| Dear Center Members: |
The purpose of this GAQC Alert is to inform you about the following Novel Coronavirus (COVID-19) developments:
- The U.S. Department of Housing and Urban Development (HUD) has issued audit submission deadline extensions and other waivers for audits of certain for-profit entities under the HUD Consolidated Audit Guide.
- The U.S. Department of Education (ED) has issued new guidance offering audit procedure alternatives relating to site visits in its Guide for Audits of Proprietary Schools and for Compliance Attestation Engagements of Third-Party Servicers Administering Title IV Programs.
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HUD COVID-19 Extensions
Multifamily Housing. HUD updated its Questions and Answers for Office of Multifamily Housing Stakeholders on March 13, 2020, to add a number of new questions and answers (Q&As). One of the new questions in the "Waivers and Extensions" section (i.e., Question 2) provides an extension for the multifamily audit submission deadline and states that all audited financial statements that are due to HUD in March or April 2020 are provided with a 30-day extension. It also states that the Office of Multifamily Housing Programs will continue to monitor the situation and may provide additional extensions as warranted. The following message has also been posted on the Multifamily Housing – Highlights and Announcements Web page:
Global 30-day Extension for All Submissions with a Due Date of 3/31/20 and 4/30/20
Due to business disruptions caused by the COVID-19 virus, the Office of Multifamily Housing has issued approval for a 30-day extension of all financial statements having due dates of 3/31/20 and 4/30/20. Financial statements with a due date of 3/31/20 will now be due on 4/30/20, and financial statements with a due date of 4/30/20 will now be due on 5/31/20. This applies to all submissions with those due dates both audited and unaudited.
While both Question 2 and the above announcement only refer to the financial statement audit deadline being extended, we verified with staff at the Real Estate Assessment Center that the extension also applies to the related multifamily compliance audit and agreed-upon procedures engagement.
If you audit multifamily housing entities you are encouraged to make your clients aware of the Q&A document and to read the many other Q&As that, in some cases, relax or waive certain multifamily compliance requirements. For example, among the topics discussed are site visits and other types of inspections, handling residents that are ill, etc. There are also flexibilities provided to multifamily property owners and agents which allow them to access property operating accounts for all reasonable and necessary COVID-19 related preparedness and response actions, including supplies, staff hours, and overtime. The document states that no advance HUD approval is required to access operating account funds.
Lenders. HUD's Federal Housing Administration (FHA), Office of Single Family Housing, also updated its COVID-19 Questions and Answers on March 13, 2020. One of the questions (Question 4) provides an extension for the audit submission deadline. It indicates that audited financial statements due to HUD on March 31, 2020, will now have an extension to April 30, 2020. It also encourages lenders that have the ability to submit their audited financial statements before April 30th to do so. We have verified with FHA staff that even though Question 4 only refers an extension of the audited financial statements, the extension applies to everything associated with the annual recertification process and thus includes the related lender compliance audit and agreed-upon procedures engagement.
If you audit lenders subject to the FHA's rules, you are encouraged to read the other Q&As provided and to make your clients aware of the document. Many of the questions address the status of various HUD activities surrounding the lending process at this time. There are also several questions that address how inspections and appraisals are to be carried out and a waiver is provided to the face-to-face interview requirement under the FHA Default Servicing rules.
Finally, we also verified that the lender extension described above does not apply to entities that are audited under chapter 6 of the HUD Consolidated Audit Guide, Ginnie Mae Issuers of Mortgage-Backed Securities Audit Guidance. We have inquired about the status of any extensions to be provided for those entities and will communicate in a future GAQC Alert what we learn.
ED Proprietary Schools Guidance
On March 10, 2020, ED issued Dear CPA Letter, CPA-20-01, Site Visit Exemption During COVID-19 Outbreak. This letter relates to audits of for-profit entities performed under the ED Audit Guide, Guide for Audits of Proprietary Schools and for Compliance Attestation Engagements of Third-Party Servicers Administering Title IV Programs. It provides exemptions to the requirements in the Guide for auditors to make site visits by allowing auditors to perform alternative procedures to achieve the intent of the site visits. The letter includes certain parameters for performing the alternative procedures that must be met. Auditors performing audits under this Guide should read the letter in its entirety.* * * * *
Sincerely,
AICPA Governmental Audit Quality Center |
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