EX H IBIT.P_A.G 5. Sum m ary ofa uditor's Results and Schedule offindings and Q uestioned Costs 2-3. ndependenta uditor's Report 4-5

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2 EX H IBIT.P_A.G 5 Sum m ary ofa uditor's Results and Schedule offindings and Q uestioned Costs ndependenta uditor's Report Balance Sheet-Enterprise Fund Statem entofrevenues,expenses,and C hanges in Retained Earnings -Enterprise Fund Statem entofc ash Flow s -Enterprise Fund C om parison ofa ctualh U D Revenue and Expenses to H U D Budgeted Notes to FinancialStatem ents Statem entand C ertification ofa ctualofm odernization C osts Schedule ofexpenditures offederalaw ards Reporton C om pliance w ith Requirem ents A pplicable;to Each MajorProgram and InternalControlOverCompliance in Accordance w ith O M B C irculara-133 :21-22 Reporton Com pliance and on InternalControlO verfinancial Reporting Based on an A uditoffinancialstatem ents Perform ed in A ccordance w ith G overnm entala uditing Standards Schedule offindings and Q uestioned C osts FinancialData Schedule

3 HO USING A UTHO RITY O F V INTO N S U M M A RY O F A U D ITO R'S R ES ULTS A N D SC HEDULE O F FINDING S A ND Q UESTIO N ED C O STS B C. W e issued an unqualified opinion Louisiana forthe auditofits financia on the Housing A uthority of V inton statem ents forthe yearended June 30 The financial statem ents are prepared on the Enterprise M ethod. See A uditor's Reportand Note A. No reportable conditions in internalcontrolw ere disclosed by ourauditofthe financialstatem ents D. The audit did not disclose any noncom pliance w hich is m aterial to the financialstatem ents. E. No reportable conditions in internalcontrolw ere disclosed by ourauditover m ajorprograms. F. W e issued an unqualified opinion on compliance formajorprograms. G. O ur audit disclosed no audit findings that w e are required to report under 510(a)ofOM B CircularA-133. H. Majorprograms are as folows,and see Schedule offederalexpenditures forc FD A num bers and am ounts: 1. Low Incom e Housing 2. C la P 3. Section 8 -V oucher 4. Section 8 -C ertificate I. The do lar threshold to distinguish Type A and Type B program s is $300,000. J. The Housing A uthority ofv inton,louisiana did notqualify forthe yearended June as a low -risk auditee. K L There are no findings in these financialstatem ents that are required to be reported in accordance w ith G A G A S. There are no audit findings or questioned costs for Federalaw ards w hich sha linclude auditfindings as described in 510a ofo M B C irculara -133.

4 M IKI I~;I~ ;,t;p,4/i'f,% C~P M IK E E STES, P.C. A PR OFESSIO N AL A CCO UN TIN G CO R PO RA TIO N 4200 A IR P O R T FR EE W A Y.SUITE 100 FO R T W O R TH.TEXA S (gl7) M ETRO (817) FAX (812) e.mail:estcs3 ~flash.nef M EM BER AM F21U('~ J'~ BOA RD (!FAt~TIFIFJ ~ PUBLIC ACCO UN ];4N 'I~ nder)endenta uditor's R eport Board ofcom m issioners Housing A uthority ofv inton V inton.louisiana RegionalInspectorG eneral fora udit O fice ofinspectorg eneral Departm entofh ousing and Urban D evelopm ent W e have audited the accom panying general-purpose financialstatem ents of the Housing A uthority ofv inton,louisiana atand forthe yearended June 30,2000,as listed in the table ofcontents. These general-purpose financialstatem ents are the responsibility of the Housing A uthority of V inton, Louisiana's m anagem ent. O ur responsim lity is to express an opinion on these general-purpose financialstatem ents based on ouraudit. W e conducted our audit in accordance w ith genera ly accepted auditing standards and the standards applicable to financialaudits contained in G overnm enta uditing Standards,issued by the C om ptrollerg eneralofthe United States,and provisions ofthe Louisiana G overnm entalauditg uide. Those standards require thatw e plan and perform the auditto obtain reasonable assurance aboutw hether the financial statem ents are free of m aterialm isstatem ent. A n audit includes exam ining,on a test basis, evidence supporting the am ounts and disclosures in the financial statem ents. A n audit also includes assessing the accounting principles used and significant estim ates m ade by m anagem ent, as w e l as evaluating the overa l financialstatem ent presentation. W e believe thatour audit provides a reasonable basis forouropinion. In ouropinion,the general-purpose financialstatem ents referred to above present faidy, in a l m aterial respects, the financial position of the H ousing A uthority of V inton,louisiana as ofjune 30,2000,the results of its operations,changes in its totalnetassets and statem entofcash flow s forthe yearthen ended,in conform ity w ith generally accepted accounting principles. As described in Note A to the financialstatem ents,the PHA has changed from the G overnm entalfunds to the Enterprise Funds m ethod forthe yearended June 30, 2000.

5 In accordance w ith G overnm enta uditing Standards,w e have also issued a reportdated Novem ber17,2000 on ourconsideration ofhousing A uthority ofv inton's internalcontrol over financialreporting and our tests of its com pliance w ith certain provisions of law s, regulations,contracts and grants. Thatreport is an integralparton an auditperform ed in accordance with Govern mentauditing Standards and should be read in conjunction with this report in considering the results ofouraudit. O urauditw as conducted forthe purpose ofform ing an opinion on the general-purpose financialstatem ents ofthe Housing Authority ofv inton,louisiana taken as a w hole. The accom panying Schedule of Expenditures of FederalAw ards,financialdata Schedule and othersupplem entary schedules are presented forpurposes ofadditionalanalysis as required by U.S. O fice of M anagem ent and Budget C ircular A-133,A udits of States, LocalG overnm ents,and Non-ProfitO rganizations,and is nota required part ofthe basic financialstatements. Such information had been subjected to the auditing procedures applied in the auditof the general-purpose financialstatem ents and,in our opinion,is fairly stated in allm aterialrespects in relation to the general-purpose financialstatem ents taken as a w hole. This report is intended solely forthe inform ation and use ofthe Board ofc om m issioners ofthe PHA,and forfiling w ith the Departm entof H U D and should not be used forany otherpurpose. FortW orth,l-exas N ovem ber17,2000

6 HO US ING A UTH O R ITY O F V INTO N BALANCE SHEET -ENTERPR ISE FU ND JU NE EX H IBIT A J=_A 046 A ssets C urrentassets C ash -Note B A ccounts receivable -tenants,netof a lowance forbad debts $1,505 A ccounts receivable -other Inventories Prepaid insurance Totalcurrentassets Fixed A ssets Land Buildings Furniture,equipm ent& m achinery $ 360, , , , , , ,682, ,854, Less:Accum ulated depreciation N etfixed assets Totalassets $ 1,185, The Notes to FinancialStatem ents are an integralpartofthese statem ents

7 HO U SIN G A UTHO R I'IY O F V INTO N BALANC E SHEET -ENTERPRISE FUND BA SIS JU N E EX H IBIT A J.Ek046 Liabilities C urrentliabilities Tenant's security deposits A ccounts payable -H U D -Note L A ccounts payable -other A ccrued w ages,com pensated absences A ccrued PILO T Totalcurrentliabilities Fund equity Totalcontributed capital Totalcontributed capita Retained earnings -ExhibitB TotalNetA ssets TotalLiabilities and NetA ssets 6, , , , , , $ 1,185, The Notes to FinancialStatem ents are an integralpartofthese statem ents

8 HO USING A UTHO R ITY O F V INTO N STATEM ENT O F REVENUES,EXPENSES,A N D C HA NG ES IN N ET A SSETS -ENTER PR ISE FU N D Y EA R EN D ED JU N E 30,2000 EX H IBIT B LA 046 Revenues Tenantrevenue H UD subsidy -Low R ent H U D subsidy -Section 8 H U D C la P soft costs grant Interestincom e TotalO perating Revenue O perating expenses A dm inistrative Utilities M aintenance G eneralexpense D epreciation HA P paym ents Totaloperating expenses Netoperating incom e (loss) Retained earnings,6/30/99 Deduct:PrioryearGAAP adjustments Retained earnings, ,restated Retained earnings,6/30/00 NetH U D contribution, 6/30/99 Currentyearaddition and prioryearadjustments NetH U D contribution,6/30/00 TotalNetA ssets, ExhibitA 70, , , , , ,497, ,271, $ 293, , $ 1,062, The Notes to FinancialStatem ents are an integralpartofthese statem ents

9 HO USING A UTHO R ITY O F V INTO N STATFM ENT O F CASH FLO W S -ENTER PR IS E FU N D Y EA R EN D ED JU N E EXHIBIT C L.A 046 C ash flow s from operating activities Tenantrevenue O perating subsidies O perating expenses Netcash (used)in operating activities 91, , (368,154.00) C ash flow s from capitaland related financing activities H U D C la P hard costadvances Equipm entand C la P additions Netcash provided (required)by capital and financing activities 49, (71,470.00) C ash flow s from investing activities Interestincom e Netcash provided (used)from investing activities 9, The Notes to FinancialStatem ents are an integralpartofthese statem ents 7

10 Adjustments HO USING A UTHO R ITY O F V INTO N STATE-MEN FOF CASH FLOW S -ENTERPRISE FUND (continued) Y EA R EN D ED JU N E I.A 046 EX HIBIT C Depreciation NET prioryearadjustments -noncash C hanges in assets and liabilities: Decrease in accounts receivable Increase in inventories Increase in prepaid insurance D ecrease;in accrued pilot Increase (decrease)in security deposits Increase (decrease)in accounts payable Totaladjustm ents 109, (11,279.00) $ 3, , C hange in (:ash and equivalents C ash and equivalents beginning ofyear C ash and equivalents end ofyear-exhibita 142, , The Notes to FinancialStatem ents are an integralpartofthese statem ents

11 HO USING A UTHO R ITY O F V INTO N C O M PA R ISO N O F AC TUA L H U D R EVEN U E A N D EX PENSES TO H U D B U D G ETED Y EA R END ED JU N E EX H IBIT D ].A Q46 H U D Budget Actua O ver (Under) Budget Revenues Tenantrevenue H U D subsidy -Low Rent H U D subsidy -Section 8 HUD C lap softcosts grant Interestincorne O therrevenue 90, $ 31, , , , , , , , , S 1, (59,891.00) 170, , (19,715.00) Totaloperating revenue 339, , O perating expenses Adm inistration,netofc la P softcosts 90, Utilities 4, M aintenance 51, G eneralexpense 38, D epreciation 0.00 HA P paym ents 164, , , , , , (20,076.00) (6,996.00) (13,211.00) 109, (51,789.00) Totaloperating expenses $ 350, $ 368, $ 17, Excess(dEficient)revenues (11,446.00) 67, , Add: Depreciation -notbudgeted by H U E) Deduct: Capitalexpenditures -budgeted by H UD Excess(deficiency)of budgeted revenues overexpenses , , , $ 198, The Notes to FinancialStatem ents are an integralpartofthese statem ents

12 H O U SING AUTHO R ITY O F V INTO N NO TES TO FINA N C IA L STA TEM ENTS JU N E NO TE A - SUM M ARY O F SIG NIFICA NT ACCO UNT PO LICIES A ND C HA NG E O F AC C O U NTING PR INC IPLE The Housing Authority ofvinton,louisiana (the Authority),a public corporate body, w as organized for the purpose of providing decent, safe, and sanitary dw e ling accom m odations forpersons oflow incom e. The A uthority is engaged in the acquisition,m odernization,and adm inistration of low -rent housing. The A uthority is adm inistered by a governing Board of Commissioners (the Board),whose members are appointed by the Mayorofthe C ity ofv inton,louisiana. Each m em berserves a five-yearterm on a rotating basis. Substantially ailof the Authofity's revenue is derived from subsidy contracts w ith the U.S.Departmentof Housing and Urban Development(HUD). The Annual Contributions Contracts entered into by the A uthority and HUD provide operating subsidies for A uthority-ow ned public housing facilities and housing assistance paym ents foreligible individuals. FinannialR ~.Bortina Entity G enera ly accepted accounting principles require that the financial statem ents present the accounts and operations of the A uthority and its cornponent units, entities for w hich the A uthority is considered to be financia ly accountable. Blended com ponent units, although lega ly separate entities,are,in substance,part of the A uthority's operations and data from these units,ifany,are com bined w ith data ofthe Authority. Each discretely presented com ponentunit,ifany,w ould be reported in a separate colum n in the com bined financialstatem ents to em phasize thatitis lega ly separate from the A uthority. A s of June 30,2000,and for the fiscalyear tinen ended,the A uthority had no discretely presented com ponent units or any com ponentunits required to be blended in these financialstatem ents. 10

13 HO U SING A UTHO R ITY C)F V INTO N NO TES TO FINA NC IA L STATEM ENTS (continued) JUN E NOTE A - SUM M A RY O F SIG N IFICANT ACCO U NT PO LIC IES AND C HANG E O F (2) ACCOUNTING PRINCIPLE (continued) For the year ended June 30, 2000, the PHA has changed from the G overn m ent Funds M ethod to the Enterprise M ethod. This change w as strongly recommended by the RealEstate AssessmentCenter(REAC)of ThE;D epartm entofhousing and U rban Developm ent. ThE;Enterprise Funds M ethod accounts foroperations in a m annersim ilarto a private business. U nder this m ethod,allassets,including fixed assets, and a lliabilities are in one fund,and one financialstatem ent. fhe Enterprise Fund recognizes revenues and expenses on the fullaccrual basis. Revenues are recognized w hen earned and becom e m easurable. Expenses are recognized in the period incurred,if m easurable. In the prior m ethod used, the G overnm ental Funds M ethod, the m odified accrual m ethod w as necessary. Depreciation expense m ust be recognized forthe Enterprise Fund. Under the G overnm entalfunds M ethod,depreciation w as optionaland the PHA elected notto recognize it. "The PHA applies a l G ASB pronouncem ents as w ell as the Financial A ccounting Standards Board pronouncem ents issued on or before Novem ber 30, 1989, unless those pronouncem ents conflict w ith or contradictg A SB pronouncem ents. R EA C suggests that soft costs from developm ent and m odernization be deleted from fixed assets and charged to H U D C apitalcontributions. R EA C also allow s PHA's to reclassify outstanding debt ow ed to HU D to C ontributed C apital.

14 HO USING A U-['HO R ITY O F V INTO N NOTES TO FINANC IAL STATEM ENTS (continued) JUN E 30,2000 NO TE A - SU /vlm A RY O F SIG N IFICA NT A C C O U NT PO LIC IES A N D C HA NG E O F ACCOUNTING PRINCIPLE (continued) (3) Eu~{get&r'j D~qta The A uthority is required by its H U D A nnualc ontributions C ontracts to adopt annual budgets for the Low -Rent Housing Program and the Section 8 Program s. A nnualbudgets are notrequired forc la P grants as theirbudgets are approved forthe length ofthe project. The A uthority is under a lim ited budget review from H U D w ith the control category oftotaloperating expenditures. Ifthere are no overruns ofthe total operating expenditures,then H U D does not require budget revisions other than w hen there are substantial additions to nonroutine expenditures, Buclgeted am ounts are as origina ly adopted or as am ended by the Board and H U D. The budgetis prepared on a statutory (HUD)basis and does netcontain a provision for unco lectible tenant receivables, or depreciation. The budget does reflectfurniture and equipm entadditions from operations. (4).Q nnh and C ash Eauivalents The entity defines cash and cash equivalents to include certificates of deposit,m oney m arketfunds,savings accounts,and dem and deposits.

15 H O U SING A UTHO R ITY O F V INTO N NO TES TO FINA NC IA L STATEM ENTS (continued) JU NE NOTE A - SUM M A RY O F SIG NIFICANT ACCO U NT PO LIC IES A ND C HANG E O F ACCOUNTING PRINCIPLE (continued) (5) T g_a g_n.tp~_g_~v a b Ie s Receivables for rentals and service charges are reported in the G enera Fund,netofa low ances fordoubtfulaccounts. NO TE B - CA SH D EPO SITS W ITH FINAN C IA L INSTITUTIO N S Itis the entity's policy fordeposits to be secured by co lateralvalued atm arketor par, w hichever is low er, less the am ount of the Federal Deposit Insurance C orporation insurance. The entity's deposits are categorized to give an indication of the levelof risk assum ed by the entity at June 30,2000. The categories are described as follow s: C ategory 1 - C ategory 2 - Category 3 - Insured orco lateralized w ith securities held by the entity orby its agentin the entity's nam e. Co lateralized w ith securities held by the pledging financia institution's trustdepartm entoragentin the entity's nam e. Unco lateralized,uninsured and unregistered,butw ith securities held by the bank,its trustdepartm ent,orits agent,pledged to the PHA.butnotin the PHA's nam e. 13

16 H O USIN G A UTHO R ITY O F V INTO N N O TES TO FINANC IAL STATEM ENTS (continued) JU N E NOTE B - CASH DEPOSITS W ITH FINANCIAL INSTITUTIONS (continued) Cash Deposits,categorized by levelofrisk,(atcost,which approximates market)are Total Bank Balance Category ,370 $ 360,370 $ NO TE C - ACTIV I'FIES O F TH E PHA AtJune 30,2000,the PHA was m anaging 68 units oflow-rentin three projects under Program FW.-588,and 60 units (underacc)ofsection 8 VoucherunderProgram LA046VO. Unit m onths available changed during the year as C ertificates converted to V ouchers. NO TE D - C O NTIN G EN C IES The entity is subject to possible exam inations by federal regulators who determ ine com pliance w ith term s,conditions,law s and regulations governing grants given to the entity in the current and prior years. These exam inations m ay resultin required refund by the entity to federalgrantors and/orprogram beneficiaries. 14

17 HO USING A UTHO R ITY O F V INTO N NO TES TO FINAN C IAL STATEM ENTS (continued) JU N E-" N O TE E - FIXED A SSETS As noted in Note A,softcosts form erly capitalized have been w ritten offand fixed assets are now depreciated on the straight-line m ethod overtheirestim ated usefullives as follow s: Site im provem ents Buildings Buildings im provem ents Nondw e ling structures Equipm ent 15 Years 33 Years 15 Y ears 15 Years 3 to 7 Years 06/30/00 C ost 06/30/99 Accum ulated D epreciation 03/31/00 C urrent Accum ulated D epreciation Depreciation Land $ 78,099 Buildings and Im provem ents 2,682,062 Equipm ent 94,074 1,924, , ,022,122 63,789 $ 2,854,235 The capitalization lim itis $ ,976, ,148 2,085,911 A lland and buildings are encum bered by a Declaration of Trust in favor of the United States ofa m erica as security forobligations guaranteed by the governm entand to protect otherinteresls ofthe governm ent. 15

18 HO USING A UTHO R ITY O F V INTO N N O TES TO FINA NC IA L STATEM ENTS (continued) JUN E NO TE F - R IEflR E!M ENT PLAN The entity provides benefits fora lofits full-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 ployee contributes 6 % and the entity contributes 8.5 % ofthe employee's base salary each month. -rhe entity's contributions foreach employee (and interestalocated to the employee's account)are vested 20 % annualy foreach yearof participation. An em ployee is fully vested after5 years ofparticipation. Contributions to the plan were $ 2, and $4, by the em ployee and the entity respectively. NO TE G - D ISC LO SUR ES A BO UT FA IR VA LUE O F FINAN C IA L INSTR U M ENTS The following m ethods and assum ptions w ere used to estim ate the fairvalue ofeach class offinancialinstrum ents forw hich itis practicable to estim ate thatvalue: C ash and Investm ents The carrying am ount approxim ates fair value because of the short m aturity of these instrum ents.

19 HO USING A UTHO R ITY O F V INTO N NO TES TO FINA NC IA L STATEM ENTS (continued) JU NE N O TE H - AC C O UNTING FO R THE IM PA IRM ENT O F LO N G -LIV ED A SSE'rS The fullam ount of the carrying value of buildings and land im provem ents are deem ed recoverable from future cash flow s. N O TE I- USE-:O F- ESTIM ATES in TH E PREPA RATIO N O F FINA NC IAL STATEM ENTS The preparation offinancialstatem ents in conform ity w ith generally accepted accounting principles requires m anagem ent to m ake estim ates and assum ptions that afect certain reported am ounts and disclosures, Accordingly, actual results could difer from those estim ates. N O TE J - C O IvlP[-NSATED ABSENC ES Em ployees earn annualleave based upon years of service,and m ay accrue up to 300 hours. Sick tim e is earned but not accrued since it is dependent upon a future event. U pon term ination a laccrued vacation tim e is paid. At6/30/00 the PHA had a liability of $7, Ofthe aforementioned am ount,$5, pertained to the prioryear, Only the $2, increase is recognized as a currentyearexpense in these financialstatem ents. NO TE K - FUN[)EQ UITY AND RETAINED EARNING S A s a result of changing from the m ethod of accounting to the enterprise fund-type of proprietary accounting as stated in Note A, 6/30/99 fund equity and 6/30/99 retained earnings has been restated by various priorperiod adjustments. Priorperiod adjustm ents to retained earnings are as folows Low Rent C LAP,C PG, Drug Elim. Tota Reclassify soft costs 269,295 19, Priorperiod depreciation 1, ,976,763 Priorperiod accrued leave Tota $ 2,203,294 67,817 2,

20 HO USING A UTHO R ITY O F VINTO N NO TES TO FINA NC IAL STATEM ENTS (continued) JUN E NOTE K - FUND EQUI-i"Y AND RETAINED EARNINGS (Continued) Restatem entofequity is as fo low s Low Rent Equity at6/30/99 H U D guaranteed debt reclassed to equity Equity at6/30/ NO TE L - AC C O UN [S PAYABLE -H UD A ccounts payable -H UD is com prised as fo low s: Voucher $ 53, C ertificate 9, Total 63,

21 S U PPLEM ENTA RY IN FO R M A TIO N

22 HO USING AUTHO R ITY O F V INTO N EX H IBIT E STATEM EN'I A N D C ERTIFICATIO N O F A CT UA L M O D ER N IZAT IO N C O ST ANNUAL CO NTRIBUTIO N CO NTRA CT ]~A The A ctualm odernization Costs are as follow s Project 1996 Project 1997 Project 1999 Funds Approved $ 104, $ 225, $ 128, Funds Expended 104, , , Excess offunds A pproved Funds Advanced $ 104, $ 225, $ 1.~!8, Funds E:xpended 104, , , Excess offunds A dvanc;ed The distribution ofcosts by projectas shown on the FinalStatements ofmodernization Costs dated 10/29/!)9,4/26/00 and 4/26/00,respectively for1996,1997 and 1999 accom panying the A ctualm odernization C osts C ertificates subm itted to H U D forapprovalare in agreem entw ith the P HA 's records. 3.A l m odernization costs have been paid and a l related liabilities have been discharged through paym ent. The Notes to FinancialStatem ents are an integralpart ofthese statem ents

23 H O U SIN G A UTHO R ITY O F'V INTO N SC H ED ULE O F EXPEN D ITU R ES O F FED ERA L A W A R DS Y EA R END ED JU N E 30,2000 FED ERA L G RA NTO R C D FA PRO G RA M TITLE N O. U.S.Departm entofhousing and Urban Developm ent D irectprogram s: Low -Incom e H ousing O perating Subsidy MajorProgram Total Section 8 Hap - V ouchers M ajorprogram Total PR O G RA M EX PEN D ITU R ES Section 8 Hap - C ertificates MajorProgram Tota Com prehensive Im provem ent A ssistance Program MajorProgram Total TotalH U D $ 379,

24 M ]K E ESTES,CI'A./PF,~,C~I' M IK E E STE S, P.C. A PR O FESSIO NA L A CCO UN TIN G CO R PO RA TIO N 4200 A IRP O R T FR EE W A Y -SUITE 100 FO R T W O R TIt,TEXA S (817) M ETRO (817) FAX (817)83t.3560 e.mail:estes3 Caflash.net M EM BER AM ERICAN FIOARI~CERTIFIED PUBLIC A ccordance w ith O M B C irculara -133 Housing A uthority ofvinton V inton.louisiana W e have audited the com pliance ofthe Housing A uthority ofv inton,louisiana w ith the types of com pliance requirem ents described in the U.S. O ffice of M anagem ent and Budget(OMB)CircularA-133 Compliance Supplement thatare applicable to each of its m ajorfederalprogramsforthe yearended June 30,2000.The Housing Authority of Vinton,Louisiana's majorfederalprograms are identified in the sum mary ofauditor's results section of the accom panying schedule of findings and questioned costs. Com pliance w ith the requirem ents oflaw s,regulations,contracts and grants applicable to each ofits majorfederalprograms is the responsibility ofthe Housing Authority of V inton, Louisiana's M anagem ent. O ur responsibility is to express an opinion on the Housing A uthority ofv inton,louisiana's com pliance based on ouraudit. W e conducted ourauditofcom pliance in accordance w ith genera ly accepted auditing standards; the standards applicable to financial audits contained in G overnm ent A uditing Standards,issued by the Com ptro lerg eneralofthe United States;and Q M B C ircular A-133,A udits of States, Local G overn m ents, and N on-profit O rganizations. Those standards and O M B C irculara-133 require thatw e plan and perform the auditto obtain reasonable assurance about w hether noncom pliance w ith the types of com pliance requirem ents referred to above thatcould have a directand m aterialeffect on a majorfederalprogram occurred. An auditincludes examining,on a testbasis, evidence about the Housing A uthority of V inton, Louisiana's com pliance w ith those requirem ents and perform ing such other procedures as w e consider necessary in the circum stances. W e beliew ;thatourauditprovides a reasonable basis forouropinion. O ur audit does.not provide a legaldeterm ination on the Housing A uthority ofv inton, Louisiana's com pliance w ith those requirem ents. 21

25 In ouropinion,the Housing Authority ofv inton w ith the requirem ents referred to above that program s forthe y~.~arended June 30,2000. Louisiana com plied,in a lm aterialrespects are applicable to each ofits majorfedera ~t~rnalg nntm l(bverc om eliance The m anagem ent of The Housing A uthority of V inton, Louisiana is responsible for establishing and m aintaining internalcontrolover com pliance w ith requirem ents of law s, regulations, contrac'ts and grants applicable to federal program s. In planning and perform ing our audit,w e considered the Housing A uthority of Vinton,Louisiana's internal controlovercornplianc-e w ith requirem ents thatcould have a directand m aterialefecton a majorfederalprogram in orderto determ ine ourauditing procedures forthe purpose of expressing our opinion on com pliance and to test and report on internal control over com pliance in ac'cordance w ith O M B C irculara-133. O urconsideration ofthe internalcontrolovercom pliance w ould notnecessarily disclose a l m atters in the internalcontrolthatm ightbe m aterialw eaknesses. A m aterialw eakness is a condition in w hic'h the design oroperation ofone orm ore ofthe internalcontrolcom ponents does not reduce to a relative)y )ow level the risk that noncom pliance w ith applicable requirem ents oflaw s,regulations,contracts and grants thatw ould be m aterialin relation to a majorfederalprogram being audited m ay occurand notbe detected within a timely period by em ployees in the norm alcourse of perform ing their assigned functions. W e noted no m atters involving the internalcontrolovercom pliance and its operation thatw e considerto be m aterialw eaknesses. This report is intended forthe inform ation ofthe aw arding agencies and pass-through entities record and its distribution is notlim ited. auditcom m ittee,m anagem entand federal H ow ever,this report is a m a ter of public FortW orth,texas Novem ber The Notes to FinancialStatem ents are an integralpartofthese statem ents 22

26 M IK E ESTE S, P.C. A PR OFESSION AL A CCO UN TIN G CO R PO RA TIO N 4200 A IRP O R T FR EE W A Y -SUITE 1 O0 FO R T W O R TH,TEXA S M IKI IS7~S,CPA/P~,CFP (817) M E]I~O (817) FAX (817) es'te~3~ ash.~ t MEMBER AM F~Lff~,N BOARD L'ERTIFIED PUBLIC ACCO UN TAN TS R,q~~.d on an A uditoffinancialstatem ents Perform ed in A cc-ordance w ith G overnm entala uditino Standards Housing A uthority ofv inton V inton.louisiana W e have audited the financialstatem ents ofthe Housing A uthority ofv inton,louisiana as ofand forthe yearended June 30,2000,and have issued ourreportthereon dated Novem ber 17,2000. W e conducted ouraudit in accordance w ith genera ly accepted auditing standards and the standards applicable to financial audits contained in G overn m entala uditing Standards, issued by the Com ptroller G eneralof the United States,and provisions ofthe Louisiana G overnm entala uditg uide. Com pliance A s part of obtaining reasonable assurance about w hether the Housing A uthority of V inton, Louisiana's financial statem ents are free of m aterial m isstatem ent, w e perform ed tests ofits com pliance w ith certain provisions oflaw s,regulations,contracts and grants,noncom pliance w ith w hich could have a direct and m aterialefecton the determ ination of financial statem ent am ounts. How ever, providing a opinion on compliance with those provisions wasnotan objective ofourauditand,accordingly,we do not express such an opinion. The results of our tests disclosed no instances of noncom pliance that are required to be reported under G ovem m enf.al A uditing Standards.orthe L.ouisiana G overnm entala uditg uide. 23

27 nternalc ontrolo verfinancialreeortine In planning and perform ing our audit, w e considered the Housing A uthority of V inton, Louisiana's internal control ever financial reporting in order to determ ine our auditing procedures forthe purpose ofexpressing ouropinion on the financialstatem ents and notto provide assurance on the internalcontroloverfinancialreporting. O urconsideration ofthe internal control over financial reporting w ould not necessari)y disclose a l m atters in the internal control over financial reporting that m ight be m aterial w eaknesses. A m aterial w eakness is a condition in w hich the design oroperation ofone orm ore ofthe internalcontrol com ponents does notreduce,to a relatively low level,the risk thatm isstatem ents in am ounts thatw ould be m aterialin relation to the financialstatem ents being audited m ay occurand not be detected w ithin a tim ely period by em ployees in the norm alcourse of perform ing their assigned functions. W e noted no m atters involving the internal control over financial reporting and its operation thatw e considerto be m aterialw eaknesses. This reportis a m atterofpublic record and its distribution is notlim ited FortW orth,texas Novem ber The Notes to FinancialStatem ents are an integralpart of these statem ents 24

28 HO US IN G A UTHO R ITY O F V INTO N SCHE-'DULE O F FINDING S AND Q UESTIO NED CO STS JU NE There w ere no priorauditfindings N one 25

29 LA046 06/30/2000 Public 5eca on 6 becllon 6 Low Rent Rou sing _ Compre hensive Rental Rental Public Improvem entassistance Voucher Certilicate AccountDescription Housing Program Program Program Total Gash -Unrestricted $234,/b2 SL $119,460 5(J $354,21: Cash -]enantsecurlfdeposits 56,1b1~ St. 50 S0 5'6, 1bi iota(gaso $ ( ( h ccouns ecewa e.-o~ r-g:ov -"~ T~m-~ t" SbU $[ S0 5u 5hi AccountsReceivable ~M lsc/.~lta neous C $( SO $21( Accounts Reca vab e ~Tenants-Dwe ibq Rents $3,045 5(, $I S0 $3.04! Ali0wanca totdoubtlulaccounts-dwelhng Rents b 5C St 50 $-1.50~ A lowance fordoubtlulaccounts.other 50 ${, 5( 50 5( TotalRecewables,nelolalowancesforoou~ ta accounts 51, St $0 $1,80t repal xpensesan 6'~ r~as-se-~" $15,533 SC St S0 S15.83: Inventories 53,519 S0 5t $0 $3.51~ AlI0wance IorO bsolete Irlventones S0 5(J 5( 50 5~ interprogram L)Ue From $ SfJ S( $17.22{ $35,3b~ TotalGurre'ntAssets 5280, ,46( 517,22( 5416,88( ~2-~ Buildings -~ 61,659, S0- --~:( 6( 5(~.2.0Zb.B7;: $/0,09.~ t-urniture,equipm ent& M acnirlery -Dwefllngs $39,74! 66,66[ 5(. 5t $46,41~ Furniture,Equipment6 Machinery -Adminlstrabon $ $2' (. 5[ $45,66~ Leasehold Im provem tm Js 5b65,06; $/0.122 $C St 56bG 16~ 16 rbo" ili~,~ teddepreciation $ ! Sb54.4b; $-63,406 ${J $~ $(676b,324 $(2,085,91 ~FbtaIAsets - " -'7"-%'8.'T4,~'61-520~.67~I-"-S~,., 1.,A /30/2000 L.ine Item # _, tdescription I~ow~ont I P ous,ngoomp,ohe~ RPublic Im provem entassistance Voucher Certificate ousing Program Pro~ram Program Total _ J SecIlon 8 ~ectlon 8 _ ~ I ~e.ta, I ~ 'T" Accrue5Wage/H ayr-blfi~ s-'l"-r~ a'a'a- 51e (. $~ St' 5698 Y2'2- I Accr~'ed Uompensatao~'A'~"~ "~ 51,620 $[ 5(, St, $1,620 Y3T" AccountsPayable-HL3~"~ ','~ 5~'~glms 50 5C $53,832 59, ,623 Y3~- AccountsPayable-O[~"~-~-~"~er "r~ ent 511J.051 5C $C 5( chantSecurityDepcs~ " $6,158 $C $C SL $6, 156 ~ '7" Interprogram Due1o 50 $(; $3b. 3b;~ 6(. 53~.353 Y~b'- tota~gurrentl~ata~ties $ ~ $8e. 18~ $9, ,3-~ ~ oncurentliabte[~s- I"~-'--~ ~ $0~ --'-%"DT'" sej so TotalLiabdibes r~.~ 2~.s2- ~ Z -~ --Eoi--'--$8~ S122,903 NetHUD PHA GOnlribu-U-~-~ 5203,672 $ $ $ ]oralcontributedoapit~ 5564,452J $768,32 T~ta~ Resewed~-unbq~-i~ l _-TC-s'~[ 5oi $~I 5oI 5o ~ designaledfufi~q!fat~ e~f,re-taq'ee'-d~:arnings r-~ 55-,66~ - ~ot-~ $3~72"fbj $8.035j $293~97-f ]otalequity I $8". 2~ f~- $203,8721 ~ $6,03~r$1,o62=~011 I 1 I I I I

30 ~0 I'~talLiabilitiesandEquity $844,6461 $203,8721 $ ~ $17.226~1, ].A {}46 06'30'20(}0 Jn{ LOW Rent F'ubfic Housing _ Comprehensive Rental Rental Ilern Public improvementassistance Voucher Certificate A:.counlDescnptlon I-tạ ~u Program program Program Total ~.~]~e"~'~nantrentalre,~-- ~[3"4"-I]enantRevenue-OlheTw~- ~~ e===: I$83,616 $._9~ $7,971 $~ $9' -$01 ~O$7,971 $0$91,5B7 $7$B3,616 T(T~ -~ UDPHA~-'~ S- ]-"~'T~/~- $170,.1~r'-~~-T0'5,-',~39~ ' $26,293}$334j94,nves,n,ont, _S_~ota,R I $0"' $2_ $0 $828 $/3 $9,669 $ ,.0'0 :,'~'~'-'[~,ommf~ira~ve aa~ s- 1-% 23~321 $01 $6,047 $1.604 $30.6B3 ~'~'-'[ Auditm9Fees " $3,60( RE $1,449 $437 $5,492.~'~'~-"~ CompensaledAbsen(:~" 52,03: $(, $0 $[ $2,032 J'~rB-"I EmpioyeeBenefitCon"['~[~"~s- 'T',~'~ '~strative $8,83~ St $359 $211 $9,402 -~'~'~'-J (.)theroperating-aori~ a-['~'~ $18,62( SL $3,639 $8"~ $23,069 ~'~'2"-l Eiectric~iy $4,23 $0 $0 ' ' $0 $4,235 ~'~ ~ Gas $ $0 $398 ~'~'-J OtherUtilitieshxp L sb _~L~ soi $91 $o $87, ~'~ OrdinaryMaintenarlo~ ons-materialsandother $7,167 So $0 $0 $7,167' OrdinaryMaintenance"~'n-o~i~'pera " "{~rls-contractcosts $7,17 $9 $0 $0 $7,1T0 Employee BenelitCo~ -~ s- rdinary Maintenance $ ~ $0 $ $8, 832 LA /30/2000 i~~e Section 8 VoucherCertificate >rogrampmg~mtotal I AcounlDescdp#on ]LowRentPubliImprovementoAsistanceeRentalnBRental [ fousing Public.J Program

31 961 " Insurance Prem ium s $t O thergeneralexpenses $( $( $382 $2! ;~411 PaymentsinLieu01i"~E" I $7,68' ~(, $0 $0 $7.66 ~F IoralD O n perating Expenses~Es" I$131,1t $1.241 $[ $1,67( $0 $3,691$146,u8~ $0$1,24~, ExcessOperatingNe~ E~F'~v~7~-p~Tai ~ Expenses "F'- '$T-,T'3-~- $1/6,966I $94,6911 $23,27~15;169.Y61 ~t3- ]oralexpenses Depreciation Expense $2 $94,094 $16,054 $16,064 $102,34.1 $0. $ze,54$36,154 SL)$109,141 t' Tear" Operating]ranslersIE I ]:~'l"7(j,yd71 $0i $01 $015170, , n lotal O therh nancm g ~"~s"-'~ L$_1 $ _~ 4 soi,oj $oi,oi-.o~ $c 1000 E xpense,,pet y,o,oper=ing= Over(uo0er, I ST=,0,1 ~-1~,04 ",14 '04'07,0" LA /30/2000 Public tsectlon 6 Section 6.irl6 Low Rent Housing Com prehensive Rental Rental tem Public ImprovementAssistance Voucher Certificate,/ AccountDescription Housing Program Program Program Tota l Ff~l- f3" Capita]0utlaysEnetete~p~ e~-~ E I $o $46,665 St $0 $46,66~ ~ DebtPrincipalHaymen'~ -~[:n-{'er'~'~e Funds $C $0 St $0 St ~eglnning Equity ~2,946,401 $ $26,15~ $7,20y $3,216,95' 1104 PriorPeriodAdjustments Equity sfersand QorrectionofEror.~ $ - $ 2,203,294 $ St $0 2,271,11" PrT'2 Depreciation A00 Bacf $94, 094 S15,054 St $0 $109,14~ PrT~ Maximum AnnualContT~u-~p~ rlitment(heracc) $(. $0 $162,641 $36,1f3 $200, 61! 1114 Prorata Max/m um AnnuaFC~ ~5~tTonsApplcable rl to a Period ot lessthan"twelvemonths $C $0 $( $0 $( ConlngencyReserve,'~ '!~ Reserve $c $0 $167,991 $61,914 $219,901 IoralAnnualContribu'6~ l~ $0 $6 $330,63? $90,067 $420,72~ UnitM onths Available" c t NumberofUnitMontls-~ EE~ { 10: 1271