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1 H oush~g A uthority of the T ow n of K aplan K aplan,l ouisiana o I,'1 (.._ (') ' -5.J Underprovisions ofstate law,this reportis a public docum ent.a copy ofthe reporthas been st.~m itted to the entity and otherappropriate public offici~is.the reportis ~.w ailatfle forl~ubllc inspecl!on atth~ 3aton Rouge office ofthe Legislatlv~ At.Jditorand,w here appropriate,atthe office ofthe parish clerk of court. ReleaseDate.~ ::Jc~ L, W ILLIAM D ANIEL M ccaskill,cpa A PR OFESSIONA L A CCO UN TING CORPORA TION 415 M A G N O LIA LAN E M AN D EV ILLE,LOU ISIAN A 70471

2 TA BLE OF CON TEN TS Independentauditor'sreportand unqualified opinion on generalpurpose financial statem ents. Exhibits--.G eneralpurpose finan cial statem entsas of an d forthe fiscal yearending June 30,2000: (A) (B) (C) (D) (E) Com bined Balance Sheetforallfunds Com bined Statem entof Revenue,Expenses,an d Change in Equity forall funds Com bined Statem entof C ash Flow s for a lfunds Com bined Statem entof Revenues& Expenditures- BudgetvsActual forthe generalfund Statem entand Certification of ActualM odernization Costs N otesto the finan cialstatem ents Supplementary information schedules(gaap) Schedule of Expendituresof FederalAw ards Com bined Balance Sheetforallfunds Com bined Statem em of Revenue,Expenses,and Chan ge in Equity forall fu nds Reporton cornpliance and on intern al controloverfinan cial reporting based on an audit of finan cialstatem entsperform ed in accordance w ith governm entalauditin g standar ds Reporton compliance with requirementsapplicableto each majorprogram an d intenml controlovercom pliance in accordan ce w ith O M B Circular A -133 Schedule of PriorFin dings Schedule ofcurrentauditfindingsan d Questioned Costs Schedule ofauditadjusting Journal Entries Schedule of Corrective Action Plan

3 W ILL IA M D A N 1EL M cc A SK ILL,C PA A PR O FE SSIO N A L A C C O U NT IN G C O R PO R A T IO N 415 M AGNOLIA LANE M ANDlZ.VILIJ~,LOUISIANA TELEPtlONE NUM BER (504) FAX NUM BEI~.(504) CI~IJ,NUM IIf'R (504) E-M AIL DANNYMAC@ CM Q.COM M EM BER OF: M ISSISSIPPISOCIETY OF CPA'S LOUISIA NA SCK~IETY OF CPA'S AM ERICAN INSTITUTE OF CPA 'S IND EPEND ENT AUD ITO R 'S REPO RT UNQUALIFIED OPINION ON GENERAL PURPOSE FINANCIAL STATEM ENTS D SUPPLEM ENTARY SC H ED ULE O F EXPENDITUR ES O F FEDFRA L AW A RD S Bom d of Com m issioners H ousing Authority of the Town of K aplan Kaplan,Louisiana 1 have audited the accom panying generalpurpose financialstatem ent s of the Housing Authority of the Town of Kaplan (PHA)as of and forthe year ended June30,2000,as listed in the table of contents. These general purpose financial statem ents are the responsibility of the PH A 's m anagem ent. M y responsibility is to express an opin ion on these generalpurpose fin ancial statem entsbased on m y audit. Iconducted nay auditin accordan ce w ith generally accepted auditing stan dardsapplicable to financial an dits com ained in Government Auditing Stan dar_ds, issued by the Com ptrollergeneralof the U nited States,and provisions of the Louisiana Governm ental A udit G uide. Those stan dar ds required that I plan and perform the audit to obtain reasonable assuran ce aboutw hether the generalpurpose financial statem ents are free of materialnfisstatem ent. A n auditincludes exam inin g,on a testbas is,evidence supporting the am ounts an d disclosures in the generalpurpose financial statem ents. An auditalso includes as sessing the accounting principles used an d the significan t estim ates ma de by m anagem en, as w el as evaluat ing the overall general purpose financial statem ent presentation. Ibelieve tlm tm y auditprovides a reasonable bas isform y opin ion. In m y opinion,lhe general purpose fin an cialstatem entsreferred to above present fairly in all material respects, the financialposition of the Housing A uthority of the Town of K aplan as of June 30,2000,an d the results of its operations an d the cash flow s of its propriety fund types forthe year ended in conform ity w ith generaly accepted accotmting principles.

4 A s described in N ote A to the fitmncial statem ents, the PH A has changed from the governm entalfunds m ethod of accounting to the enterprise funds m ethod of accounting for the year"ended June 30,2000. In accordance w ith G overnm ent A uditi _ n _ g_st _ and~ ~4~ ds Ihave also issued a reportdated _ June 30,2000 on m y consideration of the PH A 'sinternalcontroloverfinancialreporting and m y testsof its com plian ce w ith certain law s,regulations,contracts,and gran ts. That reportisan integralpart of an auditperform ed in accordan ce with GovennnentA uditing Standardsan d should be read in conjunction with thisreportin considering theresultsof m y audit. M y auditw as conducted forthe purpose of rota ting an opinion on the generalpurpose financialstatem ents of the PHA taken as a w hole. The com bining and individualfund financialstatem ents and schedules,as w ellas the accom pan ying schedule of expenditur es of federalaw ar ds is presented forpurposesof additionalan alysis as required by the U.S. O fice of M anagem entand BudgetCircular A -133 Audits of States.l,ocalGovernm ents an d N on _. P _ r~fit _ organizations,an d is nota required partof the generalpurpose financial statements. Such information hasbeen subjected to the auditing procedur esapplied in the audit of the general purp ose finan cial statem em s an d, in my opinion, is fairly presem ed in al lm aterial respects in relation to the finan cial statem ents and any other included supplem entary inform ation taken as a whole. This reportis intended solely forthe inform ation and use of the Board of Com m issioners of the PH A,and for filing w ith the Departm entof H U D and should notbe used foran y otherpurpose. W illiam DanielM ccaskill,cpa A ProfessiormlAccounting Corp oration Decem ber5,2000

5 The Housing A uthority of the Tow n of Kaplan Kaplan,Louisiana C om bined Balance Sheet-A llfunds A s ofjune 30,2000 EXHIBIT A Page I ofi C urrentasse ts: Cash and Cash Equivalents $ 44,611 TotalAccounts Receivable,NetofAllowance fordoubtfulaccounts Investm ents -Unrestricted 243,447 Prepaid Expenses and OtherAssets 18,006 inventories TotalCurrent Assets $ N oncurrentassets: TotalFixed A sse ts, Netof Accum ulated Depreciatio~ TotalNoncurrent Assets $ 2,446,261 $ 2.446,261 TotalAssets Liabilities and Equity C urrentliabilitie.~: Accounts Payat)le < 90 r)ays Accrued W age/payrolltaxes Payable Accrued Com pensated Absences Accounts F'ayable -HUD PHA Program s Accounts Payable -O therg overnm ent TenantSecurity Deposits OtherCurrentLiabilities TotalCurre~ltLiabilities 7, , $ 15,365 TotalNoncurrentLiabilities TotatLiabitities TotalFund Equity TotalLiabilities and Equity $ 15,365 $ $ 2,752,325 See notes to financialstatem ents

6 The H ousing A uthority ofthe Tow n ofkaplan Kaplan,Louisiana Com bined Statem entofrevenue,expenses,and Change in Equity -AllFunds ForFiscalYear Ending June 30,2000 EXHIBIT B Page Iof1 Revenues: NetTenantRentalRevenue HUD PHA G rants Investm enlincom e -Unrestricted O therrevenue TotalRevenues O perating E!xpenses: Adm inisl:ralive TenantServices Utilities O rdinary M aintenance & O pe rations Extraordinary M aintenance Casualty Losses -Non-capitalized Insurance Prem ium s OtherG eneral[expe nses TotalO pe rating Expenses Before Depreciation Exce ss Revenue O verexpense s Before Depreciation De prec iation Expe nse NetOpe rating Income (Los )AfterDe preciation $ $ $ ,623 81,302 1, $ 287,183 $ 334, $ 281,619 Beginning 3/31/99 NetOpe rating Income (Loss)AfterDe preciation PriorPeri~<lAdjustments CapitalO utlays Ending 3/31/00 $ 4,664, ,619 (2,230,193) $ 2,736,960 See notes to financialst atem ents

7 The Housing A uthority of the Tow n of Kaplan Kapian,Louisiana Com bining Statem entof C ash Flow s -A llfunds For FiscalYearEnding June 30,2000 EXHIBIT C Page 1 of2 Cash flows from operating activities: Cash received from tenants Cash received from otherincom e Cash paid forgoods and services Cash paid to em ployees Netcash provided by operating act ivities $ 137,270 52,968 (232,052) $ (96,945) Cash flows from noncapitalfinancing activities O perating (]rants and subsidies -softco sts Cash paid forgoods and se rv ices Netcash -softcosts $ $ $ 171,255 12o 171, Net cash provided from noncapitalfinancing act ivities $ 256,708 Cash flow s fl'om capitaland related financing act ivities: Proceeds from grants $ Acquisition ofcapitalassets Proceeds from issuance ofnotes 21,029 (21,029) Netca sh used forca pitaland related financing activities Cash flow sfrorn invest ing act ivities: Interest on Investm ents Totalca sh from invest ing act ivities $ 3,740 $ 3,740 See notes to financialstatem ents

8 The Housing A uthority of the Tow n of Kaplan Kaplan,Louisiana C om bining Statem ent of C ash Flow s -A llfunds As of June 30,2000 EXHIBIT C Page 2 of2 Reconci iation ofoperating incom e to netcash provided by operating activities: Adjustments to reconcile ope rating income to netcash $ ~ 4 _ 2~_ Totalnet adjustments -non cash Adjustm entsto reconcile ope rating income to net ca sh: (Increase)[~,crease in tenantrents rec eivable (Increase )Decrease due from U.S.Departm entofhud (Increase)[~ crease due in supp}ies inventory (Increase )[~ crease in prepaid assets (Increase )[~ crease in undistributed debits (Increase )Decrease in accounts receivable m isc Increase (Decrease)in accounts payable othergovern m ents Increase (r)ec rease )in accounts payable and accrue<!liabilities Increase (Decrease)in accounts payable HUD Increase (Decrease)in accrued vaca tion pay Increase (Decrease )in deferred revenues Increase (Decrease )in tenantse curity deposits Totaladjustments to reconcile ope rating incom e to netca sh Netchange (dec rease)in cash and cash equivalents C ash and cash equivalents atbeginning ofyear Cash and cash equivalents atend ofyear(exhibita) $ (7,142) $ 2 1,444 (700) (2,710) (992) 7,334 ~ _)_ $ 4,353 $ 160, $ 288,058 See notes to linanciatstatem ents

9 The Housing A uthority of the Tow n of K aplan Kaplan,Louisiana Com bined Statem entof Revenues & Expenditures -Budget vs.actua G eneralfund ForFiscalYear Ending June 30,2000 EXHIBIT D Page l ofl Low Rent Vari~ '~oe Budget ActuaJ Actualw Budget (HUD 52599) (Sch3,ColB) Over(Under) Revenues LocalSourCes: TotalTenant RentalRevenue Investm entincom e -Unrestricted Re(;eipts;from Sale ofequipm ent O therrevenue FederalS ources: O perating Subsidy /HUD PHA G rants AnnualCor~tribut ions TotalRevenues Expe nditures Adm inistrative TenantService s Utilities O rdinary M aintenance & O pe rations Em ployee E3enefitCont ributions OtherG eneralexpenses Nonrout ine M aint enance Casualty Losses -Non-capitalized CaptialExpenditures TotalExpe nditures $ 182,550 $ 186,697 $ 4,147 4,820 3,740 (1,080) $ 447,703 $ 450,686 $ 2,983 $ 5~,280 $ 50,556 $ q5,750 74,760 30,620 47, ,623 70,556 28,279 38,013 1, (4 (5,724) 2,873 (4,204) (2,341) (9,729) Exce ss Re,venues (Deficiency)OverEx penses See notes to financialstatem ents

10 Th()Housing A uthority of the Tow n of Kaplan Kaplan,Louisiana Stats rneritof C ertification of A ctualm odernization C osts For the FiscalYearEnding M arch 31,2000 EXHIBIT E Page 1 of1 Modem izat ion Project Num ber LA48P LA48P O riginalfunds Approved Less Funds Expended (ActualModernization Cost) 162, , ExCess Funds A pproved $ Funds D isbursed Less Funds I-Xl:X.~nded (ActualModernization Cost) Excess Funds Disbursed The distributiorlofcosts by projectas shown on HUD Final Perform ance and Evaluation Reports dated 9/20/99 and ,a,ccx~rnpanying the Act ualm odernization Cost Certificates,subm itted to HUD forapprovalare in agreem entw ith tile PHA's records. A lm odernization cost s have been paid and allrelated liabilities have been discharged through paym ents. See notes to financialstatem ents ]0

11 H ousing A uthority of the Tow n of K aplan K aplaa,louisiana NO TES TO TH E FINANCIAL STA TEM EN TS Housing Authorities are chartered as a public corporation underthe law sof the State of M ississippifor the purp ose of providin g safe and sanitary dw eling acconunodations for the residents of Kaplan, Louisiana. This creation w as contingent upon the local governing body of the city,county,or parish as applicable. A five m em ber Board of Comm issioners governs the PH A. The m em bers,appointed by the M ayor of Kaplan, Louisiana,serve a fouryearstaggered tenn. Underthe United States Housing Actof 1937,asam ended,the U S Depar tm entof H U D has direct responsibility for adm inistering low rent housing program s in the United States. Accordin gly,1-iu D has entered into an annualcontributions contract w ith the PH A fortbe pro'pose of assisting the PH A in finan cin g the acquisition,construction and leasing of housing unitsan d to make annualcontributions(subsidies)to the PHA forthe purpose of m ain tain ing thislow rentchar acter. N O TE A - FINANCIAL REPORTIN G E G enera ly accepted accounting principlesrequire thatthe finan cialstatem ent s presentthe accountsm~d operationsof the PH A and itscom ponentunits,entitiesforwhich the PH A is considered to be finan cial ly accountable, Blended com ponent units,although legally separ ate entities, ar e, in substance, part of the PH A 's operations and data fi'om these units,if any are com bined w ith data of the PH A. leach discretely presented com ponent,if an y, w ould be reported in a separate colum n in the com bined financialstatem ents to em phasize that it is legally separat e from the PH A. As of June 30,2000,and for the fiscal then ended, the PH A had no discretely presented com ponent units or an y com ponentan itsthatar e required to be blended in these fin an cialstatem ents. (2) _CJ~ar~e_in Accounting Prir~ For the year ended Jun e 30,2000,the PHA has changed from the G A A P governm ental fundsm ethod ofaccotm ting to the enterprise m ethod of accounting. The enterprise m ethod accoun ts for operat ions in a m annersim ilar to a privat e business. Under thi s rnefl~od,allassets,including fixed assets,and allliabilities are in one fund, an d one financialstatem ent. The enterprise m ethod recognizes revenues and expenses on the fu l accnlal basis. Revenuesare recognized when earned and becom e m eas urable. Expensesar e recognized in the period incurred, if m eas urable. The prior m ethod of accountin g, govern m ental fu nds,utilized the m odified accrualm ethod.

12 H ousing A uthority of the T ow n of K aplan K aplan,louisiana D epreciation expense m ustbe recognized forthe enterprise m ethod of accounting. U nder the H U D reg~dalory m ethod of accounting,depreciation was notrecogmzed. (4) The entity defines cash and cash equivalents to inc~tude certificates of deposit,m oney m arketfur ids,savingsaccounts,and dem and deposits (5) T enant_receivable~ Receivables for rental an d service charges are reported in the G eneral Fund, net of allow an cestbrdoubtfulaccounts. (6) _Co~p_ert';med Absence ~s A uthority em ployees accrue personalleave,or compensated absences,by a prescribed form ula based on length of service. NO TE B - ('ASlf DEPOSITS WITH FINAN CIAL INSTITUTIONS Category I: Insured orcollateralized w ith securities held by the entity orby its agentin the entity'snam e. Category 2: Collateralized w ith securities held by the pledging fin ancial institution's trustdepa~trnentoragentin the entity's nam e. Category 3: Uncollateralized,uninsur ed and unregistered,butw ith securitiesheld by the bank,itsagent,pledged to the PH A,butnotin the PH A 'snam e. Cash Deposits,categorized by levelof risk,(atcost,which approximatesmarket)are: "oralb ank Balan ces Ca egory 1 Category Category 2 3 $288,108 ~ $100, $188,108 12

13 H ousing A uthority of the Tow n of K aplan K aplan,l ouisiana N O TE C --ACTIVITIES OF TH E PHA At June 30, 2000, the PHA w as nm naging 86 units of low -rent under FW -2024, a C om prehensive G rantprogram,an d Public H ousing D rug Elim ination Program. N O TE D - CON TIN GENCIES. The entity is subject to possible exam inations by federalregulators who determine com pliance with term s,conditions,law s and regulations governing grants given to the entity in the currentand prioryears. These exam inations m ay resultin required refund by the entity to federalgrantorsan d/orprogram beneficiar ies. N O TE E -FIXED ASSt'77S A snoted in N ote A,softcostsform erly capitalized have be en written of an d fixed assets are now depreciated on the straight-lin e m ethod over their estim ated useful lives as follow s: Site im provem ents Buildings Building im provem ents N on-dw ellng stru ctures Equipm ent 20 Y ears 20 Y ear s 10 Y ears 20 Y ear s 3-7 Y ears C urrent A ccum ulated N eta sset Low Rent Cost D epreciation Depreciation V alue ILand $ 162,549 $ 162,549 IBuildings 2,646,254 $40,917 $885,724 1,760,530 ILeaseholdhnprovements 754,549 12, , ,154 ttotal $3,563,352 $53,139 $1,138,119 $2,425,233 A llland and building are encum bered by a D eclaration of Trust in favor of the U nited Statesof,~ neric:a as security forobligationsguar anteed by the governm entan d to protect other interests of the govextnnent. N O TE F -LON G -TERM D EBT Long-teru tdebtow ed to H UD orguaranteed and serviced by H UD has be en reclassified to H U D equity accounts. 13

14 H ousing A uthority of the Tow n of K aplan K aplan,louisiana N O TE G --.RETIREM EN T PLAN The entity provides benefits for all of its fidl-tim e em ployees through a defined contribution plan. In a defined contribution plan, benefits depend solely on am ounts contributed to the plan,plus investm ent earnings. Em ployees are eligible to participate after a six m onths exclusionary period. The em ployees contribute a m iifim um 6% and the entity contributes 8.5% of the em ployee's base salary each m onth. The entity's contributionsforeach employee (an d interestalocated to the employee'saccount)are vested 20%.an nually for each year of participation. An em ployee is fu ly vested after 5 years o f participation. The em ily'stotalpayrollin fscalyear ended June 30,2000 w as $55,131. The ent ity's contributions w ere calculated using the base salary mnountof $55,131. Contributionsto the plan w ere $3,307 and $4,686 by the em ployee an d the entity,respectively. NO TE tt-.disclosures ABO UT FA1R VALUE OF FINANCIAL 1NSTR UM EN TS: The following m ethodsand as sum ptionsw ere used to estim ate the fairvalue of each class of firhancialinstrum ents forwhich itis practicable to estim ate thatvalue: Cash an d Investm ents The carryin g am ount approxima tes fair value because of the short maturity of these insm tm ents. N O TE 1- USE OF ESTIM A TES 1N PREPARA TION OF FINAN CIAL STA TEM EN TS The preparatkm of financialstatem ents in conform ity w ith generaly accepted accounting principles requires managem ent to m ake estima tes an d as sum ptions that afect certain reported am ounts and disclosures. Accordingly,actual results could difer from those estim ates. N O TE J -COND UIT D EB T OBLIGA TIONS. To provide for developm ent and m odernization of low rent housing units,the authority issued N ew Hons in g A uthority Bonds an d Perm anentn otes- F.F.B. These bonds an d notes ar e payable by H U D and secured by annualcontributions. The bondsan d notesdo not constitute a debt by the authority and,accordingly,have not been reported in the accom pan ying finan cial statem ents. N O TE K - PRIOR PERIOD ADJUSTM E~ S I~ -sli-p.~gr_yearde_~ ciation $ 2,230,193 14

15 H ousivtg A uthority of the T ow n of K aplan K aplan,louisiana N O TE L -IN TERF UN D RECEIVABLES / PA YABLES N one N O TE M --COM PENSA TED ABSEN CES." AtJune 30,2000,em ployees of the PHA have accum ulated and vested $7,334 of em ployee leave benefits,com puted in accordance w ith G A SB Codification Section C60 The balance atjune 30,2000 w as $7,334.

16 The H ousing A uthority of the Tow n of K aplan Kaplan,Louisiana Expenditures of FederalAw ards A s of June 30,2000 SCHEDULE 1 Page 1 ofi IJ.S.Departm entof Housing CFDA # and Litton Developm entdirectproqram s a l.ow RentPublic Housing Public Housing Com prehensive Im provem entassistance Program FederalAward E xpendfure $ 85, ,403 $ 277,736 See notesto financialstatem ents ]6

17 The Housing A uthority of the Tow n of Kaplan K aplan,louisiana C om bined Balance Sheet.A llfunds A s of June 30,2000 SCHEDULE Page 1 of2 Low Rent ClP Total CurrentAssets Cash -Unrestricted TotalCash Accounts Rece ivable -M iscellaneous Accounts Receivable -Tenants Dwelling Rents Allowance fordoubtfulaccounts -Dwelling Rent s TotalAccounts R~ e~vable,netofallow ance $ 44,611 $ 44,611 $ 44,611 - $ 44,611 $ InveStm ents -Unrestricted Prepaid Expenses and OtherAssets Inventories TotalO therassets TotalC urrentassets $ 261,453 $ 306,064 - $ 261,453 - $ 306,064 Land Buildings Furniture,Equipm ent& M achinery -Dwe lings Furniture,~quiprnent& M achinery -Adm inistration Leasehold Im provem ents Accum ulated Depreciation TotalFixe(IAssets,NetofAccum ulated Depreciation $ 162,549 - $ 162,549 2,646,254 $ 21,029 2,667, , ,549 1) ( TotalNoncurrentAssets TotalAssets See notes to financialstatem ents 17

18 The Housing A uthority of the Tow n of Kaplan Kaplan,Louisiana C om bined Balance Sheet-A llfunds As of June 30,2000 SCHEDULE Page 2 of2 [.iabitities and EQuitv C urrentliabilities: Accounts Payable < 90 Days Accrued W age/payro ltaxes Payable Ac rued Com pensated Absences Accounts Payable -HUD PHA Program s Accounts Payable -OtherG overn m ent TenantSecurity Deposits OtherCurrentLiabilities TotalC urrentliabilities $ , $ 15,365 $ 7, , TotalN oncurrenlliabilities $ - $ TotalLiabilities Equity : $ 15,365 - $ 15,365 ProjectNotes (FLU[)) Long-term Debt-.HUD G uaranteed NetHUD PHA Contributions TotalContribute{fCapital Undesignated Fund Balance/Retained Earn ings TotalEquity TotalLiabilities and Equity $ 2,581,474 $ 21,028 2,602,502 $

19 The Housing A uthority of the Tow n of Kaplan Kaplan,Louisiana Com bined ~tatem entofrevenue,expenses,and C hange in Equity -AllFunds As of June 30,2000 SCHEDULE, P~ oi=4 Revenue~: NetTenantRentalRavenue NetTenantRev~=hqt,le -Other TotalTer ~antrentalrevenue Low Rent Public Ho~Jsing Total ClAP 137,270 $ HUD PHA G rants {nvestm entincom e -Unrestricted O therrevenue TotalOtherRevenue $ 263,989 $ 171,255 $ 435,244 $ 450,686 $ 171,255 $ 621,941 O perating Expen.,~s Adm inistrative Salari(~ Auditing Fees Com pensated Abs(~c~ ; Em ployee Benefit OtherO perating -Adm inistrative TenantServices W ater Electricity G as Other Utilitie~ ~ nse O rdinary M aint~ ar~ ;& O perations-labor O rdinary M aintenar~e 8,O perations-m aterials O rdinary M aintenanoe.=8 O perations-contract Em ptoyee Benefit insurance Prernlurf)s OtherG en erale)~p~!~ses Paym ents in Li~ of]axes Bad Debt-TenantRen ts TotalO perating E)qx~ ser ;Before Depreciation 34,363 1, ,963 $ (120) 9, ,450 7,765 20,768 19,011 30,777 10,746 27,212 1, , ,450 7,765 20,768 19,011 30,777 10,746 27,212 1, $ 286,027 $ (120) $ 285,907 See notes to tinar~ciat st~.em ents 19

20 The Housing A uthority of the Tow n of Kaplan K aplan,louisiana Com bined Statem entof Revenue,Expenses,and change in Equity -A lfunds A s of June 30,2000 SCHEDULE I Page2of2 Low Rent Public H~ /sing ClAP Tat ar Excess Revenue OverE.~)enses Before Depreciation Extraordinary M aintonance Casualty Losses,-Non-Capitalized Deprec iation F_.x~ m se O perating Transfers -In O perating Transfer s -O ut Nat Oper atirlg Income (Loss)After Deprec iation $ 164,659 $ 171,375 1,00O , $ 336,034 1,O , (171,375) 1' $ 281,619 $ $ 281,619 Beginning &/30/99 Nat Operating Income (Loss)AfterDepreciation PriorPeriod Adju~.;tments CapitalO utlays Ending 6/30100 See nat ~ to financiatstat(~nleat s

21 W ILLIA M DAN IE L M cc A SK IL L,C PA A PR O FESSIO N AL A C C O U NTIN G C O R PO R ATIO N 415 M AGNOLLA LANE M A2xlD EVILI,E,LOUISIAN A TELFPItONE NUMBER (504) YAX N1L~ II:',ER (504) CELL NUM IIER (504) [I-M All,DANNYMAC@ CM Q.COM M EM BER OF: M ISSISSIPPISOCIETY OF CPA'S LOUISIANA SCK;IETY OF CPA'S AM ERICAN INS'I1TU I'Iz~OF CPA'S REPO RT O N COM PLIA NCE AND O N INTERNAL CO NTRO L O VER I:INANC1AL REPO RTING BASED O N AN AUD IT O F FIN AN CIAL STATEM ENTS FO RM ED IN AC CO RD AN C E W ITH G O VERNM ENT A L AUD ITIN G STAND AR DS Board of Com m issioners Housing Authority of the Town of Kaplan Kaplan,Louisiana Ihave audited the financialstatem ents of the H ousing A uthority of the Town of Kaplan (PHA),asof and forthe year ended June 30,2000 and have issued my reportthereon dated D ecem ber 5,2000. I conducted m y audit in accordan ce w ith generally accepted auditing stan dards and the standar ds applicable to finan cial audits contained in G overm nentauditstandards~ issued by the Com ptrollerg eneralof the United States. Co Q~ li _ a0_~e A s part of obtaining reasonable assurance about w hether the PH A 's fin ancialstatem ents are free of material m isstatem ent, I perform ed tests of its com pliance with certain provisions of laws,regulations,contracts and gran ts,noncom pliance w ith which could have a direct and m aterial efect on the determ in ation of fin ancialstatem ent am ounts. However,providing an opinion on complian ce with those provisionswas notan objective of m y audit and accordingly,i do not express such an opinion. The results of nay tests disclosed no ins tan ces of noncom pfian ce that are required to be reported under G overm nentauditin~ Stan dar ds. InternalCortrolO verfinan cial Reportin g In planning and perform ing m y audit, I considered the PHA 's internal control over financial reporting in order to determ ine m y auditing procedures for the purpose of expressing m y opinion on the financialstatem ents an d not to provide as suran ce on the internalcontrolover financialreportin g. M y consideration of the in tern al controlover financialreportin g w ould not necessarily disclose a lm atters in the in ternalcontrolover finan cial reporting that m ight be ma terial weaknesses. A material weakness is a condilion in w hich the design or cooperation of one or m ore of the internalcontrol 21

22 com ponents does notreduce to a relatively low levelthe risk thatm isstatem ents in the am ounts thatwould be m aterialin relation to the financialstatem entsbe ing audited ma y occur and notbe detected w ithin a tim ely period by em ployees in the norm alcourse of perform ing their assigned functions. I noted no ma ters involving the internalcontrol overfinancialreporting an d its operation thaticolasiderto be ma terialw eaknesses. This report:is intended for the inform ation of the auditcom m ittee,m anagem ent,and for H U D. H owever,this reportisa ma tterof public record and itsdistribution isnotlim ited. W illiam D anielm ccaskill,cpa A ProfessionalAccOun ting Corporation D ecem ber5,2000

23 W ILLIA M DA N IE L M cc A SK ILL,C PA A PR O FESSIO NAL A C C O UN'H N G C O R PO RA TIO N 415 M AGNO LIA LA N E M AN DEVILLE,LOUISIAN A TELEH ton!inum BER (504) FAX NUM BI'R (504) CFd.L N1J/Vl}~ER ~504) E-M AIl.I)ANNYM ACg~)CM Q.COM M F',M BEII.OF': M ISSISSIPPISOCIETY OF CPA 'S LOUISIANA SOCIETY OF CPA 'S AM ERICAN INSTIqRJ'lt:'.OF CPA'S REPO RT ON COM PLIANCE W ITH REQUIREM ENTS APPLICAB LE TO EACH M AJO R PRO GRAM AN D INTERNAL CO NTRO L O VER CO M PLIANCE IN ACCO RDAN CE W ITH O M B CIRCULAR A-133 Board of Com m issioners Housing A uthority of the Tow n of Kaplan Kaplan,Louisiana _Com plim3 _ ce 1haveaudited 1hecomplianceof thehousing Authority ofthetown ofkaplan (PHA) w ith the types of com plian ce requirem ents described in the U.S.O fi ce of M wo _ agem en and Budget (~ ulara-133(2o~ esupplementthatareapplicableto each of itsmajorfederalprogrmnsforthe year ended June 30,2000. ThePttA'smajorfederal program s are identified in the sum m ary of auditor's results section of the accom panying schedule of findings and questioned costs. Com pliance w ith the requirem ents of law s, regulations,contracts,an d grantsapplicable to each ofitsmajorfederalprogramsisthe responsibili y of the PHA 's m anagem ent. M y responsibility is to express an opinion on the PH A 'scom pliance based on m y audit. I conducted my audit of com pliance in accordance w ith: generaly accepted auditin g standar ds;the slandards applicable to financialaudits contain ed in Governm enta uditing Stan dards,issued by the Com ptroller Generalof the United States;and O M B Circular, A udits of Slates.Local G overnm ents.and N on Profit O roan izations. Those standar ds an d O M B CircularA -133 require thatiplan and perform the auditto obtain reasonable assurance abo u whether noncom plian ce w ith the types of com plian ce requirem ents referred to abovethatcould have a directan d materialeffecton a ma jorfederalprogram occurred. A n audit includes exam ining, on a test basis, evidence about the PH A 's com plian ce w ith those requirem ents an d performing such other procedures as w e considered necessary in lhe circum stan ces. Ibelieve thatm y auditprovidesa reas onable basis for m y opinion. M y audit does not provide a legaldeterm ination on the PHA 's com pliance w ith those requirem ents,

24 In m y opinion, the PHA 's com plied, in al material respects w ith the requirem ents referred to above thatare applicableto each of itsmajorfederalprogramsfortheyear ended June 30,2000. InternalControlOverCom pliance The m anat!:em ent of the PHA is responsible fox'establishing and m aintaining efective internalcontrolover com plian ce w ith requirem ents of law s,regulations,contracts and grants applicable to federalprogram s. In planning and performing m y audit,iconsidered the PH A 's internalcontrolover com pliance w ith requirem ents tha t could have a direct an d materialefect on a ma jor federalprogrmn in order to determine my auditing proceduresforthe purpose of expressing m y opinion on com plian ce and to testand report on internalconlrolovercom plian ce in accordance with O M B CircularA-133. M y consider ation of the internalcontrolover com plian ce w ould notnecessar ily disclose allm atter iu the.in ternalcontrolthatm ightbe m aterial w eaknesses. A m aterialw eakness is a condition in w hich the design or operation of the internalcontrolcom ponents does not reduce to a relatively low level the risk that noncom plian ce w ith applicable requirem ents of law s,regulations,contracts and grantstha tw ould be m aterialin relation to amajorfederalprogram be ing audited may occurand notbedetected within atimely period by em ployeesin the normalcourse of perform ing their assigned functions. Inoted no m attersinvolving the intern al cont rolovercom pliance and itsoperation thaticonsider to be m aterialw eaknesses. This report is intended for the inform ation of the audit comm ittee, managem ent,an d H U D. However,thisreportisa m atterof public record an d its distribution isnotlim ited. W illiam DanielM ccaskill,cpa A Professional Account ing Corporation Decem ber5.2000

25 H ousing A uthority of the T ow n of K aplan K aplan,l ouisiana SCttED ULE OF PRIOR FINDINGS There w ere no findingsin the prioraudit. 25

26 H ottsing A uthority of the T ow n of K aplan K aplan,louisiana SCHEDULE OF CURRENT A UD1T FINDINGS AND QUESTIONED COSTS PerA-133,Section 505(d) I. Sum m alt Schedule of A uditorsresults i. The reportincludesan unqualified opinion on the financialstatem ents. ii. iii. There w ere no reportable conditions in intern alcom rols found thatare required to be disclosed atthe financialstatem entlevel. The auditdisclosed no noncom pliance thatis m aterialto the financial statem ents. v. No reportableconditionsin internalcontrolovermajorprograms,asrequired by A -133,w ere disclosed by the audit, v. Thecomplian cereportissued formajorprogramswasunquafified vi. J'he reportdisclosed no auditfin dingsrequired to be reported undersection 510a of A vii. Allmajorprogram shave oversightby HUD an d are identified asfolows C FD A # N am e of P royr,r am Low -RentH ousing viii. The dollar threshold used to distinguish between Type A an d Typ e B program sw as $300,000. ix. 'It~e auditee w as considered a low risk auditee 2. Finding relating to the financialstatem entsrequired to be reported w ith G A GA S ar e as follow s: N ON E 3. Fin dingsand questioned costsforfederalaw ardsas defined in A -133,Section 510a allw ith H U D oversight: N ON E 26

27 H ousing A uthority of the T ow n of K aplan K aplan,l ouisiana SUM M A R Y OF A UDIT ADJUSTIN G JO URNAL EN TRIES I Account I Debit ] Credit [OtherRevenue [ $190,438 ] [PriorPeriodAdjustment I [ $190,438 To correctthe internetsubm ission. The entriesin the generalledgerare recorded correctly. 27

28 H ousing A uthority of the T ow n of K aplan K aplan,i,ouisiana SCH ED ULE OF CORRECTIVE A C170N PLAN N one