N.Y. Comp. Codes R. & Regs. tit. 9 § 1645-2.8

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

Section 1645-2.8 - State Housing Fund investments

(a) The State Comptroller may, from time to time, invest the proceeds of an issue of State housing bonds. These investments are investments of development funds but are designated as State Housing Fund investments to distinguish them from development funds invested directly by the local agency and under its custody and control. The local agency will be notified, through the division, when the investments are made, as to the amounts invested in the various securities. No accounting entry shall be made on the books of the local agency to reflect investments made by the Comptroller. The balance in account 1123, State Housing Fund, may therefore represent cash held by the Comptroller, or cash and investments. The Comptroller does not amortize premium or discount on investments made by him and interest thereon is ordinarily paid into the State Housing Debt Fund. The balance in account 1123, State Housing Fund, will therefore ordinarily remain undisturbed. State Housing Fund investments are primarily of a short-term nature and are on a yield basis. The interest earned represents the difference between the amount expended on acquisition and the proceeds received on disposition of the security.

(b) The Comptroller does not accrue interest earned on State Housing Fund investments, but records them on a cash basis, as received. Accordingly, interest earned on State Housing Fund investments shall not be accrued periodically by the local agency but shall be recorded, on a cash basis, whenever the local agency is notified by the division of the receipt of the interest by the Comptroller. Upon receipt of such notice, a journal entry is made charging account 1124, State Housing Debt Fund, and crediting the appropriate interest earned account, apportioning the interest earned to the applicable period, as follows:

(1) Interest applicable to the period up to the date of substantial completion--credit account 1420.2, Interest Income.

(2) Interest applicable to the period beginning with the date of substantial completion--credit account 3610, Interest Earned, for interest applicable to the current fiscal year; credit account 2710, Prior Years Adjustments, for interest applicable to prior fiscal years. The local agency will be expected to propose the disposition of the credit to account 2710 to the division for approval prior to the end of the current fiscal year, along with the disposition of other charges and credits to the prior years adjustments account.

(c) The Comptroller will ordinarily apply the interest received on the State Housing Fund investments to the payment of interest on State housing bonds. The local agency will be notified by the division as to the amount so to be applied and the local agency will then proceed to make the entries recording the application of the interest, as described in Part 1644, Debt Service. However, as previously noted, in the event of a loss on disposition of State Housing Fund investments, the Comptroller will apply the interest to the loss to the extent that such interest is available in the State Housing Debt Fund. In the event that such interest has been recorded on the books of the local agency as having been received by the Comptroller but not yet applied by him to the payment of interest on State Housing bonds, a reversing entry charging the interest earned account and crediting account 1124, State Housing Debt Fund, for the interest applied to the loss will be necessary. It is evident that if the Comptroller has received interest which has not yet been recorded on the local agency's books and has applied it to a loss on disposition, the entry on the local agency's book recording the interest will be for the net amount. The division's letter of notification to the local agency will contain full instructions for the accounting treatment of these items.

N.Y. Comp. Codes R. & Regs. Tit. 9 § 1645-2.8