Page:United States Statutes at Large Volume 103 Part 2.djvu/995

 PUBLIC LAW 101-235—DEC. 15, 1989 103 STAT. 2005 security deposit in an amount not in excess of 1 month's rent, to guarantee the performance of the covenants of the lease. "(F) Not holding any funds collected as security deposits separate and apart from all other funds of the project in a trust account, the amount of which at all times equals or exceeds the aggregate of all outstanding obligations under the account. "(G) Payment for services, supplies, or materials which exceeds $500 and substantially exceeds the amount ordi- narily paid for such services, supplies, or materials in the area where the services are rendered or the supplies or materials furnished. "(H) Failure to maintain at any time the mortgaged property, equipment, buildings, plans, offices, apparatus, devices, books, contracts, records, documents, and other related papers (including failure to keep copies of all writ- ten contracts or other instruments which affect the mort- gaged property) in reasonable condition for proper audit and for examination and inspection at any reasonable time by the Secretary or any duly authorized agents of the Secretary. "(I) Failure to maintain the books and accounts of the operations of the mortgaged property and of the project in accordance with requirements prescribed by the Secretary. "(J) Failure to furnish the Secretary, by the expiration of the 60-day period beginning on the 1st day after the comple- tion of each fiscal year, with a complete annual financial report based upon an examination of the books and records of the mortgagor prepared and certified to by an independ- ent public accountant or a certified public accountant and certified to by an officer of the mortgagor, unless the Secretary has approved an extension of the 60-day period in writing. The Secretary shall approve an extension where the mortgagor demonstrates that failure to comply with this subparagraph is due to events beyond the control of the mortgagor. "(K) At the request of the Secretary, the agents of the Secretary, the employees of the Secretary, or the attorneys of the Secretary, failure to furnish monthly occupancy reports or failure to provide specific answers to questions upon which information is sought relative to income, assets, liabilities, contracts, the operation and condition of the property, or the status of the mortgage. "(L) Failure to make promptly all payments due under the note and mortgage, including mortgage insurance pre- miums, tax and insurance escrow payments, and payments to the reserve for replacements when there is adequate project income available to make such payments. The pay out of surplus cash, as defined by and provided for in the regulatory agreement, shall not constitute a violation of such agreement. "(2) AMOUNT OF PENALTY.— A penalty imposed for a violation under this subsection, as determined by the Secretary, may not exceed $25,000. ' (d) AGENCY PROCEDURES.—

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