H IBER N IA C O M M UN ITY D EV ELO PM E N T C O R PO R A TIO N,IN C.

Size: px

Start display at page:

Download "H IBER N IA C O M M UN ITY D EV ELO PM E N T C O R PO R A TIO N,IN C."

William Greene
6 years ago
Views:

1 H IBER N IA C O M M UN ITY D EV ELO PM E N T C O R PO R A TIO N,IN C. FIN A N C IA L A N D C O M PLIA N C E A U D IT A ND SU PPL EM EN TA R Y IN FO R M A TIO N T O G E TH ER W ITH IND E PEND E N T A U D IT O R 'S R EPO R T FO R TH E YE A R S END ED D EC E M BER 31,2002 A N D 2001 Release Date ~-~ '-!~

2 H IBER N IA C O M M U N ITY D E V EL O PM EN T C O R PO R A TIO N,IN C. TA BL E O F C O N TE N T S PA G E IndependentA uditors'r eport FinancialStatem ents Statem ents of FinancialPosition Statem ents of A ctivities Statem ents of Cash Flow s N otes to Finan cialstatem ents IndependentA uditors'reporton C om pliance an d Intem alcontrolover FinancialReporting 11 H IB ERN IA C O M M U NITY D EV EL O PM EN T C O RP O RA TIO N,IN C.

3 M em ber Am erican Institute of Certified Public Accountants Society oflouisiana Certified Public Accountants M ichaelb.bruno,cpa Alcide J.Tervalon,Jr.,GPA W aldo J.M otet,jr.,opa PaulK.Andoh,St.,CPA IND EPENDEN T A U D ITO R S'R EPO R T To the Board of D irectors H ibernia C om m unity D evelopm entc orporation,inc. N ew Orleans,Louisiana W e have audited the accom pan ying statem ents of financial position of H ibernia C om m unity Development Corporation,Inc.(Hibernia CDC) (a non-profit corporation) as of D ecem ber 31,2002 and 200 I,an d th e related statem entsof activitiesand cash flow sfor th e years then ended. These financialstatem ent s ar e the responsibility of H ibernia C D C 's management. Ourresponsibility isto expressour Opinion on these financialstatements based on our audits. W e conducted our audits in accordan ce w ith auditing stan dar ds generally accepted in the U ni ted Statesof A m erica an d the stan dardsapplicable to G overnm enta uditing Standards issued by thecomptrollergeneralof the United States. Those stan dardsrequire th atwe plan and perform the auditto obtain reasonable assur ance aboutw hether the financial statem entsare free of m aterialm isstatem ent. An auditin cludesexam ining,on a testbasis, evidence supporting th e am ountsand disclosur es in th e finan cialstatem ents. A n audi talso includes assessin g th e accounting principles used and significan t estim ates m ade by m anagem ent,as w ellas evaluating th e overal lfinancialstatem entpresentation. W e believe thatourauditsprovide a reasonable basisfor our opini on. In our opinion,th e finan cialstatem entsreferred to above presentfairly,in allm aterial respects,th e finan cialposition of H ibernia CD C asof D ecem ber 31,2002 and 2001,and th e changesin itsnetassetsan d itscash flow sforthe yearsth en ended in conform ity with accoun tin g principlesgenerally accepted in the U nited Statesof Am erica ElYSIAN FIELDS AVENUE,NEW ORLEANS, LA (504) FAX (504) E-M AIL:brunterv@ btcpas,com

4 INDEPENDENT AUDITO R S'REPO R T (CONTINUED) To the Board of D irectors H ibernia C om m unity D evelopm entc orporation,inc. N ew Orleans,Louisiana Page 2 In accordance w ith G overnm enta uditing Standards,w e have also issued our reportdated M ay 27,2003 on our consideration of H ibernia C D C 's internalcontrolover finan cial reporting and our tests of its com plian ce w ith certain provisions of law s,regulations, contracts,and grants. Thatreportisan integralpartof an auditperform ed in accordan ce with GovernmentAuditing Standard~,an d should beread in conjunction with thisreport in considering the results of our audit. ~,9~ zzp BRU NO & TER V A LO N LLP C ER TIFIED PU B LIC A C C O U N TA N TS M ay 27,2003

5 H IBERN IA CO M M U N ITY D EV EL O PM EN T C O R PO R A TIO N,IN C. STATEM EN TS OF FIN AN CIAL PO SITION D ecem ber 31,2002 and 2001 General Fund Escrow Fund Elim inations 2002 Total 2001 Total A ssets Cash $ 505,336 $ $ 505,336 $ 128,426 Aecotm tsreceivable 798, , ,849 Inventory of hom esavailable forsale 229, , ,729 ConslrtclJon in progress 122, , ,943 G-r ~ ts receivable 21,529 In ventory of land held for developm ent 72,339 72, ,705 N otesreceivable 289, , ,844 Accrued interestreceivable 16,042 16,042 3,842 Totalassets $ 2,033,530 $ - $ - $ 2,033,530 $ 1,880,867 Totalliabilities 1,554,256 1~54,256 1,297,885 See notesto jqnancialstatements

6 H IBERN IA C O M M U N ITY D EV E L O PM EN T C O R PO RA T IO N,IN C. STA TEM EN TS OF A CTIV ITIES Y earsended D ecem ber 31,2002 and 2001 G eneral Fund E scrow Fund 2002 T otal 2001 Total See notesto financialstatements

7 H IBER NIA COM M U N ITY DEV ELO PM EN T C O R PO R ATION,IN C. STA TEM ENTS OF CASH FLOW S Y earsended December31,2002 and 2001 G eneral Escrow Total Investing A ctivities: Costsof construction Proceedsfrom salesof hom es Issuance of notesreceivable Repaym em sof notesreceivable Purchase of land for develol~m e (606,106) 703,200 (35,136) 5,087 (36,426) (606,106) 703,200 05,136) 5,087 (36,426) (284,325) 581,351 (257,442) 19,894 40,880) Cash atend of - $ $ 128,426 notes to

8 H IBERN IA C O M M UN ITY D EV EL O PM EN T C O R PO R A TIO N,IN C. N O TES T O FINA N C IA L STA TEM EN TS N O TE 1 Sum m ary of Significant A ccounting Policies Hibemia Community Development Corporation, Inc. (Hibernia CDC) is a non-profit 501(c)(3) corp oration which works to revitalize declining neighborhoods and provide affordable housing opportunitiesfor low -and m iddle-incom e hom ebuyers. H ibern ia CD C is a jointeffortbetween Hibernia NationalBank and variousothernon-profitorganizationsan d governm ental entities w orking together to stop the decline of neighborhoods, prom ote com m unity reinvestm entan d restore com m unity pride and confidence. The G eneralfund is used to record allactivities of H ibern ia CD C exceptfor those relating to the CDC'srole asadministrative agentforprojectrenaissance.during 2001,Hibernia CDC became the administrative agen tforprojectrenaissan ce,acting ascustodian forfundsfrom hom eow ners an d governm entalentitiesw hich a re to b e used to p ay for the renovation o f hom es. These fim ds are held in escrow untilthe w ork is com pleted,th en disbursed to the contractors for paym ent. A s these am oun ts ar e held in a custodial capacity, they are segregated in the Escrow Fun d. A ll significant interfund balan ces and transactions ar e eliminated.in 2002,theCity of New Orleansdiscontinued the ProjectRenaissan ce program. A lprojectscontinuing from 2001werecompleted in 2002.A lcontractoran d homeown er claim s w ere paid. Currently,th e fu ture of th e progr am is bein g considered by th e new city adm ini stration. Finan cialstatem en tpresentation:h ibernia CD C com plies w ith th e disclosure requirem ents setforth in Statem entof FinancialA ccoun ting Stan dar dsn o.117,"financialstatem ents of N ot-for-profitorgan izations". A ccordingly,th e netas sets of H ibernia CD C ar e classified as unrestricted netassetsas the assetsare notsubjectto donor-imposed restrictions. Reven ue R ecognition:h ibern ia CD C recognizescontributed support as in com e in the period received. Contributed support is reported as unrestricted or restricted depen din g on th e existence of donor stipulations th at lim itthe use of the support. D uring 2002 an d 2001, H ibernia CD C did notreceive an y restricted support. Inventory of H om esa vailable for Sale:The inventory of hom es avai lable for sal e is carried atcostnotto exceed estimatesof netrealizable valuedetermined on an individual project bas is.these hom esw ere builtin accordan ce w ith governm en tcontracts. Gran ts R eceivable:h ibernia CD C considersth e gr an ts receivable to be fully collectible since the bal an ce consists principally of paym en tsdue under govern m entalcontracts. If an am oun t due becom esun collectible,itischar ged to expense w hen thatdeterm ination is m ade. Accoun ts Receivable an d N otes R eceivable:h ibernia CD C review s th e collectibility of accounts an d notesreceivable periodi cal ly. If an am ountdue is deem ed un collectible,itis char ged to expense w hen th atdeterm ination ism ade.

9 Contributed Facilities and Services: Contributed facilities and services represent the estim ated fair rental value of office space and general corporate services provided by H ibernia N ationalb ank. Contributed services are reflected in th e finan cialstatem entsatfair value of th e services received. The contributions of services are recognized if the serv ices received (a)create orenhan cenonfman cial assetsor(b)require specialized skilsthatare provided by individuals possessing th ose skills an d w ould typically need to be purchas ed if notprovided by donation. Cash Equival ents:h ibernia CD C considersdem and dep osits an d short-term in vestm entsw ith originalm aturitiesof three m onthsor less to be eash equival ents. Estim ates:the prepar ation of finan cial statem ents in conform ity w ith general ly accepted accounting principles requiresm an agem entto m ake estim ates an d as sum ptionsth atafectth e am oun tsrep orted in th e fm an cialstatem ents an d accom pan ying notes. A ctual results could dif er from those estim ates. Fair V alues of Fin an cial Instrum ents: G eneral ly accep ted accounting principles requi re di sclosur e of fair val ue inform ation aboutfinancialin strum ents for w hich itis practicable to estim ate fair value,w hether or notrecognized in th e statem ents of finan cial position. Cas h an d cash equivalents carrying am oun ts reported in the sta tem ents of financial position approxim ate fair valuesdue to th e short m aturitiesof those instrum ents. Income Taxes:Hibernia CDC isa tax-exemptcorp oration undersection 501(c)(3)of the InternalReven ue Code. A ecordin gly,no provisions for federalor state incom e tax es have been recorded in th e ac com pan ying financialstatem ents. N O TE 2 A ccountsr eceivable In the norm al cour se of business, H ibernia CD C advances funds to other non-profit organizationsto assistin community developmentprojects.theseagreementsare generaly un secur ed an d provide for rep aym en t of am ounts advan ced after th e construction is com pleted an d th e hom es ar e sold. In som e instan ces,the agreem ents callfor the paym entof intereston th e am oun tadvanced. In th ose casesw here H ibernia CD C believesthe interest w illbe fu lly collectible,interestincom e isaccrued. If there isdoubtaboutth e collectibility of th e interest,itisrecognized asincom e upon collection. Am oun ts due from individualhom eow ners represen t funds advan ced on th eir behal f for initial costs incurred in the renovation process. These am oun tsw illbe reim bur sed w hen the renovationsar e com plete and th e loan is funded. In addition to receivables from non-profitorgan izations,am ounts are periodically advan ced to borrow ers on behalf of governm ental agencies. Th ese receivables are related to governm entagency m ortgage assistance an d generally repaid shortly after loan s ar e closed on propertiessold by H ibernia CD C.

10 A ccountsreceivable consisted of the follow ing atd ecem ber 31,2002 and 2001 Total accoun tsreceivable $ 798,831 $ 955,849 N O TE 3 G rantsr eceivable Grants receivable consisted of the follow ing atd ecem ber 31,2001. There w ere no gran ts receivable outstanding atd ecem ber 31,2002. D ecem ber 31,2001

11 N O TE 4 N otes R eceivable The follow ing isa sum m ary of notes receivable The note receivable from N ew Orleans Com m unity D evelopm entfund is unsecured,bears interest at 3%,and m atures in Interest is payable annually,w ith principal due at m atur ity. The notes originated by Grow th Enterprises of M arshall,in c.,a com m unity developm ent corporation,are funded in partby H ibernia CD C. These notesare unsecured,bear interestat 7.25%,and ar e repaid in m onthly or quarterly installm ents w ith m aturity dates through The note receivable from the V elocity Foun dation,a nonprofitorganization,is an un secur ed, non-interestbearing note th atm atur esin N O TE 5 D ue to R elated Party Th e due to related party consists of notespayable to H ibem ia N ationalbank. These notes payable bear no interest an d m atur e on various dates through Th e total am ount outstan ding atdecem ber31,2002 an d 2001w as$1,521,000 an d $1,271,000 respectively.

12 N O TE 6 Expenses The follow ing isa sum m ary of program and supportexpenses. Y ear ended D ecem ber 31, Y ear ended D ecem ber 31, N O TE 7 C ontingencies Grantagreem ents an d other contractsw ith govern m entalagenciesoften require fulfillm entof certain conditionsassetforth in the term s of th e agreem ents. Fai lure to fulfillthe conditions could result in th e return of funds to the gr antors. A lthough the return of funds is a possibility,m an agem entdeem sthe contingency unlikely,since H ibernia CD C has agr eed to com ply w ith the grantor'sprovisions. 10

13 M em ber Am erican Institute of Certified Public Accountants Society oflouisiana Certified Public Accountants M ichaelb.bruno,cpa Alcide J.Tervalon,,Jṛ, CPA W aldo J.M otet,jr.,cpa PaulK.Andoh,St.,CPA IN D EPEN DEN T AUDITORS'REPORT ON COM PLIA N CE AN D ON IN TERN AL CON TRO L O V ER FIN AN CIAL RE PO RTIN G BA SED O N A U D ITS OF FIN AN CIAL STA TEM EN TS PERFORM ED CO RD AN CE W ITH G O VE RN M EN T AU D ITIN G ST To the Board of D irectors H ibernia C om m unity D evelopm entc orporation,inc. N ew Orleans,Louisian a W e have audited th e fm ancial statem ents of H ibernia C om m unity D evelopm ent Corporation,Inc.(H ibernia CDC)(a non-profitcorporation)asof an d forthe years ended D ecem ber31,2002 and 2001an d have issued our reportth ereon dated M ay 27, W e conducted our auditsin accordan ce w ith generally accepted auditing stan dar dsand the stan dards applicable to financialauditscontained in andards,issued by th e Com ptroller G eneralof th e United States. C om pliance A s part of obtaini ng reasonable assuran ce about w heth er H ibernia CD C 's fin an cial statem ents are free of m aterialm isstatem ent,w e perform ed tests of its com pliance w ith certain provisions of law s,regulations,contracts an d grants, noncom plian ce w ith w hich could have a directan d m aterialefecton th e determ ination of finan cialstatem entam ounts. However,providing an opinion on compliancewith thoseprovisionswasnotan objective of our auditsand,accordingly,w e do notexpresssuch an opinion The resultsof our tests. disclosed no instancesof noncom pliance thatar e required to be reported under Governm ent A uditmg Standards ELYSIAN FIELDS AVENtJE,NEW O RLEANS LA (504) FAX (504)284~8296 E.-M AIL:brunterv@ btcpas.corn

14 IN D EPEN D EN T AU D ITOR S'RE PORT ON CO M PLIAN CE AN D ON IN TERN A L CON TRO L OV ER FIN AN CIAL RE PO RTIN G BA SED ON AU D ITS O F FIN AN CIA L STA TEM EN TS PERFORM ED IN A CCO RD AN CE W ITH G O VERN M EN T A U D ITIN G STAN D ARD S (CONTINUED) InternalC ontrolo ver FinancialR eporting In planning and perform ing our audits,w e considered H ibernia C D C 's internalcontrolover financialreporting in order to determ ine our auditing procedures for the purpose of expressing our opinion on th e finan cialstatem ents and notto provide assur ance on th e intern al controlover finan cialreporting. O ur consideration of the internalcontroloverfinan cialreporting w ould notnecessarily disclose allm atersin th e internalcontroloverfinan cialreporting thatm ightbe m aterial w eaknesses. A m aterialw eaknessisa condition in w hich the design oroperation of one or m ore of the intern alcontrolcom ponentsdoesnotreduce to a relatively low levelth e risk that m isstatem entsin am ountsth atw ould be m aterialin relation to th e finan cial statem entsbeing audited m ay occur an d notbe detected w ithin a tim ely period by em ployeesin th e norm al cour se of perf orm ing th eir assign ed functions. W e noted no m aters involving th e internal controlover finan cialreportin g an d its operation thatw e consider to be m ateri alw eaknesses. Thisreportisintended forth e in form ation of th e Boar d of D irectors,m an agem ent,regulatory agencies,federalawarding agency and pass-through entity an d isnotintended to beand should notbe used by an yone oth er th an th ose specified parties. ~ j.~,~..(.~ zz.p BR U N O & TER V A LO N LLP CER TIFIED PUBLIC A CC O UN TA N TS M ay 27,2003

O~ JtJN 22 AH i1:09 RECEIVED FINA N CIA L STA TEM ENTS LEGISLATIVE AUDITOR

O~ JtJN 22 AH i1:09 RECEIVED FINA N CIA L STA TEM ENTS LEGISLATIVE AUDITOR RECEIVED LEGISLATIVE AUDITOR O~ JtJN 22 AH i1:09 LO U ISIA NA M U N IC IPA L A DV ISO RY A N D TEC H N ICA L S ERV IC ES BU REA U C O RPO RA TIO N FINA N CIA L STA TEM ENTS D EC EM BER 3 1,2003 R~C~VE~