Exhibit A to Subpart C of Part 1930 - Steps for Farmers Home Administration (FmHA) or Its Successor Agency Under Public Law 103-354 Personnel in Conducting Annual Review of Multiple Housing Operations

I.Examine the Condition of the Borrower/Management Reports to Determine that:

A.Required accounts are being properly maintained in accordance with the loan resolution or agreement.

B.Decisions of officials are being entered in the minutes book, if applicable.

C.Any membership or stock transfers have been approved by FmHA or its successor agency under Public Law 103-354 and recorded as required.

D.Financial records are maintained by qualified persons.

E.The financial records are being reviewed by a qualified auditor where an audit is required or by a competent individual or committee when a verification of review of accounts is required.

II.Study the Financial Progress: Compare current financial condition and owner's equity with previous years to discover any trends, for example:

A.Has cash carryover increased or decreased?

B.Are the debts greater or less?

C.Is the owner's equity greater or less?

D.Are accounts receivable greater or less?

E.Are collection provisions being enforced?

F.Are reserve and other required funds or accounts properly maintained?

III.Study the State of Income and Expenditures for the Past Year: Compare it with the budget for the past year and the same statement for previous years.

A.Were rents or occupancy charges, subsidies, and other monies collected sufficient to produce the required revenues for planned expenditures?

B.Were actual expenditures significantly different from those budgeted?

C.Were the expenditures sufficient to adequately maintain the project?

D.Were expenditures reasonable and typical for similar projects?

E.Were any essential items of maintenance deferred during the past year?

F.Were payments made on authorized debts in the proper amounts and on the dates agreed to?

G.If the borrower is operating on a limited profit basis, did net cash return exceed the amount permitted in the loan agreement or loan resolution?

H.Did the borrower charge late fees to project accounts other than the Return on Investment Account?

I.Were an excessive number of overage charges paid by the project?

IV.Study the Budget for the next Year: Compare it with the statement of income and expenditures for the past year, taking into consideration any known increase or decrease in operating expenses for the planned year and the prevailing costs of doing similar business in the market area.

A.Are proposed expenditures adequate for normal maintenance and operation of the project?

B.Are proposed fees to be paid to firms closely associated with the borrower and their management agents typical, reasonable, and earned for the services to be provided?

C.Does the budget make provision for financing maintenance or energy conservation measures/practices deferred from the previous year?

D.Does it provide for the required financial reserves?

E.Is planned revenue adequate to cover planned expenditures?

F.Will the budget and planned operating practices correct any deficiencies in the past year's operations?

V.Study the Audit Report: Compare it with the audit from the previous year, noting any significant changes affecting the borrower's operations. Exhibit A-1 of this subpart may be used as a guide.

VI.Review the Energy Audit: Review the most recent energy audit and the borrower's plan for implementation.

VII.Determine Whether or Not the Borrower Has:

A.Maintained required financial records and accounts, made required reports, submitted required financial audits or verifications of review and taken appropriate action to correct previously noted deficiencies of such records, reports, audits or verifications.

B.Renewed fidelity coverage and insurance policies.

C.For borrowers with governing bodies.

1.Held regular board, committee, and membership meetings.

2.Conducted the affairs along sound business lines.

D.Made a change in any organizational documents without FmHA or its successor agency under Public Law 103-354 consent.

E.Made a change in the plans for management and operations of the project without FmHA or its successor agency under Public Law 103-354 consent.

F.Made a change in the membership or interest in ownership without FmHA or its successor agency under Public Law 103-354 consent.

VIII.Summary: Summarize major observations and decisions reached as the result of the review and record on Form FmHA or its successor agency under Public Law 103-354 1930-10, “Annual Multiple Family Housing Project Review.”