Frequently Asked Questions - LASS Policy

Q1:	Who is required to submit financial statements using the Lender Assessment Subsystem (LASS)?

A1:	HUD-approved Title I and Title II nonsupervised lenders, nonsupervised mortgages, and loan correspondents (collectively referred to as "lenders") with fiscal years ending on or after September 30, 2002.

Q2:	When is the submission due?

A2:	The electronic submission of the financial statements (reporting package) must be submitted to HUD annually no later than 90 days after the end of the lender's fiscal year.

Q3:	How are extension requests submitted?

A3:	For each reporting period (i.e., annually), lenders are permitted to request one 30-day extension for submitting their reporting package. Lenders must request extensions through LASS. Their request must be received no earlier than 45 days prior to the submission due date and no later than 15 days prior to the submission due date. Per Mortgagee Letter 95-6, a lender's extension request will be granted only for catastrophic events. Lenders are notified through the LASS system whether the extension request was granted or denied.

A3:

For each reporting period (i.e., annually), lenders are permitted to request one 30-day extension for submitting their reporting package. Lenders must request extensions through LASS. Their request must be received no earlier than 45 days prior to the submission due date and no later than 15 days prior to the submission due date.

Per Mortgagee Letter 95-6, a lender's extension request will be granted only for catastrophic events. Lenders are notified through the LASS system whether the extension request was granted or denied.

Q4:	What happens if the reporting package is not filed on time?

A4:	If the reporting package is late, the lender is notified via certified mail that they are subject to administrative action if an acceptable reporting package is not received within 30 days of receipt of the letter. If the reporting package is deemed deficient by HUD and cannot be cured within the 30 day time period, the lender is subject to withdrawal. Lenders will not be notified via certified mail if a late reporting package is rejected or deficient. Lenders should monitor their status by checking their LASS inbox periodically. If the status is "Rejected" or "Deficient", the lender needs to address the deficiencies identified by HUD. If the status is "Complete", the reporting package has been accepted by HUD and no further action is required.

A4:

If the reporting package is late, the lender is notified via certified mail that they are subject to administrative action if an acceptable reporting package is not received within 30 days of receipt of the letter. If the reporting package is deemed deficient by HUD and cannot be cured within the 30 day time period, the lender is subject to withdrawal. Lenders will not be notified via certified mail if a late reporting package is rejected or deficient. Lenders should monitor their status by checking their LASS inbox periodically. If the status is "Rejected" or "Deficient", the lender needs to address the deficiencies identified by HUD. If the status is "Complete", the reporting package has been accepted by HUD and no further action is required.

Q5:	Are hardcopy financial statements required to be mailed to HUD in addition to the electronic submission?

A5:	No, hardcopy financial statements are NOT required to be mailed and will not be accepted by HUD. All reporting packages must be submitted electronically through LASS. If a Title II mortgagee is also a Ginnie Mae Issuer, a separate paper copy of the auditing financial statements must also be submitted to Ginnie Mae for review.

Q6:	Does LASS require a special format for reporting the electronic submission of the audited financial statements?

A6:	Financial data is reported on the Financial Data Template (FDT). The FDT consists of the Balance Sheet, Statement of Operations and Retained Earnings, Statement of Cash Flow, Computation of Adjusted Net Worth and Computation of Liquidity (if required). The FDT follows the traditional format of basic financial statements. An updated Line Item Definition Guide, which includes definitions of all line items in the Financial Data Template, is available at http://www.hud.gov/offices/hsg/sfh/lass/lass_doc.cfm.

A6:

Financial data is reported on the Financial Data Template (FDT). The FDT consists of the Balance Sheet, Statement of Operations and Retained Earnings, Statement of Cash Flow, Computation of Adjusted Net Worth and Computation of Liquidity (if required). The FDT follows the traditional format of basic financial statements. An updated Line Item Definition Guide, which includes definitions of all line items in the Financial Data Template, is available at http://www.hud.gov/offices/hsg/sfh/lass/lass_doc.cfm.

Q7:	How is the audit opinion, compliance information, etc. reported via LASS?

A7:	The reporting package consists of the Financial Data Template (FDT) and the Data Collection Form (DCF). The FDT collects financial data and the DCF collects information on the lenders, auditors and the audited financial statements. The General Information tab of the DCF collects the contact information for both the lender and auditor. The Financial Statement tab of the DCF collects information about the financial statements and audit. An updated Line Item Definition Guide, which includes definitions of all line items in the Data Collection Form, is available at http://www.hud.gov/offices/hsg/sfh/lass/lass_doc.cfm.

A7:

The reporting package consists of the Financial Data Template (FDT) and the Data Collection Form (DCF). The FDT collects financial data and the DCF collects information on the lenders, auditors and the audited financial statements. The General Information tab of the DCF collects the contact information for both the lender and auditor. The Financial Statement tab of the DCF collects information about the financial statements and audit. An updated Line Item Definition Guide, which includes definitions of all line items in the Data Collection Form, is available at http://www.hud.gov/offices/hsg/sfh/lass/lass_doc.cfm.

Q8:	Are any of the auditor's reports required to be electronically submitted via LASS?

A8:	No auditor reports are required to be electronically submitted. The DCF gathers information on the Independent Auditor's Report, Independent Auditor's Report on Supplemental Information, Independent Auditor's Report on Compliance and Internal Controls, and Independent Auditor's Report on Applicable Major HUD Projects.

Q9:	What is required to be submitted electronically?

A9:	The notes to the financial statements must be attached to the Footnotes tab under the Notes & Findings section. If applicable, the Schedule of Findings & Questioned Costs and Corrective Action Plans must be attached to the Audit Finding and Action Plan tabs. An audit finding and corrective action plan is required for any instance of reportable conditions/material weaknesses or material noncompliances. The documents must be in Rich Text Format (RTF) in order to be attached.

A9:

The notes to the financial statements must be attached to the Footnotes tab under the Notes & Findings section. If applicable, the Schedule of Findings & Questioned Costs and Corrective Action Plans must be attached to the Audit Finding and Action Plan tabs. An audit finding and corrective action plan is required for any instance of reportable conditions/material weaknesses or material noncompliances. The documents must be in Rich Text Format (RTF) in order to be attached.

Q10:	What basis of accounting is acceptable for the preparation of the financial statements?

A10:	The financial statements must be prepared in accordance with generally accepted accounting principles (GAAP).

Q11:	What auditing standards are used to conduct the audit?

A11:	The audit must be conducted in accordance with the generally accepted government auditing standards (GAGAS).

Q12:	Is the latest version of the HUD Consolidated Audit Guide available?

A12:	The latest version of the HUD Consolidated Audit Guide for Audits of HUD Programs is available at the http://www.hud.gov/offices/oig/reports/auditguides.cfm .

Q13:	Are definitions available of the line items on the Financial Data Template?

A13:	Yes, the Line Item Definition Guide defines each line of the Financial Data Template. There is also an icon on each page of the FDT titled "Line Item Definitions" to allow the user to search for line item definitions by line number.

Q14:	What happens if mandatory fields on the FDT do not apply?

A14:	Fields that are mandatory are designated with an asterisk. If the field does not apply, enter zero (0).

Q15:	What does the SAS 29 Opinion refer to on the Data Collection Form, Financial Statement tab, Question G3000-012?

A15:	The SAS 29 Opinion refers to the American Institute of Certified Public Accountants Statement on Auditing Standards Number 29. This SAS addresses the auditor's opinions on required supplementary information (RSI) that is not part of the basic financial statements. Currently, the RSI for this program is the net worth calculation. It is required that auditors apply auditing procedures to the net worth calculation and issue an opinion on it.

A15:

The SAS 29 Opinion refers to the American Institute of Certified Public Accountants Statement on Auditing Standards Number 29. This SAS addresses the auditor's opinions on required supplementary information (RSI) that is not part of the basic financial statements. Currently, the RSI for this program is the net worth calculation. It is required that auditors apply auditing procedures to the net worth calculation and issue an opinion on it.

Q16:	What guidance is available to users of LASS?

A16:	For technical guidance, the LASS User Manual provides detailed step-by-step instruction on how to create the submission. For accounting guidance, the Line Item Definition Guide is available. Please contact the auditor who performed the audit if difficulties are encountered while doing the data input into LASS from the hardcopy financial statements or while answering the DCF questions.

Q17:	Who do I contact with questions that are not answered by the user guide, FDT Line Item Definition Guide, or my auditor?

A17:	Contact the Office of Lender Activities at (202) 755-7400 ext. 163 or email the LASS Security Administrator. Questions not related to LASS or recertification should be directed to the Office of Lender Activities at (202) 755-7400 ext. 161.

Q18:	How is the financial and compliance data submitted via LASS evaluated?

A18:	HUD personnel review the data for compliance in accordance with 24 CFR Part 202, HUD Consolidated Audit Guide 2000.4, Mortgagee Handbook 4060.1, Mortgagee Letters and other guidance as established and disseminated by HUD.

Q19:	If a lender changes their Fiscal Year End (FYE) from 9/30 to 12/30, what financial statements should be filed?

A19:	HUD will accept the lender's audited financial and compliance data under the lender's new fiscal year ending date as long as the lender's prior year financial and compliance data was received and approved by HUD within the past 18 months. Otherwise, the lender should submit their audited financial and compliance data under the lender's original FYE.