HomeMy WebLinkAbout1998 North Fork Housing Alliance ' NORTH FORK HOUSING ALLIANCE, INC.
FINANCIAL STATEMENTS
SUPPLEMENTARY INFORMATION
AND
' OBSERVATIONS AND RE
COMAIENDATIONS
' For the Years Ended December 31. 1998 and 1997
' with
REPORT OF CERTIFIED PUBLIC ACCOUNTANTS
C' Deans •Archer
CERTIFIED PUBLIC ACCOUNTANTS
' NORTH FORK HOUSING ALLIANCE, INC.
YEAR ENDED DECEMBER 31, 1998
TABLE OF CONTENTS
' PART I- REPORT ON FINANCIAL STATEMENTS PA E
' - Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-6
- Statements of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
' - Statements of Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
' - Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
- Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10-19
PART II - SUPPLEMENTARY INFORMATION
' - Schedule of Functional Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
- Schedule of Program Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
' - Schedule of Supporting Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Rural Preservation Program Schedule of DHCR
' Revenues and Expenses Compared to Budget
and Questioned Costs Contract Number C-698059
Contract Period July 1, 1998 to June 30, 1999
' For the year ended December 31, 1998 . . . . . . . . . . . . . . . . . . . . . . . . 24
- Rural Preservation Program Schedule of DHCR
' Revenues and Expenses Compared to Budget
and Questioned Costs Contract Number C-697059
Contract Period January 1- June 30, 1998
' For the year ended December 31, 1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Deans • Archer
' NORTH FORK HOUSING ALLIANCE, INC.
YEAR ENDED DECEMBER 31, 1998
TABLE OF CONTENTS
' PA E
G (s)
' PART III - INTERNAL CONTROL STRUCTURE AND COMPLIANCE
INFORMATION IN ACCORDANCE WITH GOVERNMENT AUDITING
' STANDARDS
- Independent Auditors' Report on Compliance and on
' Internal Control Over Financial Reporting Based on
an audit of Financial Statements Performed in Accordance
With "Government Auditing Standards" . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27-28
' - Findings and Recommendations - On
Internal Control over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29-32
1
Deans Archer
NORTH FORK HOUSING ALLIANCE, INC.
FOR THE YEAR ENDED DECEMBER 31, 1998
' (with comparative totals for 1997)
PART I
' REPORT ON FINANCIAL STATEMENTS
Deans • Archer
' Deans • Archer
CERTIFIED PUBLIC ACCOUNTANTS
' 265 East Merrick Road
Valley Stream,New York 11580
(516)872-6922/FAX:(516)872-6925
INDEPENDENT AUDITORS' REPORT
' The Board of Directors
North Fork Housing Alliance, Inc.
' Greenport, New York
We have audited the statements of financial position of the North Fork Housing Alliance, Inc., as
' of December 31, 1998 and 1997 and the related statements of activities and cash flows for the
years then ended. These financial statements are the responsibility of North Fork Housing
Alliance, Inc.'s., management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing standards, 1995 Audit
' Manual for Selected Division of Housing and Community Renewal Programs, and Government
Auditing Standards, issued by the Comptroller General of the United States. Those standards
' require that we plan and perform the audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes examining, on test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also
' includes assessing the accounting principles used and significant estimates made by management,
as well as evaluating the overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
' In our opinion, the financial statements referred to above present fairly, in all material respects,
the financial position of the North Fork Housing Alliance, Inc., as of December 31, 1998 and
' 1997, and the changes in its net assets and its cash flows for the years then ended in conformity j
with generally accepted accounting principles.
In accordance with Government Auditing Standards, we have also issued our report dated May 7,
1999 on our consideration of North Fork Housing Alliance, Inc's., internal control structure over
financial reporting and on our test of its compliance with certain provisions of laws, regulations,
' contracts and grants.
' Our audits were made for the purpose of forming an opinion on the financial statements taken as
a whole. The supplemental schedules listed in the table of contents is presented for the purpose
of additional analysis and are not a required part of the financial statements of North Fork Housing
Alliance, Inc. Such information has been subjected to the auditing procedures applied in the audits
of the financial statements and, in our opinion, is fairly stated in all material respects in relation
' to the financial statements taken as a whole.
Valley Stream, New York
' May 7, 1999
Dcan., • Areiier
' NORTH FORK HOUSING ALLIANCE, INC.
STATEMENTS OF FINANCIAL POSITION
' December 31, 1998 and 1997
Total Total
$ 997
ASSETS �
' Current assets:
Cash $ 861,484 $402,220
Grants receivable 46,985 30,871
' Tenants' rent receivable 11,917 8,531
Prepaid expenses 1,358 1,358
Other receivable 33,353 32,778
Other assets 73,537 66,901
Total current assets 1,028,634 542,659
' Fund reserves - restricted (Note 4) 102,159 121,317
Tenants' security deposits 15,628 11,117
Property and equipment (Notes 2 and 5) 2.940.886 2,968,520
' Total assets $4 7 3 7 $3.643.613
LIABILITIES AND NET ASSETS
' Current liabilities:
Accounts payable and accrued expenses $ 109,765 $100,278
' Due to funding source (Note 6) 787,286 493,979
Long-term debt, current portion (Note 7) 44,819 40,929
Deferred revenue 301,343 436
' Line of credit 81,955 -
Other liabilities 119,605152,966
Total current liabilities 1,444,773 788,588
' Security deposits 15,628 15,520
Other long-term liabilities (Note 8) 50,000 50,000
' Long-term debt (Note 7) 1.495.389 1,599,677
Total liabilities 3,005,790 2,453,785
' Contingencies (Note 9) - -
Net assets
Unrestricted 1,071,105 1,164,416
Temporarily restricted 10,412 25,412
Permanently restricted - -
' Total net assets 1.081.517 1,189,828
Total liabilities and net assets $4.087.307 $3.643.613
1
' The accompanying notes are an integral part of these financial statements 7
Deans • Archer
' NORTH FORK HOUSING ALLIANCE, INC.
STATEMENTS OF ACTIVITIES
For the years ended December 31, 1998
' (With Comparative Totals for 1997)
Temporarily Permanently Total Total
Unrestricted Restricted Restricted 1998 1997
Support and revenue:
Support:
Department of Housing and
' Community Renewal $ 146.110 $ _ $ - $ 146,110 $ 181,492
County of Suffolk(Rehabilitation) 82,158 82,158 53,513
Town of Southold Block Grant 54,627 40,000 - 94,627 96,294
Village of Greenport 50,001 - - 50,001 -
' Section 8 rent subsidies (HUD) 2,090,645 _ - 2,090,645 2,111,373
FMHA interest reduction subsidy 52,714 52,714 54,063
Revenue:
' Rental income 347,011 _ - 347,011 338,210
Interest income 1,125 1,125 1,120
Washing machine income 2,417 - - 2,417 2,630
Other income 30,413 - - 30,413 26,319
' Realized gain on sale of
fixed asset 13.902 13,902 (12.247)
2,871,123 40,000 - 2,911,123 2,852.767
Net assets released from
' restriction(Note 2) 55.000 (55.000) - - -
Total public support
' and revenue 2,926,123 (15,000) - 2,911,123 2,852,767
Expenses:
Program services:
' General Fund 6,459 - - 6,459 7,714
Reserve Fund 92,950 92,950 57,650
Section 8 Certification Program 756,140 - - 756,140 768,616
Section 8 Voucher Program 1,108,404 - - 1,108,404 1,111,829
' Lakeside Garden Apartments 154.797 _ - 154.797 155.419
Total program services 2,118,750 2,118,750 2,101,228
' Support services:
Management and general:
General Fund 362,455 362,455 340,768
Reserve Fund 332,064 - - 332,064 300.845
' DHCR Fund 65,000 - _ 65,000 65,000
Section 8 Certification Proeram 47,548 47,548 52,171
Section 8 Voucher Program 4,806 - - 4,806 4,534
Lakeside Garden Apartments 29,919 - - 29.919 28.499
' Total support services 841,792 - - 841,792 791,817
Total expenses 2,960,542 - - 2,960,542 2,893,045
' Change in Net Assets (34,419) (15,000) - (49,419) (40.278)
Net Assets, Beginning of
Year as. Restated 1,164,416 25,412 - 1.189,828 1,439,317
' Prior Period Adjustment(Note 12) (58.892) - (58.892) (209.211)
' Net Assets. End of Year $1.071.105 $ 10.412 $_ $1.081.517 $1.189.828
' The accompanying notes are an integral pail of these financial statements g
Deems • .Archer
' NORTH FORK HOUSING ALLIANCE, INC.
STATEMENTS OF CASH FLOWS
December 31, 1998 and 1997
' Cash flow from operating activities: 142 1997
' Increase (decrease) in net assets $(49,419) $(40,278)
Depreciation 136,871 303,912
Prior period adjustment (58,892) (209,211)
' Realized gain on sale of fixed assets (13,902) 12,247
Decrease (increase) in receivables (20,076) 56,164
Decrease (increase) in prepaid expenses - 2
' Increase in other assets (6,636) (58,070)
Increase (decrease) in due to funding source 293,307 (1,957)
' (Decrease) increase in accounts payable and accrued expenses 9,487 16,422
Increase in deferred revenue 300,907 (4,721)
Decrease (increase) in deposits/escrow 14,755 590
' Increase in other liabilities 33.361 12,720
Net cash flow from operating activities 639,763 87.820
Cash flow from investing activities:
Purchase of buildings and building improvement (218,902) (239,769)
Proceed from the sale of fixed assets 64,714 114,304
' Purchase of equipment and furniture and fixtures (7,868) ( 8,702)
Net cash flow from investing activities (162.056) (134.167.)
' Cash flow from financing activities:
Line of credit 81,955 -
' Long-term debt - 134,350
Payment of principal (100.398) (153.540)
Net cash flow from financing activities (18443) ( 19,190)
Net increase (decrease) in cash 459,264 (65,537)
' Cash, beginning of year 402,220 467.757
Cash, end of year $861.484 $ 402,220
'
Supplemental disclosure of cash flow information
' Interest $152,217 $ 163.458
The accompanying notes are an integral part of these financial statements 9
Deans • Archer
NORTH FORK HOUSING ALLIANCE, INC.
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 1998 and 1997
' NOTE 1. ORGANIZATION AND PURPOSE
North Fork Housing Alliance, Inc., ("the Organization") is a corporation formed
under the Not For Profit Corporation Law of the State of New York on October
28, 1982. The purpose of the Organization is to provide decent, affordable housing
to low income families and individuals in the Greenport area of New York State.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
' (a) Method of Accounting
The financial statements of the Organization have been prepared utilizing
the accrual basis of accounting.
' (b) Basis of Presentation
I
' Financial statements presentation follow the recommendation of the
Financial Accounting Standards Board in its Statement of Financial
Accounting Standards ("SFAS") No.116 "Accounting for Contributions
Received and Contributions Made" and No.117, "Financial Statements of
Not-For-Profit Organizations". Under SFAS No.116 and 117, the
Organization is required to report information regarding its financial
' position and activities according to three classes of net assets: unrestricted
net assets, temporarily restricted net assets, and permanently restricted net
' assets.
(c) Promises To Give
The Organization reports contributions as restricted support if they are
received with donors' stipulations that limit the use of the donated assets.
' When a donor restriction expires, that is, when the stipulated time
restriction ends or purpose restriction is accomplished, temporarily
restricted net assets are reclassified to unrestricted net assets and reported
' in the statement of activities as net assets released from restrictions.
' 10
' NORTH FORK HOUSING ALLIANCE, INC.
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 1998 and 1997
' NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
' (d) Support and Revenues
The Organization derives a major portion of its support and revenues from
the Department of Housing and Urban Development, New York State
Division of Housing and Community Renewal, the Town of Southold, the
County of Suffolk and rental property. Support is derived from program
' amounts received as reimbursements of certain expenditures as stipulated
under contract agreements. Revenue is derived from a per diem rate as
determined by the governmental agencies for the programs. Support and
' revenues are recognized on the accrual basis of accounting.
' (e) Prom and Equipment
Buildings, equipment, furniture, fixtures and leasehold improvements are
' recorded at cost. Land contributed to the Organization has not been
recorded on the books. Selected buildings are being depreciated over the
estimated useful lives using the straight-line method.
' (f) Income Taxes
' The Organization qualified as a tax exempt organization under Section
501(c)(3) of the Internal Revenue Code and, therefore, has no provision for
Federal income taxes.
(g) Functional Expenses
' The costs of providing the various programs and other activities of the
Organization have been summarized on a functional basis in the schedule
of functional expenses, which includes all expenses incurred for the year.
Accordingly, certain costs have been allocated among the programs and
supporting services benefitted. Such allocations are determined by
' management in accordance with grant provisions and/or other equitable
bases.
11
Deans • .Archer.
' NORTH FORK HOUSING ALLIANCE, INC.
NOTES TO FINANCIAL STATEMENTS
' For the years ended December 31, 1998 and 1997
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
(h) Basis of Combination
' Total accounts are presented on a combined basis whereby all significant
interfund accounts and transactions have been eliminated.
' (i) Cash and Cash Equivalents
' For purposes of the statements of cash flows, the Organization considers all
unrestricted highly liquid investments with an initial maturity of three
' months or less to be cash equivalents. There were no cash equivalents at
December 31, 1998.
' (j) Comparative Data
The financial information for the year ended December 31, 1997, presented
' for comparative purposes, is not intended to be a complete financial
statement presentation.
' (k) Use of Estimates
The preparation of financial statements in conformity with generally
' accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
' date of the financial statements, and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from
those estimates.
12
' NORTH FORK HOUSING ALLIANCE, INC.
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 1998 and 1997
' NOTE 3. RURAL RENTAL ASSISTANCE PROGRAM
Through Lakeside Garden Apartments, the Organization has entered into a rural
' rental assistance contract with the Department of Housing and Community Renewal
("DHCR") whereby qualified tenants are subsidized for rent and utility expenses.
The term of the original contract was five years through 1998 up to a maximum of
' $514,600. In 1999, this contract was amended to allow for an increase in funding
of $712,600 through January 2002. There are no funds due from DHCR as of
December 31, 1998.
NOTE 4. FUNDED RESERVES - RESTRICTED
Lakeside Garden Apartments is required to place monthly deposits into a reserve
' for replacements and a tax insurance escrow account. These accounts are restricted
and cannot be used without prior written authorization from Farmers Home
Administration("FMHA"). In addition amount includes accruals under the Family
' Self Sufficiency Program associated with Section 8 HUD.
NOTE 5. PROPERTY AND EQUIPMENT
As of December 31, buildings, equipment, furniture, fixture and leasehold
' improvements consisted of the following:
As
' Restated
1998 1997
' Buildings $2,575,133 $2,658,360
Buildings Improvements 1,072,177 853,275
Equipment 34,844 26,976
' Furniture and Fixtures 4.565 4.565
3,686,719 3,543,176
Less: accumulated depreciation7� 45,833) (574.656)
' $2,940.886 $2.968.520
' 13
' Deans • Archer
' NORTH FORK HOUSING ALLIANCE, INC.
NOTES TO FINANCIAL STATEMENTS
' For the years ended December 31, 1998 and 1997
' NOTE 6. DUE TO HUD
As of December 31, 1998 and 1997, the amounts due the Department of Housing
t and Urban Development for the Certificate Program was $415,611 and $197,476,
respectively. For the Voucher Program, the amounts due was $371,674 and
$296,503, respectively.
NOTE 7. LONG-TERM DEBT
' Long-term debt is :comprised of the following:
g
' 10.625% mortgage payable to FMHA due in
monthly installments beginning June 1, 1987
' of$5,614 including interest through May,
2035 collateralized by 3 buildings at
Lakeside Gardens. Monthly payments are
reduced by a FMHA interest reduction
subsidy of$4,243 per month. $621,036
10.625% mortgage payable to FMHA due in
monthly installments beginning June 1, 1987
of$372 including interest through May, 2035
collateralized by 3 buildings at Lakeside
Gardens. Monthly payments are reduced by
' a FMHA interest reduction subsidy of$281
per month. 41,185
' 9.5% mortgage payable to a Bank, due in
monthly installments beginning August 1,
1993 of$786 including interest through
' July, 2017 collateralized by a building
located at 421 Front Street, Greenport,
New York. 82,269
' 14
' NORTH FORK HOUSING ALLIANCE, INC.
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 1998 and 1997
' NOTE 7. LONG-TERM DEBT (Continued)
7.5% mortgage payable to a Bank, due in
monthly installments beginning January 1,
1993 of$1,191 including interest through
December, 2006 collateralized by a building
' located at 428 4th Street, Greenport,
New York. 85,917
' 8.25% mortgage payable to a Bank, due in
monthly installments beginning September 1,
1989 of$678 including interest through July,
2017 collateralized by a building at 413 3rd
Street, Greenport, New York. 77,525
' 8.5% mortgage payable to a Bank, due in
monthly installments beginning July 1, 1995
of$486 including interest through June, 2013
collateralized by a building located at 712
Wiggins St., Greenport, New York. 48,398
6.25% mortgage payable to a Bank, due in
monthly installments beginning June 1, 1995
of$1,097 including interest through May 1,
2008 collateralized by a building located at
116 South St., Greenport, New York. 96,335
' 6% ae a mortable to a Bank due in m
mortgage PY monthly
installments beginning August 1, 1995 of$559
including interest through July 1, 2008
collateralized by a building located at 211
' Center St., Greenport, New York. 46,945
15
Deans • Archer
' NORTH FORK HOUSING ALLIANCE, INC.
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 1998 and 1997
NOTE 7. LONG-TERM DEBT (Continued)
6% mortgage payable to a Bank, due in monthly
installments beginning August 1, 1995 of$854
including interest through August 1, 2008
collateralized by a building located at 211
Carpenter St., Greenport, New York. 72,214
6% mortgage payable to a Bank, due in monthly
' installments beginning January 1, 1995 of$517
including interest through December, 2013
collateralized by a building located on 45 Walnut
St., Mattituck, New York. 62,988
' 9.5% mortgage payable to a Bank, due in
monthly installments beginning July 1, 1998
of$1,380 including interest through June 1, 2027
collateralized by a building located on
632-634 Second Street, Greenport, New York. 133,077
' 9.5% mortgage payable to a Bank, due in
monthly installments beginning September
16, 1997 of$1,170 including interest
through August, 2011 collateralized by a
building located on 523 Main St., Greenport,
New York. 103,172
' 9.625% P
e mortgag payable to a Bank due in
' monthly installments beginning September 9,
1997 of$789 including interest through
August, 2011 collateralized by a building
' located at 502 Wiggins St., Greenport,
New York. 69.147
' 1,540,208
Less: current portion (44.81 )
' Long-term debt $1495.389
' 16
Deans • .archei.
1
' NORTH FORK HOUSING ALLIANCE, INC.
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 1998 and 1997
' NOTE 7. LONG-TERM DEBT (Continued)
Following are maturities of long-term debt for each of the next five years and the .
' years thereafter:
Years Ending December 31,
2000 $48,906
2001 53,396
' 2002 57,823
2003 63,636
2004 69,449
' Thereafter 1.202.179
$1.495.389
NOTE 8. OTHER LONG-TERM LIABILITIES
' In August 1997 the Organization assumed liability associated with property
purchased. This liability is due to the Town of Southold and County of Suffolk
Community Development Division only in the event of a sale, transfer, or further
encumbrance of the premises.
' NOTE 9. COMMITMENTS AND CONTINGENCIES
' Reimbursable Expenses and Overhead
Reimbursement of expenses and overhead applicable to various programs
conducted for and on behalf of government and other agencies are subject to
adjustments, if any, based upon the results of audits by the agencies. Management
' is of the opinion that such audits would not have a material effect on the
accompanying financial statements.
' 17
Deans archer
' NORTH FORK HOUSING ALLIANCE, INC.
NOTES TO FINANCIAL STATEMENTS
' For the years ended December 31, 1998 and 1997
' NOTE 9. COMMITMENTS AND CONTINGENCIES(Continued)
Lease Commitment
' The Organization rents office space from the Village of Greenport under a lease
that expires in 1999. Rent expense for the year ended December 31, 1998 was
' $10,200.
The aggregate rental commitment at December 31, 1998 under the noncancellable
' leases for real estate is as follows:
1999 10,200
'
Note and Mortgage Agreements
s
' Under the terms of certain note and mortgage agreements between the Organization
and various Federal, State and Local funding sources, lien covenants are
' enforceable for specified periods.
' NOTE 10. MATCHING REQUIREMENT
Under the terms of the DHCR Rural Preservation Program Contract, the
' Organization is required to match one-third of the DHCR grant, $65,000 for the
year ended December 31, 1998, with funds to be used for neighborhood and rural
preservation activities. The Organization met this requirement for the year ended
' December 31, 1998.
NOTE 11. CERTAIN CONCENTRATIONS AND CREDIT RISK
The Organization receives a substantial amount of its support from Federal, State
and Local governments. A significant reduction in the level of support, if this was
to occur, may have an effect on the Organization's programs and activities.
' 18
Deans • Archer
' NORTH FORK HOUSING ALLIANCE, INC.
NOTES TO FINANCIAL STATEMENTS
For the years ended December 31, 1998 and 1997
NOTE 12. PRIOR PERIOD ADJUSTMENT
'
he 7 377
T $5 and $209,211 in 1998 and 1997 represents adjustments for
' depreciation associated with property owned by the Organization that was not
recognized in prior periods.
' NOTE 13. LINE OF CREDIT
' North Fork Housing Alliance, Inc., has a line of credit agreement with the Bank
of Brideghampton National Bank. The Bank has agreed to make loans to the
Organization from time-to-time in an aggregate principal amount not to exceed
' $135,000. The loan bears interest on the unpaid balance at a fluctuating rate of 2%
above the Bank's Prime Rate. The principal of the loan is payable in monthly
' installments. The outstanding balance was $81,955 as of December 31, 1998.
Interest rate at the close of business on December 31, 1998 was 8.75%. This
agreement will expire November 23, 1999.
' 19
Deem.s Archer1
' NORTH FORK HOUSING ALLIANCE, INC.
' FOR THE YEAR ENDED DECEMBER 31, 1998
(with comparative totals for 1997)
' PART II
SUPPLEMENTARY INFORMATION
1
Deans .-Archer
NORTH FORK HOUSING ALLIANCE,INC.
SCHEDULE OF FUNCTIONAL EXPENSES
For the year ended December 31,1998
(With Comparative Totals for 1997)
Section 8 Section 8 Lakeside
DHCR Certificate Voucher Garden General Reserve Total Total
Fund Program Program Apartments Fund Fund 1998 1997
EXPENSES
Personnel services:
Salaries $47,600 $ $ - $18,359 $191,496 $ - $257,455 $251,366
Fringe benefits 7.600 - 1.256 34.872 43.728 44.583
Total personnel services 55,200 - 19,615 226,368 301,183 295,949
Other than personnel services:
Housing assistance payments - 756,140 1,108,404 - - 1,864,544 1,880,445
Management fee - - _ _
6
Administrative fee 122,980 100,881 - - 223,861 229,758
Advertising - - 211 2,993,207 3,505
Telephone 716 6,967 7,683 6,100
Postage - 5,521 5,521 4,631
Public relations and training - - 2,533 - 2,533 3,971
Travel - - 35 1,502 1,107 2,644 3,728
Miscellaneous administrative 450 450 - 1,586 - 2,486 900
Repairs and maintenance - - 9,512 3,006 34,610 47,128 41,912
Service contracts and equipment leases 8,593 22,024 2,142 32,760 33,784
Supplies 296 - - 296 12,238
Utilities 8,133 8,368 30,234 46,735 55,370
Real estate taxes 29,360 - 40,295 69,655 62,529
Office rent - - 10,200 - 10,200 10,200
Insurance 1,500 6,463 1,902 25,903 35,768 26,379
Interest expense - - - 68,862 176 83,179 152,217 163,458
Audit 4,000 4,000 1,200 1,100 - 10,300 13,634
Legal - - - - - - - 7,686
Consultants 8,300 46,037 8,753 63,090 28,999
Permits and licenses - - 50 50 1,147
Publication dues 3,411 3,411 1,743
Office expense 11,553 11,553 5,828
Computer costs 2,940 2,940 7,611
Placement fees - 4,035
Day care grant 6,000 - 6,000 6,000
Rehabilitation cost - - -
Apprenticeship program 459 459 1,714
Home LPA expense - 37,950 37,950
Homeless prevention - - -
Home project 55,000 55,000 13,062
S.T. Home Investment program - 44,588
Downpayment Assistance Program - - - - - - _
Depreciation 738 356 29,771 2,511 103,495 136,871 96,220
Bad debt expense - - - - - - 7,000
Bank charges 113 292 809 1,214
Miscellaneous - 1.835 1.463 1.487 4.785 2.418
Total other than personnel services 9,800 884,308 1,214,091 165,100 142,547 425,014 2,840,860 2,780,593
Eliminating entry (80,170) (101,331) - - - (181.501) (183.498)
Total expenses $65.000 $804.138 $ 112 7 $184.715 $368.915 $425.014 2.960.543 $2.893.044
See accountants'report on supplementary information 21
NORTH FORK HOUSING ALLIANCE,INC.
SCHEDULE OF PROGRAM SERVICES
For the year ended December 31,1998
(With Comparative Totals for 1997)
Section 8 Section 8 Lakeside
DHCR Certificate Voucher Garden General Reserve Total Total
Fund Program Program Apartments Fund Fund 1998 1997
EXPENSES
Personnel services:
Salaries $ $ $ - $ 18,359 $ - $ - $18,359 $19,855
Fringe benefits - - 1,256 - - 1,256
Total personnel services - 19,615 19,615 21,371
Other than personnel services
Housing assistance payments 756,140 1,108,404 - - 1,864,544 1,880,445
Management fee - - - _
Administrative fee _ _
Advertising - 211 211 485
Telephone 716 - 716 669
Postage - -
Public relations and training 1,733
Travel -
Miscellaneous administrative _
Repairs and maintenance 9,512 - - 9,512 7,279
Service contracts and equipment leases 8,593 - 8,593 8,618
Supplies - - 296 - 296 108
Utilities - - 8,133 - - 8,133 11,448
Real estate taxes - 29,360 - - 29,360 27,103
Office rent - - - _
Insurance - 6,463 - 6,463 6,463
Interest expense - - 68,862 - - 68,862 70,351
Audit 1,200 1,200 334
Legal - _ _ - _
Consultants
Permits and license
Publication dues
Office expenses
Computer costs
Fuel and gas -
Placement fee - _ _
Day care grant 6,000 6,000 6,000
Rehabilitation cost - _ _
Apprenticeship program 459 - 459 1,714
Home LPA expense - - 37,950 37,950 -
Homeless prevention - _ _
00 13
Home project - 55,000 55,0 ,062
S.T. Home Investment program - _ 44,588
Downpayment Assistance program _
Depreciation
Bad debt expense _
Bank charges - -
Miscellaneous - 1.836 - - 1.836 (543)
Total other than personnel services 756,140 1,108,404 135,182 6,459 92,950 2,099,135 2,079,857
Eliminating entry - -
Totalexpenses $_ $!Mj 40 $I 1_, 08.404 $1 4 797 $6.459 122-950 $2.118.750 $2.101.228
See accountants'report on supplementary information 22
NORTH FORK HOUSING ALLIANCE,INC.
SCHEDULE OF SUPPORT SERVICES
For the year ended December 31, 1998
(With Comparative Totals for 1997)
Section 8 Section 8 Lakeside
DHCR Certificate Voucher Garden General Reserve Total Total
Fund Proeram Program Apartments Fund Fund 199 1997
EXPENSES
Personnel services:
Salaries $47,600 $43,260 $ $ - $191,496 $ - $282,356 $231,511
Fringe benefits 7.600 - 34,872 42,472 y2 43,067
Total personnel services 55,200 43,260 226,368 324,828 274,578
Other than personnel services
Housing assistance payments - - _ _ _
Management fee - _ _
Administrative fee 79,720 100,881 - 180,601 229,758
Advertising - - 2,996 2,996 3,020
Telephone 6,967 6,967 5,431
Postage 5,521 5,521 4,631
Public relations and training 2,533 2,533 2,238
Travel - - 35 1,502 1,107 2,644 3,728
Miscellaneous administrative 450 450 - 1,586 - 2,486 900
Repairs and maintenance - - 3,006 34,610 37,616 34,633
Service contracts and equipment leases 22,024 2,142 24,166 25,166
Supplies - - - 12,130
Utilities 8,368 30,234 38,602 43,922
Real estate taxes - 40,295 40,295 35,426
Office rent - 10,200 - 10,200 10,200
Insurance 1,500 1,902 25,903 29,305 19,916
Interest expense - - - 176 83,179 83,355 93,107
Audit 4,000 4,000 1,100 - 9,100 13,300
Legal - - - - - - 7,686
Consultants 8,300 46,037 8,753 63,090 28,999
Permits and license - - 50 50 1,147
Publication and dues 3,411 - 3,411 1,743
Office expenses 11,553 11,553 5,828
Computer costs 2,940 2,940 7,611
Placement fees -
4,035
Day care grant
Rehabilitation cost
Apprenticeship program
Home LPA expense
Homeless prevention
Home project
S.T.Home investment program
Downpayment Assistance program - - - - - _ _
Depreciation 738 356 29,771 2,511 103,495 136,871 96,220
Bad debt expense - - - - - - 7,000
Bank charges 113 292 809 1,213 -
Miscellaneous - - 1,463 1,487 2,951 2.%1
Total other than personnel services 9,800 84,908 105,687 29,919 136,087 332,064 698,466 700,736
Eliminating entry - 8( 0.620) 1( 00,881) - - - (181,501) (183.498)
Total expenses $65.000 $-41J48 $ 4.806 $29 919 $362.455 $332.064 $ 41 793 $791.817
See accointlanls'report on supplementary igjorination 23
NORTH FORK HOUSING ALLIANCE, INC.
RURAL PRESERVATION PROGRAM
SCHEDULE OF DHCR REVENUES AND EXPENSES
tCOMPARED TO BUDGET AND QUESTIONED COSTS
CONTRACT NUMBER: C-698059
' CONTRACT PERIOD: JULY 1, 1998 TO JUNE 30, 1999
For the year ended December 31, 1998
Latest Actual Over/
' Approved Revenues & (Under) Questioned
Budget Expenses Budget Costs
' REVENUE
DHCR Grant $65.000 $ 2.500 $32.500 $ -
' Total Revenue $ 5 0 $21M 5 $32.500 $ -
EXPENSES
Staff Salaries:
Executive Director 11,900 5,950 5,950 -
Executive Assistant/ -
Program Manager 11,900 5,950 5,950
Housing Counselor 11,900 5,950 5,950 -
Administrative Assistant 11,900 5,950 5,950 -
Fringe Benefits 7,600 _3,800 3,800 -
'
Regulated OTPS:
' Insurance 1,500 750 750 -
Professional Services 8.300 4.150 4.150
Total Regulated OTPS 9.800 4.900 4.900 -
Total Expenses $65.000 $32.500 $32.5000-
See
32.500See accountant's report on supplementary information
' 24
Deans • Archer
NORTH FORK HOUSING ALLIANCE, INC.
RURAL PRESERVATION PROGRAM
SCHEDULE OF DHCR REVENUES AND EXPENSES
' COMPARED TO BUDGET AND QUESTIONED COSTS
CONTRACT NUMBER: C-697059
' CONTRACT PERIOD: JANUARY 1, 1998 TO JUNE 30, 1998
For the year ended December 31, 1998
Latest Actual Over/
Approved Revenues & (Under) Questioned
Budget Expenses uB dget Costs
REVENUE
DHCR Grant $32.500 $32.500 $--:7— $ -
Total Revenue $ 2 500 $32.500
' EXPENSES
Staff Salaries:
Executive Director 5,950 .5,950 - -
Executive Assistant/
Program Manager 5,950 5,950 - -
' Housing Counselor 5,950 5,950 - -
Administrative Assistant 5,950 5,950 - -
' Fringe Benefits 3,800 3,800 - -
' Regulated OTPS:
Insurance 750 750
Professional Services 4.150 4.150 -
' Total Regulated OTPS 4.900 4.900 - -
Total Expenses $32.500
See accountant's report on supplementary information
' 25
Demes • Archer
' NORTH FORK HOUSING ALLIANCE INC.
' FOR THE YEAR ENDED DECEMBER 31, 1998
' PART III
INTERNAL CONTROL. STRUCTURE
AND COMPL.IAN('E INF RMATION
' IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARD
Deans Archer
' Oft.Deans • Archer
CERTIFIED PUBLIC ACCOUNTANTS
' 265 East Merrick Road
Valley Stream,New York 11580
(516)872-6922/FAX:(516)872-6925
INDEPENDENT AUDITORS' REPORT ON COMPLIANCE AND ON INTERNAL
' CONTROL OVER FINANCIAL REPORTING BASED ON AN AUDIT OF
FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH
"GOVERNMENT AUDITING STANDARDS"
' The Board of Directors
North Fork Housing Alliance, Inc.
' Greenport, New York
We have audited the financial statements of North Fork Housing Alliance, Inc., as of and for the
' year ended December 31, 1998, and have issued our report thereon dated May 7, 1999. We
conducted our audit in accordance with generally accepted auditing standards 1995 Audit Manual
for Selected Division of Housing and Community Renewal Programs, and the standards applicable
' to financial audits contained in Government Auditing Standards, issued by the Comptroller General
of the United States.
Co=liance
' As part of obtaining reasonable assurance about whether North Fork Housing Alliance, Inc's.,
financial statements are free of material misstatement, we performed tests of its compliance with
' certain provisions of laws, regulations, contracts, and grants, noncompliance with which could
have a direct and material effect on the determination of financial statement amounts. However,
providing an opinion on compliance with those provisions was not an objective of our audit, and
' accordingly, we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance that are required to be reported under Government Auditing Standards.
Internal Control Over Financial Reporting
In planning and performing our audit, we considered North.Fork Housing Alliance, Inc's.,
' internal control over financial reporting in order to determine our auditing procedures for the
purpose of expressing our opinion on the financial statements and not to provide assurance on the
internal control over financial reporting. However, we noted certain matters involving the internal
control over financial reporting and its operation that we consider to be reportable conditions.
Reportable conditions involve matters coming to our attention relating to significant deficiencies
' in the design or operation of the internal control over financial reporting that, in our judgment,
could adversely affect North Fork Housing Alliance, Inc's., ability to record, process, summarize,
and report financial data consistent with the assertions of management in the financial statements.
Reportable conditions are described in the accompanying.schedule of findings and recommendation
as item 98-1.
1 A material weakness is a condition in which the design or operation of one or more of the internal
control components does not reduce to a relatively low level the risk that misstatements in amounts
that would be material in relation to the financial statements being audited may occur and not be
' detected within a timely period by employees in the normal course of performing their assigned
functions. Our consideration of the internal control over financial reporting would not necessarily
disclose all matters in the internal control that might be reportable conditions and, accordingly,
' would not necessarily disclose all reportable conditions that are also considered to be material
weaknesses. However of the reportable conditions described above, we do not consider any to
be a material weakness. We also noted other matters involving the internal control over financial
reporting, which we have reported to management of North Fork Housing Alliance, Inc., in a
separate letter dated May 7, 1999.
' This report is intended for the information of the North Fork Housing Alliance Inc's., Board of
Directors and management, and the Department of Housing and Urban Development. However,
' this report is a matter of public record and its distribution is not limited.
9G, . A A'J"
' Valley Stream, New York
May 7, 1999
Dams • l rchc r
' NORTH FORK HOUSING ALLIANCE, INC.
' FINDINGS AND RECOMMENDATIONS - ON INTERNAL
CONTROL OVER FINANCIAL REPORTING
FOR THE YEAR ENDED DECEMBER 31, 1998
' CURRENT YEAR FINDINGS:
' Condition 98-1
' Test of Controls-Cash Receipts
We selected twenty-five (25) items for testing of cash receipts and noted the following:
(i) On two (2) occasions, deposits recorded were not entered into the log maintained
by the staff accountant.
(ii) On one (1) occasion cash receipt was not deposited in a timely manner.
Recommendation
' We recommend that:
(i) All cash receipt transactions be logged in at all times.
' (ii) Cash receipts are deposited within a timely manner, as determined by management.
' Condition 98-2
Single Audit-Tenants Eligibility
' We selected twenty-five (25) tenant's file for testing and noted that on four (4) occasions the exit
inspection form was not included in the terminated, (move-outs), tenant's file.
'
Recommendation
We recommend that management enforce the polices and procedures in place for exit inspections
of terminated tenants units including the completion and maintenance of required forms.
' Deans - Archer
NORTH FORK HOUSING ALLIANCE, INC.
FINDINGS AND RECOMMENDATIONS - ON INTERNAL
' CONTROL OVER FINANCIAL REPORTING
FOR THE YEAR ENDED DECEMBER 31, 1998
Condition 98-3
Brid eham ton Bank /NFHA bank accounts-
Concentration of Risk
' The organization does a significant amount of financial transactions with Brideghampton Bank.
The FDIC regulations when considered in relation to North Fork Housing Alliances Inc's
' transaction with the Bank can have a significant effect on the Organization, if the Bank were to
experience significant financial problems.
' PRIOR YEAR FINDINGS:
Condition 97-1
' Test of Controls - Payroll:
We selected thirty-five (35) employees for testing and noted that on one (1) occasion a new hire's
application form was not approved by the Executive Director.
' Recommendation
We recommend that the required forms for new employees be properly approved.
Follow-up
' This condition no longer exists
' Condition 97-2
Single Audit - Tenants Eligibility:
We selected twenty- five (25) tenant's files for testing, and noted that on two (2) occasions, the
' inspection form for a newly leased unit was dated after the effective lease date.
Recommendation
' We recommend that management enforce the policies and procedures in place for the inspection
of newly leased units.
30
NORTH FORK HOUSING ALLIANCE, INC.
FINDINGS AND RECOMMENDATIONS - ON INTERNAL
' CONTROL OVER FINANCIAL REPORTING
FOR THE YEAR ENDED DECEMBER 31, 1998
Follow-up
This condition has improved significantly.
Condition 97-
3
' Lakeside: .
' We performed a test of rental income and noted that:
(i) The security deposits, although deposited in a separate bank account, are not
' segregated by tenant.
(ii) One (1) of the five tenant's files reviewed did not contain a lease renewal
' agreement.
(iii) One (1) of the five tenant's selected did not pay the required amount of security
' deposit.
' Recommendation
(i) We recommend that the security deposits be segregated by tenants and the interest
' earned on these amounts be segregated.
(ii) We recommend that all tenants file be updated to include lease agreements.
' (iii) We recommend that security deposits be maintained at the required levels.
Follow-up
low-up
' This condition have been substantially corrected.
Condition 974
' General Ledger:
' (i) During the audit we noted that journal entries were made that:
(a) Were not adequately supported, and
31
Deans • Archer
' NORTH FORK HOUSING ALLIANCE, INC.
FINDINGS AND RECOMMENDATIONS - ON INTERNAL
' CONTROL OVER FINANCIAL REPORTING
FOR THE YEAR ENDED DECEMBER 31, 1998
(b) Were not authorized prior to recording.
' (ii) It was noted during our audit that the general ledger was not properly maintained:
(a) The general ledgers are not being updated in a timely manner.
(b) The general ledgers are being maintained on a cash basis.
(c) No analysis is being done on significant accounts.
' Recommendation
(i) We recommend that management examine the controls in place over updating the
general ledger system. All entries must be adequately documented, authorized,
reviewed and maintained.
' (ii) We recommend that an accounting policy and procedures manual be developed
which sets forth the responsibilities for each level of staff along with written
' procedures and instructions for each transactions cycles. The manual will ensure
that similar transactions are treated consistently, that the accounting principles used
are proper and that records are produced in the form desired by management. One
' of the most important elements that the manual should contain is a review process
so that transactions are entered correctly and consistently in the general ledgers.
We also recommend that the check writing function be integrated with the general
ledger system so that duplication of effort is reduced. Laser printed checks can be
' generated from information input to the system and the same information can then
be posted to the general ledger. In addition, an edit listing of the information
inputted can be obtained and reviewed for propriety and proper account coding
tbefore posting.
Follow-up
' These conditions have been substantially corrected.
32
Deunc • Archer