Vehicle & Maint. The reviewer should approve only the cost (or pro-rated Equip. Oper. and 6570 cost) of a vehicle used at the project. Repair The reviewer should ensure costs do not include items Misc. Operating & that should be paid from the reserve for replacement Maintenance 6590 account. If the amount exceeds 5% of the category, ask Expenses the owner for a breakdown if not provided. Taxes and Insurance 6700 – The reviewer should allow only verified increases in rates. If a current bill has not been issued, owners are Real Estate Taxes 6710 required to compare the current assessed value to that for the prior year. The reviewer should approve the project’s share of payroll taxes. Payroll taxes will generally be about of the payroll costs. In some areas, high costs of Payroll Taxes 6711 workman’s compensation could increase this. In those (Project’s Share) cases, ask the owner to document the costs. Note that increases in the salary base will affect this account as well. In assessing reasonableness, the reviewer should Property and Liability 6720 consider the types of coverage, deductibles, and claim Insurance (Hazard) history. The reviewer should include the cost of the premium; prorate the cost to cover frontline and principal Fidelity Bond management employees, not supervisory employees. 6721 Insurance Note: this insurance is required for all HUD multifamily projects. If there is no cost shown, the reviewer should follow up with the owner. The reviewer should approve an amount which covers Workmen’s 6722 the cost of a policy that covers all of the agent’s Compensation employees. This could be project’s pro-rated share of
Vehicle & Maint. Equip. Oper. and Repair 6570 The reviewer should approve only the cost (or pro-rated cost) of a vehicle used at the project. Misc. Operating & Maintenance Expenses 6590 The reviewer should ensure costs do not include items that should be paid from the reserve for replacement account. If the amount exceeds 5% of the category, ask the owner for a breakdown if not provided. Taxes and Insurance – 6700 Real Estate Taxes 6710 The reviewer should allow only verified increases in rates. If a current bill has not been issued, owners are required to compare the current assessed value to that for the prior year. Payroll Taxes (Project’s Share) 6711 The reviewer should approve the project’s share of payroll taxes. Payroll taxes will generally be about of the payroll costs. In some areas, high costs of workman’s compensation could increase this. In those cases, ask the owner to document the costs. Note that increases in the salary base will affect this account as well. Property and Liability Insurance (Hazard) 6720 In assessing reasonableness, the reviewer should consider the types of coverage, deductibles, and claim history. Fidelity Bond Insurance 6721 The reviewer should include the cost of the premium; prorate the cost to cover frontline and principal management employees, not supervisory employees. Note: this insurance is required for all HUD multifamily projects. If there is no cost shown, the reviewer should follow up with the owner. Workmen’s Compensation 6722 The reviewer should approve an amount which covers the cost of a policy that covers all of the agent’s employees. This could be project’s pro-rated share of