USDA issues revised audit guidance for Rural Rental Housing Program.

The U.S. Department of Agriculture Office of Inspector General has issued a new audit program for its Rural Rental Housing (RRH) Program. The USDA's previous guidance for this program was revised to address the OIG's concerns about potential "equity skimming" that they have found occurring in this program. The term "equity skimming" refers to any diversion of RRH project funds away from the benefit of the project. The new audit guidance requires an agreed-upon procedures engagement that the USDA hopes will be more successful in focusing the audit procedures in areas that will assist in identifying "equity skimming."

While the new audit guidance does not require a financial statement audit of the project, the OIG has cautioned that the projects may be required to undergo such an audit as a result of other external requirements. The new RRH audit program (visit www.usda.gov/oig/rptsauditsgde.htm) replaces the following two audit programs previously issued by the OIG: (1) Audits of Recipients of FmHA Grants, Loans, and Loan Guarantees dated October 1989 and (2) Rural Rental Housing Program--Construction Costs dated March 1994. It is effective for periods ending Dec. 31, 2005, and thereafter. The majority of the entities that receive Rural Rental Housing Program funds are for-profit organizations; therefore, they are not subject to the Single Audit Act. A small portion is not-for-profit organizations that typically receive less than $500,000 and therefore, generally are not required to undergo a single audit.

Annual Report of AICPA Disciplinary Activity January 1-December 31, 2004 and 2003 The following is a statistical report of the disciplinary activity of the AICPA, including cases investigated by the Professional Ethics Division, cases handled by the...