HOUSING AUTHORITY OF THE CITY OF BENTON BENTON, ARKANSAS

Transcription

1 ' ' l ' l c l ' i HOUSING AUTHORITY OF THE CITY OF BENTON BENTON, ARKANSAS ' 1 INDEPENDENT AUDITORS' REPORT For the Twelve Months Ended March 31, 2011 ' ' c ' ' ' ' BENTON Certified Public Accountant 101 South Main Street, Suite 3 P. 0. Box521 Cassville, MO _......_... (417) Fax (417) bentoncpa@centurytel.net ' J, I, I, I, I

2 HOUSING AUTHORITY OF THE CITY OF BENTON BENTON, ARKANSAS TABLE OF CONTENTS PAGE INDEPENDENT AUDITOR'S REPORT... I - 2 MANAGEMENT'S DISCUSSION AND ANALYSIS... i - viii BASIC FINANCIAL STATEMENTS: Statement ofnet Assets... 3 Statement of Revenues, Expenses and Changes in Net Assets....4 Statement of Cash Flows... 5 NOTES TO FINANCIAL STATEMENTS: Notes to Financial Statements..., SUPPLEMENTAL DATA Combining Statement of Net Assets Combining Statement of Revenues, Expenses and Changes in Net Assets... l7 Combining Statement of Cash Flows Statements of Certification of Aetna! Modernization Costs FEDERAL FINANCIAL AWARDS Report on Compliance and on Internal Control over Financial Reporting Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards... ; Report on Compliance with Requirements Applicable to Each Major Program and Internal Control over Compliance in Accordance with Circular A Supplementary Schedule of Revenues and Expenditnres-Federal Awards Schedule of Findings and Questioned Costs Schedule of Prior Year Findings Corrective Action Plan FINANCIAL DATA SCHEDULE Financial Data Schedule

3 Scott Benton, CPA BENTON CPA Certified Public Accountant 101 South Main Street, Suite 3 P. 0. Box 521 Cassville, MO bentoncpa@centurytel.net Independent Auditor's Report Phone (417) Fax (417) Board of Commissioners Housing Authority of the City of Benton Benton, Arkansas Dear Members of the Board: We have audited the accompanying basic fmancial statements of the Housing Authority of the City of Benton, Arkansas, (Authority) as of and for the year ended March 31,2011, as listed in the table of contents. These financial statements are the responsibility of the Authority'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 a reasonable assurance about whether the basic financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the basic fmancial 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 opinions. In our opinion, the fmancial statements referred to above present fairly, in all material respects, the fmancial position of the Housing Authority of the City of Benton, Arkansas, as of March 31, 2011, and the changes in its fmancial position and its cash flows, thereof, for the year then ended in conformity with accounting principles generally accepted in the United States of America. In accordance with Government Auditing Standards, we have also issued our report dated December 20, 2011 on our consideration of the Authority's internal control over fmancial reporting and on our tests of its compliance with certain provisions oflaws, regulations, contracts and grants. The purpose of that report is to describe the scope of our testing of internal control over fmancial reporting and compliance and the results of that testing, and notto provide an opinion on the internal control over fmancial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be considered is assessing the results of our audit. The management's discussion and analysis, listed in the table of contents, are not a required part of the basic financial statements but are supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquires of management regarding the methods of measurement and presentation of the required supplementary information. However, we did not audit the information and express no opinion on it. -1- (it14 The CPA. Never Underestimate The Value~

4 Benton Certthed Pubhc Accountant Our audit was made for the purpose of forming opinions on the fmancial statements that collectively comprise the Housing Authority of the City ofbenton, Arkansas's basic financial statements. The accompanying information listed in the table of contents under the heading SUPPLEMENTARY DATA and the accompanying Financial Data Schedule as required by the Department of Housing and Urban Development, are supplementary information that is presented for purposes for additional analysis and are not a required part of the basic financial statements. 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 ofstates, Local Governments, and Non-Profit Organizations, and is also not a required part of the basic fmancial statements of the Housing Authority of the City of Benton. Such information has been subjected to the auditing procedures applied in the audit of the basic fmancial statements and, in our opinion, is fairly stated, in all material respects, in relation to the basic fmancial statements taken as a whole. Benton, CPA December 20, 20 II -2-

5 MANAGEMENT DISCUSSION AND ANALYSIS An objective and easily readable analysis of the Authority's financial activities. The Management Discussion and Analysis presents an analytical overview ofboth short-term and long-term financial information.

6 Housing Authority of the City of Benton, Arkansas Management's Discussion and Analysis (MD & A) March31,2011 Management's Discussion and Analysis (MD&A) is an element of the reporting model adopted by the Governmental Accounting Standards Board (GASB) in their Statement No. 34 Basic Financial Statements - and Management's Discussion and Analysis -for State and Local Governments issued June Our discussion and analysis of the financial performance for the Housing Authority provides an overview of the financial activities for the fiscal year ended March 31, Please read the MD&A in conjunction with the Housing Authority's financial statements. Financial Highlights Assets: As of March 31,2011, total assets were $5,426,020 as compared to $5,478,732, as of March 31, 2010, a decrease of $52,712. Current assets increased $74,249 while capital assets decreased $126,961. Liabilities: Total liabilities decreased $62,958 from $1,016,538 in 2010 to $953,580 in Current liabilities decreased $41,158 and non-current liabilities decreased $21,800. Revenues: In 2011, total revenue increased $79,035, as compared to 2010, due to increases in Federal Grants and Subsidy revenues, other income, and gains on the sale of fixed assets. Expenses: Total expenses increased $269,137 from $4,119,814 in 2010 to $4,388,951 in 2011 due mainly to increases in Housing Assistance Payments (HAP), administrative, interest, routine maintenance, and depreciation expenses. For accounting purposes, the Housing Authority is classified as an enterprise fund. Enterprise funds account for activities similar to those found in the private business sector where the determination of net income is necessary or useful to sound financial administration. Enterprise funds are reported using the full accrual method of accounting in which all assets and all liabilities associated with the operation of these funds are included on the balance sheet. The focus of enterprise funds is on income measurement which, together with the maintenance of equity, is an important financial indicator. Overview of the Financial Statements This annual report includes this Management Discussion and Analysis report, the Basic Financial Statements, and the Notes to the Financial Statements. This annual report also contains the Financial Data Schedule (FDS) as referenced in the section of Supplemental Information Required by HUD. The financial statements are presented as fund level financial statements because the Housing Authority only has proprietary funds. i

7 Housing Authority of the City of Benton, Arkansas Management's Discussion and Analysis (MD & A) March31, 2011 The financial statements report information using accounting methods similar to those used by private sector companies. These statements offer short-term and long-term financial information about the Housing Authority's activities. The Statement of Net Assets includes all assets and liabilities and provides information about the nature and amounts of investments in resources (assets) and obligations to the creditors (liabilities). It also provides the basis for evaluating the capital structure and assessing the Housing Authority's liquidity and financial flexibility. All of the current year's revenues and expenses are accounted for in the Statement of Changes in Net Assets. This statement measures the success of operations over the past year and can be used to determine whether the Housing Authority has successfully recovered all its costs through its user fees and other charges, profitability, and credit worthiness. The Statement of Cash Flows reports cash receipts, cash payments, and net changes in cash resulting from operating, investing, and financing activities and provides answers to such questions as where did cash come from, what was cash used for, and what was the change in the cash balance during the reporting period. The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the basic financial statements. The section Supplemental Information Required by HUD contains the Financial Data Schedule (FDS). HUD has established Uniform Financial Reporting Standards that require the Housing Authority to submit financial information electronically to HUD using the FDS format. Financial Analysis One of the most important questions asked about the Authority's finances: "Is the Housing Authority as a whole better off, or worse off, as a result of the achievements of the reported fiscal year?" The information presented in this Management's Discussion and Analysis is to assist the reader in answering this question. The Housing Authority's basic financial statements are the Statement of Net Assets and the Statement of Changes in Net Assets. The Statement of Net Assets provides a summary of assets and liabilities as of the close of business on March 31, The Statement of Changes in Net Assets summarizes the revenues and sources of those revenues generated and the expenses incurred in operations for the year ended March 31, The Benton Housing Authority has a low rent program that provides housing for qualified tenants, a capital fund program that the Housing Authority uses for improvements to its low rent property, a Section 8 Housing Choice Voucher program that provides rental assistance to qualified individuals living in private housing, a Supportive Housing program that provides rental assistance for the disabled, a Disaster Housing Voucher program along with a Disaster Housing Assistance Program (DHAP) that assists those with housing needs from federally designated disaster areas, and an Affordable Housing program (designated as "component units" per the Authority's Financial Data Schedule) that builds, buys, and/or rehabilitates affordable housing for rent or homeownership specifically for low-income families or individuals. The ii

8 Housing Authority of the City of Benton, Arkansas Management's Discussion and Analysis (MD & A) March 31, 2011 following analysis focuses on the net assets and the change in net assets as a whole and not the individual programs. Net Assets March31, %of Change Change Current Assets $2,036,180 $1,961,931 $74, % Capital Assets, Net $3,389,840 $3,516,801 ($126,961) -3.61% Total Assets $5,426,020 $5,478,732 ($52,712) '0.96% Current Liabilities $567,737 $608,895 ($41,158) 6.76% Non-Current Liabilities $385,843 $407,643 {$21;800) -5.35% Total Liabilities $953,580 $1,016,538 ($62,958) -6.19% Net Assets: Invested in Capital Assets $3,003,988 $3,116,354 ($112,366) -3.61% Restricted Assets $671,494 $563,900 $107, % Unrestricted Assets $796,958 $781,940 $15, % Total Net Assets $4,472,440 $4,462,194 $10, % Capital Assets at Year-End (Net of Accumulated Depreciation) March31, %of Change Change Land $351,005 $365,342 ($14,337) -3.92% Buildings $4,265,988 $4,284,449 ($18,461) -0.43% Furniture & Equipment - Dwell $18,329 $14,458 $3, % Furniture & Equipment - Admin $214,653 $207,033 $7, % Leasehold Improvements $690,455 $701,244 ($10,789) -1.54% Construction in Progress $354,738 $350,192 $4, % Subtotal $5,895,168 $5,922,718 ($27,550) 0.47% Accumulated Depreciation {$2,505,328) {$2,405,917) {$99,411) 4.13% Net Capital Assets $3,389,840 $3,516,801 {$126,961) -3.61% iii

9 Housing Authority of the City of Benton, Arkansas Management's Discussion and Analysis (MD & A) March 31, 2011 Assets: Current assets are resources that are reasonably expected, based on the plans and intentions of the Authority, to be converted into cash or its equivalent during the cnrrent operating cycle. As of March 31, 2011, cnrrent assets were $2,036,180 as compared to $1,961,931, as of March 31, 2010, an increase of $74,249. Cnrrent assets' increase was due mainly to positive cash flow (revenues exceeding expenses, net of depreciation expense). Positive cash flow allowed the Authority to reduce liabilities with remaining resources available for future use. The change in current assets consisted of increases in assets held for sale (related to the Affordable Housing program) of$110,797, investments of$67,549, and prepaid expenses of$1,499 with decreases in cash/cash equivalents of$96,373, accounts receivables of$5,309, and inventories of$3,914. Capital assets are long-term tangible assets obtained as a result of past transactions, events, or circumstances and include buildings, equipment, and improvements to buildings and land. Capital assets decreased $126,961 from $3,516,801 in 2010 to $3,389,840 in 2011 due mainly to annual depreciation expenses. At fiscal year-end 2011, decreases occurred in land of $14,337, buildings of $18,461, and leasehold (site) improvements of $10,789 due to the sale of property. Dwelling equipment increased $3,871 due to purchases of five refrigerators and four ranges. Administrative equipment increased $7,620 due mainly to adjustments in maintenance and community room inventory. Construction in progress increased $4,546. The Housing Authority had $140,634 from their 2009 and 2010 Capital Grant revenues to draw down and spend in the future. Liabilities: Current liabilities are current debts that are owed by the Authority and due within 12 months. It is expected that cnrrent liabilities will consume cnrrent financial resources to satisfy debt. As of March 31,2011, cnrrent liabilities were $567,737 as compared to $608,895, as of March 31, 2010, a decrease of $41,158. The change in cnrrent liabilities consisted of decreases in deferred revenues (related to the Supportive Housing program) of $155,819 and vendor payables (operating expenses associated with the Affordable Home program) of $32,659 with increases in current loan liability (notes payables associated with the component units program) of $110,436, accrued compensated absences of $12,565, payment in lieu of taxes (PILOT) of $12,448, other cnrrent liabilities (primarily accrued utility payables) of$6,299, payroll taxes payables of$3,665, tenant security deposits of $1,200, and the current portion of long-term debt of $707. Non-current liabilities are debts that are owed but not due within 12 months. It is not expected that these liabilities will consume the Authority's current financial resources to satisfy the debt. Non-cnrrent liabilities decreased $21,800 from $407,643 in 2010 to $385,843 in The change in non-cnrrent liabilities consisted of decreases in long-term debt of $15,302 and non IV

10 Housing Authority of the City of Benton, Arkansas Management's Discussion and Analysis (MD & A) March 31, 2011 current accrued compensated absences of $6,498. Non-current accrued compensated absences are liabilities for wages such as vacation and sick wages earned but not yet taken. Net Assets: As of March 31,2011, the Housing Authority had $4,472,440 invested in total net assets. Of this amount, $796,958 of unrestricted assets may be used to meet the Authority's future ongoing expenses and obligations. Restricted assets of $671,494 were available for Section 8 Housing Assistance Payments (HAP). The remainder of $3,003,988 represents the net capital assets of land, buildings, furnishings, leasehold improvements, equipment, and construction in progress. Debt: Benton Housing Authority's long-term debt consisted of $385,852 in Fannie Mae loans associated with the new community center building. The current portion of long-term loans was $15,420 reported as a current liability. The non-current portion oflong-term loans was $370,432 reported as a non-current liability. Expendable Fund Balance %of Change Change Expendable Fund Balance $340,763 $439,126 ($98,363) % Number of Months Expendable Fuud (1.40} % Expendable Fund Balance: The expendable fund balance is a measure ofthe Authority's liquidity. If all current assets, less materials inventory and restricted assets, are converted to cash and the Authority pays all current liabilities, the amount of cash remaining is the expendable fund balance. Benton Housing Authority's expendable fund balance decreased $98,363 due to restricted asset activities (figures based on 2011 unaudited and 2010 audited FDS information). Number of Months Expendable Fund Balance: The number of months in expendable funds is a measure of how many months the Authority could operate under current conditions without any additional income. The number of months in expendable funds is calculated by dividing the total expenses for the year, less depreciation, by v

11 Housing Authority of the City of Benton, Arkansas Management's Discussion and Analysis (MD & A) March 31, 2011 twelve (12) to arrive at the average monthly expenses. The expendable fund balance is divided by the average monthly expense to arrive at the number of months expendable fund balance. The Authority's number of months expendable fund balance decreased 1.40 months due to decreases in the expendable fund balance (figures based on 2011 unaudited and 2010 audited FDS information). Changes in Net Assets For the Year Ended March 31 %of Change Change Revenue: Tenant Revenue $170,651 $180,578 ($9,927) -5.50% Federal Grants & Subsidy $4,107,438 $4,066,908 $40, % Investment Income $25,303 $31,712 ($6,409) % Other Income $38,795 $13,279 $25, % Gain/Loss on Sale of Fixed Assets $57,314 $27,989 $29, % Total Revenue $4,399,501 $4,320,466 $79, % Expenses: Administrative $663,136 $616,897 $46, % Tenant Services $1,008 $986 $ % Utilities $43,851 $38,697 $5, % Routine Maintenance $279,299 $268,101 $11, % General Expenses $48,829 $57,386 ($8,557) % Interest Expenses $18,550 $2,010 $16, % Non-Routine Expenses $4,095 $16,413 ($12,318) % Housing Assistance Payments $3,188,238 $2,988,850 $199, % Depreciation $141,945 $130,474 $11, % Total Operating Expenses $4,388,951 $4,ll9,814 $269, % Increase (Decrease) in Net Assets $10,550 $200,652 ($190,102) % Revenues: The Authority has two basic sources of revenues, rents and other tenant charges plus funds received from the Department of Housing and Urban Development (HUD) in the form of operating subsidies and capital improvement grants. Tenant revenue decreased $9,927 due to decreases in tenant rent revenue of $10,300 and increases in other tenant revenue of $3 73. HUD revenue will often vary from year to year since it is dependent on the federal budget (operating subsidy) and availability and/or use of grant revenues. In 2011, Benton Housing Authority's operating grant, Housing Assistance Payments, and Administrative Fees increased $182,867, Capital Grant revenue decreased $139,362, and other government grants (associated with DHAP) decreased $2,975 that resulted in a net increase of $40,530. vi

12 Housing Authority of the City of Benton, Arkansas Management's Discussion and Analysis (MD & A) March 31, 2011 Investment income decreased $6,409 from $31,712 in 2010 to $25,303 in2011. The change in investment income is generally governed by the amount of monies invested and the rates of returns on those investments. Other income increased $25,516 from $13,279 in 2010 to $38,795 in 2011 due mainly to insurance dividends received in In 2011, the Authority reported $57,314 in gains on the sale of fixed assets as compared to $27,989 in gains in Expenses: Administrative expenses increased $46,239 due to increases in administrative salaries of $18,888, employee benefits of $9,983, audit fees of $4,510 (primarily because the Authority changed audit firms with higher fees), and administrative operating expenses of$12,858. Tenant services expenses increased $22 which had minimal effects on Benton Housing Authority's 2011 financial statements. Utilities increased $5,154 from $38,697 in 2010 to $43,851 in 2011 due to increases in electricity of $2,204, sewer of $1,883, water of $1,019, and natural gas of $48. Utilities increase and/or decrease due mainly to rate changes, changes in consumption, and/or unseasonal weather. Routine maintenance expenses increased $11,198 due to increases in labor, employee benefits, and material expenses. General expenses decreased $8,557 from $57,386 in 2010 to $48,829 in Other general expenses (DHAP ongoing admin fee reductions) decreased $8,379, tenant bad-debt expenses decreased $1,795, and payment in lieu of taxes decreased $1,464 while insurance expenses increased $3,081. Interest expenses increased $16,540 from $2,010 in 2010 to $18,550 in In 2010, the construction of a community building was completed and interest was capitalized during the construction period whereas, in 2011, principal and interest was applied against the outstanding balance on the Fannie Mae loan associated with the community center. Non-routine expenses decreased $12,318 from $16,413 in 2010 to $4,095 in In 2010, the Authority replaced heating/air-conditioning units whereas, in 2011, some repairs were made to a home which was sold during the year. Depreciation expenses increased $11,471 from $130,474 in 2010 to $141,945 in Changes in depreciation expense will be dependent upon additions, disposals, and assets that have been fully depreciated. Vll

13 Housing Authority of the City of Benton, Arkansas Management's Discussion and Analysis (MD & A) March 31, 2011 Economic Factors The Housing Authority is primarily dependent upon HUD for the funding of operations. The Housing Authority is affected by both federal budgetary decisions and by local economic conditions. The funding of programs could be significantly affected by the 2010 and 2011 federal budget. Contacting the Housing Authority's Financial Management Our financial report is designed to provide our citizens, taxpayers, and creditors with a general overview of the Housing Authority's finances and to show accountability for the money it receives. If you have questions about this report or wish to request additional financial information contact Steve Eichhorn, Executive Director, Housing Authority of the City of Benton, 1200 W. Pine St., Benton, AR, 72015, telephone number (501) Vlll

14 BASIC FINANCIAL STATEMENTS

15 HOUSING AUTHORITY OF THE CITY OF BENTON BENTON. ARKANSAS STATEMENT OF NET ASSETS MARCH 31, 2011 Primary Component Elimination Government Unit ASSETS Current Assets: Cash unrestricted $ 531,154 $ 10,506 Cash restricted 514,337 Total receivables, net of allowances for uncollectibles 71,541 Investments - unrestricted 231,301 Investments - restricted 168,482 Prepaid expenses 37,253 Inventories 14,569 Assets held for sale 457,037 Due from other entities 62,760 (62,760) Total current assets 1,631, ,543 (62,760) Non-current Assets: Capital assets Land and construction in progress 705,743 Buildings and equipment net of depreciation 2,684,097 Total capital assets 3,389,840 TOTAL ASSETS $ 5,021,237 $ 467,543 $ (62,760) Total $ 541, ,337 71, , ,482 37,253 14, ,037 2,036, ,743 2,684,097 3,389,840 $ 5,426,020 LIABILITIES AND NET ASSETS Current liabilities: Accounts payable $ 13,953 $ 101 $ Accrued wage/payroll taxes payable 5, Accrued compensated absences 14, Accounts payable other gov. 26,360 Tenant security deposits ll,325 Deferred revenues 31,719 14,742 CFFP 15,420 Accrued liabilities - other 8,498 Loan liability current 425,000 Due to other entities 62,760 (62,760) Total current liabilities 127, ,210 (62,760) Noncurrent liabilities: CFFP 370,432 Accrued compensated absences - non current 14, Total noncurrent liabilities 385, TOTAL LIABILITIES 512, ,732 (62,760) NET ASSETS Invested in capital assets, net of related debt 3,003,988 Restricted net assets 671,494 Unrestricted net assets 833,147 (36,189) TOTAL NET ASSETS $ 4,508,629 $ (36,189) $ $ 14,054 5,619 15,000 26,360 11,325 46,461 15,420 8, , , ,432 l5,4ll 385, ,580 3,003, , ,958 $ 4,472,440 The accompanying Notes to Financial Statements are an integral part of this statement. -3-

16 HOUSING AUTHORITY OF THE CITY OF BENTON BENTON. ARKANSAS STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS FOR THE TWELVE MONTHS ENDED MARCH 31,2011 Primary Component Government Unit REVENUE Dwelling rental $ 167,514 $ Tenant revenue- other 3,137 Other revenue 31,693 1,000 Fraud recovery 6,102 HUD PHA operating grants 4,005,365 TOTAL OPERATING REVENUE 4,213,811 1,000 Total $ 167,514 3,137 32,693 6,102 4,005,365 4,214,811 OPERATING EXPENSES Administrative expense 634,605 28,531 Tenant services 1,008 Utilities 43,851 Ordinary maintenance 245,645 33,654 Protective services Insurance 35,014 Other general expenses 13,815 Nonroutine maintenance 4,095 Housing assistance payments 3,188,238 Depreciation expense 141,945 TOTAL OPERATING EXPENSES 4,308,216 62,185 OPERATING INCOME (LOSS) (94,405) (61,185) NONOPERATING (CHARGES) AND CREDITS: Operating transfers (61,314) 61,314 Investment income 9,431 Investment income - restricted 15,872 Gain/(loss) sale of fixed assets 57,314 Interest expense and amortization cost (18,550) TOTAL NONOPERATING (CHARGES) CREDITS 2,753 61,314 CONTRIBUTED CAPITAL lilld PHA capital grants 102,073 TOTAL CONTRIBUTED CAPITAL 102, ,136 1,008 43, ,299 35,014 13,815 4,095 3,188, ,945 4,370,401 (155,590) 9,431 15,872 57,314 (18,550) 64, , ,073 CHANGE IN NET ASSETS 10, NET ASSETS Beginning net assets 4,498,312 (36,118) Prior period adjustments, equity transfers and correction of errors (104) (200) NET ASSETS -BEGINNING OF YEAR 4,498,208 (36,318) NET ASSETS -END OF YEAR $ 4,508,629 $ (36,189) 10,550 4,462,194 (304) 4,461,890 4,472,440 The accompanying Notes to Financial Statements are an integral part of this statement. -4-

17 HOUSING AUTHORITY OF THE CITY OF BENTON BENTON, ARKANSAS STATEMENT OF CASH FLOWS FOR THE TWELVE MONTHS ENDED MARCH 31, 2011 Primary Government CASH FLOWS FROM OPERATING ACTIVITIES: Cash received from tenants $ 173,754 Cash received from HUD operating grants 3,994,887 Cash received from other income 35,095 Cash received from fraud recoverv 6,102 Cash payments for goods and services (2,526,986) Cash payments to emplovees salaries (1,284,172) Cash payments from employee benefit contributions (489,360) NET CASH PROVIDED BY OPERATING ACTIVITIES (90,680) CASH FLOWS FROM NONCAPIT AL ACTIVITIES Receipts (payments) from operating transfers (61,314) Cash receipts (payments) from interpogram due to/due from (11,197) NET CASH PROVIDED FROM NONCAPITAL ACTIVITIES (725ll) Component Unit Total $ $ 173,754 3,994,887 9,612 44,707 6,102 (47,274) (22,673) (4,878) (65,213) 61,314 ll,l CASH FLOWS FROM INVESTING ACTIVITIES Receipts of interest and dividends 27,714 Interest and dividends reinvested back into investments Investments transfer (236,031) Cash received (payments) from security deposit 1200 NET CASH PROVIDED FROM INVESTING ACTIVITIES (207,ll7) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Cash receipts from sale of assets 130,064 Cash receipts from capital debt Cash receipts from HUD capital transactions 102,073 Cash payments for capital assets (102,073) Cash payments for principal on capital debt (14,595) Cash payments for interest on capital debt (18 550) NET CASH PROVIDED FROM CAPITAL AND RELATED FINANCING ACTIVITIES NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (273,389) CASH AND CASH EOUIV ALENTS BEGINNING OF YEAR l CASH AND CASH EQUIVALENTS END OF YEAR S I Q4~421 RECONCILIATION OF CASH TO CASH ON STATEMENT OF NET ASSETS Cash-unrestricted $ 531,154 Cash- restricted Total cash and cash eqmvalents, end of year S I Q ,714 (236,031) ljoo (207,1l7) 130,064 95,694 95, ,073 (94.458) (196,531) (14,595) (18,550) ,534 (264,855) 1972 l ~ 10 ;o~ $ I Q~~ 221 $ 10,506 $ 541, $ IQ 506 $ 1 o5s 221 RECONCILIATION OF OPERATING INCOME (LOSS) TO NET CASH PROVIDED BY OPERATING ACTIVITIES Operating income (loss) $ (94,405) Adjustments to reconcile net income to net casb casb provided by operating activities: Depreciation 141,945 Allowance for doubtful accounts (1,741) Prior year adjusbnents affecting casb (2,104) (Increase) Decrease in: Accounts receivable- HUD other projects (10,478) Accounts receivable- other governments Accounts receivable - miscellaneous 3,402 Accounts receivable - tenants 3,103 Prepaid expenses (1,499) Inventories 3,914 Increase (Decrease) in: Accounts payable (5,703) Accrued wages/payroll taxes payable 3,862 Accrued compensated absences 6,096 Accounts payable - other governments 12,448 Deferred revenues (155,819) Accrued liabilities - other 6,299 Net cash provided by (used for) operating activities $ (90,680) $ (61,185) $ (155,590) 141,945 (1,741) (200) (2,304) (10,478) 8,588 8, ,426 3,103 (1,499) 3,914 (26,956) (32,659) (197) 3,665 (29) 6,067 12,448 14,742 (141,077) 6,299 $ ~65,213~ $ (155,893) The accompanying notes to financial statements are an integral part of this statement. -5

18 NOTES TO FINANCIAL STATEMENTS

19 HOUSING AUTHORITY OF THE CITY OF BENTON NOTES TO FINANCIAL STATEMENTS MARCH 31, 2011 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Reporting Entity Under the United States Housing Act ofl93 7, as amended, the U.S. Department ofhousing and Urban Development (HUD) has direct responsibility for administering low-income housing programs in the United States. Accordingly, HUD has entered into a contract with the Housing Authority of the City of Benton {Authority) to make annual contributions (subsidies) for the purpose of funding its programs for low-income families. The governing board is appointed by the Mayor of the City of Benton. The governing board employs executives; authorizes contracts of subsidy with the U.S. Department ofhousing and Urban Development (Annual Contributions Contract) pursuant to that agency's regulations and statutory authorizations; and causes the agency to construct, own, and operate public housing facilities. The Housing Authority complies with generally accepted accounting principles (GAAP). GAAP includes all relevant Governmental Accounting Standards Board (GASB) pronouncements. The financial statements for the proprietary fund, Financial Accounting Standards Board (F ASB) pronouncements and Accounting Principles Board {APB) opinions issued on or before November 30, 1989, have been applied unless those pronouncements conflict with or contradict GASB pronouncements, in which case, GASB prevails. For enterprise funds, GASB Statement Nos. 20 and 34 provide the Housing Authority the option of electing to apply FASB pronouncements issued after November 30, 1989, except for those that conflict with or contradict a GASB pronouncement. The Housing Authority has elected not to apply those pronouncements. The accounting and reporting framework and the more significant accounting policies are discussed in subsequent subsections of this Note. In June 1999, the Governmental Auditing Standards Board (GASB) issued Statement No. 34, Basic Financial Statementsand Management's Discussion and Analysis-for State and Local Governments. The Authority has adopted this Statement for fiscal year ended March 31, 20 II, and all aspects included herein. In addition, in June 200 I, the GASB issued Statement No. 37, Basic Financial Statements- and Management's Discussion and Analysis-for State and Local Governments: Omnibus - an amendment of GASB Statements No. 21 and No. 34 and Statement No. 38, Certain Financial Note Disclosures. These two statements clarily, modify, establish, and rescind certain disclosure requirements under GASB Statement No. 34. Both statements are being implemented in conjunction with GASB Statement No. 34. These statements do not have a significant impact on the results of operations or fmancial position ofthe Agency. The Housing Authority administers an annual contributions contract to provide low-income housing with significant financial support from the U.S. Department of Housing and Urban Development (HUD). Contracts administered by the Housing Authority are as follow: Projects Administered by the Authority Public Housing - The Housing Authority owns, operates and maintains units of Public Housing. The properties were acquired through bonds and notes guaranteed by HUD and through grants, subject to the terms of an Annual Contributions Contract with HUD. Revenues consist primarily of rents and other fees collected from tenants, and an Operating Subsidy from HUD. The Housing Authority considers this a major program. Capital Funds Program - Funds from the Capital Fund Program provided by HUD are used to maintain and improve the Housing Authority. Substantially all additions to land, structures and equipment of the Housing Authority are accomplished through these capital fund grants. The Housing Authority considers this a major program. Programs Administered by the Authority Housing Choice Vouchers- The Housing Authority administers vouchers to low-income individuals and families. These vouchers are used by recipients to rent appropriate privately owned housing. Revenues consist primarily of Housing Assistance Payments paid to landlords and administrative fees earned by the Authority, Housing Assistance Payments and administrative fees are from HUD. The Housing Authority considers this a major program. Disaster Housing Program - Provides housing assistance in the form of a grant to individuals whose homes sustained damage as a result of a Presidentially-declared disaster. This program provides grants for lodging expense reimbursement, minimal home repairs and rental assistance. A determination of the type(s) of housing assistance one may be eligible to receive is made upon application. -6-

20 HOUSING AUTHORITY OF THE CITY OF BENTON NOTES TO FINANCIAL STATEMENTS MARCH 31, 2011 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) Capital Fund Stimulus Program - The Capital Fund Stimulus program is part of the American Recovery and Reinvestment Act of2009 (ARRA or Recovery Act) and was enacted in February 2009 in response to severe economic conditions affecting our nation. These ARRA funds are integral to HUD's investment in sustaining affordable and safe housing, creating jobs, revitalizing and stabilizing neighborhoods and stimulating economic development. Supportive Housing for Persons with Disabilities -Provides funding to for very low-income adults with disabilities to live as independently as possible in the community by increasing the supply of rental housing with the availability of supportive services. The program also provides project rental assistance, which covers the difference between the HUnapproved operating costs of the project and the tenants' contribution toward rent. The program is similar to Supportive Housing for the Elderly (Section 202) and provides rent subsidies for the projects to increase affordability. FINANCIAL REPORTING - I. Financial Reporting Entitv - The Housing Authority's fmancial reporting entities comprise the following: Primary Government: Housing Authority of the City of Benton Component Unit: Mid-State Affordable Housing In determining the funmcial reporting entity, the Housing Authority complies with the provisions ofgasb Statement No. 14, as amended by GASB No. 39, "The Financial Reporting Entity," and includes all component units, if any. As required by General Accepted Accounting Principles (GAAP) this comprehensive annual fmancial report presents the government-wide financial statements for the Housing Authority. Consideration of the fmancial reporting entity and potential component units was evaluated in accordance with Government Accounting Standards Board (GASB) Statement No. 39 -Determining Whether Certain Organizations are Component Units. Under provisions of this Statement, the Housing Authority is considered a primary government, since it is a special purpose government that has a separately appointed board. It is legally separate and is fiscally independent of the other state or local governments. As used in GASB Statement No. 39, fiscally independent means the Authority may, without the approval or consent of another governmental entity, determine or modizy its own budget, set rates or charges, and issue debt The financial reporting was evaluated in accordance with GASB Statement No. 39. Accordingly this report includes all funds and account groups directly under the control ofthe Authority. There is one component unit discretely presented in the Authority's fmaucial statements as follows: Discretely Presented Component Unit- Mid-State Affordable Housing Corporation There is one component unit to be included in these fmancial statements, the Mid-State Affordable Housing Corporation, which consist of a non-profit community housing development organization, au affiliate of the Authority. The two agencies share a common management, employees, office space, as well as some common board members. There are no separately issued fmaucial statements for the Mid-State Affordable Housing Corporation. 2. Basis of Accounting- The Housing Authority's fmancial statements are presented on the full accrual basis in accordance with accounting principles generally accepted in the United States of America. Financial statements of the reporting entity's programs are organized and reported as au enterprise fund and are accounted for by providing a set of self-balancing accounts that constitute its assets, liabilities, fund equity, revenues, and expenditure/expenses. Enterprise funds are used to account for business like activities provided to its tenants. These activities are financed primarily by user charges and/or Federal funding and the measurement of financial activity focuses on net income measurement similar to the private sector. The reporting entity includes all of the Authority's programs as an enterprise fund. -7-

21 HOUSING AUTHORITY OF THE CITY OF BENTON NOTES TO FINANCIAL STATEMENTS MARCH 31,2011 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) 3. Measurement Focus and Basis of Accounting - Measurement focus is a term used to describe "which" transactions are recorded within the various fmancial statements. Basis of accounting refers to ''when" transactions are recorded regardless of the measurement focus applied. The proprietary fund utilizes an "economic resources" measurement focus. The accounting objectives of this measurement focus are the determination of operating income, changes in net assets (or cost recovery), financial position, and cash flows. All assets and liabilities (whether current or non-current) associated with their activities are reported. Proprietary fund equity is classified as net assets. 4. Cash and Investments - For the purpose of the Statement of Net Assets, "cash and cash equivalents" includes all demand, savings accounts, and certificates of deposits or short-term investments with an original maturity of three months or less. For the purpose of the Statement of Cash Flows, "cash and cash equivalents" include all demand and savings accounts, and certificates of deposit or short-term investments with an original maturity of three months or less. Investments are carried at fair value except for short-term U.S. Treasury obligations, if any, with a remaining maturity at the time of purchase of one year or less. Those investments, if any, are reported at amortized cost. Fair value is based on quoted market price. Investments of the Authority are limited by state law to the following: a. Direct obligations of the U.S. Goverrnnent or its agencies or instrumentalities to which acceptable collateral is pledged. b. Certificates of deposit or savings accounts that are either insured or are secured with acceptable collateral. 5. Prepaid Expenses - Certain payments to vendors reflect costs applicable to future periods. These payments are recorded as prepaid expenses. 6. Inter-program Receivables and Payables - During the course of operations, numerous transactions occur within individual programs that may result in amounts owed between these programs. Offsetting inter-programs are eliminated for financial statement presentation. 7. Operating and Non-operating Revenues and Expenses. - Operating revenues and expenses reported in enterprise funds in the financial statements are those fees charged to tenants for services ofbusiness-type activities such as rent and operating grants that are not restricted to capital grants. Non-operating revenues consist of other income such as interest and capital grants that are restricted to capital improvements. 8. Accounts Receivable-Allowance for Doubtful Accounts- Accounts receivable consist of all revenues earned at yearend and not yet received. Tenant accounts receivable and accounts receivable for United States Department ofhousing and Urban Development compose a majority of accounts receivable. Allowances for uncollectible are based on historical trends and the periodic aging of accounts receivable. Accounts receivable are stated at their gross value, where appropriate, are reduced by the estimated portion that is expected to be uncollectible as an allowance for doubtful accounts. 9. Inventories- Inventory consists of expendable supplies held for consumption stated on a first-in, frrst-out basis. They are reported at cost which is recorded as an expenditure at the time individual inventory items are used. Inventories are recorded at the lower of cost or market on a frrst-in, first-out basis. 10. Allowance for Obsolete Inventory -Allowance for obsolete inventory represents the estimate of the amount of materials in inventory that may be unusable or obsolete by the time the item is scheduled to be used under the consumption method. Since inventory is expensed as used, rather than when purchased, this line reduces the inventory balance for items no longer valuable in the inventory. -8-

22 HOUSING AUTHORITY OF THE CITY OF BENTON NOTES TO FINANCIAL STATEMENTS MARCH 31, 2011 NOTE 1- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) II. Fixed Assets - Capital assets purchased or acquired with an original cost of $500 or more and have a useful life of more than one year are accounted for as capital assets. All capital assets are valued at historical cost, or estimated historical cost if actual is unavailable, except for donated capital assets which are recorded at their estimated fair value at the date of donation. Depreciation of all exhaustible capital assets is recorded as an allocated expense depending on the program where the asset is shown, in the Statement of Revenues, Expenses and Changes in Net Assets, with accumulated depreciation reflected in the Statement of Net Assets. Depreciation is provided over the assets' estimated useful lives using the straight-line method of depreciation. The range of estimated useful lives by type of asset is as follows: Fixed Assets continued Categorv Buildings Equipment Leasehold Improvements Estimated Life 40 years 7 years 15 years Method Straight-line Straight-line Straight-line 12. Compensated Absences -The Housing Authority's policies regarding vacation time permit employees to accumulate earned but unused vacation leave. The liability for these compensated absences is recorded as short-term and long-term liabilities based on historical trends. In accordance with the provisions of GASB Statement No. 16, no liability is recorded for non-vesting accumulating rights to receive sick pay benefits. 13. Income Taxes - The Authority is not subject to federal or state income taxes nor is it required to file federal or state income tax returns. 14. Budgets - The Authority prepares annual operating budgets annually for each program. Prior to the beginning of each budget year the entity's annual budget is approved by the entity's governing body and is submitted to the United States Department of Housing and Urban Development for approval, if required. Budgets for capital improvements are prepared on a project-life basis rather than on an annual basis. 15. Use of Estimates- The preparation offmancial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the fmancial statements and the reported amounts of revenues and expenses during the accounting period. Actual results could differ from those estimates. 16. Equity Classifications- Equity is classified as net assets and displayed in three components: a. Invested in capital assets, net of related debt---consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowing that are attributable to the acquisition, construction, or improvement of those assets. The Authority had related debt as described in Note 14. b. Unrestricted net assets-all other net assets that do not meet the definition of"restricted" or "invested in capital assets, net of related debt." c. Restricted net assets- Consist of assets that having constraints placed on their use which are either: I) Externally imposed by creditors (such as through debt covenants), grantors, contributors, or laws or regulations of other governments 2) Imposed by law through constitutional provisions or enabling legislation -9-

23 NOTE 2 -CASH AND CASH EQUIVALENTS HOUSING AUTHORITY OF THE CITY OF BENTON NOTES TO FINANCIAL STATEMENTS MARCH 31,2011 It is the Housing Authority's policy to invest in those securities which are authorized by HUD. Such investments generally consist of obligation of the U.S. government and its agencies and instrumentalities, collateralized or insured certificates of deposit, or other bank deposits, and certain other connnercial instruments. The deposits and investments held at March 31, 2011, are reported at fair value. Deposits Custodial Credit Risk- Deposits. Custodial credit risk is the risk that in the event of a bank failure, the Authority's deposits may not be returned to it or the Authority will not be able to recover collateral securities in the possession of an outside party. As ofmarch 3 I, 2011, the Authority's bank balances of$1,072,0 16, including any component unit funds, were insured by federal depository insurance or collateralized with securities held by the pledging fmancial institutions in the Authority's name. Investments Custodial Credit Risk-Investments. For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the Authority will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. As of March 31, 2011 the Authority's investments (consisting of CO's) were $399,783. These investments were insured by federal depository insurance or registered, or securities held by the Authority or its agent in the Authority's name. Credit Risk Investments, Concentrations of Credit Risk and Interest Rate Risk- Investments: Credit Risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The Authority will minimize credit risk by reviewing the financial institutions with which the Authority will do business so that potential losses on individual securities will be minimized. Investment Interest rate Risk- The authority has no formal investment policy that limits investments maturities as a means of managing its exposure to fair value losses arising from increasing interest rates. Concentration of investment risk- The authority places no limit on the amount it may invest in any one issuer. At March 3 I, 2011, the authority had no concentration of credit risk. NOTE 3-RESTRICTED CASH Restricted cash consist of the following: Tenant Security Deposits held in demand deposits Capital Fund Financing Program Housing Assistance Payments Total Restricted Cash 11,325 16, $ NOTE 4- ACCOUNTS RECEIVABLE All receivables from tenants are for rentals and service charges which the Authority expects to receive fully. These receivables are shown net of an allowance for uncollectible amounts. This amount is estimated based upon what the authority expects to collect. The allowance is $25 at March 31, 20 II. -10-

24 NOTE 4- ACCOUNTS RECEIVABLE continued HOUSING AUTHORITY OF THE CITY OF BENTON NOTES TO FINANCIAL STATEMENTS MARCH 31, 2011 Receivables detail at March 31, 2011, is as follows: Tenant accounts receivable Less: allowance for doubtful accounts Net tenant accounts receivable Accounts receivable Capital Funds Accounts receivable Diaster Voucher Subtotal Accrued interest receivable Total Accounts Receivable $ $ 694 (25) ,242 57,762 69,673 1,868 71,541 NOTE S- CAPITAL ASSETS Schedule Land Structure and Equipment activity for the year ended March 31, 20 II are as follows: Balance Add. And Balance 3/31/10 Reclass. Retire. 3/31111 Primary Govermuent Business Type Activities Capital assets not being depreciated Land $ 365,342 $ $ 14,337 $ Construction in Progress 333,852 96,992 76,106 Total capital assets not being depreciated , , , Capital assets being depreciated Buildings and Improvements 4,985,693 76, ,356 Furniture and Equipment 221,491 11,491 Total capital assets, being depreciated 5,207,184 87, ,356 4,956, ,982 5,189,425 Less Accumulated depreciation for: Buildings and Improvements $2,198,590 $130,121 42,534 Furniture and Equipment 207,327 11,824 Total Accumulated Depreciation 2,405, ,945 42,534 Total capital assets, being depreciated, net 2,801,267 (54,348) 62,822 Business type activities capital assets, net $ 3,500,461 $ 42,644 $ 153,265 $ 2,286, ,151 2,505,328 2,684,097 3,389,840 Component Unit Business Type Activities Capital assets not being depreciated Construction in Progress 16,339 16,339 Total capital assets not being depreciated ,

25 NOTE 5- CAPITAL ASSETS continued HOUSING AUTHORITY OF THE CITY OF BENTON NOTES TO FINANCIAL STATEMENTS MARCH 31, 2011 All land improvements and buildings are encumbered by a Declaration oftrust in favor of the United States of America as security for obligations guaranteed by the federal govermnent and to protect other interest of the govermnent. Depreciation charged to expense for the years ended March 31, 2011, $141,945. NOTE 6 -ACCOUNTS PAYABLE- OTHER GOVERNMENTS (ACCRUED PAYMENTS IN LIEU OF TAXES) The authority contracted with the City of Benton, Arkansas under an agreement whereby the City would not levy or impose any real or personal property taxes or special assessments upon the Authority, In turn, the Authority makes annual payments to the City in lieu of such taxes and special assessments. For the year ended March 31,2011, the payment in lieu of taxes is $26,360 NOTE 7- COMPENSATED ABSENCES AND OTHER NON CURRENT LIABILITIES Accumulated unpaid compensated absences are accrued in the Enterprise Fund. The liability for compensated absences at March 31, 20 II is $30,411. The liability for compensated absences is a liability that is attributable to services already rendered and that are not contingent on a specific event that is outside the control of the Authority and its employees, is accrued as employees earn the rights to the benefits. Compensated absences that relate to future services or that are contingent on a specific event that is outside the control of the Authority and its employees are accounted for in the period in which such services are rendered or in which such events take place. As of March 31, 2011, the accrued compensated absences liabilities comprise the following: Accrued compensated absences - current portion, primary govermnent Accrued compensated absences - current portion, component unit Accrued compensated absences - non current portion, primary govermnent Accrued compensated absences - non-current portion, component unit Total $ $ $ 14, ,000 14, ,411 The following is a sunnnary of changes in the accrued compensated absences liabilities for the year ended March 31, 20 II Balance Balance Amounts March 31, March31, Due within Accrued compensated absences 2010 Additions Deductions 2011 One year Primary Govermnent $ 23,289 $ 7,838 $ 1,746 $ 29,381 $ 14,492 Component Unit 1, , Total $ 24,347 $ 7,877 $ 1,813 $ 30,411 $ 15,000 The Authority's other long term liabilities are discussed in Note 14 Long Term Debt. NOTE 8- RISK MANAGEMENT The Authority is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions and natnral disasters for which the Authority insures itself against loss by participation in a public entity risk pool. The Authority also insures itself against workers' compensation claims through participation in a public entity risk pool. There have been no significant reductions in coverage from the prior year and settlements have not exceeded coverage in the past three years. -12-

26 NOTE 8-RISK MANAGEMENT continued HOUSING AUTHORITY OF THE CITY OF BENTON NOTES TO FINANCIAL STATEMENTS MARCH 31, 2011 The Authority participates in the public entity risk pool managed by the Arkansas Housing Authorities Property and Casualty Self-Insured Fuod, Inc (AHAPCSIF} for its property and liability risk of loss coverage. The Authority, along with other participating entities, is responsible for paying annual premiums to the pool as determined by AHAPCSIF. The pool administers the pooled resources to provide risk of loss protection for each participating municipality by purchasing commercial excess insurance. NOTE 9- PENSION PLAN The Authority contributes to the United Assurance Company Prototype Standardized Money Purchased pension plan and Trust (the plan}, a single employer defined contribution plan administered by the Authority. The plan provides pension benefits for all full-time employees. Contribution provision are established, and can be amended by the Authority's Board of Commissioners. Benefits depend on amounts contributed to the plan, plus investment earnings. Employees are eligible to participate immediately. The Authority contributes 12% of the employees' base salary each month. Under certain conditions, covered employees may contribute an additional percentage of their salary to the plan. The Authority's contributions and investment earnings for each employee are vested 20% annually for each year of participation, with employees' being fully vested after five years of participation. Total pension expenses totaled $57,348 for the year ended March 31, 2011 The Authority offers no other post employment benefits. NOTE 10- INTERPROGRAM TRANASACTIONS AND BALANCES Operating Transfers Transfers to/from Low Rent Public Housing/Capital Fund Program- Transfers are used to move revenues from one program that is authorized to transfer them to another program in accordance with budgetary authorizations or closing of grant... As of March 31, 20 II, the authority had the following operating transfers. Transfer Transfer in out Low Rent Public Housing $ 48,109 $ 57,314 Mid States (CIU) 61,314 Capital Fuod Program 48,109 Capital Fuod Recovery Grant 4,000 Total $ 109,423 $ 109,423 Inter-program Receivable/Payable: Interprogram receivables and payables arise from Interprogram transactions and are recorded by all programs affected in the period in which the transactions are executed. These receivables and payables are eliminated for presentation of the financial statements. As of March 31, 2011, the following receivables and payables have been eliminated: Low Rent Public Housing Housing Choice Vouchers Mid States (CIU) Diaster Voucher Program Total Interprogram Receivable Payable $ 56,696 $ 93,956 16,846 62,760 71,046 $ 150,652 $ 150,

27 HOUSING AUTHORITY OF THE CITY OF BENTON NOTES TO FINANCIAL STATEMENTS MARCH 31, 2011 NOTE 10-INTERPROGRAM TRANASACTIONS AND BALANCES continued Equity Transfer Equity transfers are used to move revenues from one program that is authorized to transfer them to another program in accordance with budgetary authorizations or closing of grant. Transfer Transfer in out Capital Fund Program $ 66,827 $ Capital Fund Recovecy Grant 66,827 $ 66,827 $ 66,827 NOTE 11- ECONOMIC DEPENDENCY The Housing Authority of the City of Benton receives a significant portion ofits revenue from funds provided through federal grants. The grant amounts are appropriated each year at the federal level. The amount of the funds the Authority receives could be reduced significantly and have an adverse impact on its operations. NOTE 12- COMMITMENTS AND CONTINGENCIES Commitments-Construction At March 31, 2011, the Authority had the following pending construction projects in progress: CFP CFP Total CFP li\tnds Approved $ 155, ,920 $ 308,070 Funds Expended Project To Date $ 139, $ 163,437 NOTE 13- CONTINGENCIES The entity is subject to possible examinations made by federal regulators who determine compliance with terms, conditions, laws and regulations governing grants given to the entity in the current and prior years. These examinations may result in required refunds by the entity to federal grantors and! or program beneficiaries. NOTE 14- LONG TERM DEBT AND OTHER NOTES PAYABLE On February 26, 2008 the Authority entered into an agreement with Fannie Mae to construct anew community center and office buildings. The obligation is secured by pledged grant money and restricted accounts of the Authority. The note is a twenty year note to be paid monthly at 4.70% interest with monthly instalhnents of$2,759. The long term debt is shown net of the current portion. Changes in Authority's Debt payable is as follows: Balance, beginning of period Principal additions Principal retirements Balance end of period Less Current portion Total Long Term Debt Debt Payable $ 400, $ 385, $

28 HOUSING AUTHORITY OF THE CITY OF BENTON NOTES TO FINANCIAL STATEMENTS MARCH 31, 2011 NOTE 14 - LONG TERM DEBT AND OTHER NOTES PAY ABLE continued Fiscal Year Ended June 30 Princi~al 2012 $ 15, , , , , , , ,314 $ 385,852 Interest $ 17,859 17,124 16,354 15,548 14,702 59,328 31,167 4,902 $ 176,984 Total $ 33,108 33,108 33,108 33,108 33, , ,540 66,216 $ 562,836 On May 18,2009 the Authority entered into an agreement with the Arkansas Development Finance Program (AFDA) for construction of five affordable single-family homes for low-income homebuyer families through a HUD HOME Program loan. The loan amount approved was $425,000 of which $425,000 was disbursed at March 31,2011. The non-interest bearing obligation is due as the homes are sold. Balance March 31, 2010 Additions Deductions Balance Amounts March31, Due within 2011 One year AFDA $ 329,306 $ 95,694 $ $ 425,000 $ 425,000 Total $ 329,306 $ 95,694 $ $ 425,000 $ 425,000 NOTE 15- PRIOR PERIOD ADJUSTMENTS During the year ended March 31, 2011 the Authority recorded the following prior period adjustments: Low Rent Public Housing - Correct prior year inventory of materials Supportive Housing for Disabled Persons- Correct prior year deferred revenue HUD Form adjustment Housing Choice Voucher- Credit prior year for HUD 2005 reserve Correct net restricted assets per HUD Component Unit- Correct prior year balance sheet miscellaneous TOTAL PRIOR YEAR ADWSTMENTS $ ,633-21, NOTE 16-DEFICIT NET ASSETS The Disaster Voucher Program has a deficit balance of$13,284 in net assets at March 31, The balance is carried forward from 2010 and is the result of housing victims of Hurricane Katrina. To date, HUD has not reconciled with the Authority for expenses in housing Hurricane Katrina victims. The Affordable Housing Program (Mid States) has a deficit balance of$36,189 in net assets at March 31,2011. The beginning balance was a deficit balance of$52,457, a decrease of$16,

29 SUPPLEMENTARY DATA

30 HOUSING AUTHORITY OF THE CI'n' OF BENTON BENTQN ARJ{ANSAS ~ Carrent Assets: cash - unrestricted Cash - restrietcd Total receivables, net of allowances for uncollectibles Investments - unrestricted Investments restricted -.. -""""" Assets held for sale Interprogram due from Totlll eurn:at assets NOJKarn:nt Assets: Capital assets Land and construction in progress Buildings and equipment net of depreciation Total t~:pital assets TOTAL ASSETS LIABDJTIES Curn:at liabijities: Accounts payable Acaued wage/payroll tues payable Accrued compensated absences Accounts payable- other gov. Tenant security deposits """"" ~.. CFFP Acaued liabilities - other Loan liability current lnterprogram due from Total curn:nt liabilities Noncarrent liabilities: CFFP Accrued compensated absences - non current Total noacurn:at liabilities TOTAL LIABILITIES NtTASSE'I'S Invested in capital assets, net of related debt Restricted net assets Unrestricted net assets TOTAL NET ASSETS COMBINING STAtEMENT OF NET ASSETS MARCH 31,2011 PROJECTS --- Sapportivc PROGRAMS Hoasingfor Diasttl' Low :Relit ~pital Faad Penonswitb Bo111ing Diluter Public Housid!): P:1021am Disabilities Asshtnnce Vouc:her $ 289,619 $ $ 129,081 $ 63,019 28,199 11,911 IS 57,762 37,253 14, , ,096 63,019 57, , $ 3,711,210 $ $ $ $ $ 12,714 $ $ $ $ 5,520 5, ,360 11, ,895 15,420 8, , ,367 13,504 71,046 2,889,lll 16, !13,284~ $ 3,250,843 $ $ 115,592 $ 63,019 ' (13,284} ' Boasing ~pitalfaad Cboice StimalllS Component Voucben Gnot Unit ELIMINATION ~ $ 49,435 $ $ 10,506 $ $ 541, , ,337 1,853 71, , , , ,482 37,253 14, , , ~150652} 1,931, ,543 (150,652) 2.036,180 92, ,743 2~75 ~ $ 1, $ $ 467,543 $ ( ) $ s $ 1,239 $ $ 101 $ $ 14,054 5,619 8, " 15,000 26,360 11,325 18,697 14, ,420 ~ , , ;760 {150,652~ ,652) ~ , ll ~843 53, ,732 ( ) 953, ,877 3,003, , ,494 3~962 p61189~ $ 1,092,459.s. $ (36,189) $ s 4,472,440 The accompanying Notes to Financial Statements are an imegral part oftbis statement. -16-

31 $ _,...,. REVENUE Tenant revenue ~other Other revenue FI3Ud recovety HVD PHA operating grants TOTAL OPERATING REVENUE Low Rent Public Housing ' 167,514 3,137 31, , ,640 PROJECTS HOUSING AUmORITY OF me CITY OF BENTON BENTQN. ARKANSAS COMBINING STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET ASSETS FOR THE TWELVE MONTHS ENDED MARCH 31,2011 PROGRAMS Housing for Diaster Housing Capital Fund Persons with Housing Diaster Choice Prognm Disabilities Assistaru:e Voucher Vouchers ' ' ' ' ' 381 6, ,613 2~50 3,36;b , ,883 Capital Fund Stimulus Component Grant Unit ELIMINATION TOTAL $ 167,514 3,137 1,000 32,693 6,102 4,005,365 1, z.214,811 OPERATING EXPENSES Administrative expense Tenant services Utilities Ordinary maintenance Protective services -Other genera] expenses Nomoutine maintenance Housing assistance payments Depreciation expense TOTAL OPERATING EXPENSES 188,793 1,008 43, ,331 33,536 13,243 4, ,312 24,185 22, ,245 1, , , ,243 2,875, , ,879 3,288!294 28, ,136 1,008 43,851 33, ,299 35,014 13,815 4,095 3,188, ,945 62,185 4,370,401 OPERATING INCOME (LOSS) ~254,672} , ill,_ ISS) (155,590) NONOPERATING (CHARGES) AND CREDITS: Operating tnmsfers Investment income Investment income ~ restricted Gainl(loss) sale of fixed assets Interest expense and amortization cost TOTAL NONOPERATING (CHARGES) CREDITS (9,205) 1, ,314 p8,550} (48,109) (4,000) 7, ,320!48:109} ,314 9,431 15,872 57,314 ~18,550} ~067 CONTRIBUTED CAPITAL HUD PHA capital gnmts TOTAL CONTRIBUTED CAPITAL 35,246 35,~ 66, ,073 66, CHANGE IN NET ASSETS (223,308) 34,831 30,202 2,250 99,619 66, ,550 NET ASSETS Beginning net assets Prior period adjustments, equity transfers and correction of errors NET ASSETS~ BEGINNING OF YEAR NET ASSETS~ END OF YEAR 3,370,490 2,003 3,372,493 s 3,149,1~ 59, ,769 (13,284) 1,020, {28! ,827 85, ~ } (13,284) s 1,092,459 $ 11!!_,~ - 115,592 63,019 (36, 118) 4,462,194 (66.821) 1200} P04l ~66,82!} (36!318) 4 461,890 $ $ (36,189) _! ~--- 4,472,440 The accompanying Notes to Financial Statements arc an integral part of this statement 17~

32 HOUSING AUTHORITY OF THE CITY OF BENTON RfjNIQN A:RJCAJ$AS COMBINING STATEMENT OF CASH FLOWS FOR THE TWELVE MONTHS ENDED MARCH 31, OJECl'S "'OCIUMS.,.,..., CapiiiiiFand Pe... llh... Choko... c.... l'llbllcllom ,,_ v... v... -= - u ELIMINATION ~ CASH FLOWS FROM OPERATING AcriVITIES: Callh.-ivod.fromicDsDt:o ' 173,754 $ 173,754 Cub.-ivod. from HUO opomillggrmb 192,199 ' 73,425 ' 364,613 ',, ' ' ' ' ',..,..., Callh.-ivcd. fran olhc:r inoomo 34,110 9,611 """" Cash.-ivod. from fraud roc:ovecy "' "'"' Callh poymeais for goods md """"'=' ( ) (449,407) 341,339 (2.962,733) (47,174) (2,574,160) ' "' "" "'"' "" Cash poymeais tocijl!)loy<a-'nrics (17,017) (2.34,765) (234,765.1 (518,126) (21.673) (1.306.&45) Cash pll)'l1lllllt:l fran cmployt>c: benefit contributiodi '"'""" Q2774j {4~ {4~ (106J74l ~106,E4j (189~ ""'"' (4,!7!!: ~ NET CASH PROVIDED BY OPERATING ACTIVlTIES OOO.J!m 4!!,109 (1060S7'! 2.2~ reum ~... Boo'*'~ for -= - CASH FLOW FROM NONCAPITAL ACTIVITIES R=ipts {J:Ia)1Donls) from aporatills uansr.n (9,2(15) (~109) (4,000) 61,314 Cash receipts (paymc:nts) from imcrpogrumduc tolduc from om,47:!!!1 NET CASH PROVIDED FROM NONCAPITAL ACI'IVITlES (?.S82l 1$109),47 368) '"'' '"'' Jll CASH PROVIDED FROM CAl'tTAL AND RELATED INVESTING ACI'rvrriES,.., ~otilll=stond.dividcdcls lntc:al..rod dividends rem-ted bock iruo ~,_..., ' "' " "" (236,031) (2.36,031) Cash.-i...:l (paymc:nts) from~ deposit 1.12Q ---- _.!.12Q_ NET CASH PROVIDED FROM CAPri' AL AND RELATED INVESTING ACTIVITIES.., ( ) ""' ---- ~ CASH FLOWS FROM FINANCING ACTIVITIES Cash receipts from Jlllo otasscto 130, ,064 Cosh receipts from capital debt 95,694 Cash.-ipts from HUOcapita1 nn..otioas 66,827 " "' 102,073 """ Coahpii)'IIIOIIISforcapitalasscto (35,146) (66,827) (196,S31) CoahJII')'DIOIIl!lforprincipo.loraCIIpilll1d:tll (14,595) (14,.S95) Cash J*YI"'"l'l for inl=st on capital debt (18J~l ~ ~ NET CASH PROVIDED FROM FIN'ANCINC ACI'IVlTIES NET INCREASE (DECREASE) IN CASH AND '"" CASH EQuiVALENTS (10,055) (152,023) (113,561) """ """ "'"'"' CASH AND CASHEQ{)IV~BEGINNINGOFYEAR 327,!!3 28!, ~ CASH AND CASH EQVIV ALENTS-END OF YEAR """ '"' RECONCILIATION OF CASH TO CASH ON STATEMENT OF NET ASSETS Cub-~ ' ' l...--;.. ' m.m ' ' 10J06 -,--- $1055iWI ' 289,619 ' ' 129,081 ' 63,019 ' ' 49,4)5 ' ' '""" ' ~,660 Cub =trict<d ~138 m,m_ Tollll cub add cub cquiwlcnts. cnd.otyear RECONCILlATlON OF OPERATING INCOME (LOSS) TO NET CASHPROVIDEDBYOPERAT1NGACTIV111ES OpntiDsin<>oo>e(loss) ' (254.67l) ~ tgrk<iiidloeet lnogmetodct..., c:uh pnvlded..,. operatlntr: adholtict: Dcprocialiora 136,45S Allowmx:c for doubtm aca>uiiis (1,466) Prioryearadju.nmonto..rod =tions ' ' 129:081 ~ -,--- ' S35J13 ' IOJ ~ ' ' "" ' 29,734 ' 2,250 ' ' " "' ' ' "'" "' "" (61,!85) ' $ (ISS$0) 5, ,945 (1,741) 2$,962 (28.069) 000) {lncralc) l)eo:ntueid: Ae<:ounts.-ivablc: -HUOolhc:r~ (10,478) (10,478) Ae<:ounts.-i\l!lblc -other govemtiiciiis Ae<:ounts.-ivablo -.m.c.jiancous 3,426 "" "" Ae<:ounts receivable - 3,103 " 3,103 1,477 (1,499) 3, """""... (2.976) """"'"' IDcrcuc (Decrease) Ia: Ae<:ountspayablo (3,959) (537) """" "' "" """'... "'"' Accrued ""'gmlpo.yrol1 W:cs poy~~b1c '-"' Accrucd~absenccs 4,193 (51) 1.954,,..., ""' ' "' Acccuntsp~ynble othcr~ "'" ( ) 5,261 14,742 (141,077) """""-= Accrued liabilities other '"" " "'" '... ~100~!Z,l ',,06~ -,--2~~ -,--- ' ~65~13j.l...--;.. $!15S.893j ' ' Net... p...wed..,. (..n f r)...,ac:llvllles.. Tho-ponyidgNOICitoFiiUIII<iolStalanonl!l...,.,integnllputof1hia0111e1Dent. (32,6S9)

33 HOUSING AUTHORITY OF THE CITY OF BENTON BENTON. ARKANSAS STATEMENT OF CERTIFICATION OF ACTUAL MODERNIZATION COST MARCH 31, 2011 I. The actual Capital Fund Program costs are as follows: CFP Funds approved Funds expended Excess of Funds Approved $ $ 151, ,890 Funds advanced Funds expended Excess (deficiency) of Funds Advanced $ $ 151, , The costs as shown on the Actual Cost Certificate dated October 20, 20 I 0 aud approved by for audit by HUD on October 28, 20 I 0 is in agreement with the PHA's records as of March31, All Capital Fund Program costs and related liabilities have been paid. 4. The Housing Authority did not have budget overruns. The accompanying Notes to Financial Statements are an integral part of this statement. -19-

34 HOUSING AUTHORITY OF THE CITY OF BENTON BENTON, ARKANSAS STATEMENT OF CERTIFICATION OF ACTUAL MODERNIZATION COST MARCH 31, The actual Capital Fund Recovery Grant Program costs are as follows: CFRG-2009 Funds approved Funds expended Excess of Funds Approved $ $ 192, ,262 Funds advanced Funds expended Excess (deficiency) of Funds Advanced $ $ 192, , The costs as shown on the Actual Cost Certificate dated May 11, 2010 and approved by HUDon May 18, 2010 is in agreement with the PHA's records as of March 31, All Capital Fund Recovery Grant Program costs and related liabilities have been paid. 4. The Housing Authority did not have budget overruns. The accompanying Notes to Financial Statements are an integral part ofthis statement. -20-

35 HOUSING AUTHORITY OF THE CITY OF BENTON BENTON, ARKANSAS ADJUSTING JOURNAL ENTRIES FOR THE TWELVE MONTHS ENDED MARCH 3I, 2011 Number Description AcctNo. Per Audit FDS Line Number Component Unit Loan Liability - current - Other 14, Deferred Revenue - Other To recorded advances of admin fees for sale oflow income housing through ADF A 14,

36 FEDERAL FINANCIAL AWARDS

37 Scott Benton, CPA BENTON CPA Certified Public Accountant 101 South Main Street, Suite 3 P. 0. Box 521 Cassville, MO bentoncpa@centurytel.net Phone (417) Fax (417) REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of Commissioners Housing Authority of the City of Benton Benton, Arkansas We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund infonnation of the Housing Authority of the City of Benton (Authority) as of and for the year ended March 31, 2011, which collectively comprise the Authority's basic fmancial statements and have issued our report thereon dated December 20, We conducted our audit in accordance with generally accepted auditing standards generally accepted in the United States of America and the standards applicable to fmancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States Internal Control Over Financial Reporting In plarming and performing our audit, we considered the Authority's internal control over fmancial reporting as a basis for designing our auditing procedures for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Authority's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Authority's internal control over fmancial reporting. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or combination of deficiencies, in internal control such that there is a reasonable possibility that a material misstatement ofthe entity's financial statements will not be prevented, or detected and corrected on a timely basis. Our consideration of internal control over fmancial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identizy all deficiencies in internal control over fmancial reporting that might be deficiencies, significant deficiencies, or material weaknesses. We did not identizy any deficiencies in internal control over financial reporting that we consider to be material weaknesses, as defined above. However, we identified certain deficiencies in internal control over fmancial reporting, described in the accompanying schedule of findings and questioned costs that we consider to be significant deficiencies in internal control over financial reporting listed as A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Compliance and Other Matters As part of obtaining reasonable assurance about whether the Authority's fmancial statements are free of material misstatement, we performed tests ofits compliance with certain provisions oflaws, regnlations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of fmancial 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 or other matters that are required to be reported under Government Auditing Standards.. We noted certain matters that we reported to management of the Authority, in a separate letter dated December 20, 20ll.The Authority's response to the fmdings identified in our audit is described in the accompanying schedule of findings and questioned costs. We did not audit the Authority's response and, accordingly, we express no opinion on it. The Authority's response to the fmdings identified in our audit is described in the accompanying schedule of fmdings and questioned costs. We did not audit the Authority's response and, accordingly, we express no opinion on it The CPA. Never Underestimate The Value~

38 Benton CPA Certtited Pubhc Accounlanl This report is intended solely for the information and use of the Authority, others within the entity, 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. Benton, CPA December 20,

39 Scott Benton, CPA BENTON CPA Certified Public Accountant 101 South Main Street, Suite 3 P. 0. Box 521 Cassville, MO bentoncpa@centurytel.net Phone (417) Fax (417) REPORT ON COMPLIANCE WITH REQUIREMENTS THAT COULD HAVE A DIRECT AND MATERIAL EFFECT ON EACH MAJOR PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Board of Commissioners Housing Authority of the City of Benton Benton, Arkansas Compliance We have audited the compliance of the Housing Authority of the City of Benton (hereafter, "the Authority"), with the types of compliance requirements described in the U. S. Office of Management and Budget (OMB) Circular A-133 Compliance Supplement that could have a direct and material effect on the City ofbenton's major federal program for the year ended March 31, The Authority's major federal programs are identified in the summary of auditor's results section of the accompanying schedule of fmdings and questioned costs. Compliance with the requirements oflaws, regulations, contracts, and grants applicable to each of its major federal programs is the responsibility of the Authority's management. Our responsibility is to express an opinion on the Authority'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 fmancial 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 auditto obtain reasonable assurance about whethernoncompliance 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 the Authority'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 on the Authority's compliance with those requirements. ln our opinion, the Authority complied, in all material respects, with the compliance requirements referred to above that could have a direct and material effect on its major federal programs for the year ended March 31, However, the results of our auditing procedures disclosed no instances of noncompliance with those requirements, which are required to be reported in accordance with OMB Circular A-133. Internal Control Over Compliance The management ofthe Authority is responsible for establishing and maintaining effective internal control over compliance with requirements oflaws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the Authority'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 internal control over compliance in accordance with OMB Circular A-133, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion of the effectiveness of the Authority's internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis The CPA. Never Underestimate The Value~

40 Benton CPA Certihed Pubhc Accountant Our consideration of internal control over compliance was for the limited purpose described in the frrst paragraph of this section and was not designed to identify all deficiencies in internal control the might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses as defined above. The Authority's responses to the fmdings identified in our audit are described in the accompanying schedule of findings and questioned costs. We did not audit the Authority's responses and, accordingly, we express no opinion on the responses. This report is intended solely for the information and use of management, the Board of Commissioners, others within the entity, the Deparbnent of Housing and Urban Development, other 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. Benton CPA December 20,

41 HOUSING AUTHQRITY OF THE CITY OF BENTON BENTON, ARKANSAS SUPPLEMENTARY SCHEDULE OF EXPENDITURES-FEDERAL AWARDS MARCH 31,2011 Federal Grantor/Pass-Through CFDA Grantor/Program Title Number Disbursements U.S. Department ofhonsing and Urban Development (HUD) Direct Assistance: Low Rent Public Housing a $ Housing Choice Voucher Program Public Housing Capital Funds Program Public Housing Capital Funds Stimulus Grant Supportive Housing for Persons with Disabilities Disaster Housing Assistance Grant Total HUD and FEMA $ 202,677 3,362, ,671 66, ,613 2,250 4,107,438 NOTE 1 - GENERAL The accompanying Schedule of Expenditures of Federal Awards presents the activity of all federal award programs of the Authority. All federal money, both directly received and that passed through other agencies, is included in the schedule. NOTE 2- BASIS OF ACCOUNTING The accompanying Schedule of Expenditures of Federal Financial Assistance is presented using the basis of accounting described in Note 1 to the Authority's financial statements. The accompanying Notes to Financial Statements are an integral part of this statement. 26

42 Section I- Summary of Auditor's Results Financial Statements HOUSING AUTHORITY OF THE CITY OF BENTON BENTON, ARKANSAS SCHEDULE OF findings AND QUESTIONED COSTS FOR THE TWELVE MONTHS ENDED MARCH 31,2011 Type of auditor's report issued: Internal control over financial reporting: Material weakness(es) identified? Significant Deficiency(ies) identified not considered to be material weaknesses? Unqualified Yes X No X Yes No Noncompliance material to financial statements noted? Yes,X"'- No Federal Awards Internal Control over major programs: Material weakness(ies) identified? Significant Deficiency(ies) identified Yes X No not considered to be material weaknesses? Yes X No Type of auditor's report issued on compliance for major programs: Any audit fmdings disclosed that are required to be reported in accordance witb Circular A-133, Section.SIO(a)? Unqualified Yes X No Identification of major programs: CFDA Number(s) Name of Federal Program or Cluster Capital Fund Stimulus Grant Capital Fund Program Dollar threshold used to distinguish between Type A and Type B programs: Auditee qualified as low-risk auditee? $ X Yes No Section II - Financial Statement Findings See table on the following page. Section III-Federal Award Findings and Questioned Costs No matters were reported as findings or questioned costs for federal award purposes. -27-

43 HOUSING AUTHORITY OF THE CITY OF BENTON BENTON, ARKANSAS SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE TWELVE MONTHS ENDED MARCH 31,2011 Section U - Financial Statement Findings Agency/Program/CFDA No./Finding!Noncompliance Finding Criteria or specific requirement: Condition: Questioned Costs Effect: Cause: Recommendation: The Housing Authority's must design controls that would prevent, detect or correct misstatements in a timely manner. There is a lack of segregation of duties due to the Housing Authority having only a few administrative/office employees on staff. None With only a few administrative employees on staff the magnitude of potential misstatements could reasonably be expected to be material. This is an inherent weakness of any small entity due to the economic infeasibility of hiring sufficient personnel to provide adequate segregation of duties. With only a few administrative employees on staff the magnitude of potential misstatements could reasonably be expected to be material. The Housing Authority continues using a Fee Accountant to perform routine accounting functions All checks are attached with invoices for the board to review. Board members initial the invoice. Board members view the cancelled checks and bank statements. Without additional employees or having Board members involved in more daily functions we cannot achieve segregation. The use of a Fee Accountant and board oversight provides compensating controls. Management Response: Benton Housing Authority is currently working on adoption and implementation of an internal control policy to address the above referenced finding. -28-

44 HOUSING AUTHORITY OF THE CITY OF BENTON BENTON, ARKANSAS SCHEDULE OF PRIOR YEAR FINDINGS FOR THE TWELVE MONTHS ENDED MARCH 31,2010 None -29-

45 HOUSING AUTHORITY OF THE CITY OF BENTON BENTON, ARKANSAS CORRECTIVE ACTION PLAN YEAR ENDED MARCH 31, 2011 Contact Person: Steve Eichhorn, Executive Director Housing Authority of the City of Benton 1200 W. Pine St. Benton,All (501) FINDING NO FEDERAL AWARD FINDINGS AND QUESTIONED COSTS Segregation of duties The Authority does not have adequate staff to have segregation of duties. Auditor Recommendation Use Board Members in the approval process of bills to help strengthen controls. CORRECTIVE ACTION PLAN FOR FINDING Action Taken The Authority will adopt an internal control policy and will follow the Auditor's recommendation; however, due to the small size of the Authority it would not be economical for the Authority to hire the required staff members to achieve an ideal segregation of duties. Management response: Benton Public Housing Authority is currently working on adoption and implementation of an internal control policy to address the above referenced finding. <Name of Person Responsible) Mr. Steve Eichhorn, Executive Director. (Target Date for Resolving Finding) This will be resolved December 20,

46 , Ho~sing Authority of the City of Benton, AR (AR175) Benton, AR Entity Wide Balance Sheet Summary Submission Type: Audited/A-133 Fiscal Year End: 03131/ T T~;;;~T r T !. i HoU!IIng for [ Disaster! 14.0VP Olsnter! Housing i Formula ; Pro;ect.Total is Component Units~ Personswittl thouslngasslstance! VoLICherProgram! Choice Vouchers i C8pllaiFUnc:l j Subtotal! EUM ---~- ----, l _j------l l_d~~~~~---g: j J L,~~~~sGra_:_L : -~ ~ ; 111 C&sh Lifnstfided j $289,619! $10,506! $129,081 1 $83,019! SO! $49,435!! $541,660!! $ ~ ~a h-~~ ; and :~nt ==- --~ -=~1- $1; =t=~~=--~-r:~ - ~==~-~==~~=~~+==~--=+=- ~=-=c! ~012 t ! tt4 cash-ten~ntsecurttyoeposits! stt,325 i $0 i so! so! so i $(1 i i stt,325 i $11,325 _j ~c;;;:r;~~paymemorc~~-~~~===~=--=::i:~=:y=t:::::: --id:~:::-:.::~~~~=~~~~[:=::::~=::r:---$0-~=r~:---sn! $0 _j L io:_j 1100 TotaiCSsh - -- j $317,818 j $10,506 j $129,081 j $63,019! $0 l $535,573! $0 i $1,055,997! $0! $1,055,997 j tw-_;~.,.~~~~~~===- -~====:=1:=~~~:--=E==i:-=f-=:=:;~===E==~=====f-~~~ -+=~~~-_1- ~-..-;,"'~~~~~=-~~t,~~ -~~ Ac:counts'Reeelvable-r"""""=::::-'-" L T""' I ~-----~--1--~ ~ ~-.L--~---_J... : i $694 i ; -==:===- (-==$25-=:J : ~ ~u r--- --=-- -- T - ~--$0= -r---;;-- r ~ - ---~-+----~-~-~---~-+----~-~-~--~-~--t ~-~ ~--~ ~-~----~~----~----:. so -L ~---~ AcCrued Interest Receivable i SO! $0 1 $15! SO i SO! $1,853 i i $1,868! j $1,868 i f~~;~;~~~~~~~~~~~~~~~~l~~-~i~;i:;;;~~~! ~;;~~ ~: =~~1~~~[~ r=;; ~r:-- ;~~f~~~;[;; j f 135 Investments- Restricted far Payment ofcutent Llabllty I $0 i $0 I $0 i $0! $0! $0! I $0 I! $0 I ~~~~~~ j 150 Total CUrrent Assets j $436,247! $467,543 j $129,096 j $63,019! $57,762 [ $1,031,165! SO i $2,186,832 [ -$150,652 i $2,036,180 [ i -====-====~-=--===~-~==~:.==~:::======~1~~===~:~:1====--:.~=~~~c===~:.=:::I~~:.::~:~~:.=::L::~:.=:::~J====--=:J:- ~-~--~----r- ----r--=:-~:= T-=== f1s1 Land i $258,403! so i so! SO j SO! $92,602 i $351,005 = ; $351,005 ; ' ~ -~-~-~-----~-~ ~---~ r-- - -~--~ -+-~-~ ~ +-~-~- ---~--~-;--~ ~ ~--~---~-~--~-- r-. l ~ : 162 Building$! $4,247,589! $0! $0! $0! ' so i $18,399 ; l $4,265,988!! $4,265,

47 Housing Authority ofthe City of Benton, AR (AR175) Benton, AR Entity Wide Balance Sheet Summary Submission Type: Audited/A-133 Fiscal Year End: r r r r,~~~~~s:~rtlve r r r r "! ~ i i.! i Housing for i 'ifl 109 Disaster! 14.0VP Disaster! Housing Form.Jia, j! F'rtiJectTotal j6componentuni!s[ Personswlth ~HouslngAsslstancei VouctlerProgram! CllolceVouchers! ~I Fund Subtotal ELLM j Total i i j! OlsebHities j Grant j i j stimulus Grant ]. r;;o;;;;;,;;;,;:c;,;;;;;.-..;;;., =--=-~=~-1.. ~~ r~=-~t~-~=~- :--=!0~=-~t- "_ :-=~" =+-~",..,.,..., " i -~ i190t;;;;-;, $3,713.21o 1 $467,543! s129,095 1 $63,019 t $57.782! $1.146,042 i so 1 $5,578,672 -$150,652 i $5,429,020! f -==-===~:~=--==~~--L==:=:I~===-- i --==- '-~=--==r--==_.j- L ~ _.1 :'311BankQ;;"rdraft - i SO i $0 j $0 i SO! SO! $0 i i $0 i! so, )312 AecountsPayable<-90Days -====== ==--~L-- $12.7~:r::;,o, -::J_~-~-==:.C_so-:::r:_ so :::_J~_j, j_ $14.054! ~ ,! 313 Accounts Payable :>90 Days P-;;st Due-- i $0! $0! $0! $0 i $0 i $0 i 1 $0 i i $0 i ii21 Accruedw~nTaxesPayable--~==:_-=-~~=--==~~.J:---$5,~-~==~I~~~~~$99 - ==I====}~~~-~--.~=-~~~~~=====t====~=:J:::=:=-~===]=====L- ss,e19_:~r--=--='t- ss:s~~-j f'322 Accrued Compensated Absences- Current Portion j $5,905! $508 j $300! $0! $0! $8,287 )! $15,000 j! $15,000! i L?~~~~ =:===:~~:r AccNIICIInterest Payable! Y--====:r===~~~--~=:t====!.====~x=---==~=====[===~==:==I=~=~---=J=====-- $0! $0! $0 i $0 i $0 I $0!! i - ~---=T---==---====1=---s!==J $0 i! $0 l t~, At:eou~~-~~~~--==--=-:-===--=====r-- $0 =====r=~~==_!~-===r::::::=-~~:===i=--=-~:=:.~::j::.==~===---r=-!0 ---=1=====- 1 ~--=-L--===-L----~-==J i 332 Account Payable -PHA Plojects! $0! $0 ; $0! $0! $0 I $0 1! $0 j 1 so j ~~.;_:;~::c~'~:m~~-=~~~==~~~==~~~l_:i~f~=~e~-: ~J:===~::==~r-=~;~~E=~~~-1~=--=-}:-. -E=--=--~;_1=~=-:- :~ -J i 342 Deferred Revenues i $127 i j $12,895 j $0 1 $0 j $18,697 1 j $31,719 ; j $31,719 j ~~~itjif_ihl )348 Loan Liability Current 1 $0 : $439,742 i $0 $0 $0 ~ $0 :! $439,742!! $439,742 : ~~-i:~~j~ i 3S4 AccNecl Compensated Absences Non Current 1 $6,066 i $522 i $309 i $0 ] $0! $8,514! l $15,411 l i $15,411 i ~-l~~ rm""tot;i ooiiitle'; $ $ i $ ; so 1 $ i $53,583 1 $0 1 $1.104,232! -$ $953,580 t ~-&~ 1513 Total Equity/Net Assets! $3, i -$36,189 1 $115,592! $63,019 i -$13,284 i $1,092,459 ~ $0! $4.472,440 j $0! $4,472,440 1 t ~~~~~~~~;e~;.;-~~== --~=~:-~:~~=====~:~===E~.i~~~i~:::t=~~ i.ii~=:j:.=~~~~~~=e=:~~~:~-~i.:~c~~:~i~~:.=-f=~~~~~~~~~e~~- $0 - i --ss~+--.;~~~1 $5:~~~~j... : 32

48 Housing Authority of the City of Benton, AR (AR175) Benton,AR Entity Wide Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: 03131/2011 ~ r r G ~~~~;;~T r , ~ i i : i ~ ~!.Housing for! Disaster j 14.0VPDisaster! Housing! Formula ;! [! Project Total!6COJnponentUnitS; Persons with ihouslngaulstancej VoucherProgram! Choice Vouchers j Capital Fund! Subtotal! EUM i Total!!! Disabilities : Grant! l, Stimulus Grant! i, NetT;;-~-Rentar Revenue =1- $161!14 : -::lo:=--.~=---;;---==t===~j ===.1-- $0 i SO : i $1~ --+$167~~ ; i Tenant Revenue-other! $3.137 j so! SO i $0! $0 j SO! $3,137!! $3,137 ; f7050o-;tenantrevenue! $170,651 =f===~-r --!_0--+==-J~=---+ $0 : SO $0 1 $170,651 1 $0! -~ 651 : f7o6o0~~~ ---~====~-- ==-==- Lli~~l~-::=:~l=~;:== i -=~-;-~~==:t:=~-~==i.:o: :J ~"~---0_;~ : ~'" "'-~ ~ ' ~;:g;: Fee ~ ~- " " ) ~ i f ~ f ~ f:,07so OtherFees f7o7oo-r~""ifm:':':ro"'"""'c'c::::c-- >---== ~ t Government Grants! $0! $0 i $0 i $0! $0 ----~---$0-----l ~i~~~~~~~~~~~~~g~g~f ---~J~~K:~I;;~~~:;j~~#~~1~~~±~~ii;~-t_I~ fi~--~} "f:' i---= ~~~~T -~ i Fraud Recovery l $0 1 $0 l $0 i $0! $0 ; $6,102! i $6,102! : $6,102 : ; ; _..,., ; ]71500 other Revenue i $31,312! $1.000 i $0 : $0 i $0 : $381 i, $32,693!, $32,693 ; rs;;:~~=~~c~~==~=~~~~-~{~~tlj~~~~j;;:t~~~~~i~~~~iili~~~!~=~51,~1~~;~~~-r~=~~t~;~~~~!91100 Admlnistfatlvesatarles! $123,522 i $22,476! $17,017 i $0 i $0 $234,765 ; i $397,780 j i $397,780 t!moo_~lng F~ - ~ -====--=-..L=:s7.ooo --]=:} ::_..L:::~~== so -: r:::::::::::::~~::::::::::r:::::::::::!o:---- r s1.ooo 1 - $14,ooo _j 1 -r--i1~o 1! Management Fee ~ $0! $0! $0, so i so so ~ $0 ' so i gj~;;;;_;_~-----.:~====-~ ~r ~r~=~~:=-~1~~~=-=e~-~~~=t~=~=~=-=j--=:~ 0o--t---=r-:;e : -~L~;~~J i Employee Benefit eontrlbullons Administrative i $32,605 i $4,878 i $4,246 i $0 l $0 l $108,574 l $148,303!! $148,303 : ~--~~ r:~~=~=~~=::==~:~~~~~~~==~~~=i~;;~~;~~~~~~~:~;t~;~~~3~~~i~~~~~r=~:=;~~~3~~=~~~f=~~~-=--1=:;~~-- t~--~~====f;~~j ::: ::=z~ f------~ ~ ~~ ~ t--- :~ -+ : : : : -----f---~----~ t~:~;~~~~::~{~[=_=;~~~~~==~~:i=~~~~~=t~;ii~~~~~t~:~~~~!;;;~~!~;t;j(~;~;~=~(f~~=~~~~ii~~i~!=~1~~-~jf~~:=~l~~~=jj 33

49 Housing Authority of the City of Benton, AR (AR175) Benton,AR Entity Wide Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: , r r ~~ ~~~;;~-;.:T r ~ ~-----~ ~------T ~.!! [.Housing for! saster! 14.01/PDisaster! Housing! Formula [! [! j Project Total! 6 COmponent Units f Persons with ~Housing Asslstancej Vouel'ler Program j Choice Vouchel$ i C8pllal Fund 1 Subtotal i EUM [ Total r::-:;,~ -- -=-- -= ~-~~ -=-=~~~==~~= _]==~=~~~-=+- ~~i~~i==~i==j ----=~~ t=~--:- : ;m'~~~~-----t ::~:: j i Gas! $2,782 i $0 1 SO ; $0 ; SO 1 $0 l! $2.182 I i $2,782 l ~:. ::;~~~~-~~-~=~-= r~~~~~~i~~~-~~{~~i~~i~~ei~l-_j_±~----~;~5~! other Utilities Expense! $0 1 $0 I $0! $0! $0 i $0 i! $0 i ; $0 [ E~'""'"~ --~:~===---=: -~~-==-~-~~E~~:==~[==========r==]~~====E===~=~~==r==~~-J --,.-, :.. -=t---_:~: J t Ordinary Maintenance and OperatiOns Labor ; $120,346 ~ So ~ SO i $0 i SO i $0! $120,346 ;, $120,346 i ; ~ ~ ~ Ordinary Maintenance and Operations Materials and Other! $46,949 i So j $194 j $0 j SO i $5,989 i ; $53,132 j! $53, o r r r r ~ j Ordinary Maintenance and Operations COntracts i $31,200! $33,654 t SO 1 $0 j SO! $0 i! $$4,854! j $64,854 j [~~-=~~~;,_ ee""~~ntrib~ions. ordinary Maintenance ~J==~:$4-o.Ssi::r_-=~~=~~:==t~==~=:l::::~:,~:::::.':.'r~:~~~----r--:=-- _j L_ $4-o,-;--r-- --J- $40,967 :J Total Maintenance i $239,482 i $33,654 I $194 i $0 l $0 ' $5,989! SO l $279,299 I $0! $ i t==:=~~=== ==~~-=1===~-=r-==~==t==~=j=~~~~=::: L-- i - l j----==r=--=--=j i Proteetlve services. Labor I SO i so 1 SO! so i $0. so i 1 $0! i $0 i ~ectlve_.~~~-~"contraet~~ ~-~-=t~~~~~~=~~-r-===!?~~--; }?~=~~l=- -~~~==-.r~---~---- -t~-~---l i SO. L---===--=i $o==: r~~~~~~.:~~~~~~-=-~~=========1~=~~-;-=:=j===:==~===~-r====:~~=~~=t:==~~=~====l-===;~==~-=-t~-=-~; =i-.. ==------: ---~-- i-----==1~- ~ i other Generel Expenses! $795! $0 1 SO j $0 j.... ~-ii"~ab~~ =-== i so-~=1=-~1o=~=[~~~~--~j~~=~~~:~~r~=-!? i ~ ~=$J ~ J [96300 PaymentslnUeuofTaxes i $12,448 i SO i $0 i $0 i $0! SO 1 i $1.2,448! ( $12,448! ~~ ~! Interest of Mortgage (or Bonds) Payable i $ i $0! $0 i $0 j $0 j $0 ~ j $18,550. j $18,550 j l~:~;~;s;_;~~a~~=~~~~~=--===~~===~=~:~1~~=-~_;=~~±:~===~~~==±:~-~~~{~==~==r===~==~:==t:=:~-~~==t=-~---+~ : -=J -~---J -]==p===~i=~= J j Total Interest Expense and AmortiZation Cost [ $18,550 j $0 j $0 t $0! $0! $0! $0 j $18,550 j $0! $18,550! r--~==~=====~====:-~=-=:=~=~==1===:=..-r~~~=~=~~~~==-r=~~=::=r::::::~:~=:=i==---=r..=_----r ~ r t [96900 Total Operating Expenses i $562,628 j $62,185! $22,636! $0 i $0 [ $407,224 j $0! $1,054,673 i $0 ] $1,054,673, c=====~~====--=--=~~==~:=--=--=--==~~=r===:::::... J.. ====::~~:::::r:====:::::~j=======~~====r.l l f :===-- - ] 34

50 Housing Authority of the City of Benton, AR (AR175) Benton, AR Entity Wide Revenue and Expense Summary SubmissiOn Type: Audited/A~133 Fiscal Year End: r ~ ~--,---~ r r ;~ -! a1 Supportive! i j Housing for! Disaster! 14.01/POisaster! Housing! Formula,. f Prcjed.Total i6cornponen!unltsj Persons with ihouslngasslslancei VoucherPI'oglllm j Choice Vouchers j Capital Fund Subtotal! EUM i Total L---~ ! J--w w--"-----l-~~~--f- :: J. j -1- StimulusGrant ~ L ~!97000 ExcessofOperatlngRevenueoverOperatlngEXpenses j $9, $61,185! $342,445! $2,250 1 $0! $2,984,689 I $56,827 i $3,344,828 j $0! $3,344,828! L =--====:=-~.=-:-t--=:==--~c=:~-~~====r:=======--j===--=====r~~:~:=~:.==t===-=-:~t:-=-~- ~ --=L===--i- -l j Extlaorttlnary Maintenance j $4,095 j $0! $0 i $0! $0 ; $0! $4,095!! $4,095! l97200 casualty t.osses- Non-capitalized - ---=--====--=r-==-~ -I~===~=:===L--==-$0-:=]==- -~==- i --=J~==~=---'o--=r i $0 :----==r $0 -~l! HowlngAssistaneePayments! $0 i $0 l $312,243! SO! SO! $2,875,746 ; $3,187,989 1 l $3,187,989 ; i OpetaUngTransferln! $48,109 i $61,314 i $0! SO! SO! SO t! $109,423 i $1()g,423 i SO! t~~:~:~f~~~~-~~~~~--==--~===~~i- -~~~~ 42 ~~::~:====~:::~=:r=::===~====~1=~-~-~=~~==e~==~==~=e:~~~-i~:~.~-~--~~b=~~oga2 3 1:---~=-~-~j! Operating Transfers fromlto Component unit f $0! SO j SO! $0! $0 i SO j! $0 i i SO! l~~~:: =-~~:" ~~--=-~=~ -=--=-=~-~--=±===- ~E:==~====E=~--====t=~==:===r=~~====1--~~===~r=---:-~==-F--=]==-:-=-==:j j10070extraordlnatyllems,netgaln/loss! SO i SO i SO! SO! SO! SO j! SO! j SO! i Required Annual Debt Principal Payments i $14,595 i $0 1 SO 1 $0! SO! $0 ; $0 i $14,595! l $14,595.! 11o3o Beginning equity ----==--=====--~L- $3~370,490--~1=~118!~=:~..:~ _f=--sid.169--t-~4,3.284-~~t-$1:0z0.909 _c:$0--""f$ ~-==1:~~194~-~-~ PrlorPerlodAdjustments,EquityTransfersandcorrectionotErrors i $68,830! -$200! $25,962! j i -$28,089 l -$88,827 i -$304 i i -$

51 Housing Authority of the City of Benton, AR (AR175) Benton, AR Entity Wide Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: 03131/2011, , r------~ j ~ ~ wr ~. --~ r- i i! Supportive i Disaster!! ] Formula i i! ProjectTotal lscomponentunlts! =~:.!HousingAs:slstanca! ~~::.~:= j 6~ ~ 71 0 ~0:ng capital Fund Subtotal CUM Total! l!! Disabilities! Grant l! ce ou ers i Stimulus Grant!! ~~~~~~~:-=tei~ i lnfrastrudl.lr&purdlases! $0 j!!!! j I $0! $0! p351o c~oebtservicepaymenb ===--===-j_--~-=]~==-~-=:.=j.~=--====-l.=====--=-r-=-l i 1 so _:,_j-=y--1 ]13901 Replacement Housing Factor Funds 1 $0 j! j! i i $0 i i $0 j '...,,w,,w_ wowi _...,,_1- -- '.i

52 Submission Type: Aud~ed/A-133 Housing Authority of the City of Benton, AR (AR175) Benton, AR Program Balance Sheet Summary Fiscal Year End: 03/31/2011 ~... --~ r r ~ :: ~ : ~--~::: ::T... ~;:~: ~ i :: r =-- ~: :~~- : : ---r ~-~---~~-;~:: r , L l....,. l... ~.~-~~:.~~~~-~ ~::~...:... ~--- ~--rog ! Sti =~~~:.~rant_.. J J 6 Component Units J Housing for Person~ Housing Assistance) J: = ~ sasra~ C~ce Vou~~ J Capital Fund i Total..._..._... J ~ 111 Cash w Unrestricted ~ $10,506 ~ $129,081 1 $63,019 i so $49,435 ~ ; $252,041 j ffi~{~f~<~~1:~~~~t~~niz.tion an.~.:=":~~:~~===:: =_.::::::::::::::::... :.: ::::::r ::::::::. ;;_::::.:.: ::::r::::::::.. :: :~~::::::::.:::: r::::::::::.. :: ;E=:::.::.:r:::::::::::::;~- ---~:::~~;;:~::: -, -::::::::. ~--~:E:::::.:.:~~~::::.. ::J i 114 Cash- Tenant Security Depos~! so! so! so! so! so! i so! _ ,...,..._, f.,..._,_,..., i 115 Cash -Restricted for Payment of Current Liabil~ies ; so ; so ; so ; so ; so ;! so ; ;......,, ,...,..._..., ~ i 100 Total Cash l $10,506! $129,081 ~ $63,019! $0! $535,573! so! $738,179 j ~~~~~ ~ 125 Accounts Receivable- Miscellaneous i $0 i so! $0 ; so ~ $0 ~ ~ so j 1'12s AccouiiiS"Receivabie-:Ter.antS r... ~--- r... :So... ~... ici..., so... t... -so-... r = so... 1 n~~: Hif=~~-~%~~~1 ~~~~=-:~~:~~~:::::::::::::::=:==:::::::::::::::::::::::::::::::::r :~.::::::::::::::r::::::::::::::::~f:::::::::::::::r::::::::::::::::=:::::::::::::::::i:::=:=-- :~ - =:::::r:::::::::::._.: --::::::r:::::::~=::::::::::j :::::::::::::~~:::::::::::J -i 27-NoteS';"L;;;;;;;;; & iiiic;itii;;9;;;; R;;;c;;;;;;;t; i;; : cu-,;;;;;c r---$a ; $a ; $ r------so----- ; so----r :------io-----; i :za- i' ;:aii'ii.recoileiy $a , $a T ---$ 'T $-o---r $o-- r ; $ ,.~;~~ ~~=~~~:;oi;~~~~"::~ =:~:::::=:::::::"" ::: """ :::::::::::"":"::" " "~~~~~~.E::::::::".:";::::: :...,.. :::E:"::::::::~~;i:::::::::::::F :"""":.-.;~:.:::::::":: ::r::: :""::::~::.I=.:.. :::~l:.~.-- -I::::::::::::::: :::::: :::r=:;;~~~ =""i L --, Net of Allowances for Doubtful Accounts! $0! $15! $0! $57,762 l $1,853! so! $59, r r :...:... T... r l ~ _.1 n i n ve st-m ents-:"'uiiresiriciett......:... s;o- ---r so_... r... io :---- so... ~... s23; : : ":... S231.:ao;... l ~~~~ i 144 Inter Program Due From 1 $0 ~ $0 1 so j so! $93,956! ~ $93,956 l 37

53

54 Housing Authority of the City of Benton, AR (AR175) Benton, AR Program Balance Sheet Summary Submission Type: Audited/A-133 Fiscal Year End: 03/31/ ~~ r r~:: ~-~~--~-~::~;: r -~; :~~-~-~;:~ --r T... : ~ -... ~-T ~~:::::: r ! _,,,,,,_,,_, '''""'''' - -"""'''"-- ""'''''' ""'-! "'""'''''' J. l 6 Component Units!Housing for Personsi Housing Asststancel ~ 4 1 = ~ saster 1 ci~. ~ou~ l Cspital Fund l Total ~ Grant _J... :... -:.... :::J.... :_~~""'''':... L.M.~~:.. ~::t I M m --.J :: ~.j.:~~~~es : 354 Accrued Compensated Absences- Non Current : $522 : $309 : $0 : $0 : $8,514 : : $9,345 :!::~~~:~~~iiw~~i~~:;~~:~,:::,~~=~= :::::::~~:-~:~~ :::.. ~~~~~::::... :::::::::::t~~:::::::::~;:::::::::::::::::::;:;::~.:~:: : :: ::::::r. :::::::::::.;::::=:::::t::::::::... ;:::~J:~:::::~:::;::.:... : r:::::~:::::::::~:.~=::::j=~::::::f":::~]! 350 To~-~--~?.~:~~~~t Liabil~i::... ~~:::::::::::::::::::::~====-~~::~:::::::::::::::::::::::::::.. M - i -:~::::==:::::::::::::::!:::::::~::~::=::~::::::::::::::::::I::::::::::::::::::=~:::~::::::::::J:=~::~::::::::~=::::::::::::::J=- - ~~~::::~:::::::::::+=~:=~::::=:-+:~::::~:.:: 34 ~.. ~:~:::::1 :.....,._.,I,_,_,.._,_ j $503,732 i $13,504 i $0 j $71,046 j $53,583 i $0 i $641,865! t ~ ~ " """"""""""'!""""""'"",... l " i"soii:"i"""""invested i;; cap~a"i"asseis; iiiet of Relateci"Debt..._... r $0 i $0 -- -y- -- $0 --r--$0 r $114,an -r -- -r $;;4,87r.., i so Fu nct"baiance.. Resei;;e d _ r...-~ '... 1".... r : s11.2 unreserved, Designated Fui1Ci-sa iai1c r r r r-- - ~ -- r : - --! r... _... r , ~~~~~ --...,_ _...,..,h...,,

55 Housing Authority of the City of Benton, AR (AR175) Benton, AR Program Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: 03131/2011 = :... r~-~~~; s_:~; ~~: r 1.. ~;:~ ~.. ~ i:::.. T...:.. - r r ~ ::::~~~- -r- --! is component Units! HousJngf~r ihousingassistancei 14 DVPDisaster 14 ~ 71 HousJng Capital Fund Total 1 5 Persons With 5 Grant 5 Voucher Program 1 Ch01ce Vouchers 1 S1imulus Grant 1!ToJoo Nei.reiialii.. Re.~~~~ +-.. l'l.e.~~~u.~::::::::::::::::::::::::::==::::::::::::::::::::::i:::::=~~--=::::::1:::::::::::'=:.~'::=-... sa i so :::::!!i:::::::::::::::l..._:::::::::::::::::j::::- o;;::::::::::-1 ~ Tenant Revenue - Other : so l so i so i $0 i so i : so : l?:o:=::===~~i::=~~~~~::~~~~:"-~::::: ----=:::::::::::::::::::::::::::::= -..:... :::::: :-::::::::::::r=~:==:::~::::::: :::::~:::::::::::::::::J:::::::::::::::::~:::::::::::::::r-~ ~]..:... :::::::::~ -- - r:.::::::::::.. so ~::J i HUD PHA Operating Grants j so 1 $364,613 1 SO l so 1 $3,362, $3,727,013 i L?~ 1 o~: _~~Si"1e nt inoome- unres!~.~~... ::::~:::::::::::::::::::::::::::::::~:~:~:~::r=~~:::::~::::::::::::::::r=::~=------j... :~:~~~==J--$ ~::::::::~!.;!.:~:?.~:=c::::::::::::::... l- :::~?.;!.1o - ::::: Mortgage Interest Income 1 so 1 so l so i so 1 so l so i (71 ao a proceeds tram DiSPOSiiiOn ot :c.:ssets H e id.. fo r saje - r so so ~ $0.. r -$o i i o... ~ r--- io - -1 rr1 a1 a cost ot saie-ot ASse ts r so -- - r-- io r ;so -r ia -rso r --- -r-- ia -1 ~~-~ ~ Total Revenue! $1,ooo! $365,081 l $2,250 l $0 $3,391,913 ; $66,827 ' $3,827,071 l [~!; i:~~~-~~~:.;~~::~~~;.~:::::::::::::::::~: :: ::.~:::::=:::::::.::.::::::::=::::::r :.:=.;.;;~r.~::::::::::f ::-::::;;:~:~i~=:::::r:::::::::::;=::=::=r:::::::::::::=:::::::::::::e:::::~~;... r :::::::::::::::=:r::~~;~~~-=:j ; Auditing Fees 1 $0 1 so l $0 l so l $7,000 l l $7,000 ; ~~ Other 1 $1,075! $414 $0 i $0 l $ l l $26,897 r:~:.:.~::::~~;~~~~~~~:::::=:::::::::::~~::=:::::: :::.. _::::~~:::::::::~:::::~:.~:~::_::::::t:::::::::~~~~::::::r~~::~~~:::~:::::~;:~:~~:~~::~:~i::::.::~~~;:::::::::t:.::::~:~-.--:::::::::±::::~~,~":~=::::1 40

56 Housing Authority of the City of Benton, AR (AR175) Benton, AR Program Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: 03131/2011, l 1 ~~-~~--~.:~;~: r ~;: ~-~--~ i ::::; -, : - l- ----~ - r 14..: ::~= r ! iscomponentunitsi Hous ngf~r ihousingassistancei 14 -DVPD saster 14 ~ 71 HousulQ! Capital Fund i Total! i Persons w1th! Grant! Voucher Program i Cho1ce Vouchers i Stimulus Grant! i::~~!:~~:::'r.~~~~:~~r.il!~~~=:~~ia~,::=::::::::::::::::::::::::::::::::::==::::i:::::::::::::::::'."~:=::t:::::::~::=::::::::!::::::::::::::::~::::::::::::::l:::::::::::::::::s.~:::::::::::::::l::::::::::::::~-- --r:::::::::::::::::... _,_,l::::::::::... ~ ::::j i Relocation Costs i $0 i $0 i $0 i so i $0 i i so i ~~~ i Water i $0 i so i so i $0 i so i i $0 i l:~~}~~::~:r-iii\y.:::::::::::::::::=:====::::::::::::::::::::::::::::::::::::::::::~ :=::::::::::~:::::::::::.. -r- ==~:::::::::::::r:::::::::::::::~~:::::::::::::::r::::::::::::~:::::::.. -r-- : ::::::::::::::r::::=::::::::::::c::::_.~::::::::::~ r=~~:~;:=::=~==:: ~ - --~... :::::::::::::::::::::::::::::::::::::::::::=:~:~-=~=~r::::::::::::::~::::::::::. ;... ~~~~:::::::::::::r:::::::::::::::~:::=::::::::::r::::::::::::::~~~~::=~-t :~:=:::::::::::r:::::::::=~=:::::::::r::::-::::::::::-i '::ii~i:~~birffi~!'~1ti0.~:~~~~:;:~~~:::::... :_=::=.::::::::.. ::::.. J:::::::::::.. : ~t::::.. ~=.::/::::::::::::::::~ :::::::::::::::f".. :::::::::::~ ::: ::::::::::r::::: : :::::::~r::::.:::::i~~ - :~.=::.. :.f::::::::::.. ::~: ::::;::::::::., :~~ :::::::::~~ l]~~..:::t.~~!::g~:(~:::::::::::::::::::::::: - - ::::::::::::::::::::::::::::::::r:-- $~... :::::::::r:::::::::::::::!~::::::::::::::::r::::::::::::::::~:::::::::::::::r::::::::::::::~~::::::::::::::::r:::::::::::::.!o - =:r:::::::::::=.~? -- :r:::::::::::::$0 :::::::::::::: ~~--:~~~~~ ~~:~:~~~~:~:~~~::::~~~~~==i:=::::: ::::~.:::... :::::j:::~=l~~~ :~-:.:=::3=~... ~-~ = :.::.. :t::::::::::~~;::=: 1::: : :::::::::::::::=j:=~::::::~~.;::::::::::l ~ Ordinary Maintenance and Operations Contracts ~ $33,654! so! $0! so $0!, $33,654! ~~~~ ~ ProteC!ive Services - Other... M... i.,... ~... j so_... L... ~~...J... ~..-- ~ $~... L L... ~... ~ Employee Benefit COntributions - Protective Services ~ so i so i so i $0 1 $0 ~ ~ so i L~~~-~~-.. T.~~~~.. ~-~~~~.. ~-~-~~:~~::::::::::::::::::::::::::::::::::::~=:=::::::::::~::::::~::::::r::::::::::::::::~~:~:::.....l... ::::::::::#.:::::::::::::::r::::::::::::::~::::::::::::::::r::::::::::::::::~~::::::::::::::::;:::::::... ~ -.. r:=::::=::::~~... =~:::::::::::::... ~-~:~::::::1 ~~~.. : ::J r:~~~~--~;.;..~:~~j~~i.~::::::::::::::~:~:":":~~:~:.:::::-.~::::::::::::::~-::::::::::j~:::~:::.;::... =::+::~:::::::::::~::::::::::::::::r::::~~~::~:~~:., :"-:I::::~":.:.:"~i:~~::::~I~:~=:::=~~... ::::::~:I~:~::~:::::::::~~:~::r::::::::::::~~ ~, Payments in Ueu of Taxes _..,..... $0.,!... $0 j $ j... 1 so l... so!,,..., i so -._,.; l i Bad debt- Tenant Rents l so l so i $0 : so i $0 : i so ~ :...,,...,...:..._,_._,,,..., _... 41

57 Housing Authority of the City of Benton, AR (AR175) Benton, AR Program Revenue and Expense Summary Submission Type: Audited/A-133 Fiscal Year End: 03/31/2011 r..._ T r ~ ~: ~-~~--~~;~;:r ~-; ~:-~i= r T... T j 6 Component Units! Housing f~r 1 Hou~ing Assista:ce~ 14.DVP Disaster 14.~71 Housing j 1 i Persons With i Grant ; Voucher Program Choice Vouchers i ; ; Disabilities ; ; ; Formula Capital Fund Stimulus Grant , Total j Total ~-~e~_st ~=~~~-~~~-~~~~tion Cost ' so ' so SO ' so j so j so $0 j ~~~!~~~:~ t:~?.~~~:::~cess of Operatifli~~~~~~~:~~!T ~~ting ~~~,~~:::::::J:::::::::::~i;:!~ oo EXtraorti"friar; ;;,;a iiitenance ! so r~~~~:::~~;~~ ~~r~n~i~~~~~:::~::~:::~:=~~=::::::::::::::::::::!:::::::::::::::::~:::::::~:- r:t!~fit:~?j::~iitl;~~:=:::::::::::::::::::::::::::::::::::::::::::::::::=~:::::::::::::r::::::::::::::~:::::::::... t - -ic; --r- so - ] """""""""""""---- r97500""fi-3udi:o'sses''_ T... SCi ;o !'... $0... r~~g~:~~t!t:ri~~~:sp~y~:~~~~t~~:~:~;::~~~~~::~~~~==:~~::::r:::::::::::::::::::::::::::::::::::f::~:~... : --.. ~=~~~~ _ ~~!~~~~~~;:~e:::::::::::::::::::::::::::::::::::::~~.. :::~~-:.~:~~:::::::~::::::::::::~~::~:::::r ::~:::::::l::::::::~:::~::::::::::::;r~~-:::::~:::~:::::;:;:j=:~:~~~=::::::::t~::: ~::::::::::::::I~:::::::~:~:~::~J i Operating Transfer In i $61,314 i $0 i so $0 j i $61,314 i!""1 oo2o operating traiister out r... SO...-y SO... T... so... T... SO... T...-:s4.0i r10o300jjei'ating TniriSfers froililto"p'ri'ma;y"govemment""'"""""""""t'"""""""'so"'"""'~""""""'so""""""'""f""""""""so""'"""""t'""""'"""so"""""""'t"'"---ro r~:~~~ff~~~m~:~~~~~~t~pit~~::~~l-~::::~~:::::::::::::::::::::::i:::::::::::::::::~~::===t:::~:::::::::::~::::::::::::::::r::::::::::::::~:::::::::::::::r:::::::::::::::~~::::::::::::::::f::~~~~ $0 r~ ~~~~ ~~~ce-~:n=~~t:::~~~~lt~~:~~~::::::::::::::::::::::::::~~:~:::::::::::::::::::::::j:::::::::::::::::~:::::::::~--!.~:::~:::::::=::::::::::::::::r::::::::::::::~::::::::::::::::::::::::::::::::::~~::::::::::::::::~... $0 i Items (Net'Giirl/LOSS)""""""'""""""'"""""""" SO... T... $0... ~... $0... ~... $0... ~ --.-o roject Excess cashtrans:rer i n T... f... f'... T... r ~ ::c:"~~~~;.~:.~~1.i. ;:;~::::===::::::::r:::::::::::::::~::::::::::::r~::::::::~::::::::::::::r::::::::::::::;~:::::::::::::::r:::::::::::::~:::::::=r :::~~:... o...:...o.., o..._ n.,, '.,.,., : "'"' ' "'" : "'"' ~ $0 r