirements for
                                                    SUMMARY:   The Rural Housing Service                    Environmental Impact Statement
                                                                                                                                                                  Federal Agencies to assess the effects of
                                                    (RHS) is proposing to amend regulations                   This document has been reviewed in                  their regulatory actions on State, local,
                                                    to change program requirements                          accordance with 7 CFR part 1940,
                                                    regarding financial reporting to align                                                                        and tribal Governments and on the
                                                                                                            subpart G, ‘‘Environmental Program.’’                 private sector. Under section 202 of the
                                                    RHS requirements with those of the                      RHS has determined that this action
                                                    Department of Housing and Urban                                                                               UMRA, Federal Agencies generally must
                                                                                                            does not constitute a major Federal                   prepare a written statement, including
                                                    Development (HUD) which will reduce                     action significantly affecting the quality
                                                    the burden on the borrower to produce                                                                         cost-benefit analysis, for proposed and
                                                                                                            of the environment. In accordance with                Final Rules with ‘‘Federal mandates’’
                                                    multiple financial reports.                             the National Environmental Policy Act                 that may result in expenditures to State,
                                                    DATES: Written comments must be                         of 1969, Public Law 91–190, an                        local, or tribal Governments, in the
                                                    received on or before October 5, 2015 to                Environmental Impact Statement is not                 aggregate, or to the private sector, of
                                                    be assured for consideration.                           required.                                             $100 million or more in any one-year.
                                                    ADDRESSES: You may submit comments                                                                            When such a statement is needed for a
                                                    to this rule by any of the following                    Regulatory Flexibility Act
                                                                                                                                                                  rule, section 205 of the UMRA generally
                                                    methods:                                                   This proposed rule has been reviewed               requires a Federal Agency to identify
                                                       • Federal eRulemaking Portal: http://                with regard to the requirements of the                and consider a reasonable number of
                                                    www.regulations.gov. Follow the                         Regulatory Flexibility Act (5 U.S.C.                  regulatory alternatives and adopt the
                                                    instructions for submitting comments.                   601–612). The undersigned has                         least costly, more cost-effective, or least
                                                       • Mail: Submit written comments via                  determined and certified by signature                 burdensome alternative that achieves
                                                    the U.S. Postal Service to the Branch                   on this document that this rule will not              the objectives of the rule.
                                                    Chief, Regulations and Paperwork                        have a significant economic impact on
                                                    Management Branch, U.S. Department                      a substantial number of small entities                  This rule contains no Federal
                                                    of Agriculture, STOP 0742, 1400                         since this rulemaking action does not                 mandates (under the regulatory
                                                    Independence Avenue SW.,                                involve a new or expanded program nor                 provisions of title II of the UMRA) for
                                                    Washington, DC 20250–0742.                              does it require any more action on the                State, local, and tribal Governments or
                                                       • Hand Delivery/Courier: Submit                      part of a small business than required of             for the private sector. Therefore, this
                                                    written comments via Federal Express                    a large entity.                                       rule is not subject to the requirements
                                                    mail or other courier service requiring a                                                                     of sections 202 and 205 of the UMRA.
                                                    street address to the Branch Chief,                     Executive Order 13132, Federalism
                                                                                                                                                                  Paperwork Reduction Act of 1995
                                                    Regulations and Paperwork                                 The policies contained in this rule do
                                                    Management Branch, U.S. Department                      not have any substantial direct effect on               The information collection
                                                    of Agriculture, 300 7th Street SW., 7th                 States, on the relationship between the               requirements contained in this
mstockstill on DSK4VPTVN1PROD with PROPOSALS




                                                    Floor, Washington, DC 20024.                            National Government and the States, or                regulation have been approved by OMB
                                                       • All written comments will be                       on the distribution of power and                      and have been assigned OMB control
                                                    available for public inspection during                  responsibilities among the various                    number 0575–0189. This proposed rule
                                                    regular work hours at 300 7th Street                    levels of Government. This rule does not              contains no new reporting or
                                                    SW., 7th Floor, Washington, DC 20024.                   impose substantial direct compliance                  recordkeeping requirements that would
                                                    FOR FURTHER INFORMATION CONTACT:                        costs on State and local Governments;                 require approval under the Paperwork
                                                    Stephanie White, Director, Multi-Family                 therefore, consultation with the States is            Reduction Act of 1995 (44 U.S.C.
                                                    Housing Portfolio Management                            not required.                                         Chapter 35).


                                               VerDate Sep<11>2014   16:37 Aug 05, 2015   Jkt 235001   PO 00000   Frm 00001   Fmt 4702   Sfmt 4702   E:\FR\FM\06AUP1.SGM   06AUP1


                                                    46854                  Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules

                                                    E-Government Act Compliance                             program or activity conducted or funded               requirements from 7 CFR 3560.11,
                                                       Rural Development is committed to                    by the Department. (Not all prohibited                3560.301, 3560.302, 3560.303 and
                                                    complying with the E-Government Act                     bases will apply to all programs and/or               3560.308 and replace it with risk-based
                                                    to promote the use of the Internet and                  employment activities.)                               requirements for audits utilizing a
                                                    other information technologies to                          If you wish to file a Civil Rights                 modified version of the HUD Office of
                                                    provide increased opportunities for                     program complaint of discrimination,                  Inspector General’s (OIG’s) Consolidated
                                                    citizen access to Government                            complete the USDA Program                             Audit Guide standard.
                                                    information and services and for other                  Discrimination Complaint Form (PDF),                     This proposed change is a result of
                                                    purposes.                                               found online at http://                               RHS’s participation in the White
                                                                                                            www.ascr.usda.gov/complaint_filing_                   House’s Domestic Policy Council’s
                                                    Programs Affected                                       cust.html, or at any USDA office, or call             Rental Policy Working Group (RPWG)
                                                      The programs affected by this                         (866) 632–9992 to request the form. You               on an initiative to reduce duplications
                                                    regulation are listed in the Catalog of                 may also write a letter containing all of             of requirements on customers, eliminate
                                                    Federal Domestic Assistance under                       the information requested in the form.                conflicting administrative requirements,
                                                    number 10.405—Farm Labor Housing                        Send your completed complaint form or                 and align program requirements in the
                                                    Loans and Grants; 10.415—Rural Rental                   letter to us by mail at U.S. Department               affordable rental housing industry. The
                                                    Housing Loans; and 10.427—Rural                         of Agriculture, Director, Office of                   RPWG believes high-risk properties,
                                                    Rental Assistance Payments.                             Adjudication, 1400 Independence                       which consists of properties that have
                                                                                                            Avenue SW., Washington, DC 20250–                     combined federal financial assistance of
                                                    Executive Order 13175, Consultation                     9410, by fax (202) 690–7442 or email at               $500,000 or greater, should receive more
                                                    and Coordination With Indian Tribal                     program.intake@usda.gov.                              stringent evaluation of financial
                                                    Governments                                                Individuals who are deaf, hard of                  performance. RHS agrees, and plans to
                                                       This executive order imposes                         hearing or have speech disabilities and               implement a risk-based threshold to set
                                                    requirements on RHS in the                              you wish to file either an EEO or                     the standard for audit guidelines. This
                                                    development of regulatory policies that                 program complaint please contact                      will reduce the burden on project
                                                    have tribal implications or preempt                     USDA through the Federal Relay                        budgets, as multiple reports become
                                                    tribal laws. RHS has determined that the                Service at (800) 877–8339 or (800) 845–               unnecessary. Instead it will require
                                                    proposed rule does not have a                           6136 (in Spanish).                                    financial reporting to include audits
                                                    substantial direct effect on one or more                   Persons with disabilities who wish to              based on a modified version of the HUD
                                                    Indian tribe(s) or on either the                        file a program complaint, please see                  OIG Consolidated Audit Guide, which
                                                    relationship or the distribution of                     information above on how to contact us                are also acceptable to HUD.
                                                    powers and responsibilities between the                 by mail directly or by email. If you                     Combined Federal financial assistance
                                                    Federal Government and the Indian                       require alternative means of                          is defined as a combination of any or all
                                                    tribes. Thus, the proposed rule is not                  communication for program information                 of the sources identified below:
                                                    subject to the requirements of Executive                (e.g., Braille, large print, audiotape, etc.)            • The outstanding principal balance
                                                    Order 13175. If tribal leaders are                      please contact USDA’s TARGET Center                   of a USDA Mortgage, a mortgage insured
                                                    interested in consulting with RHS on                    at (202) 720–2600 (voice and TDD).                    by the Federal Housing Administration
                                                    this proposed rule, they are encouraged                 Background                                            (FHA) or HUD-held mortgages or loans
                                                    to contact USDA’s Office of Tribal                                                                            (including flexible subsidy loans);
                                                    Relations or Rural Development’s Native                    Section 515(z)(1) of the Housing Act                  • Any USDA Rental Assistance or
                                                    American Coordinator at (720) 544–                      of 1949, as amended states that the                   Project-based Section 8 assistance
                                                    2911 or AIAN@usda.gov to request such                   Secretary shall require that borrowers in             received during the fiscal year;
                                                    consultation.                                           programs authorized by this section                      • Interest reduction payments
                                                                                                            maintain accounting records in                        received during the year (interest
                                                    Executive Order 12372,                                  accordance with generally accepted                    subsidy) and/or;
                                                    Intergovernmental Consultation                          accounting principles for all projects                   • Federal grant funds received during
                                                      These loans are subject to the                        that receive funds from loans made or                 the year.
                                                    provisions of Executive Order 12372                     guaranteed by the Secretary. Since RHS                   The Agency believes standardizing
                                                    which require intergovernmental                         considers 514 loans to have similar risks             audit requirements is an important first
                                                    consultation with State and local                       as 515 loans, the regulatory accounting               step in aligning the financial reporting
                                                    officials. RHS conducts                                 requirements apply to both types of                   standards among various Federal and
                                                    intergovernmental consultations for                     loans. See 7 CFR 3560.578.                            State agencies. The new policy
                                                    each loan in accordance with 2 CFR part                    RHS published an interim rule on                   eliminates a financial reporting burden
                                                    415, subpart C.                                         November 26, 2004, (69 FR 69032–                      by allowing owners who receive less
                                                                                                            69176) to implement the consolidation                 than $500,000 in combined Federal
                                                    Non-Discrimination Policy                               of MFH’s previous 14 separate                         assistance to submit owner certified
                                                       The U.S. Department of Agriculture                   regulations, with an effective date of                financial statements instead of audited
                                                    (USDA) prohibits discrimination against                 February 24, 2005. As part of the                     financial statements.
                                                    its customers, employees, and                           interim rule, RHS required that                          Although the Agency is removing
                                                    applicants for employment on the bases                  engagement reports be submitted with                  engagement requirements as it relates to
                                                    of race, color, national origin, age,                   the annual financial reports for                      the borrower’s annual financial
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                                                    disability, sex, gender identity, religion,             borrowers with 16 or more units.                      reporting requirements, Section 514 and
                                                    reprisal, and where applicable, political               Borrowers with less than 16 units in                  515 proposals for new construction are
                                                    beliefs, marital status, familial or                    their housing project are required to                 still subject to the agreed upon cost
                                                    parental status, sexual orientation, or all             submit annual financial reports using a               certification procedures set forth in 7
                                                    or part of an individual’s income is                    limited scope engagement. Engagement                  CFR 3560.72(b).
                                                    derived from any public assistance                      is currently defined at 7 CFR 3560.11.                   In addition to the changes in the
                                                    program, or protected genetic                              RHS proposes to remove engagement                  annual reporting requirements outlined
                                                    information in employment or in any                     requirements as well as unit-based                    herein, the Agency is proposing two


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                                                                             Federal Register / Vol. 80, No. 151 / Thursday, August 6, 2015 / Proposed Rules                                                46855

                                                    additional certifications to the                          accounting, bookkeeping, and budget                     (2) Borrowers that receive less than
                                                    Performance Standards required under 7                    preparations as long as they are                      $500,000 in combined Federal financial
                                                    CFR 3560.308(c). The borrower will be                     prepared in accordance with the                       assistance must submit annual owner
                                                    asked to certify there have been no                       standards identified in § 3560.308.                   certified financial statements presented
                                                    changes in project ownership other than                     (2) Borrowers must describe their                   in accordance with Generally Accepted
                                                    those approved by the Agency and                          accounting, bookkeeping, budget                       Accounting Principles (GAAP). Owner-
                                                    identified in the certification; and that,                preparation, and financial reporting                  certified submissions will not include
                                                    real estate taxes are paid in accordance                  procedures in their management plan.                  an auditor’s opinion or auditor’s report
                                                    with state and/or local requirements and                  *     *     *     *    *                              on compliance or internal controls.
                                                    are current.                                                (e) * * *                                           Borrowers may use a CPA to prepare
                                                    List of Subjects in 7 CFR Part 3560                         (1) Borrowers must retain all housing               this report.
                                                                                                              project financial records, books, and                 *     *      *     *    *
                                                      Aged loan programs—Agriculture,                         supporting material for at least three                  (b) Performance standards. All
                                                    Loan programs—Housing and                                 years after the issuance of their financial           Borrowers must certify that the housing
                                                    Community Development, Low- and                           reports. Upon request, these materials                meets the performance standards below:
                                                    moderate-income housing, Public                           will immediately be made available to
                                                    housing, Rent subsidies.                                                                                        *     *      *     *    *
                                                                                                              the Agency, its representatives, the                    (8) There have been no changes in
                                                      For the reasons set forth in the                        USDA Office of the Inspector General                  project ownership other than those
                                                    preamble, chapter XXXV, Title 7 of the                    (OIG), or the General Accountability                  approved by the Agency and Identified
                                                    Code of Federal Regulations is proposed                   Office (GAO).                                         in the certification.
                                                    to be amended as follows:                                 *     *     *     *    *                                (9) Real estate taxes are paid in
                                                                                                              ■ 5. Amend § 3560.303 by revising                     accordance with state and/or local
                                                    PART 3560—DIRECT MULTI-FAMILY
                                                                                                              paragraph (b)(1)(vi)(Q) to read as                    requirements and are current.
                                                    HOUSING LOANS AND GRANTS
                                                                                                              follows:                                                (c) * * *
                                                    ■ 1. The authority citation for Part 3560                                                                         (1) Non-profit and public borrower
                                                                                                              § 3560.303    Housing project budgets.
                                                    continues to read as follows:                                                                                   entities subject to OMB Circular A–133
                                                                                                              *      *     *     *    *                             requirements must submit audits in
                                                        Authority: 42 U.S.C. 1480.                               (b) * * *                                          accordance with 2 CFR part 200.
                                                                                                                 (1) * * *
                                                    Subpart A—General Provisions and                             (vi) * * *                                         *     *      *     *    *
                                                    Definitions                                                  (Q) Professional service contracts                   Dated: July 9, 2015.
                                                    ■ 2. Amend § 3560.11 by removing the                      (audits, owner-certified submissions in               Tony Hernandez,
                                                    definition of ‘‘Engagement’’.                             accordance with § 3560.302(a)(2), tax                 Administrator, Rural Housing Service.
                                                                                                              returns, energy audits, utility                       [FR Doc. 2015–19342 Filed 8–5–15; 8:45 am]
                                                    Subpart G—Financial Management                            allowances, architectural, construction,              BILLING CODE 3410–XV–P
                                                                                                              rehabilitation and inspection contracts,
                                                    ■ 3. Section 3560.301 is revised to read
                                                                                                              etc.)
                                                    as follows:
                                                                                                              *      *     *     *    *                             DEPARTMENT OF ENERGY
                                                    § 3560.301       General.                                 ■ 6. Amend § 3560.308 by:
                                                       This subpart contains requirements                     ■ a. Revising paragraphs (a)(1) and (2).              10 CFR Parts 429 and 430
                                                    for the financial management of Agency-                   ■ b. Removing paragraph (b).
                                                                                                              ■ c. Redesignating paragraphs (c) and                 [Docket No. EERE–2014–BT–TP–0044]
                                                    financed multi-family housing (MFH)
                                                    projects, including accounts, budgets,                    (d) as (b) and (c) respectively.                      RIN 1904–AD45
                                                    and reports. Financial management                         ■ d. Revising the newly designated (b)
                                                    systems and procedures must cover all                     introductory text.                                    Energy Conservation Program: Test
                                                                                                              ■ e. Adding paragraphs (b)(8) and (b)(9).             Procedures for Battery Chargers
                                                    housing operations and provide
                                                                                                              ■ f. Revising the newly designated
                                                    adequate documentation to ensure that                                                                           AGENCY: Office of Energy Efficiency and
                                                    program objectives are met.                               (c)(1).
                                                                                                                 The revisions and additions read as                Renewable Energy, Department of
                                                    ■ 4. Amend § 3560.302 by revising
                                                                                                              follows:                                              Energy.
                                                    paragraphs (a), (b)(1) and (2), and (e)(1)
                                                    to read as follows:                                                                                             ACTION: Notice of proposed rulemaking.
                                                                                                              § 3560.308    Annual financial reports.
                                                    § 3560.302 Accounting, bookkeeping,                          (a) General. (1) Borrowers that receive            SUMMARY:   The U.S. Department of
                                                    budgeting, and financial management                       $500,000 or more in combined Federal                  Energy (DOE) is proposing to revise its
                                                    systems.                                                  financial assistance must include an                  test procedure for battery chargers
                                                      (a) General. Borrowers must establish                   independent auditor’s report, financial               established under the Energy Policy and
                                                    the accounting, bookkeeping, budgeting                    statements and notes to the financial                 Conservation Act of 1975, as amended
                                                    and financial management procedures                       statements, supplemental information                  (EPCA). These proposed revisions, if
                                                    necessary to conduct housing project                      containing Agency approved forms for                  adopted, would harmonize the
                                                    operations in a financially safe and                      project budgets and borrower balance                  instrumentation resolution and
                                                                                                              sheets, report on internal controls and               uncertainty requirements with the
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                                                    sound manner. Borrowers must
                                                    maintain records in a manner suitable                     compliance, and a schedule of current                 second edition of the International
                                                    for an audit, and must be able to report                  and prior year finding and corrective                 Electrotechnical Commission (IEC)
                                                    accurate operational results to the                       actions (if applicable). Borrowers must               62301 standard and other international
                                                    Agency from these accounts and                            include the audit with their annual                   standards for measuring standby power.
                                                    records.                                                  financial reports submitted to the                    Additionally, the proposed amendments
                                                      (b) * * *                                               Agency. Federal Financial Assistance is               would update and propose new battery
                                                      (1) Borrowers may use a cash, accrual,                  defined in accordance with 2 CFR                      selection criteria for multi-voltage,
                                                    or modified accrual method of                             200.40.                                               multi-capacity battery chargers, and


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Document Created: 2018-02-23 10:55:31
Document Modified: 2018-02-23 10:55:31
CategoryRegulatory Information
CollectionFederal Register
sudoc ClassAE 2.7:
GS 4.107:
AE 2.106:
PublisherOffice of the Federal Register, National Archives and Records Administration
SectionProposed Rules
ActionProposed rule.
DatesWritten comments must be received on or before October 5, 2015 to be assured for consideration.
ContactStephanie White, Director, Multi- Family Housing Portfolio Management Division, Rural Housing Service, Room 1263S--STOP 0782, 1400 Independence Avenue SW., Washington, DC 20250-0782, Telephone: (202) 720-1615.
FR Citation80 FR 46853 
RIN Number0575-AC98
CFR AssociatedAged Loan Programs-Agriculture; Loan Programs-Housing and Community Development; Low- and Moderate-Income Housing; Public Housing and Rent Subsidies

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