106 STAT. 3706

PUBLIC LAW 102-550—OCT. 28, 1992

"(1) COST LIMITATIONS.—The Secretary may establish cost
limitations on activities under this section. The amount of
rehabilitation funds under subsection (eXD that may be
approved may not exceed the per unit cost limit applicable
to the comprehensive grant program under section 14.

"(2) DEMOLITION AND DISPOSITION NOT PERMITTED.—A man-
ager may not demolish or dispose of eligible housing under
this section.

"(3) CAPABILITY OF RESIDENT MANAGEMENT CORPORA-
TIONS.—To be eligible to become a manager under this section,
a resident management corporation—

"(A) shall demonstrate to the Secretary its ability to
manage public housing effectively and efficiently, as deter-
mined by the Secretary, which shall include evidence of
its most recent financial audit; or

"(B) shall arrange for operation of the housing by a
qualified management entity.

"(4) LIMITATIONS ON PHA LIABILITY.—A public housing
agency shall not be liable for any act or failure to act by
the manager or resident council.

Regulations. "(5) BONDING AND INSURANCE.—Before assuming any

management responsibility for eligible housing, a manager shall
obtain fidelity bonding and insurance, or equivalent protection,
in accordance with regulations and requirements established
by the Secretary. Such bonding and insurance, or its equivalent,
shall be adequate to protect the Secretary and the public hous-
ing agency against loss, theft, embezzlement, or fraudulent
acts on the part of the manager or its employees.

"(6) RESTRICTION ON DISPLACEMENT BEFORE TRANSFER.—
A public housing agency may not involuntarily displace, as
determined by the Secretary, any resident of eligible housing
during the period beginning on the date that an application
under subsection (f) is submitted by a resident council, and
ending upon transfer of management of the housing or, if
the application is disapproved, the date of the disapproval,
"(j) PERFORMANCE REVIEW AND COMPLIANCE.—

"(1) MONITORING.—The Secretary shall monitor the
performance of managers under this section and shall assess
their management performance using the performance indica-
tors established under section 6(jXl).

"(2) RECORDS, REPORTS, AND AUDITS OF MANAGERS.—

"(A) KEEPING OF RECORDS.—Each manager and resi-
dent council under this subtitle shall keep such records
as may be reasonably necessary to disclose the amount
and the disposition by the manager of the proceeds of
assistance received under this section and to ensure compli-
ance with the requirements of this section.

"(B) ACCESS TO DOCUMENTS.—

"(i) SECRETARY.—The Secretary shall have access
for the purpose of audit and examination to any books,
documents, papers, and records of a manager, resident
council, and public housing agency that are pertinent
to assistance received under, and to the requirements
of, this section.

"(ii) GAO.—The Comptroller General of the United
States, and any duly authorized representatives of the
Comptroller General, shall have access for the purpose