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Home My WebLink About2001 North Fork Housing Alliance NORTH FORK HOUSING ALLIANCE, INC. REPORT ON FINANCIAL STATEMENTS For the Year Ended December 31,2001 (With comparative totals for 2000) r Deans•Archer& Co. NORTH FORK HOUSING ALLIANCE, INC. YEAR ENDED DECEMBER 31, 2001 ' TABLE OF CONTENTS PART I- REPORT ON FINANCIAL STATEMENTS PAGE(s) - 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 1I -ADDITIONAL INFORMATION - Independent Auditors Report on Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 - Schedule of Functional Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 i - Schedule of Supporting Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 - Schedule of Program Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Rural Preservation Program Schedule of DHCR Revenues and Expenses Compared to Budget and Questioned Costs Contract Number C-620059 Contract Period July 1, 2000 to June 30,2001 For the year ended December 31, 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 - Rural Preservation Program Schedule of DHCR Revenues and Expenses Compared to Budget and Questioned Costs Contract Number C-621059 Contract Period July 12001-June 30,2002 ' For the year ended December 31,2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Deans•Archer& Co. NORTH FORK HOUSING ALLIANCE, INC. YEAR ENDED DECEMBER 31,2001 ' TABLE OF CONTENTS PAGE(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" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28-29 - Findings and Recommendations -On Internal Control over Financial Reporting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 1 ' Deans•Archer& Co. I 1 NORTH FORK HOUSING ALLIANCE, INC. FOR THE YEAR ENDED DECEMBER 31,2001 (with comparative totals for 2000) ' PART ' REPORT ON FINANCIAL STATEMENTS r r Deans•Archer& Co. 1 Deans • Archer & Co. 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 accompanying statements of financial position of the North Fork Housing ' Alliance, Inc., as of December 31, 2001 and 2000 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 auditing standards generally accepted in the United ' States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and 1995 Audit Manual for Selected Division of Housing and Community Renewal Programs. Those standards require that we ' plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a 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, 2001 and 2000, and ' the changes in its net assets and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America. I _ In accordance with Government Auditing Standards, we have also issued our report dated July 5, 2002 on our consideration of North Fork Housing Alliance, Inc's., internal control structure over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts and grants. That report is an integral part of an audit performed in accordance with ' Government Auditing Standards and should be read in conjunction with this report in considering the results of an audit. i ' Valley Stream, New York July 5, 2002 ' Deans•Archer& Co. NORTH FORK HOUSING ALLIANCE, INC. STATEMENTS OF FINANCIAL POSITION December 31,2001 and 2000 ' Total 2001 2000 ' ASSETS Current assets: Cash $133,412 $ 309,135 ' Grants receivable 11,074 84,154 Tenants' rent receivable 18,956 16,011 Other receivables 21,112 33,856 ' Other assets 25,198 25,011 Total current assets 209,752 468,167 Fund reserves -restricted(Note 4) 99,649 73,966 Tenants'security deposits 23,679 21,824 Property and equipment(Notes 2 and 5) 2.875,419 2,714.317 ' Total assets $3.208.499 $3.278.274 LIABILITIES AND NET ASSETS ' Current liabilities: Accounts payable and accrued expenses $ 63,399 $ 72,131 Due to funding source (Note 6) 375,510 425,622 Long-term debt, current portion (Note 7) 57,823 53,396 Deferred revenue 35,430 189,169 Line of credit(Note 13) 24,722 78,930 Other liabilities 26.169 50,506 Total current liabilities 583,053 869,754 ' Security deposits 23,679 21,716 Other long-term liabilities (Note 8) 50,000 50,000 Long-term debt (Note 7) 1.274.841 1.326.699 ' Total liabilities 1,931,573 2,268,169 Contingencies (Note 9) - - ' Net assets Unrestricted 1,276,926 1,009,693 Temporarily restricted - 412 ' Permanently restricted - - Total net assets 1.276,926 1.010.105 Total liabilities and net assets $3.208,499 $3.278.274 The accompanying notes are an integral part of these financial statements 7 Deans•Archer& Co. NORTH FORK HOUSING ALLIANCE,INC. ' STATEMENTS OF ACTIVITIES For the years ended December 31,2001 (With Comparative Totals for 2000) ' Temporarily Permanently Total Unrestricted Restricted Restricted 2001 2000 Support and revenue: ' Support: Department of Housing and Community Renewal $ 165,783 $ - $ - $165,783 $ 218,939 Town of Southold Block Grant 3,595 - - 3,595 17,692 Section 8 rent subsidies(HUD) 1,698,026 1,698,026 1,939,731 FMHA interest reduction subsidy 47,339 47,339 52,825 Housing Opportunities 328,168 - - 328,168 34,972 ' Revenue: Rental income 424,872 - - 424,872 392,163 Interest income 90 - - 90 154 ' Washing machine income 2,375 - - 2,375 1,645 Other income 69.452 69,452 13.652 2,739,700 - - 2,739,700 2,671,773 Net assets released from ' restriction(Note 2) - - - - - Total public support and revenue 2,739,700 - 2,739,700 2,671,773 ' Expenses: Program services: Reserve Fund 47,289 - - 47,289 92,792 Section 8 Certification Program 65,780 - - 65,780 177,802 ' Section 8 Voucher Program 1,431,076 - = 1,431,076 1,539,853 Lakeside Garden Apartments 143,840 143.840 157.832 Total program services 1,687,985 - - 1,687,985 1,968,279 ' Support services: Management and general: General Fund 230,654 - - 230,654 240,694 ' Reserve Fund 396,802 - = 396,802 379,252 DHCR Fund 72,125 72,125 72,275 Section 8 Certification Program 1,000 1,000 2,000 Section 8 Voucher Program 44,677 - - 44,677 43,856 ' Lakeside Garden Apartments 32.782 - = 32.782 31.770 Total support services 778,040 778,040 769,847 Total expenses 2,466,025 - 2,466,025 2,738,126 Change in Net Assets 273,675 - 273,675 (66,354) Net Assets,Beginning of Year 1,010,105 - - 1,010,105 1,076,459 ' Prior Period Adjustment(Note 12) (6.852) - - (6,852)Net Assets,Beginning of Year as,Restated 1,003,253 - - 1,003,253 1,076,459 ' Net Assets,End of Year $1.276,926 $ - $ - $1.276.926 $1,010.105 The accompanying notes are an integral part of these financial statements 8 ' Deans•Archer& Co. NORTH FORK HOUSING ALLIANCE, INC. STATEMENTS OF CASH FLOWS December 31, 2001 and 2000 Cash flow from operating activities: 2001 2000 ' Increase (decrease) in net assets $273,675 $ (66,354) Depreciation 146,779 141,527 ' Prior period adjustment (6,852) _ Realized gain on sale of fixed assets Decrease (increase) in receivables 82,879 (31,264) ' Decrease (increase) in prepaid expenses - - Decrease (increase) in other assets (25,870) (1,046) Increase (decrease) in due to funding source (50,112) (484,064) (Decrease) increase in accounts payable and accrued expenses (8,732) 3,628 (Decrease) increase in deferred revenue (153,739) (48,049) Decrease (increase) in deposits 108 17,167 ' Decrease in other liabilities (24,337) (23,329) Net cash flow from operating activities 233.797 (491,7L4) ' Cash flow from investing activities: Purchase of buildings and building improvement (303,308) (35,161) Proceed from the sale of fixed assets - - ' Purchase of equipment and furniture and fixtures (4,573) (3,182) Net cash flow from investing activities (307,881) (38,343) Cash flow from financing activities: Receipt/Payment on line of credit (54,208) 30,690 Long-term debt (1,910) - ' Payment of principal (45,521) (43,281) Net cash flow from financing activities (101,639) (12,591) ' Net increase (decrease) in cash (175,723) (542,718) Cash,beginning of year 309,135 851.853 ' Cash, end ofY ear $133.412 $309.135 ' Supplemental disclosure of cash flow information ' Interest paid $ 1251717 $135.906 ' The accompanying notes are an integral part of these financial statements 9 ' Deans-A rcher& Co. NORTH FORK HOUSING ALLIANCE, INC. ' NOTES TO FINANCIAL STATEMENTS For the years ended December 31, 2001 and 2000 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 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. 1 ' 10 Deans•Archer& Co. NORTH FORK HOUSING ALLIANCE,INC. NOTES TO FINANCIAL STATEMENTS For the years ended December 31, 2001 and 2000 1 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) Property 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. All acquisitions of property and equipment in excess of$500 ' are capitalized. Selected buildings are being depreciated over the estimated useful lives using the straight-line method. ' (f) Income Taxes The Organization qualifies 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& Co. NORTH FORK HOUSING ALLIANCE,INC. ' NOTES TO FINANCIAL STATEMENTS For the years ended December 31, 2001 and 2000 ' 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 r perp 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, 2001. ' (j) Comparative Data ' The financial information for the year ended December 31, 2001,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 Deans-A rcher& Co. NORTH FORK HOUSING ALLIANCE,INC. ' NOTES TO FINANCIAL STATEMENTS For the years ended December 31, 2001 and 2000 ' 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, 2001. ' 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, 2001 buildings, equipment, furniture, fixture and leasehold improvements consisted of the following: ' 2001 2000 t Buildings $2,796,014 $2,502,013 Buildings Improvements 1,177,663 1,168,355 Equipment 51,640 47,629 ' Furniture and Fixtures 5,674 5,112 4,030,991 3,723,109 Less: accumulated depreciation (1,155,572) (1,008,792) ' $2 87� 5.419 $2114,317 ' 13 tDecors-A rcher& Co. 1 NORTH FORK HOUSING ALLIANCE, INC. NOTES TO FINANCIAL STATEMENTS For the years ended December 31, 2001 and 2000 NOTE 6. DUE TO HUD ' As of December 31, 2001 and 2000 the amount due to the Department of Housing and Urban Development are as follows: 2001 2000 ' Section 8 Certificate Program $ 16,801 $100,295 Section 8 Voucher Program 358,709 325.327 ' Total $375510 $425 622 ' NOTE 7. LONG-TERM DEBT ' Long-term debt is comprised of the following: 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. ' $616,182 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. 40,864 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. 76,687 1 14 Deans•Archer& Co. NORTH FORK HOUSING ALLIANCE, INC. ' NOTES TO FINANCIAL STATEMENTS For the years ended December 31, 2001 and 2000 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. 60,341 ' 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. 71,569 ' 8.5% p e mortgag 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. 42,528 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. 73,251 6%mortgage payable to a Bank, due in monthly installments beginning August 1, 1995 of$559 including interest through July 1, 2008 collateralized by a building located at 211 1 Center St., Greenport,New York. 36,057 1 1 15 ' Deans•Archer& Co. NORTH FORK HOUSING ALLIANCE, INC. NOTES TO FINANCIAL STATEMENTS For the years ended December 31, 2001 and 2000 ' 2001 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. 55,709 ' 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. 111,787 ' 9.5% Y mortgage e a able to a Bank, due in g payable 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. 88,387 ' 9.625%mortgage 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. 59.302 ' 1,332,664 Less: current portion --(57,823) ' Long-term debt $1,274.,841 16 Deans•Archer& Co. NORTH FORK HOUSING ALLIANCE, INC. ' NOTES TO FINANCIAL STATEMENTS For the years ended December 31, 2001 and 2000 ' 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, 2003 63,636 2004 69,449 2005 72,013 ' 2006 79,004 2007 78,609 Thereafter 963.953 $1,326,664 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& Co. NORTH FORK HOUSING ALLIANCE, INC. ' NOTES TO FINANCIAL STATEMENTS For the years ended December 31, 2001 and 2000 ' NOTE 9. COMMITMENTS AND CONTINGENCIES(Continued) ' Lease Commitment The Organization rents office space from the Village of Greenport under a lease that ' expires in 2002. Rent expense for the year ended December 31, 2001 was $12,000. The aggregate rental commitment at December 31, 2001 under the noncancellable leases for real estate is as follows: ' 2002 12,000 Note and Mortgage Agreements ' 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, 2001, with funds to be used for neighborhood and rural preservation activities. The Organization met this requirement for the year ended ' December 31, 2001. 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& Co. NORTH FORK HOUSING ALLIANCE, INC. NOTES TO FINANCIAL STATEMENTS For the years ended December 31, 2001 and 2000 ' NOTE 12. PRIOR PERIOD ADJUSTMENT Prior period adjustment represents adjustments for disallowed architect fees and various prior year stale dated checks. 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 $24,722 as of December 31, 2001. Interest rate at the close of business on December 31, 2001 was 9.50%. This agreement will expire December 31, 2002. 19 nv_nns•Archer& Co. NORTH FORK HOUSING ALLIANCE, INC. 1 FOR THE YEAR ENDED DECEMBER 31, 2001 ' (with comparative totals for 2000) PART II ADDITIONAL INFORMATION Deans•Archer& Co. CftDeans • Archer ' CERTIFIED PUBLIC ACCOUNTANTS 265 East Merrick Road Valley Stream,New York 11580 ' (516)872-6922/FAX:(516)872-6925 INDEPENDENT AUDITORS' REPORT ON ADDITIONAL INFORMATION To the Board of Directors North Fork Housing Alliance, Inc. Greenport, New York ' Our report on our audit of the basic financial statements of North Fork Housing Alliance Inc. for P g , December 31, 2001 appears on pages 5-6. That audit was conducted for the purpose of forming an ' opinion on the basic financial statements taken as a whole. The additional information listed in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements taken as a whole. 9 �w Valley Stream, New York July 5, 2002 NORTH FORK HOUSING ALLIANCE,INC. SCHEDULE OF FUNCTIONAL EXPENSES For the year ended December 31,2001 (With Comparative Totals for 2000) Section 8 Section 8 Lakeside DHCR Certificate Voucher Garden General Reserve Total Total Fund Program Program Apartments Fund Fund 2001 2000 EXPENSES Personnel services: Salaries $54,725 $ $37,500 $17,745 $92,880 $27,600 $230,450 $220,268 Fringe benefits 7,600 1.650 25.178 - 34,428 35,353 Total personnel services 62,325 37,500 19,395 118,058 27,600 264,878 255,621 Other than personnel services: Housing assistance payments - 65,780 1,431,076 - - - 1,496,856 1,717,655 Management fee - - - - - Administrative fee - 2,463 158,452 - - 160,915 179,086 Advertising - - - 194 - 1,214 1,408 1,201 Telephone - 715 1,490 4,000 6,205 6,326 Postage - - - 1,507 2,559 4,066 3,664 Public relations and training - 35 310 - 345 1,312 Travel - - - - 198 300 498 868 Miscellaneous administrative - 75 1,425 - 1,785 - 3,285 2,448 Repairs and maintenance - - - 9,368 648 14,142 24,158 26,675 Service contracts and equipment leases - 12,267 9,720 5,871 27,858 26,493 Supplies - - - - - - Utilities - 7,970 5,826 45,017 58,813 68,712 Real estate taxes - 14,963 - 48,075 63,038 79,946 Office rent - - 12,000 - 12,000 12,000 Insurance 1,500 5,551 - 34,667 41,718 32,976 Interest expense - - - 62,959 - 62,758 125,717 135,907 Audit - 1,000 7,000 1,000 1,500 2,000 12,500 11,500 Legal - - - 2,106 - 3,764 5,870 2,518 Consultants 8,300 - 55,763 3,600 67,663 86,097 Permits and licenses - - - - - - Publication and dues - 40 2,295 - 2,335 2,505 Office expense 300 2,915 5,000 8,215 9,284 Computer costs - 2,951 - 2,951 3,415 Placement fees - - - Day care grant - Rehabilitation cost - Apprenticeship program - - - - Home LPA expense - - 47 289 47 289 92 792 P , Home project - - - S.T.Home Investment program 3,428 3,428 Down payment Assistance Program - - - - - - Depreciation 177 32,759 3,264 110,579 146,779 141,527 Bad debt expense - - - - - - Bank charges 23 165 664 852 763 Miscellaneous - - - 6.977 10.259 21.564 38,800 16,821 Total other than personnel services 9,800 69,318 1,598,130 157,227 112,596 416,491 2,363,562 2,662,491 Eliminating entry (2,538) (159,877) - (162,415) (179,986) Total expenses $72,125 $66,780 $1,475,753 $176.622 $230.654 $4440 1 $2.466.025 $2.738.126 22 NORTH FORK HOUSING ALLIANCE,INC. SCHEDULE OF SUPPORT SERVICES For the year ended December 31,2001 (With Comparative Totals for 2000) Section 8 Section 8 Lakeside DHCR Certificate Voucher Garden General Reserve Total Total Fund Program Program Apartments Fund Fund 2001 2000 EXPENSES Personnel services: Salaries $54,725 $ $37,500 $ $92,880 $27,600 $212,705 $202,523 Fringe benefits 7,600 - 25,178 32,778 33,703 Total personnel services 62,325 37,500 118,058 27,600 245,483 236,226 Other than personnel services Housing assistance payments - - - - - - Management fee - - - Administrative fee 2,463 158,452 - - 160,915 179,086 Advertising - - - - 1,214 1,214 1,014 Telephone - 1,490 4,000 5,490 5,663 Postage - 1,507 2,559 4,066 3,664 Public relations and training - - 310 - 310 1,023 Travel - - - 198 300 498 868 Miscellaneous administrative - 75 1,425 1,785 - 3,285 2,448 Repairs and maintenance - - - - 648 14,142 14,790 16,148 Service contracts and equipment leases - - 9,720 5,871 15,591 17,059 Supplies - - - - - - Utilities - 5,826 45,017 50,843 61,193 Real estate taxes - - 48,075 48,075 49,177 Office rent - 12,000 - 12,000 12,000 Insurance 1,500 - 34,667 36,167 26,514 Interest expense - - - - 62,758 62,758 67,261 Audit - 1,000 7,000 - 1,500 2,000 11,500 10,500 Legal - - - - 3,764 3,764 1,655 Consultants 8,300 55,763 3,600 67,663 86,097 Permits and license - - - - - - Publication dues - 2,295 - 2,295 2,505 Office expenses - 2,915 5,000 7,915 8,758 Computer costs - 2,951 - 2,951 3,415 Placement fee - - - - - Day care grant - Rehabilitation cost - - Apprenticeship program - - - Home LPA expense - - - - S.T.Home Investment program - - - - - 3,428 3,428 - Depreciation - - 177 32,759 3,264 110,579 146,779 141,527 Bad debt expense - - - - - - - - Bank charges - - 23 165 664 852 763 Miscellaneous - 10,259 21,564 31,823 15.269 Total other than personnel services 9,800 3,538 167,054 32,782 112,596 369,202 694,972 713,607 Eliminating entry - x,5381 (159,877) - - (162,415) (179,986) Total expenses $72,125 $1,000 $ 44,677 $32.782 $230,654 396 802 778 040769 847 23 NORTH FORK HOUSING ALLIANCE,INC. SCHEDULE OF PROGRAM SERVICES For the year ended December 31,2001 (With Comparative Totals for 2000) Section 8 Section 8 Lakeside DHCR Certificate Voucher Garden General Reserve Total Total Fund Program Program Apartments Fund Fund 2001 2000 EXPENSES Personnel services: Salaries $ $ $ - $ 17,745 $ - $ - $ 17,745 $ 17,745 Fringe benefits - - 1.650 1.650 1.650 Total personnel services - 19,395 19,395 19,395 Other than personnel services Housing assistance payments - 65,780 1,431,076 - - - 1,496,856 1,717,655 Management fee - - - - Administrative fee - - - - Advertising - 194 194 187 Telephone 715 715 663 Postage - - - - Public relations and training - 35 35 - Travel - - - - _ 289 Miscellaneous administrative - - - Repairs and maintenance 9,368 9,368 - Service contracts and equipment lease - - 12,267 12,267 10,527 Supplies - - - 9,434 Utilities - 7,970 - 7,970 - Real Estate taxes - - 14,963 14,963 7,519 Office rent - - - - 30,769 Insurance - - 5,551 - 5,551 - Interest expense - - 62,959 62,959 6,462 Audit - - - 1,000 1,000 68,646 Legal - - - 2,106 - 2,106 1,000 Consultants - - - - - 863 Permits and licenses - - - - - - Publications and dues - - - 40 - 40 - Office expenses - - - 300 300 - Computer costs - - - - - - 526 Placement fees - - - - _ Day care grant - - - - Rehabilitation cost - - - - - Apprenticeship program - - - - 47,289 - - Home LPA expense - - - - - 47,289 92,792 S.T.Home Investment Program - - - - - - Depreciation - - - - - Bad debt expense - - - - - - - Bank charges - - - - - - _ _ Miscellaneous - 6,977 6.977 1.552 Total other than personnel services 65,780 1,431,076 124,445 - 47,289 1,668,590 1,948,884 Eliminating entry - - - - Total expenses $ $65.780 JL431 076 $143,840 $ $ 47 2 9 $1,687,985 $1 968.279 24 NORTH FORK HOUSING ALLIANCE, INC. ' RURAL PRESERVATION PROGRAM SCHEDULE OF DHCR REVENUES AND EXPENSES COMPARED TO BUDGET AND QUESTIONED COSTS ' CONTRACT NUMBER: C-620059 CONTRACT PERIOD: JULY 1, 2000 TO JUNE 30, 2001 For the year ended December 31, 2001 ' Latest Actual Over/ Approved Revenues & (Under) Questioned ' Budget Expenses Budget Costs REVENUE DHCR Grant $74.500 $74.500 $ Total Revenue $74,500 ' EXPENSES Staff Salaries: Executive Director 24,742 24,742 - - Executive Admin Assistant 14,275 14,275 - - ' Housing Program Manger 18,083 18,083 - - Fringe Benefits 7,600 7,600 - - ' Regulated OTPS: - Insurance 1,500 1,500 Professional Services 8,300 8300 - - Total Regulated OTPS 9.800 9,800 - - ' Total Expenses $74.500 $74,500 See accountant's report on supplementary information ' 25 ' Deans•Archer& Co. NORTH FORK HOUSING ALLIANCE, INC. ' RURAL PRESERVATION PROGRAM SCHEDULE OF DHCR REVENUES AND EXPENSES COMPARED TO BUDGET AND QUESTIONED COSTS ' CONTRACT NUMBER: C-621059 CONTRACT PERIOD: JULY 1, 2001 TO JUNE 30, 2002 For the year ended December 31, 2001 ' Latest Actual Over/ Approved Revenues & (Under) Questioned Budget Expenses Budget Costs ' REVENUE DHCR Grant $65,000 $32,500 $ 32,500 $ - ' Total Revenue $65,000 $32,500 $ 32,500 $ - EXPENSES Staff Salaries: - Executive Director 19,992 9,996 9,996 Executive Admin ' Assistant 11,900 5,950 5,950 = Housing Program Manager 15,708 7,854 7,854 Fringe Benefits 7,600 3,800 3,800 - Regulated OTPS: ' Insurance 1,500 750 750 - Professional Services 8300 4,150 4,150 ' Total Regulated OTPS 9,800 4,900 4,900 - Total Expenses $65 000 $32,500 $ 32,500 $ - ' See accountant's report on supplementary information 26 ' Deans-Archer& Co. NORTH FORK HOUSING ALLIANCE, INC. ' FOR THE YEAR ENDED DECEMBER 31, 2001 PART III INTERNAL CONTROL STRUCTURE ' AND COMPLIANCE INFORMATION IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS ' 27 ' Deans•Archer& Co. Deans o Archer & Co. ' 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, 2001, and have issued our report thereon dated July 5, 2002. We conducted our audit in accordance with auditing standards generally accepted in the United States ' of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and 1995 Audit Manual for Selected Division of Housing and Community Renewal Programs. Compliance ' 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. 1 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 items 01-1 and 00-1 ' A material weakness is a condition in which the design oroperation 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 July 5, 2002. This report is intended for the information and use of the North Fork Housing Alliance Inc's.,Board ' of Directors and management,the Department of Housing and Urban Development and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. An ' Valley Stream, New York July 5, 2002 Deans•Archer& Co. NORTH FORK HOUSING ALLIANCE, INC. ' FINDINGS AND RECOMMENDATIONS - ON INTERNAL CONTROL OVER FINANCIAL REPORTING FOR THE YEAR ENDED DECEMBER 31, 2001 ' CURRENT YEAR FINDINGS: ' Condition 01-1 Single Audit- Tenants Eligibility We selected twenty-five (25)tenants' files for testing and noted than 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 policies and procedures in place for exit inspections of terminated tenants units including the completion and maintenance of required forms. Management Response ' Management agrees with the recommendation. PRIOR YEAR FINDINGS: ' Condition 00-1 Bridgehampton 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 Alliance, Inc's transaction with the Bank can have a significant effect on the Organization, if the Bank were to experience significant financial problems. ' Follow-up ' This condition is substantially the same. 30 ' Deans•Archer& Co. ' NORTH FORK HOUSING ALLIANCE,INC. REPORT OF CERTIFIED PUBLIC ACCOUNTANTS ' IN ACCORDANCE WITH THE SINGLE AUDIT ACT AND OMB CIRCULAR A-133 SUPPLEMENTARY INFORMATION AND ' OBSERVATIONS AND RECOMMENDATIONS For the Year Ended December 31,2001 1 1 Deons•Archer& Co. ' NORTH FORK HOUSING ALLIANCE INC. TABLE OF CONTENTS PAGE s ' PART I -REPORT OF FEDERAL AWARDS ' - Independent Auditors' Report on Financial Statements and Supplementary Schedule of Expenditures' of Federal Awards . . . . . . . . . . . . . . . . . . . 4-5 ' - Schedule of Expenditures of Federal Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-7 - Notes to the Schedule of Expenditures of Federal Awards . . . . . . . . . . . . . . . . . . . . . . . . 8 PART II - INTERNAL ACCOUNTING AND ADMINISTRATIVE CONTROLS AND COMPLIANCE INFORMATION IN ACCORDANCE WITH OMB CIRCULAR A-133 - Independent Auditors' Report on Compliance with Requirements ' Applicable to each Major Program and Internal Control Over Compliance in Accordance with OMB Circular A-133 . . . . . . . . . . . . . . . . . . . . . . 10-11 ' - Schedule of Findings and Questioned Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12-13 ' PART III -PRIOR AUDIT REPORT AND EXIT CONFERENCE ' - Resolution of Prior Year Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 - Exit Conference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Deans-A rcher& Co. ' NORTH FORK HOUSING ALLIANCE, INC. FOR THE YEAR ENDED DECEMBER 31, 2001 ' PART I REPORT OF FEDERAL AWARDS t Deans•Archer& Co. Deans • Archer & Co. CERTIFIED PUBLIC ACCOUNTANTS 265 East Merrick Road Valley Stream,New York 11580 ' (516)872-6922/FAX: (516)872-6925 INDEPENDENT AUDITOR'S REPORT ON FINANCIAL STATEMENTS AND SUPPLEMENTARY SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS The Board of Directors North Fork Housing Alliance, Inc. ' Greenport, New York We have audited the statement of financial position of North Fork Housing Alliance, Inc. as of December 31, 2001, and the related statements of activities, functional expenses and cash flows for the year 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 audit. We conducted our audit in accordance with auditing standards generally accepted in the United ' States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are ' free of material misstatement. An audit includes examining, on a 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 audit provides 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 North Fork Housing Alliance, Inc., as of December 31, 2001, and the changes ' in its net assets and its cash flows for the year then ended in conformity with generally accepted accounting principles. In accordance with Government Auditing Standards, we have also issued our report dated July 5, 2002 on our consideration of North Fork Housing Alliance, Inc's., internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, ' and grants. The accompanying schedule of expenditures of federal awards is presented for purposes of ' additional analysis as required by U.S. Office of Management and Budget Circular A-133,Audits of States, Local Governments, and Non-Profit Organizations, and is not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the ' audit of the basic financial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic financial statements taken as a whole. ' Valley Stream, New York July 5, 2002 Deans•Archer& Co. ' NORTH FORK HOUSING ALLIANCE, INC. SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED DECEMBER 31, 2001 ' 1 of 2 Federal Grantor/ Federal Grant/ ' Pass-through Grantor/ CFDA Pass-through Disbursement/ Program Title Number Number Grant Period Expenditures ' U.S. Department of Housing and Urban Development ' Hosing Assistance 14.857 NY1045E 01/01/01-12/31/01 $ 67,365 Housing Assistance 14.857 NY152CE 01/01/00-12/31/00 116,456 Housing Assistance 14.855 NY1045V 01/01/01-12/31/01 1,630,661 ' Section 8 Housing Choice Vouchers 14.871 NY152VO 01/01/00-12/31/00 348.657 Total Department of Housing and Urban Development 2,163,139 Department of Housing and Urban Development Passed-through the State for New York-DHCR ' Home Program 14.239 C-97000233 01/01/98-12/31/03 61,417 Passed-through the County of Suffolk ' CHDO Projects-Home Program(SCCD) 14.239 8579FY01 305,180 Passed through Housing Opportunities Housing Opportunities 14.169 22,988 ' Total Department of Housing and Urban Development $2.552,724 See accountants'report on supplementary information 6 ' Deans•Archer& Co. ' NORTH FORK HOUSING ALLIANCE, INC. SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS FOR THE YEAR ENDED DECEMBER 31, 2001 ' 2 of 2 ' Federal Grantor/ Federal Grant/ Pass-through Grantor/ CFDA Pass-through Disbursement/ Prop-ram Title Number Number Grant Period Expenditures U.S.Department ofAgriculture ' Farmer Home Administration Rural Rental Housing Loan 10.415 06/01/87-09/01/2035 47,339 ' Passed-through the State of New York-DHCR ' Rural Housing Preservation Grants 10.433 C-621059 07/01/01-06/30/02 32,500 Rural Housing Preservation Grants 10.433 C-620059 07/01/00-06/30/01 39,625 Rural Rental Assistance Payments 10.427 C-200038C 02/01/87-01/31/2012 30,368 ' Total U.S.Department of Agriculture 149,832 Other Federal Assistance ' Passed-through Town of Southold CDBG Economic Development Program 14.218 1050-01-18B 01/01/01-12/31/01 3,428 ' Total $2,705,984 See accountants'report on supplementary information 7 ' Deans•Archer& Co. ' NORTH FORK HOUSING ALLIANCE, INC. NOTE TO SCHEDULE OF EXPENDITURES December 31, 2001 NOTE 1. OVERVIEW OF SCHEDULE ' The accompanying schedule of expenditures of federal awards present the activities ' of all federal assistance programs and contracts of the North Fork Housing Alliance, Inc. The reporting entity is defined in Note 1 of notes to the financial statements. All federal assistance received directly from federal agencies as well as federal ' assistance passed through other government agencies are included in the accompanying schedule of expenditures of federal awards. ' NOTE 2. BASIS OF ACCOUNTING The accompanying schedule of expenditures of federal awards are presented using the accrual basis of accounting, which is described in Note 2 of notes to the financial statements. 8 ' Deans•Archer& Co. NORTH FORK HOUSING ALLIANCE, INC. ' FOR THE YEAR ENDED DECEMBER 31, 2001 ' PART II INTERNAL ACCOUNTING AND ADMINISTRATIVE CONTROLS ' AND COMPLIANCE INFORMATION ' IN ACCORDANCE WITH OMB CIRCULAR A-133 1 9 Deans•Archer& Co. CR ' Deans • Archer & Co. ' CERTIFIED PUBLIC ACCOUNTANTS 265 East Merrick Road Valley Stream,New York 11580 ' (516)872-6922/FAX: (516)872-6925 INDEPENDENT AUDITORS' REPORT ON COMPLIANCE ' WITH REQUIREMENTS APPLICABLE TO EACH MAJOR PROGRAM AND INTERNAL CONTROL ' OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 ' The Board of Directors North Fork Housing Alliance, Inc ' Greenport, New York Compliance ' We have audited the compliance of North Fork Housing Alliance, Inc., with the types of compliance requirements described in the U.S. Office of Management and Budget (OMB) Circular ' A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended December 31, 2001. North Fork Housing Alliance, Inc's., major federal programs are identified in the summary of auditors' results section of the accompanying schedule of findings and ' questioned costs. Compliance with the requirements of laws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of North Fork Housing Alliance, Inc's.,management. Our responsibility is to express an opinion on North Fork Housing ' Alliance, Inc's., compliance based on our audit. We conducted our audit of compliance in accordance with auditing standards generally accepted ' in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and OMB Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations. Those ' standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit ' includes examining, on a test basis, evidence about North Fork Housing Alliance, Inc's., compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our ' opinion. Our audit does not provide a legal determination of North Fork Housing Alliance, Inc's., compliance with those requirements. ' In our opinion, North Fork Housing Alliance, Inc., complied, in all material respects, with the requirements referred to above that are applicable to each of its major federal programs for the year ' ended December 31, 2001. ' 10 ' Internal Control Over Compliance The management of North Fork Housing Alliance, Inc., is responsible for establishing and maintaining effective internal control over compliance with the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we ' considered North Fork Housing Alliance, Inc's., internal control over compliance with requirements that could have a direct and material effect on a major federal program in order to ' determine our auditing procedures for the purpose of expressing our opinion on compliance and to test and report on the internal control over compliance in accordance with OMB circular A-133. Our consideration of the internal control over compliance 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. Reportable ' conditions involve matters coming to our attention relating to significant deficiencies in the design or operation of the internal control over compliance that, in our judgement, could adversely affect North Fork Housing Alliance, Inc's., ability to administer a major federal program in accordance ' with the applicable requirements of laws,regulations, contracts, and grants. 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 non-compliance with applicable requirements ' of laws, regulations, contracts, and grants that would be material in relation to a major federal program being audited may occur and not be detected within a timely period by employees in the normal course of performing their assigned functions. We noted no matters involving the internal ' control over compliance and its operation that we consider to be a reportable condition and/or material weakness. ' This report is intended solely for the information and use of the North Fork Housing Alliance, Inc's., Board of Directors and management, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified ' parties. �w Vall4Stre4am, ew4Y�ork July 5, 2002 ' > > Denny•Archer& Co. 1 NORTH FORK HOUSING ALLIANCE,INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS ' FOR THE YEAR ENDED DECEMBER 31,2001 ' A. SUMMARY OF AUDIT RESULTS Financial Statements Type of auditor's report issued Unqualified ' Internal control over financial reporting: Material weakness(es)identified? Yes x No Reportable condition(s)identified not considered to be material weaknesses Yes x None reported Noncompliance material to financial ' statements noted? Yes x No Federal Awards ' Internal control over major programs: Material weakness(es)identified? Yes x No ' Reportable condition(s)identified not considered to be material weakness(es) Yes x None reported ' Type of auditors' report issued on compliance for major programs Unqualified ' Any audit findings disclosed that are required to be reported in accordance with Circular A-133 Section 510(a) Yes x No ' Identification of major programs CFDA Number(s) Name of Federal Program or Cluster 14.857 Department of Housing and Urban Development -Housing Assistance 14.855 Department of Housing and Urban Development ' -Housing Assistance 14.871 Department of Housing and Urban Development- Section 8 Housing Choice Vouchers. 14.239 Department of Housing and Urban Development -Home Investment Partnership Program Dollar threshold used to distinguish ' between Type A and Type B programs: $300.000 Auditee qualified as low-risk auditee x Yes No 12 Deans•Archer& Co. ' NORTH FORK HOUSING ALLIANCE, INC. SCHEDULE OF FINDINGS AND QUESTIONED COSTS ' FOR THE YEAR ENDED DECEMBER 31, 2001 B. FINDINGS-FINANCIAL STATEMENTS AUDIT None reported. ' C. FINDINGS AND Q IN S UESTIONED COSTS- MAJOR FEDERAL ' AWARD PROGRAMS AUDIT Questioned ' Cost None reported. 1 1 ' 13 Deans•Archer& Co. 1 ' NORTH FORK HOUSING ALLIANCE, INC. ' FOR THE YEAR ENDED DECEMBER 31, 2001 PART III ' PRIOR AUDIT REPORT AND EXIT CONFERENCE ' Deans•Archer& Co. NORTH FORK HOUSING ALLIANCE INC. ' SINGLE AUDIT FOR THE YEAR ENDED DECEMBER 31, 2001 RESOLUTION OF PRIOR YEAR COMMENTS ' PRIOR YEAR FINDINGS ' Condition 00-1 Bridgehampton 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 Alliance, Inc's transaction with the Bank can have a significant effect on the Organization, if the Bank were to experience significant financial problems. ' Follow-un This condition is substantially the same. ' 15 1 Deans•Archer& Co. NORTH FORK HOUSING ALLIANCE INC. SINGLE AUDIT FOR THE YEAR ENDED DECEMBER 31, 2001 EXIT CONFERENCE ' EXIT CONFERENCE The audit findings and recommendations were discussed with Tanya Palmore, Executive Director. ' 16 ' Deans•Archer& Co.