H ousing A uthority of the Tow n ofjonesboro Jonesboro,Louisiana

Transcription

1 (",i"t:i(;i~,.t!il~: CO P~( "r.':",?'r c~l,y,'.ro d PLAC.[ HA,(:K m It! i) ~':?t:,:t-.~ /', till:15 H ousing A uthority of the Tow n ofjonesboro Jonesboro,Louisiana FinancialStatem ents and Supplem entalfinancialinform ation "/earended Septem ber30,1999 with Reports ofcertified PubLic Accountants on Financialand Com pliance Exam ination Rel ease Date M~.Y "Io 2ooo VanRheenen & M iler,ltd. Certified Public Accountants 1309 EastRace Avenue Searcy,Arkansas 72143

2 TA BLE O F CO NTEN FinancialSection PAG E 3 ndependenta uditors'report G eneralpurpose FinancialStatem ents Balance Sheet-Enterprise Fund Statem entofrevenues,expenses,and Changes in Retained Earnings -Enterprise Fund Statem entofc ash Flows -Enterprise Fund Notes to the FinancialStatem ents SuDr~lem entalfinancialinform ation Financia}D ata Schedule -Balance Sheet FinancialData Schedule -Incom e Statem ent Schedule ofg overnm entalawards Non-FinancialSection R eporton C om pliance and on InternalC ontrolo verfinancialreporting Based on an A uditof G eneralpurpose FinancialStatem ents Perform ed in A ccordance w ith G overnm enta uditing Standards Schedule ofreport:able Conditions 24 25

3 FinancialSection

4 1309 E.Race Avenue ~ Searcy,Arkansas72143 ~ (5Oij ~ Fax C.M ark VanRheenen,CPA Steaven E.M ilerjr.,cpa L,ScottRose,CPA Board ofc om m issioners Housing Authority ofthe Town ofjonesboro 839 Harvey Place Jonesboro.LA ndedendentauditors'report W e have audited the accom panying generalpurpose financialstatem ents ofh ous]~)g Authority of the Tow n of Jonesboro as of,'septem ber30,1999,and forthe yearthen ended,as listed in the table ofcontents. These generalpurpose financialstatements are the responsibility ofthe authority's m anagement. Ourresponsibility is to express an opinion on these generalpurpose financialstatem ents based on ouraudit. W e conducted outauditin accordance with generally accepted auditing standards and the standards applicable to financialaudits contained in _ Governm entauditing Standard,% issued by the Com ptro lerg eneralofthe United States. Those stan:~ards require that w e plan and perform the audit to obtain reasonable assurance about w hetherthe generalpurpose financialstatem ents are free ofm aterialm isstatem ent. A n auditincludes exam ining, on a testbasis,evidence supporting the am ounts and disclosures in the generalpurpose financialstatem ents. An auditalso includes assessing the accounting principles used and significantestim ates m ade by m anagem ent,as w ell as evaluating the overa l general purpose financial statem ents presentation. W e believe that our audit provides a reasonable basis forouropinion. In ouropinion,the generalpurpose financialstatem ents referred to above presentfairly,in allm aterialrespects, the financialposition of H ousing Authority ofthe Tow n ofjonesboro as ofseptem ber30,1999,and the results of its operations and cash flow s forthe yearthen ended in conform ity w ith genera ly accepted accounting principles. As discussed in Note 6,in 1999 the (Housing Authority ofthe Town of Jonesboro) changed its m ethod of presentation ofits financialstatem ents from a governm entalfunds presentation to an enterprise presentation. In accordance with G overnm entauditing Standards,w e have also issued ourreport dated Apri 19,2000 on our consideration ofhousing Authority ofthe Town ofjonesboro's internalcontrolow ~rfinancial reporting and our tests ofits com pliance with certain provisions oflaws,regulations,contracts and grants. O urauditwas perform ed forthe purpose ofform ing an opinion on the generalpurpose financialstatem ents taken as a w hole. The accom panying financialinform ation listed as supplem entalfinancialinform ation in the table of contents is presented forpurposes ofadditionalanalysis and is nota required partofthe financialstatem ents of Housing Authority ofthe Town ofjonesboro. Such supplem entalfinancialinform ation has been subjected to the auditing procedures applied in the auditofthe generalpurpose financialstatem ents and,in ouropinion,is fairly presented in a lm aterialrespects in relation to the generalpurpose financialstatem ents taken as a whole. April19,2000 VanRheenen & M iller.ltd. C ertified Public Accountant M em bers,am erican Institute ofcertified Public Accountants 4

5 G eneralpurpose FinancialStatem ents

6 Housing Authority ofthe Tow n ofjonesboro Balance Sheet-Enterprise Fund Septem ber30,1999 Assets C urrentassets Cash Investm ents O therreceivables Prepaid expenses Totalcurrentassets Property and Equ)pm ent,atcost: Land and im provem ents Buildings Furniture & equipm ent-dwe lings Furniture & equipm ent-adm inistration Totalproperty and equipm ent Less accum ulated depreciation Netproperty and equipm ent t , ,738 2,757, ,340 95,063 3,692,248 (2,095,363) 1.596,885 Tota~Assets $ 1,959,400 Liabilities and Fund Equity CurrentLiabilities Payable from CurrentAssets Accounts payable Security deposits Accrued com pensated absences Deferred revenue Due to ottlergovernr'~ents Totalcurrentliabilities payable from currentassets Fund Equity Contributed capita Retained earnings Unreserved Totalfund equity TotalLiabilities and Fund Equity 6,910 14,720 16, ,812 56,494 1,584, ,898 1,900,906 $ 1,959,400 ]'he accom panying notes are an inteqralpartofthese financialstatem ents 6

7 H ousing A uthority of the Tow n of Jonesboro Statem entofrevenues,expenses and Changes in Retained Earnings -Enterprise Fund YearEnded Septem ber30,1999 Operating Revenues Dwe ling rentals O thertenantrever~ue O perating subsidy M isce laneous incom e Totaloperating revenue O perating Expenses Adm inistrative Utilities M aintenance costs Protective services G eneralexpenses Extraordinary m aintenance Depreciation and am ortization Totalotheroperating expense Operating Incom e (Loss) Non-Operating Revenues (Expenses) Interestincom e InterestexpensE, Loss on disposibon ofequipm ent Totalnon-operating revenue (expenses) Netincome (loss)before cumulative efectofchange in accounting principle Cum ulative efectofchange in accounting principle (Note 6) Netincome (Loss) Depreciation transferred to contributed capital ncrease in retained earnings Retained Earnings,atBeginning ofyear Retained Earning's,atEnd ofyear , ,316 9, ,167 14,334 58,843 36, (40,627) 16,951 16,951 (23,676) _ (31,560) (55,236) 80,933 25,697 29t,201 $ 316,898 Theaccompanyingnotesareanintegralpad(ofthesefinancialstatements

8 Housing Authority ofthe Tow n of Jonesboro Statem entof Cash Flow s -Enterprise Fund YearEnded Septem ber30,1999 nerease (r)ecrease)in (;ash and Cash Equivalents Cash Flows from O perations Receipts from tenants Receipts from governm entalsubsidies Paym ents to suppliers Paym ents forem ployee services Netcash provided by operating activities Cash Flows Used by Capitaland Related Financing Activities Additions to property,plant,and equipm ent Cash Flows from Investing Activities Purchase ofinvestm ents Investm entincom e Netcash flows provided by investing activities NetIncrease (Decrease)inCash and CashEquivalents Cash and Cash Equivalents atbeginning ofyear $ 234, ,708 (200,807) _ (215,089) (22,820~ (12,273) ,678 19, Cash and Cash Equivalents atend efyear $ Reconciliation ofoperating Income(Loss)te NetCash Provided by (Used In)Operating Activities Operating income (loss) Adjustments NotAffecting Casb Depreciation and am ortization Change in Assets and Liabilities (Increase)Decrease in prepaid expenses Increase (Decrease)inaccounts payable Increase (Decrease)in compensated absences Increase (Decrease)in security deposits Increase (Decrease)in due to etherpayables Totaladjustments $ (40,627) 80, ,340 (5,321) (160) NetCashProvided by (Used In)Operating Activities 37,740 Theaccompanyingnotesareanintegr~ partofthesefinancialstatements

9 Housing Authority ofthe Tow n ofjonesboro Jonesboro.Louisiana Notes to the FinancialStatem ents Septem ber30,1999 NOTE 1-SUM MARY O F SIG NIFICANT ACCO UNTING PO LICIES Introduction The financialstatem ents ofthe Housing Authority ofthe Tow n ofjonesboro have been prepared in accordance with generaly accepted accounting principles (GAAP)as applied to governm entalunits. The entity applies al relevant Governm ental Accounting Standards Board (GASB) pronouncements. Proprietary activities apply FinancialAccounting Standards Board (FASB)pronouncements and Accounting Principles Board (APB)opinions issued on or befere Novem ber 30, 1989, unless those pronouncem ents conflict with or contradict G ASB pronouncem ents,in w hich case,g ASB prevails. Under the United States Housing Act of 1937, as am ended,the U.S. Departm ent of Housing and Urban Developm ent(hud)has directresponsibility foradm inistering low incom e housing program s in the United States. Accordingly,HUD has contracted with the entity to adm inistercertain HUe funds. The following is a sum m ary ofsignificantaccounting policies: B. Basis ofpresentation Proprietary Fund "lvpe C. Basis ofaccount![~ Allproprietary funds are accounted forusing the accrualbasis ofaccounting. Theirrevenues are recognized w hen they are earned,and theirexpenses are recognized w hen they are incurred. The Housing Authority ofthe TownofJonesboro does notutilize encum brance accounting

10 Housing Authority ofthe Tow n ofjonesboro Jonesboro,Louisiana Notes to the FinancialStatem ents Septem ber30,1999 NOTE 1-SUMMAF~:Y OF SIGNIFICANT ACCOUNTING POLICIES (Continued) D. Budget. Enterprise Fund service delivery levels are determ ined by the extent of consum er dem and. Because Enterprise Fund revenues and expenses fluctuate w ith changing service delivery levels,generally accepted accounting principles do not require the financial statem ents to include budgetary com parisons and, accordingly,these com parisons have notbeen included. E. Assets Liabilities and Eauitv 1. Cash and Cash~ uivalents. The Housing Authority ofthe Town ofjonesboro defines cash to include certificates of deposit,m oney m arketfunds,savings accounts,dem and deposits,and other short-term securities with m aturities ofthree m onths orless,consequently,the cost,carrying value,and m arketvalue are equiw~lent.restdcted cash is excluded from cash and cash equivalents. 2. Investm ents. The authority defines investm ents to include certificates ofdepositw ith m aturities ofgreater than three m onths,consequently,the cost,carry ing value,and m arketvalue are equivalent. 3. Accounts Receivable. Accounts receivable consists of am ounts due from tenants for rental, excess utilities and repaircharges.there w ere no am ounts due from tenants atseptem ber30, Fixed Assets. Property and equipm entpurchased oracquired is carried athistoricalcostin enterprise funds. Additions,im provem ents,and othercapitaloutlays thatsignificantly extend the usefullife ofan asset are capitalized. O ther costs incurred for repairs and m aintenance are expensed as incurred. D epreciation on a lassets is provided on the straight-line basis overthe follow ing estim ated usefullives: Buildings Furniture and equipm ent-dwelling Furniture and equipm ent-adm inistrative Buildings -refurbishing and im provem ents 40 Years 7 Years 5-10 Years 10 Years 5. Securi]~y_~#jpo sit. Security deposits consists ofamounts held in trustwith the Housing Authority ofthe Tow n ofjonesboro in orderfortenants to secure apartm entleases. 6. Accrued Com pensated Absences future benefits forservices rendered Accrued com pensated absences consists of estim ated am ounts of 7. Contributed C _a S it. An alocable portionofthe annualdepreciation is charged againstcontributed capital from grants received to finance construction of the utility system (as per NCGA Statem ent #2). Consequently,overthe usefullife ofthe system, equity initialy arising from grants is efectively reclassified prorata-annua ly into equity arising from retained earnings. F. Revenues.Expenditures,and Exeenses 1. R evenues. A l~authority revenues are accrued. These revenues consistofusercharges forrents,utilities, repairs and ether miscelaneous charges.monies received from customers forsecurity deposits are recorded as a liability upon receipt. 2. GrantRevenue. Grantrevenues are recorded when (1)the earnings process is com plete or (2) an exchange has taken place and (3)no qualifying restrictions are im posed by the grant. 10

11 Housing Authority ofthe Tow n ofjonesboro Jonesboro,Louisiana Notes to the FinancialStatem ents Septem ber 30,1999 _NOTE 1-SUMMARY O F SIGNIFICANT ACCOUNTING POLICIES (Continued) 3. _O~._b. sidie s. O perating subsidies are accrued. The subsidies are calculated by use ofcurrent charges to users. 4. ~ ditue,_s.expenditures are recognized when the liability is incurred 5. _ Depreciation. Depreciation expense of$80,933 has been recognized during the yearended Septem ber Com pensated Absences. The authority accrues accumulated unpaid vacation and sick leave when earned by the em ployee. 7. Income taxes.the authority is notsubjectto federalorstate income taxes Use of Estim ates. The preparation of financial statem ents in conform ity with generally accepted accounting principles as applied to governm ental units require m anagem ent to m ake estim ates and assum ptions thataffectcertain reported am ounts and disclosures. Accordingly,actualresults could difer from those estim ates. NO TE 2 -D EPO SI3"S AND INVESTM ENTS A. Deposits Itis the entity's policy fordeposits to be secured by colateralvalued atm arketorpar,whicheveris lower,less the am ountofthe FederalDepositInsurance Corporation (FDIC)insurance. The entity's deposits are categorized to give an indication c,fthe levelofrisk assum ed by the entity atseptem ber30,1999. The categories are described as follows: Category1 -insured orcolateralized withsecuritiesheld by theentity orbyitsagentinthe entity'sname. Category 2 - Collateralized with securities held by the pledging financialinstitution's trustdepartm entoragentin the entity's nam e. Category 3 - Uncolateralized.(This includes bank balances thatare colateralized with securities held by the pledging financialinstitution,orby its trustdepartmentoragentbutnotin the entity's nam e.) Cash Deposits,cat,agorized by levelofrisk,are Category Total Bank Balances $ 0

12 Housing Authority ofthe Tow n ofjonesboro Jonesboro,Louisiana Notes to the FinancialStatem ents Septem ber30,1999 NOTE 2 -DEPOSITS AND INVESTMENTS (Continued) B. Investm ents Investing is perform ed in accordance with HUD regulations and State Statues. Funds m ay be invested in the follow ing type ofinvestm ents: Directobligations ofthe U nited States pledged by its fullfaith and credit O bligations offederalgovernm entagencies and governm entsponsored agencies Dem and,savings,m oney-m arket,certificates of deposit,and Super NO W deposits at com m ercial banks, m utualsavings banks,savings and loan associations and creditunions provided thatthe entire depositbe insured by the FDIC orthe NationalCreditUnion Share Insurance Fund (NCUSIF)and any deposits inexcess ofinsured am ounts are adequately co lateralized. Certain m unicipaldepositary funds and localgovernm entinvestm entpools provided thata linvestm ents m ade by these fund.';orpools are on the HUD-approved listofinvestmentsecurities. The entity m ustlimitits investm ents itrthis category to no m ore than 30 percentofthe entity's available investm entfunds. Repurchase agreem ents for a term of 30 days or less entered into with Federa ly insured depositary institutions forpurchase and sale ofsecurities identified in 1 and 2 above. Certain noqoaj,open-end m utualfunds investing in only HUD-approved investm entsecurities. The entity m ustlim itits investm entin this category to no m ore than 20 percentofthe entity's available investm entfunds, The entity's investments are categorized to give an indication ofthe levelof risk assum ed by the entity at Septem ber30,19~~9. The categories are: Category 1-Insured orregistered,withsecurities held by the entity orits agentin the entity's nam e C ategory 2 - Unins.ured and unregistered,w ith securities held by the eounterparty's trustdepartm entoragentin the entily's nam e Category 3 -Uninsured and Unregistered,with securities held by the counterparty,orits trustdepartm entoragent butnotin the entity's nam e nvestm ents,categorized by levelofrisk,are Cateqory TvDes ofinvestm ents 2 3 FairValue/ Carr}'in~ Value Cost Deposits atfederalyinsured depositories $ 225,974 $ 0 $ 0 $ 225,974 $ 225,974 U.S.governm entsecurities 71, ,343 71,000 M utualfunds , "[otalinvestm ents $ 299~724 $ 0 $ O $ 299t724 $ _ ~ 299~381 12

13 Housing Authority ofthe Tow n ofjonesboro Jonesboro,Louisiana Notes to the FinancialStatem ents Septem ber 30,1999 NOTE 3 -PRO PERTY AND EQ UIPM ENT C hanges in property and equipm entare as follows Land,land im pvts Building Equipm ent Tota Accum ulated depreciation Beg.ofPeriod $ 680,738 2,757, ,553 Net $ 1, 663,968 $ ,398 24,305 (2,014,430) (80,933) Additions Deletions End ofperiod $ 0 0 _ (10,465)_ (10,455) $ _ (56,628) $ (10,455)_ O $ 680,738 2,757, ,692,248 ~,095,363) $ 1,596,885 Allland and buildings are encum bered by a Declaration of Trust in favor ofthe United States ofam erica as security for obligations guaranteed by the federal governm ent and to protect other interests of the federal governm ent. NOTE 4 -CO NDUIT DEBT O BLIGATIO NS To provide forthe developm entand m odernization oflow renthousing units,the authority issued N ew Housing Authority Bonds and Perm anentnotes -F.F.B. These bonds and notes are payable by HUD and secured by annualcontributions. The bonds and notes do notconstitute a debtby the authority and accordingly have not been reported in the accom panying financialstatem ents. As ofseptem ber30,1999,there were tw o series ofnew Housing Authority Bonds outstanding. The aggregate principalam ountpayable forthe Bond series was $572,362.As ofseptem ber30,1999,perm anentnotes -F.F.B. outstanding totaled,$572,247. NOTE 5 -.RETIREM ENT PLAN The entity provides pension benefits foralofits ful-tim e em ployees through the Housing Authority ofthe Town of Jonesboro ProfitSharing Plan (the "Plan"). The Plan is a single-employerdefined contribution plan and is administered by the Housing Authority ofthe Town ofjonesboro.the Planwas established January 1,1995 and is authorized and m ay be am ended by the entity's Board ofcom m issioners. 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 aftera one yearexclusionary period. The em ployee contributes 5% and the entity contributes 7% ofthe em ployee's base salary each m onth. The entity's contributions foreach em ployee (and interest alocated to the em ployee's account) are vested 20% annualy for each year of participation. An em ployee is fully vested after5 years ofparticipation. The entity's totalpayro lin fiscalyearended Septem ber30,1999 was $179,784. The entity's contributions were carculated using the base salary am ountof$126,120. Contributions to the plan were $6,306 and $8,828 by the em ployee and the entity,respectively.

14 Housing Authority ofthe Tow n ofjonesboro Jonesboro.Louisiana Notes to the FinancialStatem ents Septem ber30,1999 NOTE 6 -CHANG E IN PRESENTATIO N O F FINANCIAL STATEM ENTS The authority has changed the presentation of its financial statem ents from a "governm ental fund type" presentation to an "enterprise fund" presentation. M anagem ent has determ ined that the "enterprise fund" presentation m ore clearly represents the operating characteristics of the authority. The U.S. b epadm ent of Housing and Urban Development(HUD)has published regulations requiring presentation ofthe authority financial statem ents in conform ity with generally accepted accounting principles. HUD further expounded on these regulations by indicating thattheirpreferred m ethod ofrepodjn9 would be the enterprise fund accounting. W ith all the facts considered above,the authority has determined thatthe change in presentation is justifiable. The difference between the "governm entalfund type"and enterprise fund accounting would include the fofiowing 1. Enterprise fund accounting utilizes a classified balance sheet. 2. Enterprise fund accounting presentation includes a statem entofcash flows. 3. G overnm entalfund accounting presentation includes a budgetversus actualcom parison. 4. Enterprise fund accounting utilizes fu laccrualaccounting versus the previous use ofthe m odified accrual accounting undergovernm entalfund accounting. 5. Enterprise fund accounting requires thataldepreciable property m ustbe depreciated.underthe authority previous governm enta~fund accounting,no depreciat{on w as recorded. As a result of the change in presentation,the authority has included the cum ulative effect of the change in presentation as a separate caption in the Statem entof Revenues,Expense and changes in R etained Earnings - Enterprise Fund before netincom e (toss). NO TE 7 -CO M M ITM E NTS Com m itm ents arise prim arily from construction in progress. Com m itm ents atseptem ber30,1999 are com posed ofthe fo low ing: Project Authorization CtAP $ 354,671 Expended to _ Septem ber30,1999 $ 0 Com m itm ent $ 354,671 A lprojectfunds are provided by grantfrom HUD,therefore no additionalfunding is required to satisfy outstanding com m itm ents atseptem ber30,1999. NO TE 8 -CO NTING ENC IES term s, These

15 Supplem entalfinancialinform ation 15

16 Housing Authority ofthe Tow n ofjonesboro FinancialData Schedule Balance Sheet Septem ber30,t999 [.nle 11811,q A ccountd escription Low Rent ASSETS: C URREN J A SSETS: Cash I11 Cash -nnreslricled 12 Cash -resl"icted -m odern ization and developm ent 113 Cash -olherrestricted 0 C ash -tenantsecurity deposits 0 Totalcash A CCOUllsand notesreceivables: 12 1 A ccountsleceivable -P;tA projects 122 Accountsicceivable-IIUD otherp/ojects 0 A ccountsleceivable -othergoverun~enl 125 A ccountsreceivable-m iscellaneous 126 Accountsrecm vable-tenants-dw elling rents 26,1 A llow ance fordoubtfulaccounts-dwelling rents 26.2 A llow ance fordoubtfulaccounts-other 127 N otesand m ortgagesreceivable-current 128 Fraud recovel2, 28.1 A llowance fordoubtfulaccounts-fraud 129 Accrued in terestreceivable 120 Totalreceivables,actof allow ancesfordoubtfulaccounts Curreutinvestfnenls 31 Investlnent,~-unrestricted 32 Inveslnlent~-restricted Prepaid expensesand otherassels lnvellorics Allow ance forobsolete inventories Interprogram -due fi'om Am ountsto beprovided TO TA L CURREN T ASSETS N O N CU I~.P,EN T A SSFq'S Fixed assels: l,and Buildings Furnitu re equipm ent& m achinei7 -dw ellings Ptn-nJlurc equipm entt~ nlac]liner) -adlgtinistlalion Leasehohlil~)lOVelnOlltS A ccunltllated depreciation Tola]fixec assels nelofaccunlulated depreciation ,363/ "16

17 1 hte Itenlz, Housing A uthority of the Tow n ofjonesboro FinancialData Schedule Balance Sheet Septem ber30,1999 A ccountd esert3rion ~ " t:dw'kdli'" O thernon-cnrrentassets: 171 N otesand m olt!;agesreceivable -non-current 172 N otesand ntortgages cceivable-non-eurrent-pastdue 174 O tt~erassets 175 U ndistribuled debits 176 [nvestnlentinjointveltures 80 TOTAI,N OiNCURREN T ASSETS 190 TO T AL ASSFTS LIABIIITII';S AN1)EQL ITY l.ia0ilities C urrentliabilities: Bank overdraft A ccountspayable < 90 days A ccountspayable > 90 dayspastdue A ccrued wage/payrolltaxespayable A ccrned cotrtpensated absences A ccrued conlm gency liabilit3 A ccrtled intecestpayable AccountsPayable -ttu D PIIA Program s A ccountspayable -PH A projects A ccountspayable -othergovernm ent Tenantsecurity deposits Deferred revelue Curren!portion of L-T debt-capitalprojects Currentportion of L-T debt-operatnrg borrow ings O tbercnrrenl[iabililies Accrued liab ties-other lnterprogram due to 310 TO TA l,cu RREN T 1AA BILn 'IES ,296 19,812 14, N O N CU RREN T LIA BILITIES 351 Long-term debt.netof current-capitalorojecrs 352 I,ong-term debt.netof current-operaung borrow ings 353 N on-currentliabilities-other 350 TO 'IA I.N O N ('U RREN T IdA BILI'III;S 300 TO TA L LIA BILITIES

18 H ousing A uthority of the Tow n ofjonesboro FinancialData Schedule Balance Sheet Septem ber30,1999 Line hem # A ccountd escription EQ UITY: 501 hw estm ent n generalfixed assets Contributed C af tal ProiectnotesiI1UD ) [,ong-tern~debt-h U D guaranteed NetH U I)Pf A contributions O ther]1u D contributions O thercontributions Totalcom ributed capita; Reserved fire d balance: Reserved fcloperaung activities Reserved forcapitalactivities Totalreserved fund balance Undesignated fdnd balan~e/retained earnings TOTAL EQUITY 600 TOTAL I.IABII.ITIF.S AND EQUITY 1,900,906 1,959,400 Proofof concept 18

19 Housing A uthority ofthe Tow n ofjonesboro FinancialData Schedule Incom e Statem ent Year Ended Septem ber30,1999 AccountDescription Low Rent R EV EN U E: 703 N etlenantrenlajrevenne 704 Tenantrevenue-ethel 705 Totaltenanlrevenue 706 H U D PH A glants 708 O thergoverllm enlgrauls 71 hlvestm enlm conle -unrestricted 712 M ortgage interestiucolue 714 Fraud recovery 715 O therrevem e 716 G ain orlosson sale of fixed assets 720 Investm entinconle -resu'icted TO TA L RI,;V ENU E ,054 EX PENSES Adm inist~alive 911 A dm inistrm ive salaries 912 A uditing fees 913 O utside m anagem entfees 9 ]4 Con/pelsal,~d absences 915 Em ployee benefitcontributions-adm irdstrattve 916 O theroperating-adm im su'auve ,985 WeuaRtseFvlces 921 Tenal/lseivtccs-salaries 922 Relocation costs 923 Enlployee benefitcontributions-tenantservices 924 Tenantservices-other 931 W ater 932 Elcctricit3 933 G as 934 Fuel 935 I.abor 937 Em ployee benefitcontributions-utilities 938 O therutiltiesexpense Oidmarv ntalllenance & opel'alton 941 O rdinar "naintenance and operations-labor 942 O rdinar. maintenance and operation~-m aterials& other 943 O rdinary maintenance and operations-contractcosts 945 F,nlployec benefitcontribulions-ordinary m ain tenance '19

20 Housing A uthority ofthe Tow n of Jonesboro FinancialData Schedule Incom e Statem ent YearEnded Septem ber30,1999 ne Item I! A ccountd escription Low Rent Protective services 951 Protective services-labor 952 Protective,?.el'vices- othercontractcosts 953 Protective,~ervlccs-other 955 Entployee benefitcontributions-protective services G eneralexpenses Insurance prenfiunls O thergeneralexpenses Pa3ntenlsin lieu of taxes Bad debt-lenantrents Bad debt-m ortgages Bad debt-othel Interestexpensc Severanceexpense TO TA L O PF,RATING EXPENSES EXC ESS O 'ERATINC R EV ENUE O V ER O PERATING EXPENSES 39, ' "i o Extraordinau nlanttenancc Casualt5 osses-non capitalized Ilousing asslslanee paynlenls D eprecialioo cxpense Fraud losses Capitaloutlays-governm entalflm ds Debtprincipalpayntent-governm entalfunds Dw ellin~ unitsroutexpense - 36, TO TA L EX PEN SES O TItER FIN 'knc IN(;SO URC ES (USES) 001 O peraung transfersin 002 O perating ~ratlsfersout 003 O peratino transfersfrom /to prim ary govem m eut 004 O peratino transfers/iota/to com ponentunit 005 Proceedsfi'olu notes loansand bonds 006 Proceeds from rx opcrd,sales 010 TO TA L O TIIEII.FINA NC ING SO URCES (USES) 000 EX C ESS (D H ~'IC IEN C Y IO F TO TA L R EV EN U E O V ER (U N D ER)TO TA L EX PENSES

21 Housing Authority ofthe Tow n ofjonesboro FinancialData Schedule Incom e Statem ent YearEnded Septem ber30,1999 AccountD escriptlo l rviem O A C C O U NT IN FO R M A TIO N : 1101 Capitalcontributions ]102 D ebtprincipalpaym ents-enterprise funds 1103 Beginning equity 1104 Priorperiod adjnstn~entsand equny tlansfers 1105 Cbalgesiu compensated absence liability (iu tiregltdag 1106 Changesilcontingentliabilit} balance (in theg L'fDAG 1107 Changesilanrecognized pension transition liability in the GLTDAG ]108 Changesm specialterm/severancebenefitsliability (inthegltdag ) I109 Changesilallow ance fordoubtfulaccounts-dwelling rents Low Rent Changesin allow ance fordoubtfulaccounts-other llld D epreciation "add back" M axium nlalm ua]contributions conrluntlenl.~,pera C C/ Prorata m axjlnunlannualcontributionsapplicable to a period of le~sthan tw elve m onths Contingenc',reserve,ACC program reserve Totalannualcontributionsavailable U nitm onthsavailable N uraberof Jnitnloltthsleased Equn3,Rolll:orw m d Test Calculation ti-om R/E Statem em B/S Line , ,301 1,900[906 L

22 Housing Authority ofthe Tow n ofjonesboro Schedule ofexpenditures ofgovernm entalaw ards YearEnded Septem ber30,1999 FederalGrantor/Proqram Title G rant ID Num ber CurrentYear Program oraw ard Am ount Balance Beginning of Year-Cash/ Receivable/ [_Payable)- Balance G rant End ofyear Receipts or G rant Cash/ Revenue Disbursem ents~ Receivable _Recognized ~ E _ x ~0enditures (Payable) U.S.Departm entofhousing and Urban Developm ent DirectProgram s: Low -Incom e Housirlg Operating Subsidies FW $ 218,708 $ ClAP ,671 $ $ $ TotalHUD and Grand Total $ 354,671 $ - $ 218,708 $ 218,708 $ See Note 1to FinancialStatem ents fora discussion ofaccounting principles applied to this statem ent, See Notes to FinancialStatem ents

23 inancia!section 23

24 1309IZ Race Avenue ~ Searcy,Arkansas72]43 ~ (501) ~ Fa~268@362 C.M ark VanRheenen,CPA Steaven E.M ilerjr.,cpa L ScottRose,CPA Reporton C om pliance and on InternalControlO verfinancialreporting Based on an A G eneralpurpese FinancialStatem ents Perform ed in Accordance with Governm entauditina Standards Board ofcom m issioners Housing Authority ofthe Tow n ofjonesboro 839 Harvey Place Jonesboro.LA W e have audited the generalpurpose financialstatem ents ofhousing A uthority ofthe Tow n ofjonesboro as of and forthe yearended Septem ber30,1999,and have issued ourreportthereon dated April19,2000. O urreport on the generalpurpose financialstatem ents included an explanatory paragraph w hich described a change in presentation ofthe financialstatem ents,disclosed in Note 5 to the financialstatem ents,from a "governm ental funds"presentation to an "enterprise fund"presentation. W e conducted ourauditin accordance with generally accepted auditing standards and the standards applicable to financialaudits contained in G overnm entauditin.q Standards,issued by the Com ptrollerg eneralofthe U nited States. C om pliance As part ofobtaining reasonable assurance aboutwhetherhousing Authority ofthe Town ofjonesboro's general purpose financialstatem ents are free ofm aterialm isstatem ent,w e perform ed tests ofits com pliance w ith certain provisions oflaws,regulations,contracts and grants,noncom pliance with w hich could have a directand m aterial effecton the determ ination offinancialstatem entam ounts. However,providing an opinion on com pliance with those provisions was notan objective ofourauditand,accordingly,we do notexpress such an opinion. The results of ourtests disclosed instances of noncom pliance that are required to be reported under G overnm ent Auditing Standards w hich ate described in the accom panying schedule offindings and questioned costs as item s nternalc ontrolo verfinancialr eoorfincl In planning and perform ing ouraudit,w e considered Housing Authority ofthe Tow n ofjonesboro's internalcontrol overfinancialreporting in orderto determ ine ourauditing procedures forthe purpose ofexpressing ouropinion on the generalpurpose financialstatem ents and not to provide assurance on the internalcontroloverfinancial reporting. However,we noted certain m atters involving the internalcontrolover financialreporting and its operation thatw e considerto be reportable conditions. Reportable conditions involve m atters com ing to our atention relating to significantdeficiencies in the design oroperation ofthe internalcontroloverfinancialreporting that,in ourjudgment,could adversely affecthousing Authority ofthe Town ofjonesboro's ability to record, process, sum m arize and report financialdata consistent w ith the assertions of m anagem ent in the financial statem ents. Reportable conditions are described in the accom panying schedule offindings and questioned costs as item s A m aterialweakness is a condition in which the design or operation of one or m ore ofthe internalcontrol com ponents does notreduce to a relatively low levelthe risk thatm isstatem ents in am ounts thatw ould be m aterial in 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 ofperform ing theirassigned functions. O urconsideration ofthe internalcontrol overfinancialreporting would notnecessarily disclose allm aters in the internalcontrolthatm ightbe reportable conditions and,accordingly,w ould notnecessarily disclose allreportable conditions thatare also considered to be m aterialw eaknesses. H ow ever,ofthe reportable conditions described above,w e consideritem 99-1 to be a m aterialw eakness. This report is intended forthe inform ation ofthe Board ofcom m issioners,m anagem entand the State oflouisiana Legislative Auditorand is notintended to be and should notbe used by anyone otherthan these restricted parties April19,2000 VanRheenen & M iller,ltd. Certified Public Accountants M em bers,am erican Institute ofcertified Public Accountants 24

25 Housing Authority ofthe Tow n ofjonesboro Jonesboro,Louisiana Findings -FinancialStatem ents Audit Septem ber 30,1999 FINDINGS -FINANCIAL STATEM ENTS AUDIT 99-1 Late S ubm ission ofa uditr eoort Criteria:Louisiana Revised Statutes (LSA-RS)24:513 requires governm entalaudits to be submited to the Legislative A uditorw ithin six m onths afterthe fiscalyearend. Condition:The auditreportwas notsubm itted by M arch 31,2000 in accordance with state law Effect:The Authority may be found innon-com pliance with LSA-RS 24:513 and be subjectto certain fines and othercorrective action. Recom m endation:the Authority should subm itits auditreportwithin the statutory defined tim e fram e Response:W e have subm itted the required report. The delay was caused by an ice storm. O ur auditors were on-site when the storm arrived. The auditorwas forced to leave and was notable to return before the deadline. W e w illinsure that allfuture required reports willbe subm ited to the Legislative A uditorw ithin the required tim e fram e. 25