N.Y. Comp. Codes R. & Regs. tit. 9 § 1642-1.1

Current through Register Vol. 46, No. 25, June 18, 2024

Section 1642-1.1 - Segregation of funds

The segregation of funds, by project and by purpose, as required by the provisions of the various contracts for State aid and the regulations of the commissioner, is achieved by setting up separate bank accounts as follows:

(a) Development fund. This is the general designation of the bank account or accounts set up to receive the proceeds of loan funds and any other funds received by the local agency in connection with the development of a project. Typical sources of such funds are loan funds advanced by the State, loan funds borrowed from private investors, deposits on plans and specifications, sales of salvage, rents from the operation of the site prior to demolition and construction, sales of excess land, rents and other revenues received in connection with the related programs, interest on development fund investments, etc. A separate development fund bank account shall be set up for each project. The division may further require, depending on the circumstances, the segregation in separate bank accounts of the development funds for the various sites included in a multiple development project and of the development funds for the related programs of a project, in which case the local agency will be so advised. A separate general ledger account shall be set up for each bank account. Where the development fund of a project consists of more than one bank account, each such bank account shall be assigned account numbers in sequence, as account 1111.1, 1111.2, etc. Payments shall be made from the development fund only for such purposes as shall have been previously specified in a signed certificate of purposes (see Part 1646) filed with and approved by the commissioner. Steps should be taken to open a development fund bank account (see § 1642-1.2 ) prior to the initial financing of the project.

(b) Administration fund. This is the general designation for the bank account or accounts set up to receive all income, cash subsidies, and other funds received by the local agency in connection with the operation of the project proper. Typical sources are rents from the operation of the project proper beginning with the first rents derived from the completed buildings, cash subsidies, penalty charges, sales and services to tenants, telephone commissions, washing machine concessions, interest on administration fund investments, etc. The administration fund bank account is opened at the beginning of the initial operating period of the project proper. All rents received from the operation of the project proper are deposited therein beginning with the first such rents received and all expenses of managing the project proper shall be paid therefrom. The net income or deficit during the initial operating period results in a corresponding credit or charge to development costs and will be reflected in a transfer of funds between the development and administration funds. For details of the procedure during the initial operating period see Part 1646, Development Period Accounting. A separate administration fund bank account or accounts shall be set up for each project, a separate general ledger sheet being maintained for each bank account as described under development fund above. The division may further require, depending on the circumstances, the segregation in separate bank accounts of the administration funds of the various sites included in a multiple development project, in which case the local agency will be so advised. Payments shall be made from the administration fund only for such charges as are eligible to be made to project revenues.

(c) Security deposits fund. This is the general designation of the bank account or accounts set up to receive security deposits from tenants. A separate security deposits fund bank account shall be set up for each project. The division will not require that separate security deposits fund bank accounts be opened for each of the various sites included in a multiple development project.

(d) Reserve fund. This is the general designation of the bank account or accounts set up to receive funds set aside from project revenues for the following reserves:

(1) Replacement reserve

(2) Painting and decorating reserve

(3) Vacancy and collection loss reserve

(4) Any other authorized and approved reserve

A separate reserve fund bank account shall be set up for each project. The division will not require that separate reserve fund bank accounts be opened for each of the various sites included in a multiple development project. For details as to setting up the various reserves and the transfers to be made between the administration and reserve funds, see Part 1647, Operating Period Accounting.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 1642-1.1