N.Y. Comp. Codes R. & Regs. Tit. 9 §§ 1641-2.1
The accounts listed on the chart of accounts [see § 1641-5, supra] are defined in this section. Questions concerning the classification of charges and credits not covered by the account definitions should be referred to the division for ruling.
ASSET ACCOUNTS-1000 GROUP
1100 Cash, Receivables, and Investments
This group of accounts includes all cash, accounts, notes and accrued receivables, and investments held by a local agency in the name of, or for the benefit of, a given project. Separate accounts under this heading shall be maintained as herein prescribed.
1110 Cash
This group of accounts includes all cash of a given project on hand or on deposit. Separate accounts shall be maintained under this heading as herein prescribed. When a given fund consists of more than one bank account, each such bank account shall be designated as a separate subaccount under the applicable fund. For example, if development funds are deposited in two banks, the bank accounts are designated as Development Fund #1, and Development Fund #2, respectively, and separate ledger accounts kept for each bank account, the ledger accounts being designated as account 1111.1, 1111.2, etc. Savings accounts in savings and loan associations and commercial banks, and certificates of deposits with commercial banks, are classified as investments and should not be included under the heading of cash. See 1170 group of accounts, Investments, for further details.
1111 Development Fund
The debit balance of this account shall reflect funds received for the development of the project, less expenditures made, in accordance with the contract for State aid.
1112 Administration Fund
The debit balance of this account represents the unexpended cash balance of revenue received from the management and operation of the project, including subsidies.
1113 Reserve Fund
The debit balance of this account represents the amount of uninvested cash on deposit in a bank account specifically designated for such reserve funds as are required to be segregated from the Administration Fund. See Part 1647, Operating Period Accounting, for the operation of this account.
1114 Security Deposits Fund
The debit balance of this account represents the uninvested amount of cash paid by tenants to secure a local agency against losses arising from nonpayment of rent or from other causes. These deposits, by law, are held in trust for the tenants, and should be segregated from all other funds. If security deposits funds are invested by the local housing authority or deposited in a bank account paying interest, the interest thereon is the property of the tenants, and the debit balance in account 1114 will also include the undistributed portion of such interest received. Where a Consolidated Security Deposits Fund has been approved by the division for the housing authority, the balance in this account represents the project's equity in the Consolidated Security Deposits Fund of the authority.
1115 Special Deposits
This account is provided for unusual transactions which may arise, such as the deposit of a sum of money in escrow while a pending claim against a local agency is being resolved. The use of this account will be restricted to such transactions as are approved by the Division of Housing. Container deposits, etc., should be charged to account 1129, Sundry Accounts Receivable.
1116 Local Funds
The debit balance of this account represents the unexpended cash balance of funds donated to, or borrowed by, a local agency for payment of other than eligible development or operating costs of a State-aided project or for the payment of indeterminate expenditures.
1117 Petty Cash Fund
The debit balance of this account represents the amount of imprest cash fund available for the payment of nominal expenses.
1118 Change Fund
The debit balance of this account represents the cash fund made available from the Administration Fund for convenience in making change. The amount of cash on hand in this fund should at all time[s] be constant for the total amount of the fund as established. The Change Fund is maintained and operated independently of the Petty Cash Fund.
1120 Accounts Receivable
This group of accounts shall include all amounts due from tenants, and all amounts, except accrued receivables other than rent, due on open account not evidenced by a formal instrument of indebtedness in favor of the local authority, such as a note. Separate accounts are provided under this heading, as follows:
1122 Tenants Accounts Receivable
This account shall control the balances on the individual tenants account cards, and the account balance shall represent the net of the debit and credit balances of the individual tenants' accounts. At the end of each quarter, the sum of the individual credit balances shall be reported, as account 2240, Tenants' Prepaid Rents. See subdivision (j) of section 1642-4.3, Part 1642, Basic Instructions, for entries and procedures. The above instructions under 1122 apply to the subaccounts listed below.
1122.1 Permanent Projects
This balance represents the amount due from tenants who are occupying apartments or have vacated apartments in the permanent operating project.
1122.2 Site Operations
This balance represents the amount due from residential and commercial tenants who are occupying or have vacated accommodations on the site. This situation occurs if the authority has acquired property, with tenants in occupancy, which land is to be incorporated into the project site.
1122.3 Former Owners and Fixture Awardees
The balance in this account represents the amount due from former owners for rent and sundry charges, who remain in occupancy after property was acquired by the authority for the project. It also includes unpaid rent and sundry charges owed by commercial tenants who have been granted fixture awards.
1122.4 Rehabilitation Operations
Where a housing authority has rehabilitated old buildings to provide additional dwelling units, this account represents past due rent and sundry charges due from tenants.
1122.5 Offsite Tenants
The balance in this account represents the amount due from tenants who are occupying dwellings on property acquired by the authority for the purposes of offsite clearance.
1123 State Housing Fund
This account will reflect any balance that may be due to the local agency from the State of New York from funds received by the State representing the proceeds of the sale of bonds (exclusive of the premium thereon) earmarked for a specific project and paid into the State Housing Fund. Such balance may consist of cash on deposit with the State Comptroller, or of cash and investments.
1124 State Housing Debt Fund
This account is charged with the amount of the premiums received by the State from purchasers of State housing bonds over and above their face value, with the interest received by the State on State Housing Fund Investments, and with the remittances made by the authority to the State to meet payments of interest and amortization on State housing bonds and is credited with such payments of interest and amortization as have been made to bondholders by the State. The authority will be advised by the division of the amount of the premium to be recorded. Interest on State Housing Fund Investments should, also, not be accrued or recorded until the authority is advised by the division as to the amount of the interest. See Part 1646, Debt Service, for accounting entries.
1129 Sundry Accounts Receivable
The debit balance of this account represents amounts receivable as a result of transactions for which specific accounts are not provided above. Accounts shall be maintained with each individual, firm, organization, or other entity, in a subsidiary sundry accounts receivable ledger to be controlled by this account.
As an aid in reconciling the funds, it is recommended that the authority use the following subaccounts to indicate the fund involved:
1129 D Sundry Accounts Receivable-Development
1129 A Sundry Accounts Receivable-Administration
1129 R Sundry Accounts Receivable- Reserve
With respect to transactions between funds, use the 1680 group of accounts.
1140 Accrued Receivables
This group of accounts shall include all subsidies due on account of the operation of a given project and all accrued receivables other than rent. The term accrued receivables refers to revenue accruing with the lapse of time or as services are performed, and periodically recognized. Separate accounts are provided under this heading, as follows:
1141 Subsidies-State of New York
The debit balance of this account represents the accrued annual subsidies that may be due from the State of New York. See Part 1648, Subsidies, for accounting entries.
1142 Subsidies-Other
The debit balance of this account represents the amount of accrued local subsidies in the form of cash that may be due from the city, town, village, or other political subdivision obligated to pay such subsidies under the terms of a contract for State aid.
Memo Subsidies-Tax Exemption (Cumulative)
The debit balance of this account represents, for record-keeping purposes only, the cumulative value of the exemption from local real estate taxes granted to the project in accordance with the provisions of the Public Housing Law and the contract for State aid. The entries to this account shall be made at the close of each fiscal year, beginning with the fiscal year in which the date of substantial completion falls, for the value of the tax exemption subsidy for that year, the credit being made to the memo income account, Tax Exemption Subsidies, (Annual), kept with the 3800 group of accounts. Both these memo accounts are for the purpose of reflecting on the books of record the accumulated tax exemption enjoyed by the project and are not to be reflected on the financial reports.
1143 Accrued Interest Receivable on Mortgages
The debit balance of this account represents the accrued interest receivable on mortgages acquired in connection with the acquisition of land, title to which has not yet been acquired by the local agency. In the acquisition of land by private negotiation, local agencies will very often deal with the owners of the land and the holders of the mortgage separately and may buy the mortgage prior to obtaining title to the land. The accrual of interest will cease as of the date the title to the land is acquired, and the mortgage is merged into the fee.
1144 Accrued Interest Receivable on Investments
The debit balance of this account represents the accrued interest receivable on investments of the local agency. Interest on State Housing Fund Investments shall not be accrued, but shall be charged to account 1124, State Housing Debt Fund, when the local agency is advised by the Division of Housing as to the amount of such interest received by the State and paid into the State Housing Debt Fund. The increase or decrease in redemption value of local agency investments in series F, G, J and K United States savings bonds shall not be charged to this account, but shall be charged to the appropriate investment subaccount of the 1170 group of accounts, See Part 1645, Investments, for accounting entries. As an aid in reconciling the funds, it is recommended that the authority use the following subaccounts to indicate the fund involved:
1144 D Accrued Interest Receivable on Development Fund Investments
1144 A Accrued Interest Receivable on Administration Fund Investments
1144 R Accrued Interest Receivable on Reserve Fund Investment
1170 Investments
There shall be included in this group of accounts all investments of project funds, in formal securities, made by the local agency. Savings accounts in savings and loan associations and commercial banks, and certificates of deposit with commercial banks, are to be included in this account and treated like an investment in a formal security. This group of accounts does not include investments made by the State of the proceeds of bond issues paid into the State Housing Fund nor mortgages acquired by the local agency in connection with the acquisition of land. The individual contracts for State aid should be referred to for possible limitations and restrictions on the investments of the various funds by the local agency. Accounting entries and procedures in connection with investments will be found in Part 1645, Investments. Separate accounts shall be maintained, by source of funds invested, as follows:
1172 Development Fund Investments
The debit balance of this account represents the book value of investments purchased or made from the Development Fund.
1173 Administration Fund Investments
The debit balance of this account represents the book value of all investments purchased or made from the Administration Fund.
1176 Reserve Fund Investments
The debit balance of this account represents the book value of all investments purchased or made from the Reserve Fund.
1200 Deferred Charges and Prepayments
There shall be included in this group of accounts all expenditures made or accrued in one period which shall become a charge to operations or development costs, in subsequent periods. Separate accounts shall be maintained, as follows:
1210 Deferred Charges to Insurance
The debit balances of the accounts in this group represent the amount of the unexpired portion of insurance premiums and the amount of rebates, return premiums, or dividends due on expiration of policies with mutual insurance companies. Refer to Part 1642, Basic Instructions, for entries and procedures. Separate accounts shall be maintained as follows:
1211 Prepaid Insurance This account includes the unexpired portion of stock company insurance premiums and of the estimated net premium where the insurer is a mutual insurance company. Estimated net premium is defined as the difference between the gross premium on the face of the policy and the estimated rebate or return premium from the mutual insurance company accruing upon the expiration of the policy.
As an aid in reconciling the funds, it is recommended that the authority use the following subaccounts to indicate the fund involved.
1211 D Prepaid Insurance-Development 1211 A Prepaid Insurance-Administration
1212 Anticipated Returnable Premiums
This account includes deposit premiums and the estimated amount of rebates, return premiums, or dividends that will become due upon the expiration of policies, such as those placed with mutual insurance companies.
As an aid in reconciling the funds, it is recommended that the authority use the following subaccounts to indicate the fund involved:
1212 D Anticipated Returnable Premiums-Development 1212 A Anticipated Returnable Premiums-Administration
1230 Prepaid Utilities
Payments for utilities chargeable to expense in future periods shall be charged to this group of accounts in the interim. Separate accounts shall be maintained by type of utility. The following is the only account now prescribed:
1231 Prepaid Water
When payment has been made in advance for water, the total payment made should be charged to this account. Thereafter, the proportionate part of such charge should be written off, the appropriate development cost or operating expense account being debited and this account credited.
1260 Inventories
Ordinarily, all commodities, supplies, and materials, except fuel and paint supplies, will be charged directly to the appropriate cost or expense accounts when purchased. Purchases of fuel and paint supplies, however, shall first be charged to the inventory accounts prescribed in this group of accounts and the amounts consumed subsequently credited out of inventory and charged to the appropriate expense accounts in the manner described in Part 1642, Basic Instructions. In addition to the general ledger account controlling the money value of the inventory of paint supplies, a stores system to control the physical quantities of paint supplies shall be maintained. Stores systems to record and control the physical quantities of other commodities, supplies, and materials purchased, issued, and consumed may be prescribed by the Division of Housing or adopted by the local agency, but they need not be controlled by general ledger inventory accounts. Refer to Part 1642, Basic Instruction, for entries and procedures. Separate accounts are prescribed, as follows:
1261 Fuel Inventory
The debit balance of this account includes the inventory value of coal, fuel oil, etc.
1262 Paint Supplies Inventory
The debit balance of this account includes the inventory value of paint, paint supplies, and painting accessories such as ladders, drop cloths, brushes, etc.
1269 Sundry Inventories
The debit balance of this account represents the value of any inventory established other than fuel or paint supplies.
1270 Prepaid Rent
The debit balance of this account represents the amount of rent paid or vouchered by the local agency for premises occupied by it (such as a central office), but applicable to a future period.
1280 Prepaid Taxes
The debit balance of this account represents the amount of taxes which have been paid or vouchered, but which are applicable to a future period.
1290 Sundry Deferred Charges and Prepayments
The debit balance of this account represents the amount of prepayments of costs or expenses applicable to future period which are not specifically chargeable to other accounts in the 1200 group.
1300 Working Capital
The debit balance of this account represents the amount of funds borrowed from the proceeds of a State housing bond issue in excess of the development cost of a project, as certified by the Commissioner of Housing. This account is used only after the project is declared physically completed and the amount of working capital has been certified by the Commissioner of Housing. See section 1646-8.1 for the accounting entries.
1400 Development Costs
The debit balances of the accounts in this group represent all eligible costs and expenses of project development which have been capitalized in accordance with a contract for State aid between the local agency and the State. The balances of these accounts shall be net of credits to development costs. This account is a general ledger control account. Detailed development costs accounts subsidiary to this account are defined following the general ledger accounts.
1500 Incompleted Contracts
The debit balance of this account represents the amount of the unliquidated balance of development cost and management contracts. This account is contra to account 2400, Contract Awards. For balance sheet purposes, this account should be shown as a deduction from account 2400, Contract Awards.
As an aid in reconciling the funds, it is recommended that the authority use the following subaccounts to indicate the fund involved:
1500 D Incompleted Contracts-Development
1500 A Incompleted Contracts-Management
1600 Suspense and Clearance
This group of accounts includes all items the charging of which is suspended pending the determination of the particular cost or expense accounts to be charged. It also includes items which cannot ultimately be charged to other specific accounts, such as ineligible expenditures. Separate accounts shall be maintained under this heading as follows:
1610 Indeterminate Expenditures
The debit balance of this account represents expenditures incurred by the local agency prior to the date of the contract for State aid, the eligibility of which as development costs is subject to audit and approval by the division. Such expenditures shall be paid out of local agency funds other than funds advanced or to be advanced by the State or project revenues. After review and approval by the division, the amount of such expenditures as are determined to be eligible shall be transferred from this account and charged to account 1400, Development Costs. The local agency may then reimburse itself for the expenditures approved as eligible out of loan funds advanced or to be advanced by the State. Local agencies should predetermine, as far as possible, the eligibility of indeterminate expenditures inasmuch as the eligible purposes for which such expenditures may be made are principally restricted to those in connection with the application for financial assistance or a housing survey. In addition, the division may limit, in advance, the total amount of otherwise eligible indeterminate expenditures which may be reimbursable out of loan funds. No disposition of the balance, if any, remaining in this account, after eligible expenditures have been transferred to development costs, shall be made without prior division approval. Refer to Part 1640, General Information, for procedures in connection with indeterminate expenditure.
1620 Ineligible Expenditures
The debit balance of this account represents the amount of expenditures, made by a local agency subsequent to the date of a contract for State aid, and charged to project revenues or funds advanced or to be advanced by the State, which, upon audit and review, have been determined by the division to be ineligible to be charged to project revenues or to funds advanced or to be advanced by the State. Refer to Part 1640, General Information, for procedures in connection with eligibility standards, audit and review of expenditures, determination of ineligibility, and reimbursement of funds for ineligible expenditures which have been paid therefrom. The liability for ineligible expenditures charged but not paid shall be transferred to account 2119, Accounts Payable, Sundry, pending payment by the local agency out of funds other than project revenues, or funds advanced or to be advanced by the State.
As an aid in reconciling the funds, it is recommended that the authority use the following subaccounts to indicate the fund involved:
1620 D Ineligible Expenditures-Development 1620 A Ineligible Expenditures-Administration
1640 Payroll Clearance
This account is charged at the end of each payroll period with the actual disbursements (net) for salaries and wages, from the cash disbursements-voucher register. This account is credited with the net amount paid, the total of which is reflected in column (9) of the periodical payroll form, Exhibit 29 of Appendix S-8. The use of this account is ordinarily indicated only where the authority is operating more than one project or a central office. The detailed procedure with respect to making entries in this account is more fully explained in Part 1642, Basic Instructions. As an aid in reconciling the funds, it is recommended that the authority use the following subaccounts to indicate the fund involved:
1640 D Payroll Clearance-Development 1640 A Payroll Clearance-Administration
1650 Revolving Fund
A Revolving Fund, in the form of a separate bank account, may be established, with prior written division approval, where an authority is operating more than one project for the purpose of paying joint expenses. The balance in this account represents the project's equity in the Revolving Fund of the housing authority. As an aid in reconciling the funds, it is recommended that the authority use the following subaccounts to indicate the fund involved:
1650 D Revolving Fund-Development 1650 A Revolving Fund-Administration
1670 Insurance Claims
(b) A file shall be maintained for each loss covered by hazard insurance, regardless of the amount of the loss, which shall include, besides copies of all documents and correspondence relating to the loss, a record of costs incurred in repairing, restoring or replacing the loss or damage, the cost of making the claim, the amount of the claim, and the ultimate disposition of the claim. No accounting entry is made when the claim is filed. When the claim is settled, the amount of the settlement is charged to account 1129, Sundry Accounts Receivable, and credited to Insurance Claims Clearance, account 1670. If the claim has arisen prior to the date of substantial completion, the difference, if any, is transferred out of the Insurance Claims Clearance account and charged or credited to account 1480, Other Charges and Credits to Development Costs, unless the claim is in connection with related offsite, rehabilitation, or relocation of buildings programs, when the transfer will be to the appropriate development cost subaccount. If the claim has arisen subsequent to the date of substantial completion, the transfer shall be to account 3590, Miscellaneous Project Income, if the amount received in settlement is in excess of the cost, and to account 6100, Miscellaneous Losses, if the settlement is less than the costs.
(c) This account shall also be charged with the amount of the claim against surety and bonding companies arising out of losses covered by fidelity bonds. The account to be credited when such claim is charged will depend on the circumstances. When the claim is settled, the amount of the settlement shall be transferred to account 1129, Sundry Accounts Receivable, and the differences, if any, between the amount of the claim and the settlement handled in the same manner as for losses covered by hazard insurance.
1680 Interfund Clearance
1680 D Interfund Clearance-Development
A debit balance in this account represents the amount due to the Development Fund from the Administration and/or Reserve Funds; a credit balance in this account represents the amount owing by the Development Fund to the Administration and/or Reserve Funds.
1680 A Interfund Clearance-Administration
A debit balance in this account represents the amount due to the Administration Fund from the Development and/or Reserve Funds; a credit balance in this account represents the amount owing by the Administration Fund to the Development and/or Reserve Funds.
1680 R Interfund Clearance-Reserve
A debit balance in this account represents the amount due to the Reserve Fund from the Development and/or Administration Funds; a credit balance in this account represents the amount owing by the Reserve Fund to the Development and/or Administration Funds.
1690 Sundry Suspense and Clearance
This account shall be charged and credited with such suspense and clearance items for which accounts have not been otherwise provided in the 1600 group of accounts.
1695 Tenants Disbursements Clearance
This account shall be used to record the liability for legal fees, marshall fees, court costs and other costs directly chargeable to tenants, pending the payment of invoices by the local agency. When the invoice is received and approved for payment, a miscellaneous charge and credit ticket (Exhibit 22 of Appendix S-8) shall be prepared for each item on the invoice and the charges posted simultaneously to the tenants charges and credit book (Exhibit 25 of Appendix S-8) and to the individual tenants ledger cards. The total amount of the invoice will thereby be reflected as a charge to Tenants Accounts Receivable, account 1122, and as a credit to account 1695, Tenants Disbursements Clearance, through the medium of the TCC book. When the invoice is paid, account 1695 shall be charged.
LIABILITIES, RESERVES AND CAPITAL-2000 GROUP
2100 Payables and Accruals
This account group shall include all payables and accruals of the local agency as indicated by the account designations that follow. Separate accounts shall be maintained under this heading as follows:
2110 Accounts Payable
This group of accounts shall include all amounts payable by the local agency on open account not evidenced by a formal instrument of indebtedness such as a note. Separate accounts are provided under this heading, as follows:
2111 Vendors and Contractors-Accounts Payable
2111 D Vendors and Contractors-Development
The credit balance of this account represents amounts due and payable from the Development Fund which have been vouchered. Contract retentions, taxes payable, and accrued liabilities should be credited to the appropriate accounts provided therefor. If salaries and wages payable from Development Funds have been vouchered, and remain unclaimed for one month, the vouchers should be cancelled and the amounts transferred by journal voucher to account 2115, Unclaimed Salaries and Wages.
2111 A Vendors and Contractors-Administration
The credit balance of this account represents amounts due and payable from the Administration Fund which have been vouchered. Contract retentions, taxes payable, and accrued liabilities should be credited to the appropriate accounts provided therefor. If salaries and wages payable from Administration Funds have been vouchered, and remain unclaimed for one month, the vouchers should be cancelled and the amounts transferred by journal voucher to account 2115, Unclaimed Salaries and Wages.
2112 Contract Retentions
The credit balance of this account represents the amounts withheld from payments of contractors' periodical estimates or other contracts payable from the Development and Administration Funds. The balance of this account shall agree with the total of the Contract Retentions column on the schedule of Contract Awards submitted with the periodical financial reports.
As an aid in reconciling the funds, it is recommended that the authority use the following subaccounts to indicate the fund involved:
2112 D Contract Retentions-Development 2112 A Contract Retentions-Administration
2113 Deposits-Other Than Tenants
(a) The credit balance of this account represents the amount of deposits received by the local agency (exclusive of tenants' security deposits) and subject to possible refund. This includes such items as earnest money, deposits on bids and specifications, deposits by contractors, and others in connection with construction, demolition and management, and deposits, binders, or options, on sales of real property owned by the local agency prior to the closing of title. All such deposits shall be deposited in the applicable fund. This account shall control and be supported by a subsidiary ledger in which accounts shall be maintained with each individual, firm, organization, or other entity from whom a deposit is received. Local agencies will find it useful to note on each account, the conditions surrounding the receipt and possible refund of the deposit.
(b) Refunds of deposits, when made, shall be charged to this account. Where a set of contract documents has not been returned within 30 days following the award of the contract or the rejection of the proposal of such person or corporation, the deposit is to be declared forfeited. Forfeited deposits, or the difference between the amount of the deposit and the amount refunded shall be transferred from this account and credited to account 1430.5, Blue Printing, if the deposit was originally made in the Development Fund.
If the deposit has been received in connection with the sale of real property or salvage from demolition, however, and the underlying transaction has been consummated, the deposit should be considered as being on account of the sales or contract price, and should be credited, upon consummation, to the appropriate development cost account (see e.g., account 1440.15, Sale of Site Land, or account 1440.14, Demolition and Clearing).
(c) For those deposits in the Administration Fund that are forfeited, the account to be credited is 3590, Miscellaneous Project Income.
(d) For the handling of deposits paid by the local agency, see account 1115, Special Deposits, account 1129, Sundry Accounts Receivable, and account 1440.7 Consideration for Options.
2114 Tenants' Security Deposits
(a) The credit balance of this account represents the amount of deposits which are held for tenants and are to be returned on the termination of their occupancy after deducting therefrom rent due and charges for replacement or repair of damaged property, etc. Tenants' security deposits from all sources shall be credited to this account, and deposited in the Security Deposits Fund, whether received during the development, initial operating, or operating periods, or in connection with the operation of the project proper prior and subsequent to demolition, or the related offsite clearance, rehabilitation, or relocation of buildings program.
(b) All reimbursement of tenants' security deposits shall be made by check. Unclaimed security deposits checks shall be redeposited in the Security Deposits Fund.
(d) See Part 1642, Basic Instructions, for entries and procedures.
2114.1 Interest Earned on Tenants' Security Deposits
The credit balance of this account represents the cumulative interest earned on all tenant security deposits.
2115 Unclaimed Salaries and Wages
The credit balance of this account represents the amount of all unclaimed salaries and wages due employees. This account shall be cleared of all wages and salaries remaining unclaimed for one year.
2117 Deductions and Withholdings
2117.1 Income Taxes Withheld
The credit balance of this account represents the payroll deductions for income tax which have not been remitted to the Director of Internal Revenue. If the total income taxes withheld exceeds $100 for either of the first two months of a calendar quarter, the local agency is obliged to deposit the taxes with a Federal reserve bank or commercial bank authorized to receive them, within 15 days after the close of the calendar month.
2117.3 Pension Fund Deductions
The credit balance of this account represents the salary deductions for employees' pensions, which have not been remitted to the pension system.
2117.4 Social Security Deductions and Employer's Contributions
The credit balance of this account represents the combined amount of the local agency's contributions and payroll deductions for social security, which have not been remitted to the State social agency.
2119 Sundry Accounts Payable
The credit balance of this account represents all accounts payable (except for transactions between funds-use account 2280) not allocable to other specific accounts provided in the 2110 group. Accounts shall be maintained with each individual, firm, organization, or other entity, in a subsidiary sundry accounts payable ledger to be controlled by this account. As an aid in reconciling the funds, it is recommended that the authority use the following subaccounts to indicate the fund involved:
2119 D Sundry Accounts Payable-Development 2119 A Sundry Accounts Payable-Administration 2119 R Sundry Accounts Payable-Reserve
2120 Temporary Loan Notes Payable
The credit balance of this account represents the amount of the outstanding Temporary Loan Notes of the local agency. DO NOT include the advance loan notes to the State of New York held in escrow, under the terms of a requisition agreement as security for the payment of interest and principal of the Temporary Loan Note or certificates of indebtedness issued to the State. The former are shown as a footnote to the balance sheet and the latter are separately classified and shown under the Indebtedness to State of New York (2300 group of accounts). Refer to Part 1643, Financing, for entries and procedures pertaining to temporary financing.
2130 Accrued Liabilities
This group of accounts shall include all items of cost or expense applicable to the current period, which are due and payable in a subsequent period. Separate accounts are provided under this heading, as follows:
2132 Accrued Interest Payable
2132.1 Accrued Interest Payable-State of New York
This account shall be credited with all interest accrued on all indebtedness to the State of New York. Refer to Part 1644, Debt Service, for the operation of this account.
2132.2 Accrued Interest Payable-Temporary Loan Notes
This account shall be credited with all interest accrued on all indebtedness other than indebtedness to the State of New York. Refer to Part 1645, Debt Service, for the operation of this account.
2134 Accrued Utilities
The credit balance of this account represents the amount of utility expense accrued. The use of subaccounts in the general ledger to analyze accrued utilities by type of utility is optional. Suggested subaccounts follow:
2134.1 Water
2134.2 Electricity
2134.3 Gas
2134.4 Fuel
2134.9 Sundry
The analysis, if made, should not, however, be reflected in statements or reports to the division.
2135 Accrued Salaries and Wages
The credit balance of this account represents the amount of salaries and wages accrued and unpaid. This account is used to reflect the liability of the project for salaries and wages accrued to the end of an accounting period, but not payable until the following period, as where the ends of the accounting and the payroll periods do not coincide. Refer to Part 1642, Basic Instructions, for the operation of this account and account 1640, the Payroll Clearance Account.
2136 Accrued Insurance
The credit balance of this account represents the amount of accrued insurance cost or expense. Refer to Part 1642, Basic Instructions for the operation of this account. As an aid in reconciling the funds, it is recommended that the authority use the following subaccounts to indicate the fund involved:
2136 D Accrued Insurance-Development 2136 A Accrued Insurance-Administration
2137 Acrued Real Estate Taxes
The credit balance of this account represents the amount of accrued real estate taxes. Income taxes withheld from salaries and wages should be credited to account 2117, Income Taxes Withheld.
2138 Accrued Pension Fund Contributions
The credit balance of this account represents the local agency's contribution for employees' pensions. As an aid in reconciling the funds, it is recommended that the authority use the following subaccounts to indicate the fund involved:
2138 D Accrued Pension Fund Contributions-Development
2138 A Accrued Pension Fund Contributions-Administration
2139 Sundry Accruals
The credit balance of this account represents the amount of accrued cost or expense not allocable to the other specific accounts provided in the 2130 group of accounts.
2200 Deferred Credits
This group of accounts shall include all liabilities for premiums on temporary loan notes, prepaid rents, subsidies received and not applied, and amounts received in payment for services to be rendered at a future date. Separate accounts are provided under this heading as follows:
2230 Premium on Temporary Loan Notes
The credit balance of this account represents the premium received on the sale of a local agency's Temporary Loan Notes, as amortized pursuant to procedures set forth in section 1644-2.5.
2240 Tenants Prepaid Rents
The credit balance of this account reflects the total of the individual credit balances in account 1122, Tenants' Accounts Receivable. See Part 1642, Basic Instructions, for entries and procedures.
2250 Prepaid State of New York Subsidies
There shall be included in this group of accounts all subsidies received from the State of New York which are to be applied to meet deficits resulting from operations in current or future periods. Refer to Part 1648, Subsidies, for accounting procedures and entries in connection with State subsidies.
(a) The credit balance of this account represents the amount of State subsidies not applied to meet deficits in operations and available for such use.
(b) All subsidies received from the State of New York shall be credited, upon receipt, to this account or applied to meet deficits in operations. The application of subsidies to meet deficits in operations may be by way of a charge closing out of the debit balance, if any, in account 1141, Accrued Receivables-State of New York Subsidies, and by way of a charge at the end of the fiscal year, transferring to revenue (account 3810, State of New York Subsidies) the amount, to the extent of credit balance remaining in this account not reserved for working capital, required to meet the deficit in operations for that year. Part 1648, Subsidies, should be referred to for accounting entries and procedures in this connection and also with respect to limitations and restrictions on the accrual, determination, payment, and application of State subsidies.
2260 Other Prepaid Cash Subsidies
In the event that a portion of the local subsidy is in the form of cash, the total amount of such cash subsidy received shall be credited to this account before being applied. The credit balance of this account represents the balance of cash subsidies received from others than the State of New York which has not been applied to meet deficits in current operations. Refer to Part 1648, Subsidies, for entries and procedures in connection with other cash subsidies.
2300 Indebtedness to the State of New York
This group of accounts shall include all outstanding indebtedness to the State of New York arising out of financing prior or subsequent to the issuance of bonds by the State, that may be evidenced by certificates of indebtedness or otherwise. Advance loan notes payable to the State of New York, executed and held in escrow, shall not, however, be included in this group of accounts, but shall be disclosed in a footnote to the balance sheet. Refer to Part 1643, Financing, for procedures in connection with this group of accounts. Separate accounts are provided under this heading as follows:
2310 Certificate of Indebtedness
2311 Certificates of Indebtedness Authorized
The credit balance of this account represents the amount of Certificates of Indebtedness to the State of New York which has been authorized by resolution of the local agency.
2312 Certificates of Indebtedness Unissued
The debit balance of this account represents the amount of Certificates of Indebtedness to the State of New York which has been authorized but not issued.
2313 Indebtedness Amortized-State of New York
The debit balance of this account represents payments made by the State to holders of housing bonds in reduction of the amount of bonds issued and outstanding. The balance in this account is cumulative. Refer to Part 1644, Debt Service, for procedures in connection with the amortization of the local agency's indebtedness to the State.
2314 Certificates of Indebtedness Subscribed
The credit balance of this account represents the amount of housing bonds issued by the State for which the local agency has not yet issued its Certificates of Indebtedness.
2400 Contract Awards
The credit balance of this account represents the value of the uncompleted portion of development cost and management contracts and that portion of contracts completed which has not been vouchered. This account is contra to account 1500, Incompleted Contracts. As an aid in reconciling the funds, it is recommended that the authority use the following subaccounts to indicate the fund involved:
2400 D Contract Awards-Development
2400 A Contract Awards-Management
2500 Reserves
This group of accounts shall include all amounts reserved out of revenue. It shall also include the amount reserved for working capital out of the proceeds of a State bond issue. Refer to Part 1646, Development Period Accounting, for procedures in connection with the Reserve for Working Capital and to Part 1647, Operating Period Accounting, in connection with other reserves. All reserves, except the Reserve for Working Capital, shall be segregated from other funds and shall be in the form of cash and investments. Separate accounts shall be maintained under this heading, as follows:
2510 Replacement Reserve
The credit balance of this account represents the amount reserved, in the manner prescribed by the Division of Housing, for future replacements of deteriorated equipment. The use and extent to which this reserve is employed in the purchase of replacements shall be in accordance with the division procedure and instructions of the division. See the instructions governing the application and use of the Replacement Reserve in Part 1647, Operating Period Accounting. The interest earned on all investments of reserve funds, whether made for the Replacement Reserve or for other reserves, although recorded separately in account 2511, shall be considered as a part of the Replacement Reserve.
2511 Interest Earned on Reserve Fund Investments
The credit balance of this account represents the cumulative interest earned on all investments purchased with moneys in the Reserve Fund (account 1111 R). Such interest shall not be recorded as income, nor apportioned to the applicable reserves, but shall be considered as part of the Replacements Reserve. Refer to Part 1645, Investments, for procedures in connection with interest on Reserve Fund Investments.
2512 Gain or Loss on Disposition of Reserve Fund Investments
The balance of this account represents the net of the credits arising from the gain on disposition of all Reserve Fund investments and the debits from loss on disposition. Such gain or loss shall not be considered income or expense, nor apportioned among the applicable reserves, but shall be considered as augmenting or decreasing the Replacement Reserve. Refer to Part 1645, Investments, for procedures in connection with this account.
2520 Vacancy and Collection Loss Reserve
The credit balance of this account represents the amount reserved and available for future vacancy and collection losses in accordance with the procedures set forth in Part 1647, Operating Period Accounting.
2530 Painting and Decorating Reserve
The credit balance of this account represents the amount reserved and available for future painting and decorating expense in accordance with the procedures set forth in Part 1647, Operating Period Accounting.
2560 Reserve for Working Capital
The credit balance of this account represents the excess of the funds borrowed from the proceeds of a State housing bond issue over the development cost of the project, as certified by the commissioner when the project is declared physically completed. This account is contra to account 1300, Working Capital, and is set up on the books only after the project is declared physically completed. Section 70 of the Public Housing Law provides that Working Capital cannot be in excess of two per cent of development cost or $100,000, whichever is less. See section 1646-8.1 for the accounting entries.
2590 Reserve for Operating Improvements
The credit balance of this account represents the amounts reserved out of project revenues for operating improvements where development funds are not available. The segregation of project revenues for operating improvement reserves requires prior written division approval. Where a Reserve for Operating Improvements is authorized to be established, the provision should be charged to account 4899, Provision for Operating Improvements.
2600 Accumulated Amortization
The credit balance of this account represents the cumulative total of the amounts periodically set aside from income to liquidate the local agency's indebtedness to the State of New York. Refer to Part 1644, Debt Service, for entries and procedures in connection with the provision of amortization out of income, the remittance of amortization payments to the State, and the application of the local agency's payments by the State.
EARNED SURPLUS
2700 Income and Expense Clearance Account
This account operates as a profit and loss account into which are closed, at the end of each fiscal year subsequent to the date of substantial completion, the Income Control Account (account 3000) and the Expense Control Account (account 4000). Refer to sections 1647-7.1 -1647-7.5 for detailed accounting entries in connection with closing the books. The account also operates as an earned surplus account for the accumulation of the periodically recognized gains or losses, if any, resulting from the operations of the project proper. Credit balances, if any, shall be expended for or applied only to such purposes as the Division of Housing shall direct. The Division may further require that such credit balances be deposited in a separate bank account.
Income and expense arising from the operation of site and offsite property, prior to demolition, from rehabilitated and relocated properties, and during the initial operating period are closed into the respective development cost accounts provided. Refer to the 1400 group of account definitions and Part 1646, Development Period Accounting, for instructions pertaining thereto.
2710 Prior Years Adjustments
This account is charged and credited with items of expense and income amounting to $50 or more each, applicable to a given year which have been discovered subsequent to the closing of the books for that year. Prior years adjustments shall be held in suspense in this account pending review and approval of the proposed disposition of the items by the division pursuant to the procedure described in section 1647-7.6 of this Subchapter, to which reference should be made. Prior year adjustments of less than $50 each shall not be charged or credited to this account but shall be absorbed in the applicable income (3000 group) or expense (4000 group) account. The $50 test shall be applied to each individual transaction standing by itself.
2800 Capital Surplus
The credit balance of this account shall include all funds or assets received by the local agency through appropriations by State, city, county, village, or other political subdivision or by gift or donation.
CONTROL ACCOUNTS
Accounts controlling income and expense applicable to the operating period of the project proper shall be maintained in the general ledger, as follows:
Income Control
This account shall control all income applicable to the operating period of the project proper and shall be supported by the detailed income accounts, in the 3000 group of accounts, the definitions of which will be found immediately following those of the 1400 group of development cost accounts.
4000 Expense Control Account
This account shall control all expenses applicable to the operating period of the project proper and shall be supported by the detailed expense accounts in the 4000 and 6000 group of accounts, the definitions of which will be found immediately following those of the 3000 group of detailed income accounts.
The restriction of the use of the general ledger control accounts defined above to income and expense applicable to the operating period of the project proper should be noted. Income and expense from operations during other phases of the local agency's program are capitalized and controlled by various development cost accounts. The latter are supported, as are the 3000 and 4000 Control Accounts defined above by detailed income and expense accounts of the 3000, 4000 and 6000 groups, maintained in separate income and expense analysis ledgers. See, for example, account 1420.4, Site Income, and account 1420.5, Site Expense, for the control of income and expense from the operation of the site of the project proper prior to construction, account 1470.3, Net Deficit or (Income), for income and expense during the initial operating period, and account 1440.16, Offsite Clearance, account 1440.17, Rehabilitation, and account 1440.18, Relocation of Buildings, for the income and expense of operations in connection with the related programs.
1400 GROUP-DEVELOPMENT COSTS
1410 Direct Costs
(b) It is anticipated that questions and problems will arise concerning the extent of the distribution and allocation of costs included in this group of accounts to the other development cost accounts and to the cost of the related programs. Small agencies, whose personnel and facilities discharge multiple function and large agencies which maintain central offices and larger staffs making possible some separation of functions, will be faced with these problems in varying degrees. In general, for the purpose of simplicity, the secondary distribution of general overhead, service, and other direct costs from the 1410 group of accounts to the other development cost accounts or to the cost of related programs will not be required unless the Subchapter, or the commissioner within his discretion specifically so directs, or approval of the division has been obtained by the local agency for a plan to serve as the basis of such distribution. It should be borne in mind that the classification of development cost accounts is designed not only for accounting purposes, but also to serve as a basis for the preparation of development cost budgets, for executive control, and for compilation of financial statistics and reports, for which purposes an objective classification of overhead costs such as is provided herein has many advantages over a functional classification of cost accounts involving secondary distributions. Moreover, even from an accounting point of view, the practical and theoretical difficulties of an equitable distribution over the various phases of development and related programs proceeding simultaneously and, at times, in highly fluid states, should be considered. Many questions regarding the classification and distribution of overhead expenditures (as well as other expenditures) may be resolved by reference to the application for financial assistance and the approved development cost budget. Other questions should be referred to the division.
1410.1 Payroll-Executive
(a) This account shall include the salaries of executive employees whose services are certified by the local agency to be an expense attributable to the planning, financing, construction, or operation during the development period of a State-aided project, including related programs.
The term executive employees, as used in this Subchapter, includes but is not necessarily limited to the executive secretary and staff, accountants, comptrollers, stenographers, typists, clerks, office-machine operators, switchboard operators, file clerks, messengers, errand boys, and similar employees. Do not include the salaries of such employees attached to technical, legal, or informational staffs. (See accounts 1410.2, 1410.4 and 1410.16.)
1410.2 Payroll-Technical
(a) This account shall include the salaries of technical employees of the local agency, including, but not limited to, engineers, architects, draftsmen, technical clerks, and stenographers, typists, secretaries, or other executive employees attached to the technical staff. Do not include the salaries of employees comprising the inspection staff at the site (see account 1430.7) or technical salaries for services (such as drawing the actual construction plans) normally performed by other than agency employees and covered by other classifications. (See account 1430.1.)
(b) No distribution of charges made to this account to the costs of related programs shall be made unless the division so directs or approves a plan to serve as the basis for such distribution.
1410.4 Legal Services and Expenses
(a) This account shall include the compensation of attorneys, whether in the form of fees, retainers, or salaries, and necessary expense in connection with the application for financial assistance, financing and re-financing, general legal advice and assistance, consultations, attendance at meetings, preparation of minutes, contracts and other legal papers and instruments, litigation, liquidated matters, and other legal services and expenses not chargeable to other accounts. Do not include fees of outside bond counsel employed in connection with the temporary financing of development costs (see account 1410.14) or legal services or expenses in connection with the acquisition of land, title examination, closing of title, condemnation proceedings, summary proceedings, or the collection of rents, which shall be charged to the appropriate accounts in the 1420 or 1440 groups, unless authority counsel is compensated on a flat retainer basis which, it will be seen, will include the two latter types of services.
(b) Where counsel for a local agency is compensated for ordinary and usual legal services during the development period on a retainer basis, the entire retainer shall be charged to this account, unless the division directs otherwise or approves a plan to serve as the basis of the distribution of the retainer. The retainer agreement should be in writing, enumerating the services to be rendered by the attorney and the agreement should be approved by the local agency and the contract submitted to the division for approval. Ordinary and usual legal services include, but are not limited to general legal advice and assistance, consultations, attendance at meetings, preparation of minutes, contracts, and other legal papers, documents and instruments, litigation, liquidated matters, summary proceedings, legal services in connection with the application for financial assistance, and with financing operations. It is apparent that legal services and expenses in connection with summary proceedings and collection of rents, if charged for separately on a fee basis, will be charged to the appropriate accounts in the 1420 or 1440 groups. A schedule of fees should be submitted to this office for approval.
(c) For services other than ordinary and usual legal services, such as in connection with the acquisition of land, title examination, closing of title, condemnation proceedings, or any other services concerning the business of the project which might require special treatment and the compensation for which is not included in the retainer, the charges shall be distributed to the appropriate development cost accounts (including this account) and to the costs of the related programs.
(d) Where compensation of agency counsel is wholly on a fee basis, the fees for ordinary and usual legal services shall be charged to this account in the same manner that a retainer would be, and the fees for other than ordinary and usual legal services shall be charged to the appropriate development cost accounts (including this account) and to the costs of the related programs.
(e) Where counsel is an employee of the local agency on a salary basis, the distribution to the legal cost accounts and costs or related programs of legal salaries, including the salaries of secretaries, stenographers, typists, clerks, and other executive employees attached to the legal staff, shall be on a timesheet or other basis approved by the division.
1410.5 Travel
(b) No distribution or allocation of travel expense to other development cost accounts or to the costs of related programs shall be made unless the division so directs or approves a plan to serve as the basis for such distribution.
(c) See "Rules and Regulations Governing Traveling Expense Chargeable to State-aided Projects", Subpart 1640-10.
1410.6 Rent-Office
(a) This account shall include rent paid for space necessary for the conduct of business in connection with the development of the project and related programs. It shall also be charged with the cost, when paid by the local agency, of light, heat, moving of office furniture and equipment, alterations of office space, and leasehold improvements in connection with the establishment and operation of the office.
1410.7 Furniture and Fixtures-Office
(b) Where separate offices are maintained in connection with the management of site or offsite property prior to demolition, or for the relocation of tenants, or for the use of field inspection staff, or in connection with the offsite clearance, rehabilitation or relocation of buildings programs, the original cost of furniture and fixtures required for the separate offices shall be charged directly to the appropriate development cost accounts provided for the respective activities. No distribution or allocation of furniture and fixture costs to other development cost accounts, or to the cost of related programs shall otherwise be made, unless the division so directs or approves a plan to serve as a basis for such distribution or allocation.
(c) Items charged to furniture and fixtures shall have an estimated useful life extending beyond the development period, and may be used for management or other purposes related to the development or operation of the project and related programs as the need arises. Within the prescribed limitations, the original purposes and intended location for which the item was purchased shall determine to which account the charge shall be made. Subsequent transfers to other purposes or locations shall not be reflected in the cost or expense accounts. A physical inventory shall however be maintained of all items charged to furniture and fixtures, which shall also furnish the current location and ultimate disposition of each item so charged.
(d) In addition to the budgetary limitations governing expenditures in general, purchases of items charged to furniture and fixtures costing $100 or more shall require the separate prior approval of the division.
(e) Bearing in mind that items having a relatively long life may be needed for only a short time, consideration should be given to the advantageous disposition of items when the need has passed and to the relative merits of renting over purchasing. Proceeds from the sale of furniture and fixtures made prior or subsequent to the date of substantial completion shall be credited to the account to which the item was originally charged, providing the development costs accounts remain open for the receipt of such credit. Subsequent sales, shall be credited to account 3590, Miscellaneous Project Income, unless the item sold is to be replaced, in which event, the proceeds shall be credited to the cost of replacement.
1410.8 Office Supplies and Sundry
1410.9 Employees Retirement Fund
(a) This account shall be charged with the amount of the local agency's contributions to retirement or pension funds, in connection with payrolls chargeable to development costs or to the costs of related programs, except as hereinafter provided. No charge shall be made to this account prior to the date of entry of the local agency into the retirement system.
1410.10 Communication Services
1410.11 Photographs
(b) Photographs similarly related to the progress of related programs (offsite clearance, rehabilitation, and relocation of buildings) shall be charged directly to the appropriate cost accounts provided.
1410.12 Fidelity Bonds and Insurance Premiums
(a) This account shall be charged with the costs of premiums for fidelity bonds on officers and employees'; workmen's compensation insurance covering members, officers, and employees of the local agency and the State's construction advisor, vehicles; fire insurance on office furniture, fixtures and equipment; public liability insurance with respect to office space occupied by the local agency; robbery and safe burglary insurance; costs of armored car service; and insurance of valuable and staffs; liability, fire, and theft insurance on automobiles, including employees' papers, where carried by the local agency.
(d) No distribution or allocation of fidelity bond and insurance premiums of the types chargeable to this account, to other development cost accounts or to the costs of related programs shall otherwise be made unless the division so directs, or approves a plan to serve as the basis of such distribution or allocation. While the number of types of insurance chargeable to this account appears formidable, the premiums will be found to be fairly nominal either individually, or in the aggregate, unless workmen's compensation insurance on other than office and similar classes of employees is involved.
(e) Reference should be made to account 1420.3 for the charging of other types of insurance carried by the local agency during the development period.
1410.13 Advertising
(b) The cost of advertising in connection with the procuring of bids for demolition and other contracts in connection with the offsite clearance, rehabilitation of buildings, or relocation of buildings programs shall be charged directly to the appropriate cost accounts provided for the respective activities.
1410.14 Fiscal Expense
(a) This account shall be charged with the fees of outside bond counsel employed by the local agency in connection with the issuance of temporary loan notes to parties other than the State, the cost of advertising, and other expenses in connection with temporary financing during the development period. This account shall not include fees of outside bond counsel or other fiscal expense incurred in connection with the refinancing of temporary indebtedness maturing subsequent to the date of substantial completion, unless such refinancing entails the raising of additional funds required to complete the project (see § 1643-2.6). Do not include costs and expenses in connection with the issuance of bonds by the State (see account 1420.7).
(b) No distribution or allocation of these charges to the costs of related programs shall be made unless the division so directs.
1410.15 State Construction Advisor, Auditor, and Staffs
(a) This account shall be charged with the salaries, travel, and other expenses of the State construction advisors, auditors, and staffs, as billed by the division to the local agency. The local agency shall also furnish the stationery, office supplies, facilities, etc., required by the State construction advisors, auditors and staffs in the performance of their duties, but the cost of such items as are furnished by the local agency shall be charged to the respective cost accounts provided.
(b) No distribution or allocation of salaries and travel expense chargeable to this account shall be made to other development cost accounts or to the costs of related programs.
1410.16 Informational Expense
(b) No distribution or allocation of informational expense to other development cost accounts or to the costs of related programs shall be made unless the division so directs.
1410.17 Housing Survey
(b) No distribution or allocation of housing survey costs shall be made to the costs of related programs unless the division so directs.
1410.19 Cost of Application
(a) This account shall be charged with the costs of preparing the application for the contract for State aid including, but not limited to, the cost of photographs, maps, exhibits and schedules included therein and the costs of paper, printing, mimeographing, stationery, special stenographic and typing services, etc., in connection therewith. With respect to an amended application, this account should be charged only with extraordinary cost in connection therewith. It will be found that most such amendments will be prepared by the local agency's own staff and that the costs of paper, printing, mimeographing, stationery, stenographic and typing services, etc., will be absorbed and reflected in the other accounts of the 1410 group. In general, therefore, only such costs or expenses as have been incurred on account of the application or amendments thereto, and which would not have been incurred if there were no application or amendments thereto should be charged to this account.
(b) No distribution or allocation of application costs shall be made to the costs of related programs unless the division so directs.
(c) No overruns beyond the budgeted amount for this item will be permitted without the prior approval of the division.
1420 Carrying Charges
This major group of cost accounts shall include interest on indebtedness, taxes on property included within the project proper and the cost of specified types of insurance for the project proper during the development period; income and expense of operating the project proper prior to construction; the cost of issuing State housing bonds and the premium on the bonds, if any.
1420.1 Interest Expense
(a) This account shall be charged with interest during the development period on funds borrowed to finance the development of the project proper, but such charges shall not be made beyond the date of substantial completion of the project proper. No further allocation of interest charges for the development of the project proper shall be made to account 1420.5 (Site Expense) or to the 1470 (Preoccupancy) group of accounts.
(b) It should be noted that only that portion of the total interest charge incurred which is allocable to the development of the project proper is charged to account 1420.1. Interest allocable to the related programs (Offsite Clearance; Rehabilitation; Relocation of Buildings) is charged to the development cost accounts provided for each program. See section 1644-2.4 of Part 1644 of this Subchapter, for details as to the basis of the interest allocation and as to the cut-off points for the interest charges allocable to the respective related programs.
(c) Premiums of $100 or less on temporary loan note issues shall be credited directly to this account. Premiums of more than $100 shall however be credited to account 2230 upon receipt, and written off to account 1420.1 pursuant to the procedures set forth in section 1644-2.5.
1420.2 Interest Income
(a) This account shall be credited, to the extent that interest on borrowed funds has been charged to account 1420.1, with interest (to the date of substantial completion) on Development Fund Investments and interest on mortgages acquired by the local agency during the period of land acquisition.
(b) Development Fund Investments, including those made by the local agency directly, or by the State Comptroller on behalf of the local agency, shall, however, be regarded as having been made first, from funds allocated to offsite clearance, to the extent that funds have been borrowed for that purpose, and secondly, from other funds, interest being credited accordingly. The allocation of interest income to the offsite clearance (1440.16) group of accounts shall cease on the date of substantial completion, or the date of liquidation of the program, whichever is earlier.
1420.3 Insurance
(a) This account shall be charged with the cost of premiums for the following types of insurance, in connection with operations on the site of the project proper, for the period ending with the date of substantial completion of the project proper:
(1) Owners, landlords and tenants public liability insurance covering land, buildings to be demolished, and newly constructed buildings.
(2) Fire and extended coverage insurance on buildings, including buildings to be demolished and newly constructed buildings.
(3) Fire insurance on materials paid for directly by the local agency and stored off the site.
(4) Boiler insurance, where carried.
Insurance normally carried by contractors and included in the contract amount may, under unusual circumstances, be carried by the local agency. The premiums, in such event, shall also be charged to this account.
This account shall be charged with the cost of premiums for owners contingent (protective) liability insurance carried for the protection of the local agency while demolition and construction operations are in progress. The full premium for this insurance should be charged to this account, and no portion allocated to operations.
(b) Premiums on the types of insurance listed in paragraph (a) above, carried in connection with property acquired for the offsite clearance, rehabilitation, or relocation of buildings programs shall be charged to the respective cost accounts provided.
(c) Reference should be made to account 1410.12 for the charging of other types of insurance during the development period.
(d) The local agency should be guided in all insurance matters by Part 1630 of this Chapter.
1420.4 Site Income
(a) This account shall reflect the income from the operation of the site of the project proper for housing and other income-producing purposes from the date of acquisition to the beginning of the initial operating period. Rentals received from tenants occupying dwelling units, stores, or other space on the site of the project proper, rentals for rent of parking lots, revenues from outdoor advertising signs, or other sources, and all other income arising from the use of the property of the project proper shall be credited to this account.
(b) A separate income analysis ledger shall be maintained and the applicable subaccounts of the 3000 group of accounts shall be employed in accounting for such site income during development. The monthly reports submitted during the development period shall include a report of site management income on form DH-621. This account (1420.4) shall operate as a control account in lieu of account 3000. While trial balances of the income analysis ledger should be taken periodically to see if they agree with the control, periodical closings of either the control or subsidiary accounts will not be required. The report of site income on form DH-621 will therefore reflect the cumulative income from the beginning of the site management period in the cumulative column on the form, the income for the current month being reported on the current column of the form.
(c) A space inventory and a tenants accounts receivable ledger shall also be maintained during the site management period. The full scheduled rent shall be charged, and vacancy loss recorded, until such time as the local agency, in anticipation of demolition, has declared, by appropriate resolution, that the vacant dwelling units in a particular building or buildings, or those vacated subsequent thereto, shall not be re-rented. Effective with the first day of the month following that in which such resolution has been passed, only the scheduled rent of dwelling units in such building or buildings as are not vacant shall be charged, and vacancy loss shall not be recorded. Write-offs of rent in connection with the relocation of site tenants, as authorized by a resolution by the local agency approved by the division, shall be considered a necessary cost of removal, and charged to account 1440.13, Relocation of Tenants. Other authorized write-offs shall be charged to the collection loss subaccount of account 1420.5, Site Expense. The division will not approve such write-offs unless it is satisfied that the local agency has been pursuing an aggressive collection policy and has exhausted all means of collection to the maximum extent practicable.
1420.5 Site Expense
(b) Workmen's compensation insurance premiums and employees' retirement fund contributions shall be charged to this account to the extent that employees' salaries are so charged. Other overhead and service costs falling in the 1410 classification of accounts shall not be charged to this account unless separate office is maintained for site management and such costs are directly connected with the operation of that office, or the local agency has obtained the approval of the division for a plan to serve as the basis for the distribution or allocation of such charges.
(c) Expenditures required to repair and maintain vacant buildings on the site of the project proper shall be charged to this account, but expenditures in connection with the preparation of buildings for demolition shall be charged to account 1440.14.
(d) This account shall also be charged with the initial and replacement costs of personal property, such as ranges and refrigerators, required to operate the buildings on the site for income-producing purposes, pending demolition. Where the personal property, however, is conveyed simultaneously with the real property as part of the one transaction, the entire consideration for the property shall be charged to account 1440.1. Land Purchase Price, and no attempt should be made to separate the consideration for the personal property from that for the real property for charging to the respective accounts. Sales of personal property, however acquired, shall be considered sales of salvage and shall be credited to account 1440.14, Demolition and Clearing.
(e) Applicable subaccounts of the 4000 group shall be employed in accounting for the expenses of site management, this account being operated as a control account in lieu of account 4000. A separate Expense Analysis Ledger shall be maintained and the monthly reports submitted during the development period shall include a report of site management expense on form DH-621. While trial balances of the site management books should be taken periodically to see if they agree with the control, periodical closings of the control and subsidiary accounts will not be required, as during the project management period. The report on form DH-621 will therefore reflect in the cumulative column of the form the cumulative expense of operating the project site from the beginning of the site management period and the current column of the form will reflect the results of operation for the current month being reported.
1420.6 Real Estate Taxes
(a) This account shall be charged with real estate taxes on land and improvements included within the site of the project proper, but not beyond the date of substantial completion of the project proper. No allocation of tax charges shall be made to Site Expense (account 1420.5) or to the Preoccupancy (1470) group of accounts.
(b) Real estate taxes on property acquired for the offsite clearance, rehabilitation or relocation of buildings programs shall be charged to the respective cost accounts provided.
(c) All real property acquired by a local agency in connection with the development of the project proper is taxed on the basis of the assessed valuation of the retained land and the improvements thereon, as of the date of the contract for State aid. So much of the value of the property included in a State project, as represents an increase over the assessed valuation of the property retained both land and improvements, as of the date of the contract for State aid, is exempt from any and all State, county, city, village, town, school and special district taxes. In no event may any municipality or county assess the property included in the project proper at an amount in excess of the actual cost of the project.
(d) Where a contract for State aid is amended, the date of the original contract, and not of the amendments thereto, shall govern with respect to assessed valuations, unless the amendment provides for the acquisition of land and improvements, not previously included. In such event, the date of the amended contract shall govern with respect to the additional land and improvements.
(e) Except for local property taxes, a local agency is exempt from the payment of any taxes or fees to the State or any subdivision thereof, or to any officer or employee of the State or any subdivision thereof.
(f) The taxation of real property acquired by a local agency in connection with related offsite clearance, rehabilitation, or relocation of buildings programs presents special problems. These should be referred to the division, individually for ruling.
1420.7 Cost of Borrowing
(a) This account shall be charged with the actual direct costs incurred by the State in connection with the issuance of housing bonds, as certified by the State Comptroller. Such cost will include printing, advertising, etc. Do not include fiscal and other fees (see account 1410.14) or other costs incurred by the local agency in connection with temporary or permanent financing.
(b) The cost of borrowing shall be considered a development cost of the project proper and shall be charged to this account whether the issue of bonds is prior or subsequent to the date of substantial completion. The final development cost of the project shall not be determined until the cost of borrowing is certified by the State Comptroller. No distribution or allocation of the cost of borrowing shall be made to the costs of related programs unless the division otherwise directs.
1420.8 Premium on State Housing Bonds
(a) This account shall be credited with the premium, if any, realized from the sale of State housing bonds, as certified by the State Comptroller.
(b) The premium shall be considered a credit to development costs whether the issue of bonds is prior or subsequent to the date of substantial completion. The Comptroller may deposit the premium into the State Housing Debt Fund and apply it to the payment of the next interest payment due on the bonds. If all or a portion of such interest payment has been charged to operating expenses, a transfer of funds from the Administration Fund to the Development Fund will be required. See Part 1644, Debt Service, for entries and procedures.
1420.9 War Delay Period
This account was established to determine the additional development cost of a project due to the delay resulting from World War II. The use of this account has been discontinued and it is provided here solely for recording and carrying forward balances by those local agencies which had occasion to make use of the account during the war.
1430 Architectural and Engineering
This major group of cost accounts shall include architectural and engineering costs, including supervision and inspection, to the extent that such costs are directly traceable to the development of the project proper. Architectural and engineering costs in connection with related programs shall be charged directly to the costs of those programs.
1430.1 Fees-Under Contract
(a) This account shall be charged with all costs (except as specified in par. [b] below) for architectural and engineering work in connection with the development of the project proper, performed on a fixed-fee basis, or under a fixed-fee plus reimbursable costs type of contract, or by employees of the local agency engaged in drawing up the actual plans and specifications in lieu of outside architects and engineers.
1430.2 Fees-Other
This account shall be charged with the costs of special services in connection with architectural and engineering work for the project proper, performed on a per diem or time basis.
1430.3 Travel
This account shall be charged with travel expenses and/or per diem allowances, in lieu of subsistence, of architects and engineers (other than local agency employees) when on official business of the local agency in connection with the development of the project proper. Do not include travel expense of officers or employees of the local agency (see account 1410.5) or travel expense of the State's construction advisor, auditors, and staffs (see account 1410.15).
1430.4 Borings and Test Pits
This account shall be charged with all costs incurred for borings or test pits in connection with the selection of sites for the project proper or the compilation of engineering data.
1430.5 Blueprinting
(b) This account shall also be charged with the costs of technical supplies where the architectural and engineering work is performed by employees of the local agency.
(c) This account shall be credited with any moneys received from sales of blueprinting, plans, and specifications. Moneys received as deposits on plans on specifications, shall first be credited to account 2220, Deposits During Development Period, and taken up as income to be credited to this account at the time and to the extent that the liability of the local agency for the return of such deposits ends.
1430.6 Models
This account shall be charged with the costs of any models necessary to the development of the project proper, which have not been provided for under the architects' and engineers' contracts and which have been approved by the division.
1430.7 Inspection Costs
1430.10 Material Testing
This account shall be charged with the costs of tests of materials, such as concrete, entering into the construction of the project proper.
1440 Acquisition of Sites
1440.1 Land Purchase Price
(a) This account shall be charged with the cost of the land and improvements acquired for the project proper to the extent approved by the commissioner. Do not include the cost of land and improvements acquired for the offsite clearance or rehabilitation programs or the cost of land to which relocated buildings are to be moved.
(c) The local agency shall set up and maintain a card record on form DH-Land Record (see Part 1646) for each parcel included within the site of the project proper. Interest on mortgages acquired prior to the acquisition of title shall be accrued monthly and collected when due, until the mortgage is merged into the fee. The local agency shall also set up and maintain a space inventory for the control of rents on improved property on the site until demolition thereof. Income and expense from the management of site property prior to construction will be reflected in accounts 1420.4, and 1420.5, respectively.
1440.2 Fixture Awards
This account shall be charged with the amount of condemnation awards for fixtures and equipment on the site of the project proper, when such awards are made separately from condemnation awards for land and improvements other than fixtures and equipment. Do not include interest on such awards (see account 1440.3) or condemnation costs in connection therewith (see account 1440.11).
1440.3 Interest on Condemnation Awards
This account shall be charged with the amount of the interest, if any, on all condemnation awards with respect to the project proper, whether in connection with land, improvements, or fixtures.
1440.4 Surveys and Maps
This account shall be charged with the cost of boundary, plot, property line, topographical, utility, and other surveys of the site of the project proper, and the cost of monuments, markers, maps, blueprints, and photostats in connection therewith. These surveys are made in connection with land acquisition, and as a basis for the architectural and engineering design of the project, after the site has been selected and approved and the contract for State aid signed. They should not be confused with the Housing Survey (see account 1410.17), or surveys of alternative sites made in connection with the application for financial assistance (see account 1410.19), or surveys made in connection with the relocation of tenants (see account 1440.13).
1440.5 Appraisal Fees
This account shall be charged with the cost of fees for the appraisal of all land and improvements to be acquired for the project proper, on sites approved by the commissioner. Do not include the cost of court testimony on appraisals, when required in connection with condemnation proceedings (see account 1440.11).
1440.6 Title Examination
This account shall be charged with the cost of examination of title, preparation of abstracts, furnishing of title insurance, and legal and other fees in connection with the examination of title of land to be acquired for the project proper. The prior approval of the division's legal bureau is required for fees paid under this item.
1440.7 Consideration for Options
This account shall be charged with considerations paid to bind agreements to purchase properties for the site of the project proper. Such considerations may take the form of binders prior to the execution of the contract for the purchase of land, or of deposits paid upon contract, or of options. Upon the closing of title, the amount of the binder, deposit, or option applicable to the particular property shall be transferred to account 1440.1, Land Purchase Price, to which account the balance of the purchase price will be charged directly. When the acquisition of the project site has been completed, there will remain in account 1440.7 the costs of binders, deposits and options for properties not acquired and which are not recoverable.
1440.8 Legal Services and Expenses (Land Only)
This account shall be charged with attorneys' fees or salaries, as have the prior approval of the division, process officer fees and other incidental expenses, and the cost of other necessary legal services in connection with land closings and land acquisition for the project proper. Do not include legal services and expenses in connection with the examination of title (see account 1440.6) or condemnation proceedings (see account 1440.11) or fees, salaries, and commissions paid to an attorney acting in other than a legal capacity, as for example, in the negotiation for the purchase of land (see account 1440.10). Legal services and expenses in connection with the management of the site prior to construction shall be charged to account 1420.5, Site Expense during Development, unless such services are included in the retainer paid to counsel for the local agency and charged to account 1410.4.
1440.10 Negotiation Costs
This account shall be charged with commissions or salaries paid for negotiating the purchase of land for the project proper with the prior approval of the division.
1440.11 Condemnation Costs
This account shall be charged with all costs and expenses, except interest on condemnation awards, incurred in connection with, and incidental to, the acquisition, through condemnation proceedings, of the site of the project proper, or any part thereof, and the improvements, fixtures, and equipment thereon, such as legal fees and expenses, fees for court testimony, court costs, stenographic costs, etc. This account should not be charged with any costs that would ordinarily be incurred in connection with the acquisition of the site if there were no condemnation proceedings.
1440.13 Relocation of Tenants
(a) This account shall be charged with the costs of relocating tenants on the site of the project proper so that demolition and construction can proceed. Relocation costs shall include the salaries of persons especially employed to make surveys of vacant dwellings or to locate dwellings for the purpose of relocating tenants housed on the site at the time of acquisition and other costs and expenses in connection with relocating site tenants, such as the cost of equipping, operating, and maintaining a field office, local transportation, telephone, and sundry costs incurred in locating dwellings available for relocation, or for registering and listing such dwellings, and so much of the necessary cost of voluntary removal or cash considerations in lieu thereof, as may be approved by the division, but in no event shall the necessary cost of removal be in excess of $200 for any family. The Public Housing Law also permits the payment of the necessary costs of removal for business or commercial tenants on the site, but not in excess of $500 for any one tenant. Rents due from site tenants and cancelled, as an inducement to remove from the site, in accordance with a resolution of the local agency, as approved by the division, shall be a charge to the necessary cost of removal to the extent provided by such resolution. Subaccounts or other analysis of the charges to this account shall be maintained of the necessary costs of removal, and of the other relocation costs. Local agency procedures relating to the payment of relocation costs to residential and commercial tenants should be submitted to the division for prior approval.
1440.14 Demolition and Clearing
(a) This account shall be charged with the net cost of demolition and of clearing the site of the project proper, including demolishing and clearing away of structures, other improvements, and debris on the site, water charges, if any, for wetting down during demolition, boarding-up vacant properties prior to demolition, stripping properties of piping, equipment, etc., to reduce loss by theft, the wages of watchmen employed on the site prior to completion of demolition, the moving and storing of salvaged equipment, such as refrigerators and ranges, pending final sale, erection of sidewalks, bridges and fences around cleared parcels, etc. Where any of these items are included in a demolition contract, the contract price shall be charged to this account. Where the contract calls for a payment to be made to the local agency, this account shall be credited. This account shall also be credited with amounts received on sale of salvage. The use of a schedule or subaccounts to analyze the entries made to this account is recommended. Suggested classifications are:
(1) Demolition and Clearing-Contract
(2) Salaries of Watchmen
(3) Demolition and Clearing-Other Expense
(4) Sales of Salvage
(b) Where the project plan calls for moving buildings on the site of the project proper to another location, in lieu of demolition, all costs in connection therewith shall be charged to account 1440.18, Relocation of Buildings.
(c) This account should also be credited with amounts received from an insurance company for salvage destroyed by fire or stolen prior to its sale.
1440.15 Sale of Site Land
(a) This account shall be credited with the proceeds of the sale of land or excess land acquired for the project proper and sold prior to the determination of the final development cost and shall be charged with the incidental costs incurred in connection with such sale, such as legal services and expenses, title examination, negotiation costs, appraisal fees, etc. The proceeds of the sale shall be deposited in the Development Fund and disposition thereof shall not be made except in accordance with the instructions of the division. The proceeds of the sale of land in connection with offsite clearance, rehabilitation, and relocation of building programs shall be credited to similar subaccounts in the respective cost classifications.
(b) See account 2113, Deposits-Other Than Tenants, for the handling of deposits, binders or options received by the local agency in connection with the sale of site land.
1440.16 Offsite Clearance
(a) This account shall be charged with the net cost of the offsite clearance program, giving effect to any credits from the operation of the offsite property, the sale of salvage, the sale of land, interest received on investments of offsite funds, etc.
(b) Where a tract of land included in the offsite clearance program is ceded without cost to a municipality in accordance with the loan and subsidy contract, no accounting entry is necessary. The authority should bear in mind that its liability for real estate taxes on the tract ceases as of title vesting date and that insurance policies applicable to the tract should be cancelled and unearned premium recovered. In addition, the local agency should indicate the transfer on the land record card for the parcel (see § 1646-4.3).
(c) Offsite clearance represents a program within a program, related to the development of the project proper, and embracing the acquisition of the offsite property, operation in some cases, of the property prior and subsequent to demolition, demolition and clearing, and finally, the disposition of the land. Accordingly, all costs in connection with the offsite clearance program, including all credits related thereto, shall be capitalized and charged to this account until such time as the program has been liquidated. Ordinarily, all offsite clearance activity will have been completed before the final development cost is determined.
(d) A separate cost analysis ledger shall be maintained, using the account classification of the 1400 group of subaccounts to the extent applicable, according to the following general scheme.
| 1440.16(10) | Direct Costs, Offsite |
| 1440.16(10.1) | Payroll-Executive |
| 1440.16(10.2) | Payroll-Technical |
| 1440.16(10.4) | Legal Services and Expenses, etc. |
| 1440.16(20) | Carrying Charges, Offsite |
| 1440.16(20.1) | Interest |
| 1440.16(20.3) | Insurance |
| 1440.16(20.4) | Offsite Income |
| 1440.16(20.5) | Offsite Expense |
| 1440.16(20.6) | Taxes |
| 1440.16(40) | Land Acquisition Cost, Offsite |
| 1440.16(40.1) | Land Purchase Price |
| 1440.16(40.2) | Fixture Awards |
| 1440.16(40.3) | Interest on Condemnation Awards |
| 1440.16(40.15) | Sale of Offsite Land, etc. |
| 1440.16(80) | Other Charges and Credits to Offsite Clearance Cost, etc. |
In general, it will be found that all offsite clearance costs will fall into the above classifications and that there will be no occasion to use the Architectural and Engineering (1430), Structures, Equipment and Improvements (1460), Preoccupancy Charges and Credits (1470), or Contingency (1490) classifications.
(e) The definitions, instructions, and procedures with respect to the classification of development costs for the project proper shall apply with equal force and effect to the classification of offsite clearance costs.
(g) The monthly report submitted during the development period of the project proper shall include a separate report of offsite clearance costs on form DH 213, and a report of the results of offsite management on form DH 621. When the project proper has entered the management period these reports shall be made quarterly. The reports shall continue to be made until final disposition of the offsite property.
In general, only such costs or expenses as have been incurred on account of the offsite clearance program, and which would not have been incurred if there were no offsite program, should be charged to Offsite Clearance, account 1440.16. They are here summarized as follows:
(1) Direct Costs (1410 group). Where separate offices are maintained in connection with the offsite clearance program, or offsite management, the costs of operating such offices, including the salaries of executive personnel employed therein, office rent, furniture and fixtures, sundry office expense, communications services, and premiums for fire, public liability, safe and robbery insurance applicable thereto shall be charged to the cost of offsite clearance. Workmen's compensation insurance premiums and employees retirement fund contributions shall be charged to this account to the extent that payrolls are so charged. Photographs showing the progress of offsite clearance work, and the cost of advertising for bids for demolition of offsite property shall be charged to this account directly, as shall the cost of other than ordinary and usual legal services, in connection with offsite clearance, not covered by a retainer. No distribution or allocation of Direct Costs (1410 group) to the cost of offsite clearance, shall otherwise be made, unless the division so directs, or approves a plan to serve as the basis of such distribution.
(2) Carrying Charges (1420 group). Offsite clearance shall be charged with the interest on funds borrowed to finance the offsite clearance program until the project is declared substantially completed or the program is liquidated, whichever is earlier. Taxes and insurance on offsite property shall be charged to offsite clearance until the program is liquidated. Any insurance carried by the authority to protect the local agency during demolition operations on offsite property should also be charged to the 1440.16 group of accounts. No distribution, as between the project proper and the offsite clearance program, shall be made of the cost of borrowing, or the premium on State housing bonds. Interest on offsite clearance funds investments shall be credited in accordance with the procedure described under 1420.2.
1440.17 Rehabilitation
(a) This account shall be charged with the net cost of rehabilitating existing buildings, giving effect to any credits from the operating of the rehabilitated property, the sale of the property, etc.
(b) Rehabilitation represents a program within a program, related to the development of the project proper, and embracing the acquisition of buildings, their conversion, modernization, and rehabilitation for occupancy, the operation of the rehabilitated buildings, and their eventual disposition. All costs and expenses of the rehabilitation program, and all credits related thereto, shall be capitalized and charged to this account until such time as the program is liquidated. Ordinarily, all rehabilitation activity will have been completed before the date of substantial completion.
(c) A separate cost analysis ledger shall be maintained, using the account classifications of the 1400 group as subaccounts to the extent applicable, according to the following general scheme:
| 1440.17(10) | Direct Costs, Rehabilitation |
| 1440.17(10.1) | Payroll-Executive, etc. |
| 1440.17(20) | Carrying Charges, Rehabilitation |
| 1440.17(20.1) | Interest |
| 1440.17(20.4) | Rehabilitation Income |
| 1440.17(20.5) | Rehabilitation Expense, etc. |
| 1440.17(30) | Architectural and Engineering, Rehabilitation, etc. |
| 1440.17(30.1) | Fees-Under Contract, etc. |
| 1440.17(40) | Land Acquisition Costs, Rehabilitation |
| 1440.17(40.1) | Land Purchase Price |
| 1440.17(40.15) | Sale of Rehabilitated Property, etc. |
| 1440.17(60) | Structures, Equipment and Improvements, etc. |
| 1440.17(80) | Other Rehabilitation Costs and Credits, etc. |
(d) The definitions, instructions, and procedures with respect to the classification of development costs for the project proper shall apply with equal force and effect to the classification of rehabilitation costs.
(3) No provisions shall be made for reserves for vacancy and collection losses, painting and decoration, replacements, or amortization.
(4) Rentals must be set at levels high enough to cover all operating costs. Deficits in operation, if any, will be met out of development funds, not subsidies.
(5) Provision for amortization of indebtedness, subsequent to the issue of State housing bonds, will all be charged to project management expense, and will not be a charge to rehabilitation.
(f) The local agency upon the request of the division shall submit a quarterly report on rehabilitation cost and operations. See section 1646-7.2, Schedule Number 10 and section 1646-7.13 for further details as to the required forms to be furnished with the quarterly report.
(g) Rehabilitation costs shall include all costs directly connected with or attributable to the rehabilitation program. In general, only such expenses as have been incurred on account of the rehabilitation program, and which would not have been incurred if there were no rehabilitation program, should be charged to Rehabilitation, account 1440.17. Procedures with respect to the distribution or allocation of Direct Costs (1410 group) and Carrying Charges as between the project proper and the rehabilitation program, have been described under the various subaccounts of these groups, to which reference should be made. They are here summarized, as follows:
(1) Direct Costs (1410 group). Where separate offices are maintained in connection with the rehabilitation development program, the costs of operating such offices, including the salaries of executive personnel employed therein, office rent, furniture and fixtures, sundry office expense, communication services, and premiums for fire, public liability, safe and robbery insurance applicable thereto shall be charged to this account. Where separate offices are maintained in connection with rehabilitation management, the costs of operating such offices as described above, shall be charged to account 1440.17(20.5), Rehabilitation expense. The cutoff point for separate office costs as between rehabilitation development and rehabilitation management shall be the first day of the month following that in which 95 per cent of the total dwelling units included in the rehabilitation program became available for occupancy. Workmen's compensation insurance premiums and employees retirement fund contributions shall be charged to the 1410 group of accounts to the extent that payrolls are so charged. Photographs showing the progress of rehabilitation work and the cost of advertising for bids for rehabilitation contracts shall be charged to this account directly, as shall the cost of other than ordinary and usual legal services in connection with the rehabilitation development program not covered by a retainer. No distribution or allocation of Direct Costs (1410 group) to the cost of rehabilitation shall otherwise be made, unless the division so directs, or approves a plan to serve as the basis of such distribution.
(2) Carrying Charges (1420 group). During the rehabilitation development program, this account shall be charged with the interest on funds borrowed to finance the rehabilitation program, and with taxes and insurance on property acquired in connection therewith, as well as with insurance required to protect the local agency during construction operations. Beginning with the first day of the month following that in which 95 per cent of the total dwelling units included in the rehabilitation program became available for occupancy, the 1440.17(20.5) group of accounts shall be charged with the interest on funds borrowed to finance the program and taxes and insurance on the property acquired for the rehabilitation program. No distribution, as between the project proper and the rehabilitation program, shall be made of the cost of borrowing, or the premium on State housing bonds.
1440.18 Relocation of Buildings
(a) This account shall be charged with the net cost of relocating existing buildings giving effect to any credits from the operation of the buildings, or their sale, etc.
(b) Relocation of buildings represents a program within a program, embracing the acquisition and preparation of the sites to which the buildings are to be moved, preparation of the moved buildings for occupancy, operation of the buildings, and finally, their disposition. Accordingly, all costs in connection with the relocation of buildings program, including all credits related thereto, shall be capitalized and charged to this account until such time as the program is liquidated. Ordinarily, all relocation of buildings activity will have been completed before the final development cost is determined. An analysis of the cost of relocation, revenues, and expenses, with respect to each building relocated shall be maintained.
(c) A separate cost analysis ledger shall be maintained, using the account classifications of the 1400 group as subaccounts to the extent applicable, according to the following general scheme:
| 1440.18(10) | Direct Costs, Relocation of Buildings |
| 1440.18(10.1) | Payroll-Executive, etc. |
| 1440.18(20) | Carrying Charges, Relocation of Buildings |
| 1440.18(20.1) | Interest |
| 1440.18(20.4) | Relocated Building Income |
| 1440.18(20.5) | Relocated Building Expense, etc. |
| 1440.18(30) | Architectural and Engineering, Relocation of Buildings |
| 1440.18(30.1) | Fees-Under Contract, etc. |
| 1440.18(40) | Land Acquisition Costs, Relocation of Buildings |
| 1440.18(40.1) | Land Purchase Price |
| 1440.18(40.15) | Sale of Relocated Property, etc. |
| 1440.18(60) | Structures, Equipment, and Improvements |
| For contract and other costs in connection with moving, preparing new site, connecting and disconnecting utilities, plumbing, heating, electrical work, etc. | |
| 1440.18(80) | Other Relocation of Buildings Cost and Credits |
In general, it will be found that all relocation of buildings costs will fall into the above classifications. It will also be found, generally speaking, that the buildings included in the relocation of buildings program will have been acquired in connection with the assembly of the site of the project proper or the offsite, and are being moved to house site tenants, in lieu of demolition. In such event, the cost of the building itself shall remain as a charge to the land acquisition costs of the site, or offsite, the relocation of buildings account being charged only for the costs of moving, acquiring and preparing the new site, etc.
(d) The definitions, instructions, and procedures with respect to the classification of development costs for the project site shall apply with equal force and effect to the classifications of relocation of buildings costs.
The full scheduled rent shall be charged, and vacancy loss recorded, beginning with the first day of the month following that in which 95 per cent of the total dwelling units included in the relocation of building program become available for occupancy. Prior to this date, such Direct Costs (1410 classification) not attributable to the operation of a separate relocation of buildings management office, and such Carrying Charges (1420 classification) as are chargeable to relocation of building costs shall be charged to the appropriate accounts in the 1440.18(10) and 1440.18(20) groups (exclusive of account 1440.18[20.5]) but subsequent thereto, such costs shall be charged to Relocated Buildings Expense, account 1420.18(20.5). Other features of the accounting during the operation of the relocated buildings are:
(3) No provisions shall be made for reserve for vacancy and collection losses, painting and decorating, replacements or amortization.
(4) Rentals must be set at levels high enough to cover all operating costs. Deficits in operation, if any, will be met out of development funds, not subsidies.
(5) Provision of amortization of indebtedness, subsequent to the issue of State housing bonds, will be charged to project management expense and will not be a charge to Relocation of Buildings.
(f) The local agency shall submit a quarterly report on relocation of buildings cost and operations. See section 1646-7.2, schedule number 11 and section 1646-7.13 for further details as to the required forms to be furnished with the quarterly report.
(g) Relocation of building cost shall include all costs directly connected with or attributable to the relocation of buildings program. In general, only such costs of expenses as have been incurred on account of the relocation of buildings program, and which would not have been incurred if there were no relocation of buildings program, should be charged to Relocation of Buildings, account 1440.18. Procedures with respect to the distribution or allocation of Direct Costs (1410 group) and Carrying Charges (1420 group), as between the project proper and the relocation of buildings program have been described under the various subaccounts of these groups, to which reference should be made. They are here summarized as follows:
(1) Direct Costs (1410 group). Where separate offices are maintained in connection with the relocation of buildings development program, the costs of operating such offices, including the salaries of executive personnel employed therein, office rent, furniture and fixtures, sundry office expense, communication services, and premiums for fire, public liability, safe and robbery insurance applicable thereto shall be charged to this account. Where separate offices are maintained in connection with relocation of buildings management, the costs of operating such offices as described above, shall be charged to account 1440.18(20.5), Relocation of Buildings Expense. The cutoff point for separate office costs as between relocation of buildings development and relocation of buildings management shall be the first day of the month following that in which 95 per cent of the total dwelling units included in the relocation of buildings program became available for occupancy. Workmen's compensation insurance premiums and employees retirement fund contributions shall be charged to 1410 group of accounts to the extent that payrolls are so charged. Photographs showing the progress of relocation of buildings work and the cost of advertising for bids for relocation of buildings contracts shall be charged to this account directly, as shall the cost of other than ordinary and usual legal services in connection with the relocation of buildings development programs not covered by a retainer. No distribution or allocation of Direct Cost (1410 group) to the cost of relocation of buildings shall otherwise be made, unless the division so directs, or approves a plan to serve as the basis of such distribution.
(2) Carrying Charges (1420 group). During the relocation of buildings development program, this account shall be charged with the interest on funds borrowed to finance the relocation of buildings program, and with taxes and insurance on property acquired in connection therewith, as well as with insurance required to protect the local agency during the moving and construction operations. Beginning with the first day of the month following that in which 95 per cent of the total dwelling units included in the relocation of buildings program became available for occupancy, the 1440.18(20.5) group of accounts shall be charged with the interest on funds borrowed to finance the program and taxes and insurance on the property acquired for the relocation of buildings programs. No distribution, as between the project proper and the relocation of buildings program, shall be made of the cost of borrowing, or the premium on State housing bonds.
1460 Structures, Equipment and Improvements
(c) The account numbers to which contracts are charged should not be confused with the contract numbers used by the local agency to identify individual contracts and in reporting to the division on the schedule of contract awards. Contract numbers for the major contracts and the accounts to which they should be charged follow. Subaccount numbers for contracts charged to the 1460 group should be assigned as described above:
| Contract no. | Contract | Account no. |
| 1 | Surveys | 1440.4 |
| 2 | Test Borings | 1430.4 |
| 3 | Architects | 1430.1 |
| 4 | Demolition | 1440.14 |
| 5 | Foundations | 1460.1 |
| 6 | General Construction | 1460.1 |
| 7 | Heating and Ventilating | 1460.3 |
| 8 | Electrical | 1460.4 |
| 9 | Plumbing | 1460.2 |
| 10 | Elevators | 1460.8 |
| 11 | Testing of Concrete | 1430.10 |
| 12 | Street and Yard Improvements | 1460 |
| 13 | Topsoil and Planting | 1460.5 |
| 14 | Refrigerators | 1460.7 |
| 15 | Ranges | 1460.6 |
Where a contract is awarded to more than one contractor, the individual contracts should be distinguished by suffixing a letter of the alphabet in the order of the awards. Thus, demolition contracts would be identified as 4A, 4B, 4C etc. When contracts are combined, the combined contract shall be identified by using the component contract numbers. Thus, foundations and general construction are sometimes awarded as one contract. If so, the contract should be identified as contract no. 5-6.
(d) A physical inventory shall be maintained of all items of equipment charged to this group of accounts.
(e) Site, as used herein, refers to the site of the project proper.
(f) Mandatory account numbers to be used in the 1460 group are as follows:
1460.1 General Construction
This account shall be charged with the value of the work completed by the general contractor. The total of this account should agree with the amount entered in the column headed, "Value of Work Completed" on the Schedule of Contract Awards, Exhibit 26 of Appendix S-11.
1460.2 Plumbing
This account shall be charged with the value of work completed by the plumbing contractor. The total of this account should agree with the amount entered in the column headed, "Value of Work Completed" on the Schedule of Contract Awards, Exhibit 26 of Appendix S-11.
1460.3 Heating and Ventilating
This account shall be charged with the value of work completed by the heating and ventilating contractor. Payments for temporary heat (labor and fuel) should be charged to account 1460.11. The total of this account should agree with the amount entered in the column headed "Value of Work Completed" on the Schedule of Contract Awards, Exhibit 26 of Appendix S-11.
1460.4 Electrical
This account shall be charged with the value of work completed by the electrical contractor. The total of this account should agree with the account entered in the column headed, "Value of Work Completed" on the Schedule of Contract Awards, Exhibit 26, of Appendix S-11.
1460.5 Topsoil and Planting
This account shall be charged with the value of work completed by the topsoil and planting contractor. The total of this account should agree with the amount entered in the column headed, "Value of Work Completed" on the Schedule of Contract Awards, Exhibit 26 of Appendix S-11.
1460.6 Ranges
This account shall be charged with the cost of ranges purchased by the local agency for the tenant's apartments. This account shall also be charged with the cost of ranges purchased during the development period in excess of the current requirements and to be used for future replacement where a tenants' range becomes inoperative. Any range purchased for use of the community center shall be charged to account 1460.9, Management Equipment. Also include in this account any costs incurred for storage and insurance on ranges for the period prior to their installation in the apartments.
1460.7 Refrigerators
The account shall be charged with the cost of refrigerators purchased by the local agency for the tenants' apartments. This account shall also be charged with the cost of refrigerators purchased during the development period in excess of the current requirements and to be used for future replacement where a tenant's refrigerator becomes inoperative. Any refrigerator purchased for use of the community center shall be charged to account 1460.9, Management Equipment. Also included in this account any costs incurred for storage and insurance on refrigerators for the period prior to their installation in the apartments.
1460.8 Elevators
This account shall be charged with the cost of furnishing and erecting the elevators by the elevator contractor. The total should agree with the amount entered in the column headed, "Value of Work Completed" on the Schedule of Contracts Awards, Exhibit 26 of Appendix S-11.
1460.9 Management Equipment
This account shall be charged with the original cost of nonexpendable equipment purchased during the development period and with the original cost on nonexpendable equipment purchased after substantial completion from development funds. As a basis for determining which items are nonexpendable, all items which cost $25 or more each shall be charged to this account. Items of management equipment which cost less than $25 shall be charged to account 1410.8 during construction, to account 1470.3 (4490) during initial occupancy and to account 4490 after substantial completion. Some examples of the type of management equipment to be charged to this account are as follows:
(1) Automotive equipment. Trucks, jeeps, automobiles, tractors, etc.
(2) Operating service equipment. Garbage and trash cans, floor waxing machines, etc.
(3) Maintenance and repair equipment. Lawn mowers, hand tools, ladders, joiners, threaders, snowplows, painting machines, spray or caulking guns, compressors, garden hose, power tools, etc.
(4) Community space equipment. Swings, basketball stops, infirmary tables, work benches, vises, refrigerator and ranges, etc.
(5) Fire and air raid equipment. Fire hose, extinguishers, uniforms, etc.
1460.10 Management Supplies
This account shall be charged with the cost of the initial stock of supplies for the project's stockroom during the initial occupancy period. This account shall also be charged with any initial supplies that are received at the project after substantial completion and charged to Development Fund. A physical inventory shall be maintained of these supplies in accordance with Subpart 1642-7.
1460.11 Temporary Heat
This account shall be charged, with the costs of heating the buildings (fuel and labor) by the contractor prior to the acceptance of the buildings by the local agency.
1460.12 Future Painting
Under some circumstances, the initial painting of the project may be deferred until after initial occupancy or after substantial completion. In such cases, the estimated cost of the initial painting will be set aside from Development Funds. The cost of such initial painting should be charged to this account (1460.12).
1470 Preoccupancy Charges and Credits
This major group of cost accounts shall include all costs incidental to the initial operation of the project proper, including the direct costs of selecting tenants, preliminary expenses prior to the beginning of the initial operating period, and any net deficit or income during the initial operating period.
1470.1 Tenant Selection Costs
This account shall be charged directly with all salaries of personnel especially employed for tenant selection and with all expenses incidental to tenant selection such as the cost of receiving, processing, and investigating applications up to the end of the initial operating period. Thereafter, this type of expense will be considered a part of the regular operating expenses and charged to the operation of the project proper.
1470.2 Preliminary Expenses
(a) This account shall be charged with all expenses (except tenant selection costs) directly attributable to the initial operation of the project proper or to preparations for the operation of a project, which have been incurred, or are applicable to the period prior to the beginning of the initial operating period. Preliminary expenses include, for example, the salaries of the project manager and staff, janitorial and maintenance salaries, project office expense, costs of preparing and printing booklets for the instruction of tenants, etc. Interest on indebtedness, insurance on newly constructed buildings, and taxes shall not be included, nor shall expenses falling within the Direct Costs (1410) group of development cost accounts, unless it is clearly established that such costs would not have been incurred if the project proper were not being operated or being put into operation.
(b) It is anticipated that the period of preliminary operation, during which project operating expenses are chargeable to this account will be relatively short. Hence, the charges will be made directly to this account without the employment, as subaccounts, of the standard classification of project management expense accounts (4000 group) prescribed for use during the initial operating period.
1470.3 Net Deficit or (Income)-Initial Operating Period
(a) This account shall reflect the net deficit or income resulting from the operation of the project during the initial operating period. This account shall operate as a control account, the standard classifications of project management income and expense (3000 and 4000 groups) being maintained as subsidiary accounts to the extent applicable. Separate income and expense analysis ledgers shall be maintained during this period and reports of income and expense on form DH-621 shall be rendered quarterly.
(b) Management expenses during the initial operating period shall include only the actual expenses of operating the project proper, such as salaries of the project manager and staff, janitorial and maintenance salaries, project office expenses, operating services, and utilities. Tenant selection costs, interest on indebtedness, insurance on newly constructed buildings and taxes shall not be included, nor shall provisions be made for any reserves or for accrual of subsidies. Expenses falling within the Direct Costs (1410) or Carrying Charges (1420) group of development cost accounts shall not be charged to management expense during the initial operating period unless it is clearly established that such expenses would not have been incurred if the project were not being operated.
(c) No vacancy loss shall be recorded prior to the last day of the month during which 95 per cent of the projects' dwelling units become available for occupancy or the date of substantial completion as determined by the commissioner, whichever is earlier, only the scheduled rents of such dwelling units as have been rented being taken into income. Subsequent thereto, the full scheduled rent shall be charged and vacancy loss shall be recorded.
1480 Other Charges and Credits to Development Costs
This account is established to record charges and credits to development costs for which provision has not been made in other development cost accounts. In general, it will be found that most credits arising during the development period will follow the charge. Thus, amounts received from sales of salvage, or from demolition contractors are credited to account 1440.14, Demolition and Clearing, etc. Charges and credits from the following typical sources shall, however, be made to this account, a subanalysis being maintained:
(1) Gain or loss on disposition of development fund investments, whether sold prior or subsequent to the date of substantial completion.
(2) Gain or loss on settlement of insurance claims applicable to the period prior to the date of substantial completion, except insofar as to the claims relate to offsite management, or to other related programs.
(3) Losses incurred during the development period not covered by insurance as, for example, with respect to property damage caused by water, except insofar as the losses relate to offsite management or to the related programs.
1490 Contingencies and Working Capital
(a) This account is established, for budgetary purposes only, to provide a cushion between estimated development costs, as budgeted, and the maximum amount that the State agrees to lend and the local agency agrees to borrow under the loan contract. The amount to be set up for contingencies shall be approved by the division. This account shall include such amounts as may be included in the State loan for working capital. The definitive amount of loan funds reserved for working capital will not, however, be determined until the project is declared physically completed by the commissioner. See section 1646-8.1 for the accounting entries. Until such time as the amount of Working Capital has been certified by the commissioner, this account shall be handled as if the funds were reserved solely for contingencies.
(c) Inasmuch as account 1490 is provided for budgetary purposes only, no account is set up for it in the cost analysis ledger, nor are any overruns or other development costs charged to the account by means of formal accounting entries in the manner that development costs are charged to the other development cost accounts. The application of Contingency Funds to authorized overruns is reflected only on form DH-213, in the manner described above. No request for an advance of Contingency Funds, as such, should therefore be made on any certificate of purposes.
(d) The term overrun is also used in connection with the excesses of expenditures over amounts requested in approved certificates of purposes. Such overruns are subject to special rules as to approvals, source of funds, etc. (see Part 1646, Development Period Accounting) and should be distinguished from overruns on budgeted amounts inasmuch as the latter are the only type of overruns for which Contingencies are set up.
INCOME ACCOUNTS-3000 GROUP
3000 Income Control Account
(a) This account shall control all income, operating and nonoperating, and shall be supported by detailed income accounts in the 3000 group of accounts. Account 3000, the control account, shall be maintained in the general ledger, and the detailed income accounts shall be maintained in an income analysis ledger. Refer to Part 1642, Basic Instructions, for setting up and operating the control and subsidiary accounts.
(b) Income accounts are arranged under the following general headings:
3110 Dwelling Rent Schedule 3111 Dwelling Vacancy Loss 3390 Non-Dwelling Rental 3510 Sales and Services to Tenants 3590 Miscellaneous Project Income 3610 Interest Earned 3800 Subsidies
Breakdowns in addition to those prescribed for the detailed income accounts may be desirable on very large projects or under special circumstances. Such additional breakdowns may be made so long as the information in the form of the prescribed accounts will be available.
3110 Dwelling Rent Schedule
(b) In addition to the amount charged for shelter rent, this account shall be credited with the charges for all utilities supplied by the project, whether included in the gross rent or billed separately, and including excess utility charges.
(c) In charging rents to tenants, there shall be no variation from the established rent schedule adopted by the local agency and approved by the commissioner. The local agency may, however, charge higher than scheduled rents, subject to division approval, in exceptional cases where occupants of dwelling units whose family incomes are in excess of the limits established for eligibility for admission to the project, and continued occupancy therein, under section 156 of the Public Housing Law, and who cannot find suitable accommodations outside of the project. Such surcharges shall also be credited to this account.
(d) The local agency, for control, charging and analytical purposes will reflect the basic rent schedule, surcharges and excess utility charges as follows:
3110.1 Basic Rent Schedule 3110.2 Dwelling Rent Surcharges 3110.3 Retroactive Surcharges 3110.4 Excess Utility Charges
(e) For the recording of entries on the books of account, see Part 1642, Basic Instructions.
3111 Dwelling Vacancy Loss
(b) For the recording of the entries on the books of account, see Part 1642, Basic Instructions.
3390 Net Non-Dwelling Rent
This account shall be credited with all rental charges made to lessees of non-dwelling facilities (including charges and surcharges for utilities and equipment, whether included in the rent of billed separately). Vacancy loss shall not be computed for any of the accounts in this group. Non-dwelling facilities include stores, garages, parking spaces, doctor's offices, community facilities, etc. Charges to non-dwelling tenants for goods and services other than those provided as part of the rental charge, as hereinabove defined, shall not be included in this account (see account 3510, Sales and Services to Tenants).
3510 Sales and Services to Tenants
(b) This account shall represent the gross charges made to tenants accounts for the goods and services rendered and not the net difference between the amount charged and the cost thereof. Refer to Part 1642, Basic Instructions, for entries to be made in the books of account with respect to sales and services to tenants.
3590 Miscellaneous Project Income
This account shall be credited with all income, both operating and nonoperating which cannot be classified under any other income account. Credits to this account shall include penalties for late payments of rent, fines and penalties for infractions of rules and regulations, lockouts, rental of equipment (other than equipment included under a non-dwelling lease, which is credited to the non-dwelling rental account), commissions and profits from telephone pay-stations, washing machine consessions, vending machines, gain on the disposition of investments, or on the settlement of fire-loss claims, forfeited bid deposits on management contracts, etc. This account shall not include charges for goods and services not provided as part of the rental charge, made directly to tenants' accounts receivable.
3610 Interest Earned
(a) This account shall be credited with the interest earned on Administration Fund Investments, or on Development Fund Investments subsequent to the date of substantial completion, whether such investments are held by the local agency or by the State Comptroller. Interest on investments held by the local agency shall be accrued quarterly as interest is earned, even though the amount earned is applied to increase the face amount of the investment instead of being paid, as is the case for certain issues of United States government bonds, but interest on investments held by the State Comptroller shall be recorded on the cash basis only, whenever the local agency is notified, through the Division of Housing, of the receipt of interest by the Comptroller.
(b) This account shall be charged with the costs of acquisition and disposition of Administration Fund Investments, and shall be charged or credited with the amortization of the premium or discount on such investments, in accordance with the instructions contained in Part 1645, Investments.
(c) Refer to Part 1645, Investments, for the entries to be made in connection with the interest earned, charges on acquisition and disposition, and amortization of premium or discount.
(d) Interest earned on Development Funds earmarked for rehabilitation, or relocation of buildings, shall at all times, be credited to the appropriate development fund cost account. Interest earned on investments of Development Funds earmarked for offsite clearance should be credited to the appropriate development cost account until the date of substantial completion or the date of liquidation of the program, whichever is earlier. After substantial completion, interest earned on off-site investments should be credited to administration. See account 1420.2, Interest Income.
3800 Subsidies
This major group of accounts shall include cash subsidies paid or due from the State or local bodies obligated to pay such subsidies under the terms of the contract for State aid, and taken into income. It also includes a memo account for local subsidies in the form of tax exemption. Separate accounts shall be maintained as follows:
3810 State of New York Cash Subsidy
(a) This account shall be credited with the amount of State subsidies taken into revenue in accordance with the instructions and limitations prescribed in Part 1648, Subsidies.
(b) At the end of each fiscal year during the fiscal years for which State subsidies are receivable, a journal voucher shall be prepared crediting this account for the amount of the State subsidy applicable to the operations for the year, and debiting account 2250. Prepaid State of New York Subsidies, to the extent of the credit balance therein, or if the credit balance has been exhausted, debiting account 1141, Subsidies-State of New York. All subsidies received from the State of New York prior to the end of the fiscal year to which the subsidy is applicable shall first be credited to account 4410, Prepaid State of New York Subsidies. Any balance in account 1141, Subsidies-State of New York, should then be transferred, by journal voucher to the prepaid subsidies account.
(c) Refer to Part 1648 for the computation of State subsidies.
3820 Other Cash Subsidy
(a) This account shall be credited with the amount of local cash subsidies taken into revenue, as computed in Part 1648, Subsidies, and in accordance with the contract for State aid.
(b) At the end of each fiscal year for which local cash subsidies are receivable, a journal voucher shall be prepared crediting this account for the amount of the local cash subsidy applicable to the operations for that fiscal year and debiting account 2260, Other Prepaid Cash Subsidies, to the extent of the credit balance therein, or, if the credit balance has been exhausted, debiting account 1142, Subsidies-Other. Cash subsidies received from local bodies prior to the end of the fiscal year to which the subsidy is applicable shall first be credited to account 2260, Other Prepaid Cash Subsidies. Any balance in account 1142, Subsidies-Other, should then be transferred by journal voucher, to the prepaid subsidies account.
3830 Annual Local Tax Exemption Subsidy (Memo)
This account will reflect the annual value of the exemption from local real estate taxes granted to the project in accordance with the Public Housing Law and the contract for State aid. At the end of each fiscal year, beginning with the fiscal year in which the date of substantial completion falls, a journal voucher should be prepared debiting the Subsidies-Tax Exemption (Cumulative) memo account, kept with the 1140 group of accounts, and crediting this account with the value of the tax exemption subsidy for that year. The Tax Exemption Subsidy (Annual) memo account is then ruled off when the income and expense accounts of the 3000 and 4000 groups are closed out. These memo accounts are provided for record-keeping purposes only, the balance on the Subsidies-Tax Exemption (Cumulative) memo account providing a cumulative record and the entries in the Annual Local Tax Exemption Subsidy (Memo) providing an annual record. The latter entry is not controlled by, and should not be reflected in, account 3000, the Income Control Account, as are the entries to the other accounts in the 3000 group.
EXPENSE ACCOUNTS-4000 GROUP
4000 Expense Control Account
(a) This account shall control all expenses, operating and nonoperating, chargeable to project revenue and shall be supported by the detailed accounts which are defined under the 4000 and 6000 categories. Account 4000, the control account, shall be maintained in the general ledger, and the detailed expense accounts shall be maintained in an expense analysis ledger. Refer to Part 1642, Basic Instructions, for setting up and operating the control and subsidiary accounts.
(b) Expense accounts are arranged under the following general headings:
4100 Management 4200 Operating Services 4300 Dwelling and Commercial Utilities 4400 Repairs and Maintenance 4700 Other Expenses 4800 Reserve Provisions 6000 Extraordinary Expenses
Breakdowns in addition to those prescribed in the detailed expense accounts described in the following pages may be desirable on very large projects, or under special circumstances. Such additional breakdowns may be made so long as the information in the form of the prescribed accounts is available.
4100 Management
(a) This major group of operating expense accounts shall include all items of expense incidental to carrying out overall direction, control, and other executive functions in connection with the management of the project.
(b) With respect to the allocation of management expenses as between the project proper and related offsite clearance, rehabilitation, and relocation of buildings programs being conducted simultaneously, the same principle shall be followed as for Direct Costs (1410 group) during the development period, viz; no allocation or distribution of management expense to the other expense accounts shall be made unless the division so directs, or the division has approved a plan to serve as the basis of such distribution or allocation.
(c) Separate accounts shall be maintained as follows:
4110 Project Office Salaries
This account shall include salaries of all persons engaged in the project office (or other local agency office serving only one project) for performing functions such as general management supervision; tenant selection; renting and leasing; handling tenant complaints and service requests; collections; budgeting and accounting; reporting; personnel administration; requisitioning and purchasing of supplies and materials; stenographic and clerical services; telephone operators; office machine operators. This account does not include salaries (either full-time or applicable pro rata share) of persons and staff engaged in supervision of repairs and maintenance (see account 4401) or of persons engaged in direct or active leadership in health education, and recreation activities (see account 4760). It shall, however, include the salaries of personnel, such as the executive secretary, executive director, or project manager performing authorized coordinating, executive, or advisory functions relating to the operation of the project.
4120 Central Office Salaries
This account is to be used only when a central office is established to serve more than one project. Such portions of the salaries of persons engaged at the central office as are directly traceable to the management of the project and approved by the division as properly chargeable to the revenues of the project shall be charged to this account. Such salaries will, in general, be of the same type as project office salaries chargeable to account 4110. The proration of central office salaries to the various projects served shall require the prior approval of the division.
4130 Legal, Fiscal and Other Fees
(d) Where the limited size of the project does not permit the expenditure of funds for a bookkeeper, the cost of outside accounting services as approved by the division, shall be charged to this account.
4140 Project Office Expense
This account shall be charged with all items, other than salaries, in connection with the operation of the project office (or other local agency office serving only one project) for the purpose of carrying out the overall direction, control, and operation of the project, such as: report and accounting forms; stationery and other office supplies; printing; advertising; informational expense; postage; incidental express, freight and drayage not identified with and charged to the same account as the article shipped; communications, including messenger service; tenant investigation reports; armored car service; safe deposit box rentals; rent of office space, if any; travel expense; rent of office machinery, and equipment; towel service, etc. The cost of office furniture, fixtures, and equipment shall not be charged to this account. See accounts 4490 and 6210.
4150 Central Office Expense
This account is to be used only when a central office is established to serve more than one project. Such portions of central office expenses as are directly traceable to the management of the project and are approved by the division as properly chargeable to the revenues of the project shall be charged to this account. Such expenses will, in general, be of the same type as project office expenses chargeable to account 4140. The proration of central office expense to the various projects served shall require the prior approval of the division.
4200 Operating Services
This major group of expense accounts shall include salaries and other expense incurred in performing janitorial, exterminating, watchmen, and refuse removal services. Separate accounts shall be maintained, as follows:
4210 Janitorial
4210.1 Janitorial-Wages
The salaries of employees engaged principally in janitorial functions, such as porters, janitors and caretakers shall be charged to this account. Where employees perform other services which are incidental to their janitorial activities, their entire salaries shall be charged to this account and no distribution shall be made for these incidental duties. See accounts 4402 and 4403 for Repair and Maintenance Salaries.
4210.2 Janitorial-Other
This account shall include the cost of all supplies, material and expendable equipment applicable to washing, cleaning, waxing, and polishing, the cost of uniforms for janitorial personnel, and of cleaning and laundering them. It shall also include the cost of rubbish and garbage collection and incinerator operation in apartments, group dwellings, or in stations to which tenants bring refuse, including the cost of collection of garbage and rubbish from pickup points, its removal from the project site or the operation of central incinerators.
4210.3 Exterminating
This account shall include the cost of all labor, supplies, material, expendable equipment and contract costs in connection with routine disinfecting and extermination of rodents and household insect pests. It shall not include exterminating costs in connection with horticultural pests (see account 4410, Repairs and Maintenance-Grounds) or termites (see account 4420, Repairs and Maintenance-Structures) or costs in connection with extermination which are charged to tenants (see account 1695).
4220 Watchmen
4220.1 Watchmen Wages
This account shall be charged with the salaries of watchmen, housing guards and housing officers.
4220.2 Watchmen-Other
This account shall be charged with the uniforms, badges, equipment, and other items of expense for those employees charged to account 4220.1, or the cost of watchmen services rendered by contract.
4300 Dwelling and Commercial Utilities
This major group of expense accounts shall include the cost of all dwelling, non-dwelling, and commercial utility services, whether purchased from utility companies or produced by the project. Utility charges to these accounts include those supplied to dwelling tenants and non-dwelling lessees, whether included in the rental charge or billed separately. The cost of repairs and maintenance of utility systems shall not be included in these accounts. Separate accounts shall be maintained, as follows:
4310 Water
This account shall include the cost of water for all purposes purchased from either private or municipal water plants.
4320 Electricity
This account shall include the cost of electrical energy for all purposes. Where electricity charges to tenants are made on a metered basis, the cost of reading electric meters shall also be charged to this account. The cost of repairs and maintenance of the electrical system shall not be included (see account 4440.2).
4330 Gas
This account shall include the cost of gas for all purposes, except the cost of gas for heating or hot water where gas is the principal means of providing heat or hot water (see account 4340). Where separate meters are not used for the gas chargeable to the latter account, the utility company should be called upon to furnish an estimate of consumption to be used as a basis for the proration of gas costs. Where gas charges to tenants are made on a metered basis, the cost of reading gas meters shall be charged to this account. The cost of repairs and maintenance of the gas system shall not be included (see account 4440.1).
4340 Fuel
This account shall include the cost of coal, fuel oil, purchased steam, gas, and any other fuels for heating of space or hot water, and supplied by the project to tenants as a part of the rent. Do not include the cost of coal, fuel oil, or other fuels purchased by the project and resold to tenants on a reimbursable basis (see account 1695). Where the use of gas is incidental to the provision of heat or hot water (such as the gas consumed in an oil burner pilot light) and is not the principal means of providing the same, no charge for the gas so used shall be made to this account (see account 4330, Gas). Do not include the cost of heating supplies (see account 4440.3) or heating labor (see account 4350).
4350 Heating Wages
This account shall be charged with the salaries of housing firemen and stationary engineers. This account shall also be charged with the salary of any other employee where the principal portion of his duties are in connection with the operation of the project's heating system. The cost of labor in connection with repairs and maintenance of the heating system shall not be charged to this account (see account 4402), unless performed by above listed employees.
4400 Repairs and Maintenance
(a) In performing its statutory function of providing decent, safe and sanitary housing for those income groups which would otherwise be unable to afford such housing, a project employs an aggregate of physical assets in the form of structures, site improvements, fixed and movable equipment, etc., to produce revenue, or to provide necessary facilities for the operation of the project, or because of their utility or function. Costs must be incurred to preserve and maintain the revenue-producing capacity of these assets and their utility and function during their useful lives, and to replace these assets at the end of their useful lives. These costs may be classified as follows:
(1) Maintenance. This term refers to the measures undertaken to keep an asset in good operating condition over its useful life, as by regular cleaning, oiling, adjusting, inspecting, overhauling, etc., or to maintain a certain standard of appearance, utility, or function, as by painting, renewing or replacing parts, or to prevent an asset from wearing out or breaking down before its time. Behind the idea of maintenance is the thought that an ounce of prevention is worth a pound of cure. Just as the Division of Housing feels that the best materials obtainable should go into the construction of a project, so it feels that local agencies should aggressively pursue policies of full maintenance. The regular type of cleaning done with a mop, broom, scrubbing, brush or dust cloth is not included herein, but represents a special type of maintenance classified as Operating Services-Janitorial (see account 4210).
(2) Repairs. This term refers to the measures necessary to put an asset in good operating condition, or restore its utility, function or revenue-producing capacity after a condition has been reached which maintenance has been unable to prevent. Repairs, like maintenance, may involve labor alone, or labor and materials, or the renewal or replacement of parts, but, generally speaking, neither repairs nor maintenance materially add to the value of the asset, or to its utility, function, or revenue-producing capacity or appreciably prolong its life expectancy. They merely serve to keep the asset in an ordinary efficient operating condition and up to a certain standard of appearance, utility or function.
(3) Renewals. This term refers to the replacing of parts of an asset by other parts, as contrasted with the replacement of the entire asset. As indicated above, maintenance and repairs may include renewals. Sometimes the renewals may be so extensive, however, that they constitute an arresting of deterioration or restoration of depreciation, thereby prolonging the life of the asset beyond its normal span. Consideration has been given this factor in arriving at replacement reserve fund requirements.
(4) Replacements. This term refers to the replacing of an entire asset by another asset, as contrasted with the replacing of parts of that asset. The latter operation has been above defined as a "renewal". A simple illustration is a refrigerator. Replacing a motor would be a renewal, replacing the entire refrigerator would be a replacement. As the asset becomes more complex, however, it becomes more difficult to distinguish between a renewal and a replacement. For example, the replacing of a steam boiler may be a renewal or replacement depending on whether the boiler is considered by itself or as part of the heating system. For the purposes of classifying expenditures in this system of accounts, however the distinction is not too important. When an asset has reached the end of its useful life, or when neither maintenance nor repairs have been able to keep the asset in efficient operating condition, or up to a certain standard of appearance, utility, or function, or when the item has lost or suffered serious impairment of its utility, function, or revenue-producing capacity through wear, damage, obsolescence, or lack of proper maintenance and repair, it should be replaced. The useful life of any asset installed or used in a project depends on the care with which it has been maintained and repaired. If maintenance and repairs are neglected, early replacement of the item neglected with [sic ] be necessary. It is evident that replacement costs are dependent on the adequacy and degree of maintenance and repairs. Deferred maintenance may be in the long run, shortsighted economy. Generally speaking, the division will insist that policies of full maintenance be followed.
(b) Expenditures for maintenance, repairs, renewals, and replacements, (hereinafter referred to as MRR&R expenditures) are classified either as charges to current revenues, in which case they are charged to the 4400 group of expense accounts, or as replacements in which case they are charged to account 2510, Reserve for Replacements. The classification of the charges shall be made in accordance with the following procedure:
(1) A detailed description and cost estimate of all replacements planned for the budget year will be incorporated in each annual operating budget submitted to the division for review and approval.
(2) In the event that the need for an unanticipated replacement occurs, the local agency shall request division approval of a corresponding amendment in the operating budget.
(3) MRR&R expenditures for those items which are specifically provided for in the approved annual operating budget, shall be charged direct to account 2510, Reserve for Replacements, as described in Part 1647, Operating Period Accounting. All other MRR&R expenditures not so provided for shall be charged to the 4400 group of expense accounts.
(c) Charges to the 4400 group of accounts shall include labor, supplies, material, expendable equipment, contract costs, and such fixed or movable equipment as [do] not constitute charges to the Reserve for Replacements, account 2510, or account 6210, Operating Improvements. Many construction contracts, such as roofing, refrigerators, ranges, contain guarantee provisions as to performance, as do many types of maintenance contracts. Where such contracts are in force, items of MRR&R expense incurred by a project, as by failure of the guarantor to perform, or otherwise, shall be held in suspense in account 1690, Sundry Suspense and Clearance, until liquidated under the guarantee provisions of the contract.
4401 Maintenance Supervision Salaries
This account shall be charged with the salaries and wages of personnel engaged at the project in the supervision of operating services, utilities, or repair and maintenance activities, as for example the superintendent and assistant superintendent titles. It shall also include the salaries of project office personnel (clerks, typists and stenographers) who devote the major portion of their time to the superintendent's office. Do not include any part of the salaries of the executive secretary, executive director, project manager, or manager-superintendent (see account 4110) or the salaries of personnel employed at the central office in the over-all supervision of operating services, utilities, or repair and maintenance activities (see account 4120).
4402 Project Maintenance Salaries
This account shall be charged with the salaries of employees on the project staff in the following titles: maintenance mechanic, maintenance laborer, groundsman, gardener, laborer and any other employee who devotes the major portion of his time to project repairs and maintenance activities.
4403 Central Maintenance Salaries
This account shall be charged with the salaries of maintenance personnel attached to central office, whose time is prorated among various projects. The charges shall be based upon the time spent at the project. The duties of the maintenance personnel charged to this account are similar to those charged to accounts 4401 and 4402.
4410 Grounds
This account shall include all costs of MRR&R for lawns, planted areas, shrubs, trees, etc., fences, wading pools, clothes poles, flag poles, benches and retaining walls, surfaced areas as recreation areas, sidewalks, paths, walkways, parking spaces, individual driveways, cul-de-sacs, streets, roads, public driveways and areas not normally maintained by local government. This account shall also be charged with the costs of snow removal.
4420 Structures
This account shall include all costs of MRR&R, except those costs which are properly chargeable to account 2510, Reserve for Replacements, as described in paragraph (b) under account 4400 above, in connection with all structural work such as: carpentry; wood and asphalt tile floors; roofing and sheet metal; tile work; caulking and waterproofing; lathing and plastering; glazing; hardware; screens, storm doors, stormsash (including seasonal removal and installation); kitchen-cabinets; counter tops; etc. Do not include these costs in connection with grounds (see account 4410).
4430 Painting and Decorating
4430.1 Painting and Decorating Salaries
This account is to be charged with the wages and salaries of painters, painters helpers, plasterers and plasterers helpers.
4430.2 Painting and Decorating-Other
This account shall include all material and contract costs in connection with exterior and interior painting and decorating such as: washing and cleaning painted surfaces preparatory to or in lieu of painting, plaster patching, paper hanging, floor refinishing, curtain rods, painting radiators, exposed plumbing and heating pipes, boiler, generators, yard appurtenances, playground and other equipment. The replacement, washing and repair of window shades shall also be charged to this account.
Refer to Part 1647, Operating Period Accounting, for entries and procedures in connection with the charges to be made to this account and account 4894, Provision for Painting and Decorating.
4440 Mechanical Systems
4440.1 Plumbing and Gas Systems
This account shall include all costs of MRR&R, both inside and outside of structures except those costs properly chargeable to account 2510, Reserve for Replacements, as described in paragraph (b), under account 4400, above, such as piping, supplies, tanks, meters, valves, pumps, motors and controls, plumbing fixtures, etc., in connection with the hot and cold water systems, the gas system, including individual hot water heaters, and the drainage and sewerage systems.
4440.2 Electrical System
This account shall include all costs of MRR&R, both inside and outside of structures, except those costs properly chargeable to account 2510, Reserve for Replacements, as described in paragraph (b), under account 4400, above, in connection with the electrical system, such as: transformers; exterior distribution lines and equipment, interior wiring; meters; fixtures; lamps; fuses; street lighting systems; fire alarm and communications systems; etc.
4440.3 Heating and Ventilating System
This account shall include all costs of MRR&R, except those costs properly chargeable to account 2510, Reserve for Replacements, as described in paragraph (b), under account 4400, above, in connection with central, group, or individual space heating plants and central or group water heating plants such as: boilers, firing equipment; furnaces; fans and pumps; distribution systems, both interior and exterior including mains, valves, pipes, ducts, meters, automatic controls; radiation, including radiators, radiator valves, traps, and grilles, individual or group furnaces, including valves, motors, fans and controls; stoves, when used for space heating; ventilating equipment and controls. Do not include the cost of labor in connection with routine adjustment, oiling, and inspection of heating equipment. See account 4350 for cost of labor performed by heating staff and account 4402 for cost of labor performed by the project maintenance staff. This account shall also be charged for the cost of heating supplies, such as pokers, slice-bars, tube-brushes, shovels, ashcans, ash-can trucks, boiler feed-water treatments, fuel oil solvents, and lubricating oil, wiping rags, etc.
4440.4 Elevators
This account shall include all costs of MRR&R in connection with elevators including maintenance contracts and inspection fees; except those costs properly chargeable to account 2510, Reserve for Replacements, as described in paragraph (b) under account 4400, above.
4480 Ranges and Refrigerators
4480.1 Ranges
This account shall include all costs of MRR&R, except those costs properly chargeable to account 2510, Reserve for Replacements, as described in paragraph (b) under account 4400, above, in connection with coal, oil, gas, or electric stoves or ranges used wholly or in part for cooking. This account shall also include the costs of washing and cleaning ranges when performed in connection with overhauling, renovating and repairing ranges.
4480.2 Refrigerators
This account shall include all costs of MRR&R, except those costs properly chargeable to account 2510, Reserve for Replacements, as described in paragraph (b), under account 4400, above in connection with mechanical refrigerators or ice-boxes. This account shall also include the costs of washing and cleaning of refrigerators when performed in connection with overhauling, renovating, and repairing refrigerators.
4490 Other Equipment
4490.1 Office Furniture and Equipment, Maintenance Equipment and Motor Vehicles
This account shall be charged with the cost of nonexpendable equipment purchased during the operating period from administration funds. All items which cost $25 or more shall be considered nonexpendable and shall be charged to account 4490.1. Items of furniture and equipment which cost less than $25 shall be considered expendable and shall be charged to account 4490.2. Items of furniture and equipment to be used in the community activities program shall be charged to account 4760.2. Some examples of the types of furniture and equipment to be charged to this account are as follows:
(1) Management furniture and equipment. Desks, accounting machines, typewriter, adding machines, chairs, filing cabinets, fans, calculating machines, mimeograph machines, dictating machines, safes, etc.
(2) Operating service equipment. Garbage and trash cans, floorwaxing machines, etc.
(3) Maintenance and repair equipment. Lawnmowers, tools, ladders, joiners, threaders, snowplows, painting machines, spray or caulking guns, or compressors, etc.
(4) Automotive equipment. Trucks, jeeps, automobiles, tractors, etc.
(5) Laundry equipment. Washing machines, ironers, etc.
(6) Fire and air raid equipment. Fire hose, extinguishers, buckets, uniforms.
Any of the above items included in the approved operating budget as costs properly chargeable to account 2510, Reserve for Replacements, or to account 6210, Operating Improvements, are not to be charged to this account. Purchase of an item or group of items charged to this account in the amount of $100 or more shall require prior approval of the division, unless included in the approved operating budget. However, any purchase, although included in the approved budget, in excess of the dollar limitation governing expenditures as stated in the budget approval letter shall require separate prior approval of the division. A physical inventory shall be maintained of all items charged to this account in accordance with Subpart 1642-7.
4490.2 Equipment Repairs and Supplies
This account shall include costs for Repairs and Maintenance of all items charged to account 4490.1. It shall also be charged with items of expendable furniture and equipment as defined under account 4490.1 above. This account shall also be charged with gasoline, oil and other operating costs of vehicles.
4700 Other Expenses
This major group of expense accounts shall include items of fixed expenses such as insurance, taxes, interest, etc.; community activities; collection losses. Separate accounts shall be maintained, as follows:
4710 Insurance
This account shall include the total amount of premiums applicable to the period for all forms of insurance carried, such as fire and extended coverage, boiler, elevator, automobile, owners and landlord public liability, workmen's compensation, burglary, theft, fidelity and surety bonds, etc. See Part 1642, Basic Instructions, for accounting entries and procedures.
4713 Municipal Service Charges
Where special conditions exist and the contract for State aid expressly permits payment to the municipality or other local body for services and facilities, this account shall be charged with all such payments. These services may consist of fire, police and health protection, schools and educational services and facilities, sewer service, snow removal, collection and disposal of garbage, trash and ashes, maintenance of streets, etc. If the charge is made on an annual basis, one quarter of the annual charge should be charged to this account at the end of each quarter, in accordance with the procedure described under account 4730, Taxes.
4716 Interest on Indebtedness
This account shall be charged with the interest on outstanding indebtedness of the local agency, accrued quarterly in accordance with the instructions in Part 1644 Debt Service. Charges to this account will accrue as of the first day of the month following that in which the initial operating period terminates.
4717 Amortization of Indebtedness
Beginning with the date of substantial completion or the date of issue of bonds by the State, whichever is later, this account shall be charged with the proportionate amount of the scheduled payment on account of the principal amount of the loan outstanding that will be due and payable by the local agency on the next succeeding principal payment date. The charges shall be accrued quarterly, in accordance with Part 1644, Debt Service.
4730 Real Estate Taxes
(a) This account shall include such local real estate, school, and county taxes as the local agency is required to pay in accordance with the Public Housing Law.
(b) At the end of each quarter, until actual payment of the taxes has been made, a journal voucher should be prepared charging this account with one quarter of the total annual taxes and crediting account 2137, Accrued Real Estate Taxes. When the real estate taxes are paid, the entries shall be as follows:
(1) Debit account 2137 for that portion of the tax accrued to the end of the quarter preceding the date of payment.
(2) Debit account 1280, Prepaid Taxes, for the balance of the tax paid.
(3) Credit the appropriate cash account with the payment. Thereafter until the end of the period to which the taxes apply, the quarterly write-off should be debited to account 4730, and credited to account 1280.
4740 Pension and Other Funds
This account shall be charged with the following items:
(1) Local agency's contributions to employees retirement and pension systems.
(2) Local agency's contributions for social security.
(3) Local agency's contributions to employee group insurance plans such as Blue Cross, Blue Shield, Health Insurance Plan of New York, Group Life Insurance, etc. Where the amount of charges to this account for each of the above items is substantial, the use of subaccounts is recommended. The amounts withheld from employees' salaries as their contribution to these funds shall not be charged to this account but shall be charged as a part of gross salaries. The charges to this account shall be made by journal voucher at the end of each quarter, the credit being to account 2138, Accrued Pension Fund Contributions.
4760 Community Activities
4760.1 Community Activity-Salaries
This account shall be charged with the salaries of a housing community coordinator, recreation director, consultant-social agencies or any other employee authorized to conduct, supervise or participate in a community activities program. No allocation should be made of the salary of an employee, such as a project manager or housing assistant whose community activity duties are incidental to his main duties.
4760.2 Community Activity-Supplies and Equipment
This account shall be charged with the cost of materials, supplies and equipment in connection with health programs, health education, health centers, clinics, infirmaries, etc.; child care and similar welfare services; educational and civic activities; recreation, including playgrounds and community centers. The extent to which the cost of these activities shall, however, be charged to project revenues shall have the prior approval of the Division of Housing. A physical inventory shall be maintained of all items of nonexpendable equipment charged to this account in accordance with Subpart 1642-7. As a basis for determining which items are to be inventoried, all items or a group of items which cost $25 or more shall be considered nonexpendable. Any items of equipment included in the approved operating budget as costs properly chargeable to account 2510, Reserve for Replacements, are not to be charged to this account. Purchase of equipment in the amount of $100 or more shall require prior approval of the division, unless included in the approved operating budget. However, any purchase, although included in the approved budget, in excess of the dollar limitation governing expenditures as stated in the budget approval letter shall require separate prior approval of the division.
4770 Collection Losses
(a) This account shall include the actual amount of past-due accounts receivable which are determined to be uncollectible and written off pursuant to the local agency's procedure as adopted by authority resolution, which resolution has been approved by the division. The division, notwithstanding a write-off pursuant to an approved procedure, will take exception, unless it is satisfied that the local agency has been pursuing an aggressive collection policy and has further exhausted all means of collection to the maximum extent practicable before making the write-off.
(b) Collections made on accounts which have previously been determined to be uncollectible and written off shall be credited to this account. See Part 1642, Basic Instructions, for entries and procedures.
4800 Reserve Provisions
This group of accounts shall include all provisions for reserves permitted by division policy. Separate accounts shall be maintained as follows:
4891 Provision for Replacements
(a) This account shall include the amount set aside from revenue in any period to create a reserve for future costs of replacements and other charges in accordance with division policy.
(b) See Part 1647, Operating Period Accounting, for entries and procedures.
4894 Provision for Painting and Decorating
(a) This account shall include the net amount set aside from revenue in any period to create a reserve for future costs of painting and decorating.
(b) See Part 1647, Operating Period Accounting, for entries and procedures.
4895 Provision for Vacancy and Collection Losses
(a) This account shall include the net amount set aside from revenue in any period to create a reserve for future vacancy and collection losses in accordance with division policy.
(b) See Part 1647, Operating Period Accounting, for entries and procedures.
4899 Provision for Operating Improvements
This account shall include the amount set aside from revenue for operating improvements, where Development Funds are not available. All charges to this account require prior written division approval. See account 2590, Reserve for Operating Improvements, for the credit entries which are contra to the charges to this account.
6000 Extraordinary Expenses
This group of accounts shall include operating items of a nonrecurring nature and all expenses arising from other than normal operations. The accounts in this group shall be controlled by account 4000, Expense Control Account, in the same manner as the normal operating expenses included in the 4000 category of accounts. Separate accounts shall be maintained as follows:
6010 Prior Years Adjustments
This account shall be charged or credited with prior years adjustments amounting to $50 or more each, the disposition of which as a charge or credit to current year's operations has been approved by the division. See Subpart 1647-7 for a definition of Prior Years Adjustments and for a description of the review and disposition procedure. See also account 2710 for prior years adjustments held in suspense pending division review.
6100 Miscellaneous Losses
This account shall include all costs in connection with the settlement of claims for personal injury or damage to property such as clothing, luggage, furniture or other personal effects arising out of operations, and for which insurance is not carried by the local agency. This account shall also be charged with losses, such as automobile collision costs, where the authority cannot collect for damage to its own property because of the lack of insurance coverage; losses on the sale of Administration Fund Investments; the difference between the proceeds of the insurance claim and the costs of restoring the damaged property and of making the claim, where the costs are in excess of the amount recovered (see account 1670, Insurance Claims Clearance), etc.
6210 Operating Improvements
(a) This account shall include expenditures from management funds for such improvements, additions, alterations, or betterments to a project made subsequent to the date of substantial completion, as are approved by the commissioner and for which development or reserve funds are not available.
(b) The purpose of the operating improvement account is to provide funds, when development funds are not available, to improve the operating efficiency of the project, or to effect economies in operation, or to increase the revenue, utility, or function of the project, or to pay for items omitted from, or overlooked in, the original design or planning of the project which experience with operation has indicated to be necessary or serve to maintain or increase the revenue, utility, or function, or to cure deficencies in construction caused by conditions during the construction period, such as war-caused deficiencies, or to cure deficiencies arising out of technological improvements, etc.
(c) This account shall also be charged with expenditures from management funds for replacements which constitute betterments and which materially increase the utility or function of an item, but only to the extent of the difference between the cost of the new item and the original cost of the item replaced, such as the replacement of half-screens with full screens. Replacements of a type that have a greater durability or expected life than the item being replaced, but which do not increase the utility or function of the item being replaced, such as replacement of gravel roads with paved roads of the same extent, or tar paper with permanent roofing etc., do not constitute betterments.
N.Y. Comp. Codes R. & Regs. Tit. 9 §§ 1641-2.1