EUs may elect to have expenses averaged if:
- expenses are billed less often than monthly, the expenses may be averaged forward over the interval between scheduled billings; or
- the expenses are fluctuating.
If no scheduled interval exists, average the expense over the period of time it was intended to cover.
The EU can change (once per certification period) from lump sum budgeting to averaging expense, or from averaged to lump sum. Do not allow an expense more than once.
EXAMPLE: Mr. B paid real estate taxes of $150 on 2/4. He applied for FS on 3/1 and elected to have his expenses averaged. He was certified for a period of four months, March through June. Since the taxes covered a period of 12 months, 1/12th of $150 is allowed for each month certified.
EXAMPLE: Mr. B paid his taxes of $150 on 3/10. He applied for FS on 3/12 and was certified for only one month, March. If he elects not to average expenses, the total expense for the taxes can be allowed in March. If he elects averaging, 1/12 of $150 is allowed.