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New Administrative Notices from USDA-RHS Regarding Ordering Credit Reports and the Management Control Review

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USDA-RD made two administrative notices (AN) regarding rural multifamily housing issues available to the public.  They are as follows:

· AN No. 4649 “Procedure for Ordering Dun and Bradstreet Comprehensive Credit Reports for Single Family Housing and Multi-Family Housing and Ordering Individual Consumer Credit Reports from CBCInnovis” (May 18, 2012)

This AN provides guidance on ordering Comprehensive Credit Reports (formerly known as the Commercial Credit Reports) from Dun and Bradstreet for RD Single Family Housing and Multi-Family Housing programs. Additionally, this AN includes guidance on ordering individual consumer credit reports on the owner/principal(s) from CBCInnovis (replacing Trans Union). Comprehensive credit reports are required for SFH general or dealer/contractor approvals and MFH loan making, including Farm Labor Housing. This AN replaces RD AN No. 4623 (1910-C), dated March 1, 2012. A copy of AN 4649 may be found here: http://www.rurdev.usda.gov/SupportDocuments/an4649.pdf

· AN No. 4645 “Response to the 2011 MFH 514/515/516 Management Control Review (MCR) Weaknesses” (April 18, 2012)

Results from the 2011 Management Control Review (MCR) for the Multi-Family Housing (MFH) sections 514/515/516 programs revealed several areas of concern regarding the design and construction process and required documentation for projects funded in the MFH programs. The AN provides clarification and emphasis on the guidance and direction provided in RD Instructions 1924-A and 1940-G, as well as MFH’s regulatory requirements and Handbook provisions in order to address the concerns raised in the 2011 MCR.

The issues raised in the MCR are as follows:

1. There was evidence that reports were being incorrectly categorized as a Life Cycle Cost Analysis;

2. Rural Development concurrence of the construction contracts was not documented as required;

3. The project files failed to indicate that “As-Built” documents were received and properly filed;

4. The reviewed files indicated that all required suspension and debarment investigations were not performed as required;

5. The MCR report indicated that the environmental site assessment was not consistently included in the file;

6. Documentation of the required Lead-Based Paint actions were not consistently found in the files of the applicable projects;

7. The MCR report noted that categorization of some projects as being Categorical Excluded (CATEX) from National Environmental Policy Act (NEPA) review was not properly documented; and

8. The MCR review revealed that in some cases, the Federal Emergency Management Agency (FEMA) Form 81-93, “Standard Flood Hazard Determination Form” and documentation of flood insurance was not included in the project file.

A copy of AN 4645 may be found here: http://www.rurdev.usda.gov/SupportDocuments/an4645.pdf

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