P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 Financial Statements and Supplementary Information December 31, 2016 and 2015

Transcription

1 Financial Statements and Supplementary Information December 31, 2016 and

2 Table of Contents Page(s) Independent Auditor s Report 1 3 Financial Statements: Statements of Financial Position 4 Statements of Activities and Changes in Net Assets 5 Statements of Cash Flows 6 7 Notes to Financial Statements 8 10 Supplementary Information: Supporting Data Required by HUD Schedule of Expenditures of Federal Awards Independent Auditor s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards Independent Auditor s Report on Compliance For Each Major Program and on Internal Control Over Compliance Required By The Uniform Guidance Schedule of Findings and Questioned Costs 25 Certification of Project Owner 26 Management Agent s Certification 27 Independent Accountant s Report on Applying Agreed-Upon Procedures Attachment to Independent Accountant s Report on Applying Agreed-Upon Procedures 30 Independent Auditor s Report on Compliance With Specific Requirements Applicable to Fair Housing and Non-Discrimination 31

3 INDEPENDENT AUDITOR'S REPORT Board of Directors P.B.H Housing of Plainfield, Inc. Plainfield, CT Report on the Financial Statements We have audited the accompanying financial statement of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046, which comprise the statements of financial position as of December 31, 2016 and 2015, and the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements. Management s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. -1-

4 An audit involves performing procedures to obtain audit evidence about the amounts and disclosure in the financial statements. The procedures selected depend on the auditor s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity s internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 as of December 31, 2016 and 2015 and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Other Information Our audit was conducted for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplementary information shown on Pages 11 to 17 is presented for purposes of additional analysis as required by the Consolidated Audit Guide for Audits of HUD Programs issued by the U.S. Department of Housing and Urban Development, Office of the Inspector General, and is not a required part of the financial statements. The accompanying schedule of expenditures of federal awards, as required by Office of Management and Budget Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirement of Federal Awards (Uniform Guidance) is presented for purposes of additional analysis and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the information is fairly stated, in all material respects, in relation to the financial statements as a whole. -2-

5 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 17, 2017, on our consideration of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 s internal control over financial reporting and compliance. Robert A. LaSaracina Certified Public Accountant March 17,

6 Notes to Financial Statements December 31, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES P.B.H. Housing of Plainfield, Inc. is a non-profit corporation formed under the laws of the State of Connecticut. The Project is a 24 unit apartment complex for the elderly located in Plainfield, Connecticut. It is operated under Section 202 of the National Housing Act and regulated by the U.S. Department of Housing and Urban Development (HUD) with respect to rental charges and operating methods. The Project s major program is its Section 202 Capital Advances and its Section 8 Rent subsidy. The Project also is subject to Section 8 Housing Assistance Payment agreements with the U.S. Department of Housing and Urban Development (HUD), and a significant portion of the Project s rental income is received from HUD. Method of Accounting: The accrual method of accounting is used for financial statement purposes. Date of Management s Review: Management has evaluated subsequent events through March 17, 2017, the date on which the financial statements were available to be issued. Accounts Receivable: The Project uses the allowance for doubtful accounts method for recognizing bad debts. Management believes no allowance is required at the date of the financial statements. Fixed Assets: Fixed assets are stated at cost. Expenditures for repairs and maintenance are charged against operations. Renewals and betterments that materially extend the life of the assets are capitalized. Depreciation is computed using the straight-line method over the estimated useful life of the related assets as follows: Estimated Useful Life In Years Buildings 40 Equipment and furnishings 10 Income Taxes: The Organization is a non-stock corporation recognized as a tax-exempt charitable organization under Section 501(c)(3) of the Internal Revenue Code. However, income from certain activities not directly related to the Organization s tax exempt purpose is subject to taxation as unrelated business income. Neither the Project nor their corporate owners are subject to income taxes. The Organization s open audit periods are generally for 3 years after the tax returns are filed. In evaluating the Organization s tax provisions and accruals, future taxable income, and the reversal of temporary differences, interpretations, and tax planning strategies are considered. The Organization believes their estimates are appropriate based on current facts and circumstances. -8-

7 Notes to Financial Statements December 31, SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.) Distributions: The Project s regulatory agreement with HUD stipulates, among other things, that the Project will not make distributions of assets or income to any of its officers or directors. Cash Equivalents: For purposes of the statements of cash flows, all investment instruments purchased with a maturity of three months or are considered to be cash equivalents. At December 31, 2016, there were no cash equivalents. Estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. 2. CAPITAL ADVANCE P.B.H. Housing of Plainfield, Inc. constructed the complex with a capital advance under Section 202 of the Housing Act of Capital advances do not bear interest and need not be repaid as long as the Project Owner continues to make the housing available to the elderly for at least 40 years. Failure to keep the housing available for elderly persons would result in HUD billing the owner for the entire capital advances outstanding plus interest since the date of the first advance. The capital advance has been recorded on P.B.H. Housing of Plainfield, Inc. s Statement of Financial Position as a long-term liability. Also, Section 202 requires owners to escrow certain funds to demonstrate the Project Owner s commitment to the Project and a financial cushion in the event the Project requires additional funds. 3. SECURITY DEPOSITS To ensure against liability of property damage and broken leases, the Project secures its risk by collecting deposits from tenants. These deposits are refundable with interest, at market rate, to tenants according to provisions outlined in the individually signed lease agreements. Under HUD guidelines, separate bank accounts are required to be established for the security deposits. Security deposits at December 31, 2016 and 2015 were $ 7,661 and $ 8,165, respectively. -9-

8 Notes to Financial Statements December 31, RENTAL INCOME The Project is subject to restriction on rental rates charged on its low income units. Under the regulatory agreement, the Project may not increase rents charged to tenants without prior HUD approval. 5. CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS P.B.H. Housing of Plainfield, Inc. s sole asset is a 24 unit apartment complex. Operations are concentrated in the multifamily real estate market. In addition, the Project operates in a heavily regulated environment. The operations of the Project are subject to the administrative directives, rules and regulations of Federal, state and local regulatory agencies, including, but not limited to, HUD. Such administrative directives, rules and regulations are subject to change by an act of Congress or an administrative change mandated by HUD. Such changes may occur with little notice or inadequate funding to pay for the related costs, including the additional administrative burden, to comply with a change. 6. HUD RESTRICTED DEPOSITS Under the regulatory agreement, the Project is required to set aside amounts for the replacement of property and other Project expenditures approved by HUD. The HUD restricted deposits at December 31, 2016 and 2015 were $ 123,196 and $ 151,923, respectively. The HUD restricted deposits are held in a separate account and are not available for operating purposes. 7. UNRESTRICTED NET ASSETS None of the Project s net assets are subject to donor imposed restrictions. Accordingly, all net assets are accounted for as unrestricted net assets under SFAS No MANAGEMENT FEE The Project pays a management fee equal to 11.1% of gross revenues to Rural Consulting & Management. -10-

9 P.B.H. Housing of Plainfield, Inc. HUD Project No. 017-EE046 Supporting Data Required by HUD December 31,

10 Index to Supplementary Information Required by HUD Page(s) Statement of Financial Position Data 13 Statement of Activities Data 14 Statement of Cash Flows Data Computation of Cash Deficit - Annual 17 Schedule of Changes in Fixed Asset Accounts 17 Schedule of Reserve for Replacements 17 Schedule of Residual Receipts

11 Supporting Data December 31, COMPUTATION OF CASH DEFICIT ANNUAL At December 31, 2016, cash is as follows: Cash: S Cash $ 24,672 S Rental assistance receivable 25,074 S TOTAL CASH $ 49,746 Current Obligations: S Accounts payable 39,424 S Accrued expenses 6, Tenant deposits held in trust 7,661 S TOTAL CURRENT OBLIGATIONS 53,085 S CASH DEFICIT $ (3,339) SCHEDULE OF CHANGES IN FIXED ASSET ACCOUNTS Beginning Ending Balance Additions Deductions Balance Land $ 270,000 $ -- $ -- $ 270,000 Buildings 1,743,669 2, ,746,319 Equipment and furnishings 6,195 2, ,995 TOTAL $ 2,019,864 $ 5,450 $ -- $ 2,025,314 Accumulated depreciation $ 572,674 $ 43,924 $ -- $ 616,598 Net Book Value $ 1,408,716 SCHEDULE OF RESERVE FOR REPLACEMENTS 1320P Balance at beginning of year $ 151, DT Total monthly deposits 9, INT Interest income on replacement reserve accounts WT Approved withdrawal (38,786) 1320 Balance at End of Year $ 123,196 SCHEDULE OF RESIDUAL RECEIPTS 1340P Balance at beginning of year $ 6, WT Approved withdrawals (6,100) 1340OWT Other withdrawals (30) 1340 Balance at End of Year $

12 Schedule of Expenditures of Federal Awards For the Year Ended December 31, Federal Grantor/Program Title Federal CFDA Number Federal Expenditures U.S. Department of Housing and Urban Development: Section 202 Capital Advance $ 2,016,800 Section 202 Housing Assistance Program ,289 $ 2,062,

13 Notes to Schedule of Expenditures of Federal Awards For the Year Ended December 31, BASIS OF PRESENTATION The accompanying Schedule of Expenditures of Federal Awards (The Schedule) includes the federal grant activity of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046, under programs of the federal government for the year ended December 31, The information in this schedule is presented in accordance with the requirements of The Uniform Guidance, Audits of States, Local Governments, and Non-Profit Organizations. Because the Schedule presents only a selected portion of the operations of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046, it is not intended to and does not present the financial position, changes in net assets, or cash flows of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Expenditures reported on the Schedule are reported on the accrual basis of accounting. Such expenditures are recognized following the cost principles contained in The Uniform Guidance, Cost Principles for Non-Profit Organizations, wherein certain types of expenditures are not allowed or are limited as to reimbursement. -19-

14 INDEPENDENT AUDITOR'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Board of Directors P.B.H Housing of Plainfield, Inc. Plainfield, CT We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046, which comprise the statement of financial position as of December 31, 2016, and the related statements of activities, and cash flows for the year then ended, and the related notes to the financial statements, and have issued our report thereon dated March 17, Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 s internal control over financial reporting (internal control) to determine the audit procedures that are appropriate in the circumstances for the purpose of expressing our opinion on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 s internal control. Accordingly, we do not express an opinion on the effectiveness of P.B.H Housing of Plainfield, Inc., HUD Project No. 017-EE046 s internal control. -20-

15 A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity s financial statements will not be prevented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. Compliance and Other Matters As part of obtaining reasonable assurance about whether P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 s financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the determination of financial statement amounts. However, providing an opinion on compliance with those provisions was not an objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of This Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the entity s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Robert A. LaSaracina Certified Public Accountant March 17,

16 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM, REPORT ON INTERNAL CONTROL OVER COMPLIANCE AND REPORT ON SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE Board of Directors P.B.H Housing of Plainfield, Inc. Plainfield, CT Report on Compliance for Each Major Federal Program We have audited P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 s compliance with the types of compliance requirements described in the OMB Compliance Supplement that could have a direct and material effect on each of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 s major federal programs for the year ended December 31, P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 s major federal programs are identified in the Summary of Auditor s Results section of the accompanying Schedule of Findings and Questioned Costs. Management s Responsibility Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants applicable to its federal programs. Auditor s Responsibility Our responsibility is to express an opinion on compliance for each of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 s major federal programs based on our audit of the types of compliance requirements referred to above. We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America, the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States, and the audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Those standards and The Uniform Guidance require that we plan and perform the -22-

17 audit to obtain reasonable assurance about whether noncompliance with the types of compliance requirements referred to above that could have a direct and material effect on a major federal program occurred. An audit includes examining, on a test basis, evidence about P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 s compliance with those requirements and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal program. However, our audit does not provide a legal determination of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 s compliance. Opinion On Each Major Federal Program In our opinion, P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 complied, in all material respects, with the types of compliance referred to above that could have a direct and material effect on each of its major federal programs identified in the Summary of Auditor s Results section of the accompanying Schedule of Finding and Questioned Costs for the year ended December 31, Report on Internal Control Over Compliance Management of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 is responsible for establishing and maintaining effective internal control over compliance with the types of compliance requirements referred to above. In planning and performing our audit of compliance, we considered P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 s internal control over compliance with the types of requirements that could have a direct and material effect on each major federal program to determine the auditing procedures that are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major federal program and to test and report on internal control over compliance in accordance with The Uniform Guidance, but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, we do not express an opinion on the effectiveness of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 s internal control over compliance. A deficiency in internal control over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance is a deficiency, or combination of deficiencies, in internal control over compliance such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance. -23-

18 Our consideration of the internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified. The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of The Uniform Guidance. Accordingly, this report is not suitable for any other purpose. Report on Schedule of Expenditures of Federal Awards Required by The Uniform Guidance We have audited the financial statements of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046, as of and for the year ended December 31, 2016, and issued our report thereon dated March 17, 2017, which contained an unmodified opinion on those financial statements. Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The accompanying Schedule of Expenditures of Federal Awards is presented for purposes of additional analysis as required by The Uniform Guidance, and is not a required part of the financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Schedule of Expenditures of Federal Awards is fairly stated, in all material respects, in relation to the financial statements as a whole. Robert A. LaSaracina Certified Public Accountant March 17,

19 Schedule of Findings and Questioned Costs December 31, Findings 2015 At December 31, 2015, there are no findings or questioned costs. 2. Current Year Findings The December 31, 2016 audit disclosed no findings or questioned costs. -25-

20 Supporting Data December 31, Certification of Project Owner We hereby certify that we have examined the accompanying financial statements and supplemental data of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 and to the best of our knowledge and belief, the same is complete and accurate. Board of Directors Steven W. Farner President Dan E. Remian Vice President Gary Brown Secretary Corporate Employer Identification Number:

21 Supporting Data December 31, Management Agent s Certificate I hereby certify that I have examined the accompanying financial statements and supplemental data of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 and to the best of our knowledge and belief, the same is complete and accurate. Rural Consulting & Management Pauline Galbreath Employer Identification Number:

22 INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES Board of Directors P.B.H Housing of Plainfield, Inc. Plainfield, CT We have performed the procedure described in the second paragraph of this report, which was agreed to by P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 and the U.S. Department of Housing and Urban Development, Real Estate Assessment Center (REAC), solely to assist them in determining whether the electronic submission of certain information agrees with the related hard copy documents included within The Uniform Guidance reporting package. P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 is responsible for accuracy and completeness of the electronic submission. This agreed-upon procedure engagement was conducted in accordance with the attestation standards established by the American Institute of Certified Public Accountants and the standards applicable to attestation engagements contained in Government Auditing Standards issued by the Comptroller General of the United States. The sufficiency of the procedure is solely the responsibility of those parties specified in this report. Consequently, we make no representation regarding the sufficiency of the procedure described below either for the purpose for which this report has been requested or for any other purpose. We compared the electronic submission of the items listed in the UFRS Rule Information column with the corresponding printed documents listed in the Hard Copy Documents column. The results of the performance of our agreed-upon procedure indicate agreement or non-agreement of the electronically submitted information and hard copy documents as shown in the attached chart. -28-

23 We are engaged to perform an audit in accordance with Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance), of the financial statements of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 as of and for the year ended December 31, 2016, and have issued our report thereon dated March 17, The information in the Hard Copy Documents column was included within the scope, or was a by-product of that audit. Further, our opinion on the fair presentation of the supplemental financial data templates dated March 17, 2017, was expressed in relation to the basic financial statements of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 taken as a whole. A copy of the financial statement package required by The Uniform Guidance, which includes the auditor s reports, is available in its entirety from P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046. We have not performed any additional auditing procedures since the date of the aforementioned audit reports. Further we take no responsibility for the security of the information transmitted electronically to the U.S. Department of Housing and Urban Development, REAC. This report is intended solely for the information and use of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046, the U.S. Department of Housing and Urban Development and REAC, and is not intended to be and should not be used by anyone other than these specified parties. Robert A. LaSaracina Certified Public Accountant March 17,

24 Attachment to Independent Accountant s Report on Applying Agreed-Upon Procedure December 31, UFRS Rule Information Hard Copy Document(s) Findings 1 Balance Sheet, Revenue and Expense Supplemental Schedules Agrees and Cash Flow Data (account numbers with Financial Statement 1120 to 7100T and the S1200 series) Data 2 Surplus Cash (S1300 series of Computation of Surplus Agrees accounts) Cash, Distributions and Residual Receipts (Annual) 3 Footnotes (S3100 series of accounts) Notes to Financial Agrees Statements 4 Type of Opinion on the Financial Auditor s Reports on the Agrees Statements and Compliance (S3400 Financial Statements, S3500 and S3600 series of accounts) Compliance and Internal Control 5 Type of Opinion on Supplemental Auditor s Report on Agrees Data (account number ) Supplemental Data 6 Audit Findings Narrative (S3800, Schedule of Findings and Agrees series of accounts) Questioned Costs 7 General Information (S3300, Schedule of Findings and Agrees S3700 and S3800 series of Questioned Costs and accounts) Federal Awards Data -30-

25 INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE WITH SPECIFIC REQUIREMENTS APPLICABLE TO FAIR HOUSING AND NON-DISCRIMINATION Board of Directors P.B.H Housing of Plainfield, Inc. Plainfield, CT We have audited the statement of financial position of P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 as of and for the year ended December 31, 2016 and have issued our report thereon dated March 17, We have applied procedures to test P.B.H. Housing of Plainfield, Inc., HUD Project No. 017-EE046 s compliance with the Fair Housing and Non-Discrimination requirements applicable to its HUD-assisted programs for the year ended December 31, Our procedures were limited to the applicable compliance requirements described in the Consolidated Audit Guide for Audits of HUD Programs, (the Guide ) issued by the U.S Department of Housing and Urban Development, Office of the Inspector General. Our procedures were substantially less in scope than an audit, the objective of which is the expression of an opinion on P.B.H. Housing of Plainfield, Inc., HUD Project No EE046 s compliance with the Fair Housing and Non-Discrimination requirements. Accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported herein under the Guide. This report is intended for the information and use of the Board of Directors, management, and the U.S. Department of Housing and Urban Development and is not intended to be and should not be used by anyone other than these specified parties. March 17, Robert A. LaSaracina Certified Public Accountant

26 Statements of Financial Position As of December 31, ASSETS CURRENT ASSETS: Cash (Note 1) $ 16,572 $ 14,693 Rental assistance receivable (Note 1) 25,074 24,812 Prepaid expenses 13,956 4,865 TOTAL CURRENT ASSETS 55,602 44,370 RESTRICTED DEPOSITS: Tenant deposits held in trust (Note 3) 8,100 8,096 Residual receipts reserve 240 6,370 Reserve for replacement (Note 6) 123, ,923 TOTAL RESTRICTED DEPOSITS 131, ,389 FIXED ASSETS (Note 1): Land 270, ,000 Buildings 1,746,319 1,743,669 Equipment and furnishings 8,995 6,195 2,025,314 2,019,864 Less, accumulated depreciation (616,598) (572,674) NET FIXED ASSETS 1,408,716 1,447,190 TOTAL ASSETS $ 1,595,854 $ 1,657,949 LIABILITIES AND NET ASSETS CURRENT LIABILITIES: Accounts payable $ 39,424 $ 31,097 Accrued expenses 6,000 6,000 Tenant deposits held in trust payable (Note 3) 7,661 8,165 TOTAL CURRENT LIABILITIES 53,085 45,262 LONG-TERM LIABILITIES: Capital advance (Note 2) 2,016,800 2,016,800 Due to management -- 1,265 TOTAL LONG-TERM LIABILITIES 2,016,800 2,018,065 TOTAL LIABILITIES 2,069,885 2,063,327 NET ASSETS (DEFICIT): Unrestricted (474,031) (405,378) TOTAL LIABILITIES AND NET ASSETS $ 1,595,854 $ 1,657,949 "See accompanying notes to financial statements" -4-

27 Statements of Activities and Changes in Net Assets For the Years Ended December 31, REVENUES: Rental income $ 99,475 $ 99,174 Rental assistance 45,289 48,903 Interest income Tenant charges (net) 3,126 1,439 TOTAL REVENUES 148, ,594 EXPENSES: ADMINISTRATIVE EXPENSES: Office supplies Management fees 16,069 16,437 Audit expenses 6,000 6,000 Bookkeeping fees 3,600 3,600 Miscellaneous administrative expenses TOTAL ADMINISTRATIVE EXPENSES 26,659 26,179 UTILITIES EXPENSE: Electricity 25,274 23,514 Water 6,650 3,295 Heat, fuel, other 4,490 7,991 Sewer 6,960 6,960 TOTAL UTILITIES EXPENSE 43,374 41,760 OPERATING AND MAINTENANCE EXPENSES: Supplies 25,649 10,761 Grounds maintenance 10,284 6,472 Trash removal 2,496 2,425 Snow removal 2,764 8,699 Depreciation 43,924 43,592 TOTAL OPERATING AND MAINTENANCE EXPENSES 85,117 71,949 TAXES AND INSURANCE: Real estate taxes 46,423 29,896 Property and liability insurance 15,184 14,391 Miscellaneous taxes TOTAL TAXES AND INSURANCE 61,607 44,527 TOTAL EXPENSES 216, ,415 DECREASE IN NET ASSETS FROM OPERATIONS (68,653) (34,821) DECREASE IN NET ASSETS (68,653) (34,821) NET ASSETS (DEFICIT) - BEGINNING OF YEAR (405,378) (370,557) NET ASSETS (DEFICIT) - END OF YEAR $ (474,031) $ (405,378) "See accompanying notes to financial statements" -5-

28 Statements of Cash Flows For the Years Ended December 31, CASH FLOWS FROM OPERATING ACTIVITIES: Rental receipts $ 144,502 $ 136,535 Interest receipts Tenant charges 1,154 1, , ,052 Administrative 10,593 6,141 Management fees 24,948 12,310 Utilities 43,106 42,558 Operating and maintenance 41,343 28,539 Real estate taxes 28,629 29,896 Property insurance 24,275 6,000 Tenant security deposits Miscellaneous tax TOTAL ADJUSTMENTS 173, ,898 NET CASH (USED BY) PROVIDED BY OPERATING ACTIVITIES (27,528) 12,154 CASH FLOWS FROM INVESTING ACTIVITIES: Net deposits to replacement reserve and interest retained in account and transfers 28,727 (9,974) Net receipts from residual receipts and interest retained in account and transfers 6,130 (1) Net purchase of fixed assets (5,450) -- NET CASH PROVIDED BY (USED BY) INVESTING ACTIVITIES 29,407 (9,975) NET INCREASE IN CASH AND CASH EQUIVALENTS 1,879 2,179 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 14,693 12,514 CASH AND CASH EQUIVALENTS AT END OF YEAR $ 16,572 $ 14,693 "See accompanying notes to financial statements" -6-

29 Statements of Cash Flows (cont.) For the Years Ended December 31, CASH FLOWS FROM OPERATING ACTIVITIES: Change in Net Assets $ (68,653) $ (34,821) Adjustments to Reconcile Change in Net Assets to Net Cash (Used by) Provided by Operating Activities: Depreciation 43,924 43,592 (Increase) decrease in operating assets: Cash restricted for tenant security deposits (4) 6 Tenant accounts receivable (262) (11,553) Prepaid expenses (9,091) 8,391 Increase (decrease) in operating liabilities: Accounts payable 8,327 6,759 Tenant security deposits held in trust payable (504) (220) Due to management (1,265) -- TOTAL ADJUSTMENTS 41,125 46,975 NET CASH (USED BY) PROVIDED BY OPERATING ACTIVITIES $ (27,528) $ 12,154 "See accompanying notes to financial statements" -7-

30 Statement of Financial Position Data As of December 31, ASSETS CURRENT ASSETS: 1120 Cash $ 16, Rental assistance receivable 25, Prepaid expenses 13, T TOTAL CURRENT ASSETS 55,602 RESTRICTED DEPOSITS: 1191 Tenant deposits held in trust 8, Reserve for replacement Residual receipts reserve 123, T TOTAL RESTRICTED DEPOSITS 131,536 FIXED ASSETS: 1410 Land 270, Buildings 1,746, Equipment and furnishings 8, T TOTAL FIXED ASSETS 2,025, Accumulated depreciation (616,598) 1400N NET FIXED ASSETS 1,408, T TOTAL ASSETS $ 1,595,854 LIABILITIES AND NET ASSETS CURRENT LIABILITIES: 2110 Accounts payable $ 39, Accrued expenses 6, T TOTAL CURRENT LIABILITIES 45, Tenant security deposits held in trust payable 7,661 LONG-TERM LIABILITIES: 2320 Capital advance 2,016, Due to management T TOTAL LONG-TERM LIABILITIES 2,016, T TOTAL LIABILITIES 2,069, UNRESTRICTED NET ASSETS (474,031) 3130 NET ASSETS (474,031) 2033T TOTAL LIABILITIES AND NET ASSETS $ 1,595,854 "See accompanying notes to financial statements" -13-

31 Statement of Activities Data For the Year Ended December 31, REVENUES: 5120 Rental income $ 110, Rental assistance 45, T TOTAL RENT REVENUE 155,564 VACANCIES: 5200 Apartments (10,800) 5152N NET RENTAL REVENUE 144, Interest income - replacement reserve Interest income - miscellaneous T TOTAL FINANCIAL REVENUE 214 OTHER REVENUE: 5920 Tenant charges - cable 3, T TOTAL OTHER REVENUE 3, T TOTAL REVENUE 148,104 EXPENSES: ADMINISTRATIVE EXPENSES: 6311 Office supplies Management fees 16, Audit expenses 6, Bookkeeping fees/accounting services 3, Miscellaneous administrative expenses T TOTAL ADMINISTRATIVE EXPENSES 26,659 UTILITIES EXPENSE: 6420 Heat, fuel, other 4, Electricity 25, Water 6, Sewer 6, T TOTAL UTILITIES EXPENSE 43,374 OPERATING AND MAINTENANCE EXPENSES: 6515 Supplies 25, Contracts 10, Trash removal 2, Snow removal 2, T TOTAL OPERATING AND MAINTENANCE EXPENSES 41,193 TAXES AND INSURANCE: 6710 Real estate taxes 46, Property and liability insurance 15, Miscellaneous taxes T TOTAL TAXES AND INSURANCE 61, T TOTAL COST OF OPERATIONS BEFORE DEPRECIATION 172, T CHANGE IN NET ASSETS BEFORE DEPRECIATION (24,729) 6600 DEPRECIATION EXPENSE 43, N OPERATING LOSS (68,653) 3247 CHANGE IN UNRESTRICTED NET ASSETS FROM OPERATIONS (68,653) 3250 CHANGE IN TOTAL NET ASSETS FROM OPERATIONS $ (68,653) S TOTAL OF 12 MONTHLY DEPOSITS DURING THE YEAR INTO THE REPLACEMENT RESERVE ACCOUNT, AS REQUIRED BY THE REGULATORY AGREEMENT $ 9,850 "See accompanying notes to financial statements" -14-

32 Statement of Cash Flows Data For the Year Ended December 31, CASH FLOWS FROM OPERATING ACTIVITIES: S Rental receipts $ 144,502 S Interest receipts 214 S Tenant charges 1,154 S TOTAL RECEIPTS 145,870 S Administrative 10,593 S Management fees 24,948 S Utilities 43,106 S Operating and maintenance 41,343 S Real estate taxes 28,629 S Property insurance 24,275 S Miscellaneous tax -- S Tenant security deposits 504 S TOTAL DISBURSEMENTS 173,398 S NET CASH (USED BY) OPERATING ACTIVITIES (27,528) CASH FLOWS FROM INVESTING ACTIVITIES: S Net deposits to replacement reserve and interest retained in account and transfers 28,727 S Net receipts from residual receipts and interest retained in account and transfers 6,130 S Net purchase of fixed assets (5,450) S NET CASH PROVIDED BY INVESTING ACTIVITIES 29,407 S NET INCREASE IN CASH AND CASH EQUIVALENTS 1,879 S S CASH NET INCREASE AND CASH IN EQUIVALENTS CASH AND CASH AT EQUIVALENTS BEGINNING OF YEAR 14,693 S1200T CASH AND CASH EQUIVALENTS AT END OF YEAR $ 16,572 "See accompanying notes to financial statements" -15-

33 Statement of Cash Flows Data (cont.) For the Year Ended December 31, CASH FLOWS FROM OPERATING ACTIVITIES: 3250 Decrease in net assets $ (68,653) Adjustments to Reconcile Change in Net Assets to Net Cash (Used by) Operating Activities: 6600 Depreciation 43,924 S Increase in tenant accounts receivable (262) S Increase in prepaid expenses (9,091) S Increase in cash restricted for tenant security deposits (4) S Increase in accounts payable 8,327 S Decrease in tenant security deposits held in trust payable (504) S Decrease in due to management (1,265) TOTAL ADJUSTMENTS 41,125 S NET CASH (USED BY) OPERATING ACTIVITIES (27,528) S Previous year unrestricted net assets (405,378) 3247 Change in unrestricted net assets from operations (68,653) 3131 UNRESTRICTED NET ASSETS (474,031) S Previous year total net assets (405,378) 3250 Change in total net assets from operations (68,653) 3130 TOTAL NET ASSETS $ (474,031) SCHEDULE OF REPLACEMENT RESERVE: 1320P Balance - beginning of year $ 151, DT Total monthly deposits, net of withdrawals 9, INT Interest on replacement reserves WT Withdrawal during the year (38,786) 1320 BALANCE - END OF YEAR $ 123,196 "See accompanying notes to financial statements" -16-