1. (1) If there are not sufficient funds available in the administration fund at any particular time during the initial operating period for payment of such operating expenses as are required to be paid therefrom, there may be transferred, in even amounts, from the development fund to the administration fund sufficient funds to cover such requirements.

2. (2) In transferring the above mentioned funds, a development fund accounts payable voucher shall be prepared, as follows:

   Debit: 1680D Interfund Clearance-Development $XXX

   Credit: 1111 Development Fund $XXX

3. (3) The deposit of funds in the administration fund is recorded in the cash receipts register, as follows:

   Debit: 1112 Administration Fund $XXX

   Credit: 1680A Interfund Clearance-Administration $XXX

   (e) Reporting.

4. (1) Where requested by the division, the local agency shall include with each quarterly financial report (see § 1646-7.2) filed subsequent to the beginning of the initial operating period, an itemized statement of initial operating period, on form DH-621, Income and Expense—Budget Control Statement. Form DH-621 is a printed form supplied by the division and is shown as Exhibit 27 of Appendix S-11. For use in reporting the results of operation during the initial operating period, the phrase “Initial Operating Period” shall be added to the heading of form DH-621, and the budget columns of the form shall be disregarded. Column 3, cumulative figures—actual, shall reflect the results of operation from the first day of the initial operating period to the closing date of the current quarter or the date of substantial completion, whichever is earlier. The net income or deficit shown on the last line of form DH-621 shall agree with and support the amounts entered for account 1470.3 on form DH-213, Development Cost—Budget Control Statement, submitted simultaneously therewith.
5. (2) The transfer from the development fund and the net receipts (other than transfers) or disbursements of the administration fund during the initial operating period will appear as reconciling items in schedule A and B, respectively, of form DH-213 until the final amount of the net income or deficit for the initial operating period has been determined and the final transfer of funds, reflecting such determination has been made.

(a) Initial operating period income.

During the initial operating period, only income derived from the operation of the project proper shall be deposited into the administration fund. Such income shall include dwelling and non-dwelling rentals, revenue from other charges made to tenants, such as for sales and services, fines and penalties, commissions and profits from telephone pay-stations, washing machine concessions, vending-machines, etc. Revenue derived from other sources, such as interest on development fund investments, forfeited deposits on plans and specifications, etc., shall continue to be deposited into the development fund and credited to the development cost accounts provided.

(b) Initial operating period expenses.

Expenses chargeable to the initial operating period shall include only the actual expenses, applicable to the period, of operating the project proper, such as salaries of the project manager and staff, janitorial and maintenance salaries, project office expenses, operating services, and utilities. Tenant selection costs, interest on indebtedness, insurance on newly constructed buildings, and taxes shall not be included, nor shall any provision be made for amortization of a bond issue, if any, for accrual of subsidies, or for any reserves. Expenses falling within the direct costs (1410) group of development cost accounts shall not be charged to initial operating period expense unless it is clearly established that such expenses would not have been incurred if the project proper were not being operated. All expenses chargeable to the initial operating period shall be paid out of the administration fund.

(c) Vacancy losses.

No vacancy loss shall be recorded prior to the last day of the month during which 95 per cent of the dwelling units of the project proper become available for occupancy or the date of substantial completion as determined by the commissioner, whichever is earlier. However, for purposes of control over the charging of rents to tenants, it is recommended that a memorandum record of vacancy losses be maintained in the rent roll and vacancy loss control book, as described in section 1642-4.7.

(d) Transfers from development fund.