White River Regional Housing Authority Melbourne, Arkansas. Financial Statements and Supplemental Financial Information

Transcription

1 White River Regional Housing Authority Melbourne, Arkansas Financial Statements and Supplemental Financial Information Year Ended June 30, 2017

2 TABLE OF CONTENTS PAGE Financial Section 3 Independent Auditors' Report 4 Management Discussion and Analysis 6 Basic Financial Statements 14 Statement of Net Position 15 Statement of Revenues, Expenses, and Changes in Net Position 16 Statement of Cash Flows 17 Notes to the Financial Statements 18 Supplemental Financial Information 26 Financial Data Schedule 27 Schedule of Modernization Grant Activity 47 Schedule of Expenditures of Federal Awards 48 Notes to the Schedule of Expenditures of Federal Awards 49 Non-Financial Section 50 Independent Auditors' 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 51 Independent Auditor's Report on Compliance For Each Major Program and on Internal Control Over Compliance Required the Uniform Guidance 53 Schedule of Findings and Questioned Costs 55 Summary of Prior Audit Findings 56

3 Financial Section 3

4 Independent Auditors' Report STEAVEN E. MILLER, JR., CPA L. SCOTI ROSE, CPA 1309 E. RACE AVENUE SEARCY, AR T F Board of Commissioners White River Regional Housing Authority 1327 E. Main Street Melbourne, AR Report on the Financial Statements We have audited the accompanying financial statements of White River Regional Housing Authority as of and for the year ended June 30, 2017, and the related notes to the financial statements, which collectively comprise the basic financial statements as listed in the table of contents. 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. Auditors' 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. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures 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. Opinions In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of White River Regional Housing Authority as of June 30, 2017, and the changes in financial position, and its cash flows thereof for the year then ended in conformity with accounting principles generally accepted in the United States of America. 4

5 Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board, who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management's responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Other Information Our audit was conducted for the purpose of forming an opinion on the basic financial statements of the White River Regional Housing Authority. The accompanying financial information listed as supplemental financial information in the table of contents is presented for purposes of additional analysis and is not a required part of the basic financial statements. The schedule of expenditures of federal awards is presented for purposes of additional analysis as required by Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance) and is also not a required part of the financial statements. The supplemental financial information and the schedule of expenditures of federal awards are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the supplemental financial information and the schedule of expend itures of federals awards are fairly stated in all material respects in relation to the basic financial statements as a whole. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated March 22, 2018, on our consideration White River Regional Housing Authority'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 the entity's internal control over financial reporting and compliance. March 22, 2018 Miller & Rose, P.A Certified Public Accountants 5

6 MANAGEMENT DISCUSSION AND ANALYSIS WHITE RIVER REGIONAL HOUSING AUTHORITY The White River Regional Housing Authority's (the "Authority") management discussion and analysis is designed to (a) assist the reader in focusing on significant financial issues, (b) provide an overview of the Authority's financial activity, (c) identify changes in the Authority's financial position (its ability to address the next and subsequent year challenges), and (d) identify individual fund issues or concerns. Since the Management Discussion and Analysis (MD&A) is designed to focus on the current year's activities, resulting changes and currently known facts, please read it in conjunction with the Authority's financial statements. FINANCIAL IDGHLIGHTS The Authority's Net Position decreased by $227,713 (or 3.31%) during the fiscal year ended June 3 0, The decrease is primarily due to recording depreciation of assets purchased in prior years. Net Position was $6,878,288 and $6,650,575 for FYE 6/30/2016 and FYE 6/30/2017, respectively. Total revenue increased by $288,024 (or 3.68%) during the fiscal year ended June 30,2017. Total revenue was $7,828,733 and $8,116,757 for FYE 6/30/2016 and FYE 6/30/2017, respectively. The primary increase is attributed to a $383,659 increase in governmental operating grants during the current fiscal year. Total expenses of all Authority programs increased by $444,706 (or 5.63%). Total expenses were $7,899,764 and $8,344,470 for FYE 6/30/2016 and FYE 6/30/2017, respectively. The Authority added the Rental Assistance Demonstration program (RAD) in March 2017 into the Housing Choice Voucher program which contributed to the increase of Housing Assistance Payments of$215,570. Also administrative expenses increased by $137,852, which also contributed to the overall increase in total expenses. The Authority borrowed $-0- and $476,638 during FYE 6/30/16 and FYE 6/30/17, respectively, and paid principal payments of$-0- and $1,747 during 2016 and USING THIS ANNUAL REPORT This annual report consists of three parts- management's discussion and analysis, the basic financial statements, and supplementary information. The basis financial statements consist of three financial statements- a Statement ofnet Position; a Statement of Revenues, Expenses and Changes in Net Position; and a Statement of Cash Flows. The financial statements and related notes focus on the individual parts of the Authority, offering short and long term financial information about the activities that the government operates like businesses. 6

7 Authority-Wide Financial Statements The Authority-wide fmancial statements (pages 15-17) are designed to be corporate-like in that all activities are consolidated into a total for the entire Authority. These statements include a Statement of Net Position, which is similar to a balance sheet. The Statement ofnet Position reports all financial and capital resources for the Authority. The statement is presented in the format where assets minus liabilities, equals "Net Position," formerly known as equity. Assets and liabilities are presented in order of liquidity, and are classified as "Current" (convertible into cash within one year) and "Non-current." The focus of the Statement of Net Position is the representation of the "Net Position" which is reported in three broad categories: Net Investment in Capital Assets: This component of Net Position consists of all Capital Assets, reduced by the outstanding balances of any bonds, mortgages, notes or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. Restricted Net Position: This component of Net Position consists of restricted assets, such as when constraints are placed on the asset by creditors, grantors, contributors, laws, regulations, etc. Unrestricted Net Position: Consists of Net Position that do not meet the definition of"net Investment in Capital Assets," or "Restricted Net Position." The Authority-wide financial statements also include a Statement ofrevennes, Expenses and Changes in Net Position (similar to an Income Statement). This Statement includes Operating Revenues, such as rental income and operating subsidies and grants, and Operating Expenses, such as administrative, utilities, and maintenance, and depreciation, and Non-Operating Revenues and Expenses, such as interest income and interest expense. The focus of the Statement of Revenues, Expenses and Changes in Net Position is the "Change in Net Position," which is similar to Net Income or Loss. Finally, a Statement of Cash Flows is included, which discloses net cash provided by, or used for, I) operating activities, 2) noncapital financing activities, 3) capital and related financing activities, and 4) investing activities. Fund Financial Statements (Financial Data Schedule) Traditional users of governmental financial statements will find the Fund Financial Statements presentation more familiar. The focus is now on Major Funds, rather than fund types. The Authority consists of exclusively Enterprise Funds and utilizes the full accrual basis of accounting. The Enterprise method of accounting is similar to accounting utilized by the private sector accounting. Many of the funds maintained by the Authority are required by the Department of Housing and Urban Development (HUD). Others are segregated to enhance accountability and control. 7

8 The Authority's Funds Business Activities - represents non-hud resources developed from a variety of activities. HOME Investment Partnerships Program -Under a contract with the Arkansas Development Finance Authority, the Authority administers contracts with independent landlords to provide tenant-based rental assistance (TBRA) for qualifying families. Housing Choice Vouchers- Under the Housing Choice Voucher Program, the Authority administers contracts with independent landlords that own the property. The Authority subsidizes the family's rent through a Housing Assistance Payment made to the landlord. The program is administered under an Annual Contributions Contract (ACC) with HUD. HUD provides Annual Contributions Funding to enable the Authority to structure a lease that sets the participants' rent at 30% of household income. Section 8 Moderate Rehabilitation-Single Room Occupancy- Under the Single Room Occupancy program, the Authority administers HAP contracts at two locations to provide rental subsidy for homeless or mentally ill individuals. Funding for the program is provided through an annual contributions contract with HUD. Low Rent Public Housing- Under the conventional Low Rent Public Housing Program, the Authority rents units that it owns to low-income households. This program is operated under an Annual Contributions Contract (ACC) with HUD, and HUD provides Operating Subsidy to enable the PHA to provide the housing at a rent that is based upon 30% of household income. Public Housing Capital Fund Program -The conventional Low Rent Public Housing Program also includes the Capital Fund Program, which is the primary funding source for physical and management improvements to the Authority's Low Rent Public Housing properties. Rental Assistance Demonstration Program/Project Based Voucher- Under the Rental Assistance Demonstration Program (RAD), the Authority rents units that it owns to low-income households and is funded under a project based voucher program. RAD allows public housing agencies to convert projects currently under the Public Housing program to a long-term project based Section 8 rental assistance program. White River Regional Housing Authority chose to convert their Low-Rent Public Housing program to RAD in March A Housing Assistance Payments (HAP) contract was executed and the project was removed from the Public Housing program by releasing the project from the Declaration of Trust and removing it from the Annual Contributions Contract. At that time, the ownership was transferred to the White River Affordable Housing, LLC, which is a single member LLC and the only member is White River Regional Housing Authority. Component Unit- Blended- White River Regional Housing Authority had assumed management of the Housing Authority of the City of Melbourne in a prior fiscal year. The units were converted to Rental Assistance Demonstration program in March 2017 and combined with the White River Affordable Housing. The Rental Assistance Demonstration program and activities are reported in the the White River Affordable Housing, LLC financials, which is a reported as a component unit of White River Regional Housing Authority. 8

9 Statement of Net Position AUTHORITY-WIDE FINANCIAL STATEMENTS The following table reflects the condensed Statement of Net Position compared to the prior year. TABLEt STATEMENT OF NET POSITION FYE 6/30/2017 FYE 6/30/2016 Current and Other Assets Capital Assets (Net) Total Assets Current and Other Liabilities Long-Term Liabilities Total Liabilities Net Position: Net Investment in Capital Assets Restricted Unrestricted Total Net Position $3,396,484 3,941,671 $7,338, , ,288 $687,580 3,466,780 52,864 3,130,931 $6,650,575 $2,953,298 4,151,155 $7,104, ,320 40,845 $226,165 4,151,155 29,045 2,698,088 $6,878,288 For more detailed information see page 15 for the Statement ofnet Position. Major Factors Affecting the Statement of Net Position Current assets increased by $443,186, while capital assets decreased by $209,484, representing a net increase in total assets of$233,702. The primary increase in current assets is the $687,595 increase in restricted cash which can be attributed to the RAD rehabilitation construction account which had a balance of $505,473 at the end of the fiscal year while the decrease in capital assets is a result of increases in accumulated depreciation of assets purchased for major improvements to Low Rent Public Housing and Rental Assistance Demonstration program structures. Liabilities increased by $461,415 primarily due to the Authority incurring debt of$476,638 to fund the rehabilitation of the Authority's public housing properties. Other liabilities stayed consistent with the prior fiscal year balances. 9

10 Statement of Revenues, Expenses and Changes in Net Position The following schedule compares the revenues and expenses for the current and previous fiscal year. TABLE2 STATEMENT OF REVENUES, EXPENSES AND CHANGES IN NET POSITION FYE 6/30/2017 FYE 6/3 0/20 16 Revenues Tenant Revenue- Rents and Other Operating Subsidies and Grants Capital Contributions Investment Income Other Revenues Total Revenue $334,585 7,423,772 22,383 15, ,777 8,116,757 $271,924 7,040,II3 136,729 17, ,410 7,828,733 Expenses Administrative Tenant Services Utilities Maintenance Insurance General Housing Assistance Payments Depreciation Total Expenses Net Increase (Decrease) in Net Position 1,609,825 2, , ,132 66,687 61,016 5,834, ,793 8,344,470 $(227,713) 1,471,973 2, , ,213 61,634 65,135 5,619, ,355 7,899,764 $(71,031) For more detailed information see page 16 for the Statement of Revenues, Expenses and Changes in Net Position. Major Factors Affecting the Statement of Revenue, Expenses and Changes in Net Position Tenant revenue increased by $62,661 (approximately 23.04%) as a result of changes in tenant incomes and household composition which increased the tenants' portion of rent payments. Operating Subsidies and Grants increased overall by approximately 5.45% due to incremental changes in funding provided across the various program. Other revenue decreased $41,633 primarily due to dividend proceeds were received from participating in an insurance pool in the prior fiscal year. Some expenses increased moderately due to inflation with an overall increase of approximately 5.63%. Housing Assistance Payments were increased by approximately 3.84% due to the Authority adding the Rental Assistance Demonstration program (RAD) in March 2017 into the Housing Choice Voucher 10

11 program. Administrative expenses increased $134,852 primarily due to the additional staff position created during FYE 6/30/17 as well as standard cost of living raises. The Statement of Cash Flows Changes in the Authority's cash flows are consistent with changes in operating income (loss) and nonoperating revenues and expenses discussed earlier. The Statement of Cash Flows is included in the financial section on page 17. Capital Assets CAPITAL ASSETS AND DEBT ADMINISTRATION As of year-end, the Authority had approximately $3.94 million invested in a variety of capital assets as reflected in the following schedule, which represents a net decrease (additions, deductions and depreciation) of $209,485 or 5.05% from the end of last year. TABLE3 CAPITAL ASSETS AT YEAR-END (NET OF DEPRECIATION) 6/30/2017 Land and Land Improvements $1,034,829 Buildings 8,285,221 Equipment- Dwelling 370,746 Equipment - Administration 306,666 Accumulated Depreciation (6,144,839) Construction In Progress 89,048 Total $3,941,671 6/30/2016 $1,034,829 8,281, , ,246 (5,813,437) 11,520 $4,151,156 11

12 The following reconciliation summarizes the change in Capital Assets, which is presented in more detail in Note 4 of the Notes to the Financial Statements. TABLE4 CHANGE IN CAPITAL ASSETS Beginning Balance Additions Retirements Net of Depreciation Depreciation $4,151, ,308 (3,391) 3,391 (334,793) Ending Balance $3,941,671 This year's Capital Asset additions are: Capital Improvements Programs & RAD Rehabilitation Program on Authority's Public Housing properties Capital Fund Program (CFP) Buildings Furniture and Equip Construction in Progress (CFPIRAD) Total $25,268 4,014 18,498 77,528 $ 125,308 Debt Outstanding The Authority had no debt outstanding at the end of fiscal year 6/30116 and $474,891 at the end of the fiscal year 6/30/17. The Authority's debt represents funds advanced from a local bank to fund physical improvements to the Authority's properties. The Authority borrowed $476,638 during 2017 and made principal payments of$1,747. ECONO!\flCFACTORS Significant economic factors affecting the Authority are as follows: Federal funding of the Department of Housing and Urban Development. Local labor supply and demand, which can affect salary and wage rates. Local inflationary, recessionary and employment trends, which can affect resident incomes and therefore the amount of rental income. Inflationary pressure on utility rates, supplies and other costs. 12

13 FINANCIAL CONTACT The individual to be contacted regarding this report is Katy Blevins, Executive Director of the White River Regional Housing Authority at (870) Specific requests may be submitted to Katy Blevins, Executive Director, White River Regional Housing Authority, 1327 East Main Street, PO Box 650, Melbourne, AR

14 Basic Financial Statements 14

15 White River Regional Housing Authority Statement of Net Position Proprietary Funds June 30, 2017 ASSETS Current Assets Cash Restricted cash Total cash Investments Receivables Tenants other governments Miscellaneous Prepaid expenses Total current assets Noncurrent Assets Capital Assets Nondepreciable Depreciable, net of accumulated depreciation Total noncurrent assets Total Assets LIABILITIES Current Liabilities Accounts payable Security deposits Accrued liabilities Current portion of accrued compensated absences Current portion of loans payable Unearned revenue Due to other governments Other current liabilities Total current liabilities Noncurrent Liabilities Loans payable, net of current portion Compensated absences, net of current portion Total noncurrent liabilities $ 675, ,505,427 1,807,746 5,839 11, ,976 3, ,240 3, ,941,671 7, ,654 42,500 7,014 17,665 7,141 33,630 16,039 14, , ,288 Total Liabilities NET POSITION Net investment in capital assets Restricted for housing assistance payments Unrestricted Total net position 3,466,780 52,864 3,130,931 $ 6, See accom~~nying notes.

16 White River Regional Housing Authority Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds Year Ended June 30, 2017 Operating Revenues Tenant revenue, gross Less: bad debts Tenant revenue, net $ 336,396 (1,811) Governmental operating grants Miscellaneous Total operating revenues 7,423, ,777 8, Operating Expenses Administrative Tenant services Utilities Maintenance Insurance General Housing assistance payments Depreciation Total operating expense 1,609,825 2, , ,132 66,687 61,016 5,834, ,344,470 Operating Income (Loss) Non-Operating Revenues (Expenses) Interest income (265,336) Income (loss) before contributions Capital Contributions (250,096) Increase (decrease) in net position Net Position - Beginning of Period Net Position - End of Period (227,713) 6,878,288 $ 6,650,575 See accolllfbbnying notes.

17 White River Regional Housing Authority Statement of Cash Flows Proprietary Funds Year Ended June 30, 2017 Cash Flow from Operating Activities Receipts from tenants Operating subsidies Payments to suppliers Payments to employees Other receipts (payments) Net cash provided (used) by operating activities $ 335,191 7,448,356 (953,700) (1,162,922) (5,583,492) 83,433 Cash Flows from Capital and Related Financing Activities Purchases of capital assets Capital contributions Debt incurred Principal retirement Net cash provided (used) by capital and related financing activities (125,308) 22, ,638 (1,747) 371,966 Cash Flows from Investing Activities Redemption of investments Interest earned on invested cash Net cash provided (used) by investing activities 26,041 15,240 41,281 Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents - Beginning of Year 496,680 1,008,747 Cash and Cash Equivalents - End of Year $ 1,505,427 Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used In) Operating Activities Operating income (loss) Adjustments Not Affecting Cash Depreciation and amortization Change in Assets and Liabilities (Increase) Decrease in accounts receivable- tenants (Increase) Decrease in other receivables (Increase) Decrease in receivables- other governments (Increase) Decrease in prepaid expenses Increase (Decrease) in accounts payable Increase (Decrease) in accrued expenses Increase (Decrease) in accrued compensated absences Increase (Decrease) in security deposits Increase (Decrease) in unearned revenue Increase (Decrease) in due to other governments Total adjustments Net Cash Provided by (Used In) Operating Activities $ (265,336) 334,793 (21) (87) 37,581 (1 0,020) 12,304 (6,456) (4,863) 627 (12,997) (2,092) 348,769 $ 83,433 See accompflfying notes.

18 White River Regional Housing Authority Notes to the Financial Statements June 30, 2017 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Introduction. The financial statements of the White River Regional Housing Authority are prepared in accordance with generally accepted accounting principles (GAAP). The Governmental Accounting Standards Board (GASB) is responsible for establishing GAAP for state and local governments through its pronouncements (Statements and Interpretations). The more significant accounting policies established in GAAP and used by the White River Regional Housing Authority are discussed below. Under the United States Housing Act of 1937, as amended, the U.S. Department of Housing and Urban Development (HUD) has direct responsibility for administering low income housing programs in the United States. Accordingly, HUD has contracted with the entity to administer certain HUD funds. A. Reporting Entitv. These financial statements present the net position and results of operations of White River Regional Housing Authority, a primary government and its component unit. White River Regional Housing Authority's financial statements include White River Affordable Housing, LLC, which is a 'single member LLC and the only member is White River Regional Housing Authority. B. Basic Financial Statements. The authority is a public corporation, legally separate, fiscally independent and governed by a Board of Commissioners. As such, White River Regional Housing Authority is considered a special-purpose government. All activities of authority are considered business type activities. All activities of the authority are reported as a proprietary fund type. The focus of proprietary fund measurement is upon determination of operating income, changes in net position, financial position, and cash flows. The generally accepted accounting principles applicable are those similar to businesses in the private sector. The entity's proprietary fund authority is classified as an enterprise fund. An enterprise funds is required to be used to account for operations for which a fee is charged to external users for goods or services and the activity (a) is financed with debt that is solely secured by a pledge of the net revenues, (b) has third party requirements that the cost of providing services, including capital costs, be recovered with fees and charges or (c) establishes fees and charges based on a pricing policy designed to recover similar costs. The White River Regional Housing Authority is considered to be a special-purpose government since its existence is to satisfy a very specific and narrow purpose. As such, the authority presents a single set of enterprise fund financial statements. The Statement of Net Position is reported on a full accrual, economic resource basis, which recognizes all long-term assets and receivables as well as long-term debt and obligations. The authority's.net position is reported in three components: 1. Net investment in capital assets - Consists of the historical cost of capital assets and related deferred outflows of resources, net of accumulated depreciation and related deferred inflows of resources and reduced by the outstanding balances of any borrowings that are attributable to the acquisition, construction, or improvements of those assets. 2. Restricted net position - Net position is considered restricted if their use is constrained to a particular purpose. Restrictions are imposed by external organizations such as creditors, grantors, contributors, or laws and regulations of other governments. Restricted net position is reduced by liabilities and deferred inflows of resources related to the restricted assets. 3. Unrestricted net position - Consists of all other net position that does not meet the definition of the above two components and is available for general use. 18

19 White River Regional Housing Authority Notes to the Financial Statements (Continued) June 30, 2017 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) C. Authority Activities. The authority is administering the following activities and programs: Public Housing (commonly referred to as Low-income housing or Low Rent) - The Public Housing Program provides and operates cost-effective, decent, safe and affordable housing to low-income households. The Public Housing Program is operated under an Annual Contributions Contract (ACC) with HUD who provides Operating Subsidy and Capital Grant funding to enable the PHA to provide the housing at a rent that is based upon 30% of household income. The Public Housing Program also includes the Capital Fund Program (CFP), which is the primary funding source for physical and management improvements to the Authority's properties. The Capital Fund Program provides annual grant funds to the Authority for capital and management activities including modernization and correcting physical deficiencies. The CFP is awarded non-competitively and is based upon a formula that considers existing and accrual (future) modernization needs of the Authority. Housing Authority of the City of Melbourne is included in the Public Housing Program. Housing Choice Voucher Program - The Housing Choice Voucher Program is designed to aid very lowincome families in obtaining decent, safe, and sanitary rental housing. The Authority administers contracts with independent landlords that own property and rent that property to families that have applied for housing assistance through the Authority. The Authority subsidizes the family's rent through a Housing Assistance Payment made to the landlord. The program is administered under an Annual Contributions Contract (ACC) with HUD. HUD provides Annual Contributions Funding to enable the Authority to structure a lease that sets the participants' rent at 30% of household income. Business Activities- represents non-hud resources developed from a variety of activities. ADFA Home - a program under the Tenant Based Rental Assistance Program in which the Authority administers contracts with independent landlords that own the property. The Authority subsidizes the family's rent through a Housing Assistance Payment made to the landlord. The program is administered under contract with ADFA (Arkansas Development Finance Authority). ADFA provides funds to enable the Authority to structure a lease that sets the participants rent at 30% of household income. Section 8 Moderate Rehabilitation Single Room Occupancy (SROJ - The objective of the Section 8 project-based rental assistance programs is to aid low and very low-income families in obtaining decent, safe, and sanitary rental housing through the provision of housing assistance payments to participating owners on behalf of eligible tenants. Family Self-Sufficiency (FSSJ -The purpose of the FSS program is to promote the development of local strategies to coordinate the use of assistance under the Housing Choice Voucher and Public Housing programs with public and private resources to enable participating families to increase earned income and financial literacy, reduce or eliminate the need for welfare assistance, and make progress toward economic independence and self-sufficiency. Rental Assistance Demonstration Program/Project Based Voucher - Under the Rental Assistance Demonstration Program (RAD), the Authority rents units that it owns to low-income households and is funded under a project-based voucher program. RAD allows public housing agencies to convert projects currently under the Public Housing program to a long-term project-based Section 8 rental assistance program. White River Regional Housing Authority chose to convert their Low-Rent Public Housing program to RAD in March A Housing Assistance Payments (HAP) contract was executed and the project was removed from the Public Housing program by releasing the project from the Declaration of Trust and removing it from the Annual Contributions Contract. At that time, the ownership was transferred to the White River Affordable Housing, LLC, which is a single member LLC and the only member is White River Regional Housing Authority. 19

20 White River Regional Housing Authority Notes to the Financial Statements (Continued) June 30, 2017 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Component Unit- Blended -White River Regional Housing Authority had assumed management of the Housing Authority of the City of Melbourne in a prior fiscal year. The units were converted to Rental Assistance Demonstration program in March 2017 and combined with the White River Affordable Housing. The Rental Assistance Demonstration program and activities are reported in the the White River Affordable Housing, LLC financials, which is a reported as a component unit of White River Regional Housing Authority. D. Accrual Basis of Accounting. Basis of accounting refers to the point at which revenues or expenditures/expenses are recognized in the accounts and reported in the financial statements. It relates to the timing of the measurements made regardless of the measurement focus applied. Proprietary fund financial statements are presented on the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized when incurred. E. Budget. Enterprise Fund service delivery levels are determined by the extent of consumer demand. Because Enterprise Fund revenues and expenses fluctuate with changing service delivery levels, generally accepted accounting principles do not require the financial statements to include budgetary comparisons and, accordingly, these comparisons have not been included. Budgets are prepared for regulatory purposes in accordance with the Authority's contract with HUD. The entity prepares annual budgets for each program. Prior to the beginning of each budget year, the entity's annual budget is approved by the entity's governing body. Budgetary amendments require approval by the governing body. All budgetary appropriations lapse at the end of each year. Budgets for Capital Fund Programs are approved in the Authority's 5-year and annual plans. F. Financial Statement Amounts. 1. Cash and Cash Equivalents. The White River Regional Housing Authority defines cash to include certificates of deposit, money market accounts, savings accounts, demand deposits, and other shortterm securities with original maturities of three months or Jess; consequently, the cost, carrying value, and market value are equivalent. 2. Investments. The authority defines investments to include certificates of deposit with maturities of greater than three months; consequently, the cost, carrying value, and market value are equivalent. 3. Accounts Receivable. Accounts receivable consists of amounts due from tenants for rental, excess utilities and repair charges. No provision for an allowance for doubtful accounts has been made since these amounts are considered fully collectible. 4. Due from Other Governments. Due from other governments consists of amounts due from HUD for operational subsidies. No provision for an allowance for doubtful accounts has been made since these amounts are considered fully collectible. 5. Restricted Assets. Restricted assets consist of cash and investments that are held in trust or to satisfy specific program or purpose restrictions. 20

21 White River Regional Housing Authority Notes to the Financial Statements (Continued) June 30, 2017 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 6. Capital Assets. Capital assets purchased or acquired with an original cost of $500 or more are reported at historical cost or estimated historical cost. Contributed assets are reported at fair market value as of the date received. Additions, improvements and other capital outlays that significantly extend the useful life of an asset are capitalized. Other costs incurred for repairs and maintenance are expensed as incurred. Depreciation on all assets is provided on the straight-line basis over the following estimated useful lives: Land improvements Buildings Buildings- refurbishing and improvements Furniture and equipment- dwelling. Furniture and equipment- administrative 15 Years 40 Years 15 Years 7 Years 3-7 Years Construction in Progress. Construction in progress consists of expenditures under HUD's Capital Fund Program (CFP). Certain expenditures under these programs are not capitalizable expenditures, and therefore are expensed as incurred. : SecuritY Deposit. Security deposits c~nsist of amounts held'in trust with the White River Regional Hqusing Authority in order for tenants to secure apartment leases. Compensated Absences. The authority's policy, allows employees to accumulate. unused sick leave. and vacation leave. Sick leave is not paid upon termination, but will be paid only upon illness while employed..,- ". ' ' ' '. Due to Other Governments: 'Due to other govern ments consists of amounts due local governments for pa'yments in lieu of taxes (PILOT). Long-term Liabilities. Long-term liabilities expected to be financed from proprietary funds are accounted for in the proprietary fund. Expenditures related to such debt are also included in the proprietary fund.. ' Restricted Net Position. Restricted net position represents cumulative funding provided by HUD in excess of cumulative housing assistance payments. These funds are restricted by HUD program rules. Use. of Re'strictea Resources. When an expense is incurred that can be paid using either restricted or unrestricted resources (net position), the White River Regional Housing Authority's policy is to first apply the expense toward restricted resources and then toward unrestricted resources. Defining Operating Revenues and Expenses. The authority distinguishes between operating and nonoperating revenues and expenses. Operating revenues and expenses consist.of charges for services and the costs of provided those services, including depreciation and excluding interest cost. Ali other revenues and expenses are reported as nonoperating..,, ' - Revenues.- AU authority reven~es are accrued. These revenues consist of user charges for rents, utilities, repairs and other miscellaneous charges. Monies received from customers for security deposits are recorded 'as a liability upon receipt. Tenant revenue is reported net of bad debts in the amount of $1,811. Subsidies and grants, which finance current operations, are reported as operating revenues. Subsidies and grants,. which finance capital operations, are reported.as non-operating revenues. Revenues for government-mandated and voluntary exchange transaction are recorded when all applicable eligibility requirements, including time requirements are met. Resources received before au eligibility requirements are met are reported as deferred inflows of resources. 21

22 White River Regional Housing Authority Notes to the Financial Statements (Continued) June 30, 2017 NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 16. Expenditures. Expenditures are recognized when the liability is incurred. Inventory costs are reported in the period when inventory items are used, rather than in the years purchased. 17. Depreciation. Depreciation expense of $334,793 has been recognized during the year ended June 30, Income taxes. The authority is not subject to federal or state income taxes. 19. Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles as applied to governmental units require management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. NOTE 2 - DEPOSITS AND INVESTMENTS Deposits Regulations ~equi'rei that d'eposits with financial institutions be. collateralized with collateral whose market value is equal to the uninsured amount of the deposits. The collateral must be placed by the depository bank in an escrow account in a second bank for the benefit of ihe Authority. ' Investments '. Investing is performed in accordance with HUD regulations and State Statues. Funds may be invested in the following,type of inve~tments: '. ~ 1. Direct obligations of the United States pledged by its full faith and credit. 2. Obligations of Federal government age ncies and government sponsored agencies.' _ 3. Demand, savings, money-market, certificates of deposit, and Super NOW deposits at federally chartered banks: and savings and loan association. 4. Certain municipal depositary funds and local government investment pools provided that all investments made by these funds or pools are on approved list of investment securities. The entity must limit its investments in this category to no more than 30 percent of the entity's available investment funds. 5. Certain repurchase agreements in accordance with state law. ~ Investments at June 30, 2017 consist of the following: Type of Investments Fair Value/ Carrying Value Cost Certificates of deposits at federally insured depositories $ 1,807,746 $ 1,807,746 22

23 White River Regional Housing Authority Notes to the Financial Statements (Continued) June 30, 2017 NOTE 3 - RESTRICTED CASH Restricted cash consist of the following: Security deposits Housing assistance payments FSS Escrow Section 8 Single Room Occupancy (SRO) HOME Investment Partnerships Reserve for replacement RAD Construction Total NOTE 4" CAPITAL ASSETS Changes in capital assets are as follows: Beginning Reclassifications. ' Balance Additions and Retirements Capital assets not being depreciated:.-land $ 360,192 $ 0 $ 0 Construction in progress 11,520 77,528 0 Total capital assets not being depreciated ,528 0 Capital assets being depreciated: Land improvements 674, Building 8,281,207 4,014 0 Equipment 637,037 43,766 (3,391) Total capital assets being depreciated 9,592,881 47,780 (3,391) Less accumulated depreciation for: Land improvements (449,817) (68,069) 0 Building (4,893,937) (248,289) 0 Equipment (469,683) (18,435) 3,391 Total accumulated depreciation (5,813,437) (334,793) 3,391 Total capital assets being depreciated, net 3,779,444 (287,013) 0 Total business-type.activities capital assets, net $4,151,156 $ (209,485) $ 0 $ $ 42,974 52,864 14,649 18,445 22, , , ,522 Ending Balance $ 360,192 89, , ;637 8,285, ,637,270 (517,886) (5, 142,226) (484,727) (6, 144,839) 3,492,431 $ 3,941,671 Construction in progress is composed of expenditures related to major renovation of certain buildings owned by the entity,' said renovation to be fully financed by grants from HUD. All land aqd buildings are encumbered by a Declaration of Trust in favor of the United States of America as security for obligations guaranteed by the federal government and to protect other interests of the federal government. 23

24 White River Regional Housing Authority Notes to the Financial Statements (Continued) June 30, 2017 NOTE 5- NONCURRENT LIABILITIES Noncurrent liabilities consist of the following: Compensated absences, net of current portion of $17,665 First National Bank of Izard County Notes, net current portion $7,141 Total of Interest Rate None 3.5% Principal Balance $ 37, ,750 $ 505,288 Accrued compensated absences consist of estimated liability for employees accrued vacation and sick leave for which employees are entitled to be paid upon termination. The First National Bank of Izard County notes dated March 23, 2017, are payable in monthly installments of $1, and $873.93, including principal and interest, with final balloon payments due on March 23, The notes are secured by real estate. ~hanges in fixed liab)lities are as follows: Description Balance, beginning of period Additions PrincipaLretirement Balance, end of period First National Bank of Izard County Notes $ 0 476,638 (1,747) $ 474,891 Compensated Absences $ 60,066 0 (4,863) $ 55,203 Scheduled retirements of fixed liabilities are as follows: 1" 2"" 3"' 4'" 5'" 6 1 "-10'" 11 1 "-15'"' ' 16 1 "-18 1 " year year year year year year year year First National Bank of Izard County Notes $ 7,141 7,395 7,658 7,930 8,212 45,657 54, ,523 Interest $ 16,507 16,253 15,990 15,718 15,436 72,585 63,867 30,819 $ Total 23,648 23,648 23,648 23,648 23, , , ,342 NOTE 6- RISK MANAGEMENT The Authority is exposed to various risks of loss related to torts; theft of, damage to and destruction of assets; errors and omissions and natural disasters for which ttie Authority insures itself against loss by participation in a public entity risk pool. The Authority also insures itself against workers' compensation claims through participation in a public entity risk pool. There have been no significant reductions in coverage from the prior year and settlements have not exceeded coverage in the past three years. The Authority participates in the public entity risk pool managed by the Arkansas Housing Authorities Property and Casualty Self-Insured Fund, Inc. (AHASIF) for its property and liability.risk of loss coverage. The Authority, along with other participating entities, is responsible for paying annual premiums to the pool as determined by AHASIF. The pool administers the pooled resources to provide risk of loss protection for each participating municipality by purchasing commercial excess insurance. 24

25 White River Regional Housing Authority Notes to the Financial Statements (Continued) June 30, 2017 NOTE 6 - RISK MANAGEMENT (CONTINUED) The Authority participates in the public entity risk pool managed by the Municipal League Workers Compensation Trust for its workers compensation risk of loss coverage. The Authority, along with other participating entities, is responsible for paying annual premiums to the pool as determined by the Municipal League. The pool administers the pooled resources to provide risk of loss protection for each participating municipality by purchasing commercial excess insurance. NOTE 7- RETIREMENT PLAN The entity provides pension benefits for all of its full-time employees through the White River Regional Housing Authority 458(b) Plan (the "Plan"). The Plan is a single-employer defined contribution plan and is administered by the White River Regional Housing Authority.. The Plan was established July 1, 2005 and is authorized and may be amended by the entity's Board of Commis~iorieis. _ ' '. -. In a defined contribution plan, benefits depend solely on amounts contributed to the plan, plus investment earnings, and the forfeitures of other participant's benefits that may be allocated to such participant's account. Forfeitures of accounts of not fully vested terminated participants in excess of plan expenses shall be reallocated among the accounts of the remaining participants in accordance with the plan. There are no forfeitures reflected in pension expense recognized by the employer during the current fiscal year. Employees are eligible to participate immediately. The employees are allowed to contribute up to the maximum amounts allowed by the IRS. The entity matches up to 10% of the employees' base salary each month. The entity's contributions for each employee '( and interest allocated to the employee's account) are vested 100% immediately.. '..,,.. ' The entity's total payroll in fiscal year ended June 30, 2017 was $1,158,059. The entity's contributions were calculated using the base salary amount of $1,191,550. Contributions to the plan were $143,955 and $119,155 by th.e employee and the entity, respectively. ' ' ~. NOTE 8 -COMMITMENTS,, Commitments arise primarily from construction in progress. All project funds are provided by grant from HUD; therefore no additional funding is required to satisfy outstanding commitments at June 30, ' - NOTE 9- CONTINGENCIES The entity is subject to possible examinations made by federal regulators who determine compliance with terms, cond!tioris, laws and regulations governing grants given to the entity in the current and prior years. These examinations may result in required refunds by the entity to federal grantors and/or program beneficiaries. 25

26 Supplemental Financial Information 26

27 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Balance Sheet Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/2017 Project Total PIH Family Self-Sufficiency Program Section Housing Moderate Choice Vouchers Rehabilitation Single Room Occupancy 6.2 Component Unit- Blended 111 Cash - Unrestricted $202, Cash- Restricted- Modernization and Development 113 Cash - Other Restricted $52,864 $18, Cash- Tenant Security Deposits 115 Cash - Restricted for Payment of Current Liabilities $14, T a tal Cash $0 $0 $270,087 $18,445 $206,874 $505,474 $172,158 $42,974 $927, Accounts Receivable - PHA Projects 122 Accounts Receivable - HUD Other Projects $2, Accounts Receivable - Other Government 125 Accounts Receivable - Miscellaneous 126 Accounts Receivable- Tenants Allowance for Doubtful Accounts -Tenants AlloWance for Doubtful Accounts- Other $0 127 Notes, Loans, & Mortgages Receivable- Current 128 Fraud Recovery $4, AlloWance for Doubtful Accounts - Fraud -$4, Accrued Interest Receivable 120 Total Receivables, Net of Allowances for Doubtful Accounts $0 $0 $2,791 $0 $5,839 $0 $5, Investments - Unrestricted 132 Investments - Restricted 135 Investments - Restricted for Payment of Current Liability 142 Prepaid Expenses and Other Assets $25, Inventories $29,858

28 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Balance Sheet Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/2017 Project Total PIH Family Self-Sufficiency Program Section Housing Moderate Choice Vouchers Rehabilitation Single Room Occupancy 6.2 Component Unit- Blended Allowance for Obsolete Inventories 144 Inter Program Due From 145 Assets Held for Sale 150 Total Current Assets $0 $0 $298,422 $18,445 $963,177 "' Land $167, Buildings $518, Furniture, Equipment & Machinery- Dwellings 164 Furniture, Equipment & Machinery -Administration $125, Leasehold Improvements 166 Accumulated Depreciation -$343, Construction in Progress 168 Infrastructure 160 Total Capital Assets, Net of Accumulated Depreciation $0 $0 $ $0 $867,212 $7,766,660 $370,746 $180,855 -$5,800,919 $89,Q48 $3,473, Notes, Loans and Mortgages Receivable- Non-Current 172 Notes, Loans, & Mortgages Receivable- Non Current- Past 173 Grants Receivable- Non Current 174 Other Assets 176 Investments in Joint Ventures 180 Total Non-Current Assets $0 $0 $468,069 $0 $ Deferred Outflow of Resources 290 Total Assets and Deferred Outflow of Resources $0 $0 $ $18,445 $4.436,779

29 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Balance Sheet Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/2017 Project Total PIH Family Self-Sufficiency Program Section Housing Moderate Choice Vouchers Rehabilitation Single Room Occupancy 6.2 Component Unit- Blended 1\J <0 311 Bank Overdraft 312 Accounts Payable<= 90 Days $ Accounts Payable >90 Days Past Due 321 Accrued Wage/Payroll Taxes Payable $4, Accrued Compensated Absences- Current Portion $9, Accrued Contingency Liability 325 Accrued Interest Payable 331 Accounts Payable- HUD PHA Programs 332 Account Payable - PHA Projects 333 Accounts Payable - Other Government 341 Tenant Security Deposits 342 Unearned Revenue $18, Current Portion of Long-term Debt- Capiial 344 Current Portion of Long-term Debt- Operating Borrowings 345 other Current Liabilities $14, Accrued Liabilities - Other 347 Inter Program- Due To 348 Loan Liability - Current 31 0 Total Current Liabilities $0 $0 $37,030 $ $19,778 $3,852 $323 $8,266 $42,500 $7,141 $81, Long-term Debt, Net of Current- Capital Projects/Mortgage 352 Long-term Debt, Net of Current- Operating Borrowings 353 Non-current Liabilities- Other 354 Accrued Compensated Absences - Non Current $19, Loan Liability - Non Current 356 FASB 5 Liabilities $467,750 $8,185

30 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Balance Sheet Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/2017 Project Total PIH Family Self-Sufficiency Program Section Housing Moderate Choice Vouchers Rehabilitation Single Room Occupancy 6.2 Component Unit - Blended 357 Accrued Pension and OPEB Liabilities 350 Total Non-Currenl Liabilities $0 $0 $19,960 $0 $475, Total Liabilities $0 $0 $56,990 $18,445 $557, Deferred Inflow of Resources "' Net Investment in Capital Assets $468, Restricted Net Position $52,864 $ Unrestricted Net Position $0 $0 $188,568 $0 513 Total Equity- Net Assets I Position $0 $0 $709,501 $0 $2,998,711 $880,273 $3,878, Total Liabilities, Deferred Inflows of Resources and Equity- $0 $0 $766,491 $18,445 $4,436,779

31 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Balance Sheet Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/ HOME Investment Partnerships Program 1 Business Activities Subtotal ELIM Total 111 Cash - Unrestricted $266,457 $675, Cash - Restricted - Modernization and Development $505, Cash - Other Restricted $243, Cash- Tenant Security Deposits $42, Cash - Restricted for Payment of Current Liabilities $22,958 $37, Total Cash $22,958 $266,457 $1,505,427 $675,905 $505,474 $243,467 $42,974 $37,607 $1,505, Accounts Receivable- PHA Projects 122 Accounts Receivable- HUD Other Projects $2, Accounts Receivable- Other Government $8,611 $8, Accounts Receivable- Miscellaneous $94 $ Accounts Receivable- Tenants $5, Allowance for Doubtful Accounts -Tenants $ Allowance for Doubtful Accounts- Other $0 $0 127 Notes, Loans, & Mortgages Receivable- Current 128 Fraud Recovery $4, Allowance for Doubtful Accounts- Fraud -$4, Accrued Interest Receivable 120 Total Receivables, Net of Allowances for Doubtful Accounts $0 $8,705 $17,335 $2,791 $8,611 $94 $5,839 $0 $0 $4,040 -$4,040 $17, Investments - Unrestricted $1,807,746 $1,807, Investments - Restricted 135 Investments - Restricted for Payment of Current Liability 142 Prepaid Expenses and Other Assets $10,574 $65, Inventories Allowance for Obsolete Inventories $1,807,746 $65,976

32 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Balance Sheet Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/ HOME Investment Partnerships Program 1 Business Activities Subtotal ELIM Total 144 Inter Program Due From 145 Assets Held for Sale 150 Total Current Assets $22,958 $2,093,482 $3,396,484 $3,396, Land $1,034, Buildings $8,285, Furniture, Equipment & Machinery- Dwellings, $370, Furniture, Equipment & Machinery- Administration $306, Leasehold Improvements 166 Accumulated Depreciation -$6,144, Construction in Progress $89, Infrastructure 160 Total Capital Assets, Net of Accumulated Depreciation $0 $0 $3,941,671 $1,034,829 $8,285,221 $370,746 $306,666 -$6,144,839 $89,o48 $3,941, Notes, Loans and Mortgages Receivable - Non-Current 172 Notes, Loans, & Mortgages Receivable - Non Current- Past 173 Grants Receivable - Non Current 174 Other Assets 176 Investments in Joint Ventures 180 Total Non-Current Assets $0 $0 $3,941,671 $3,941, Deferred Outflow of Resources 290 Total Assets and Deferred Outflow of Resources $22,958 $2,093,482 $7,338,155 $7,338, Bank Overdraft

33 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Balance Sheet Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/ HOME Investment Partnerships Program 1 Business Activities Subtotal ELIM Total 312 Accounts Payable <- 90 Days $ $43, Accounts Payable >90 Days Past Due 321 Accrued Wage/Payroll Taxes Payable $2.141 $6, Accrued Compensated Absences - Current Portion $4,420 $17, Accrued Contingency Liability 325 Accrued Interest Payable $ Accounts Payable- HUD PHA Programs 332 Account Payable - PHA Projects 333 Accounts Payable - Other Government $7,773 $16, Tenant Security Deposits $42, Unearned Revenue $15,185 $33, Current Portion of Long-term Debt- Capital $7, Current Portion of Long-term Debt- Operating Borrowings 345 Other Current Liabilities $14, Accrued Liabilities - other 347 Inter Program- Due To 348 Loan Liability- Current 310 Total Current Liabilities $22,956 $21,999 $162,292 $ $6,691 $17,665 $323 $16,039 $42,500 $33,630 $7,141 $14,649 $182, Long-term Debt, Net of Current- Capital Projects/Mortgage $467, Long-term Debt, Net of Current- Operating Borrowings 353 Non-current Liabilities- Other 354 Accrued Compensated Absences - Non Current $9,393 $37, Loan Liability - Non Current 356 FASB 5 Liabilities 357 Accrued Pension and OPEB Liabilities $467,750 $37,536

34 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Balance Sheei Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/ HOME Investment Partnerships Program 1 Business Activities Subtotal ELIM Total 350 Total Non-Current Liabilities $0 $9,393 $505,288 $505, Total Liabilities $22,958 $31,392 $687,580 $687, Deferred Inflow of Resources Net Investment in Capital Assets $3,466, Restricted Net Position $ Unrestricted Net Position $0 $2,062,090 $3,130, Total Equity- Net Assets I Position $0 $2,062,090 $6,650,575 $3,466,780 $52,864 $3,130,931 $6,650, Total Liabilities, Deferred Inflows of Resources and Equity- $22,958 $2,093,482 $7,338,155 $7,338,155

35 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Revenue and Expense Summa,.Y Submission Type: Audited/Single Audit Fiscal Year End: 06/30/2017 Project Total PIH Family Self-Sufficiency Program Section Housing Moderate Choice Vouchers Rehabilitation Single Room Occupancy 6.2 Component Unit - Blended Net Tenant Rental Revenue $118, Tenant Revenue - other $8, Total Tenant Revenue $127,577 $0 $0 $0 $201,634 $7,185 $208,819 "' HUD PHA Operating Grants $384,550 $39,593 $6,532,446 $54, Capital Grants $22, Managemeni Fee Asset Management Fee Book Keeping Fee Front Line Service Fee Other Fees Total Fee Revenue $190, Other Government Grants Investment Income- Unrestricted $62 $ Mortgage Interest Income Proceeds from Disposition of Assets Held for Sale Cost of Sale of Assets Fraud Recovery $5, Other Revenue $5, Gain or Loss on Sale of Capital Assets Investment Income - Restricted $ Total Revenue $514,572 $39,593 $6,543,017 $54,420 $124,143 $252 $3,828 $527, Administrative Salaries $91,814 $26,923 $485,955 $14,418 $126,180

36 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Revenue and Expense Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/2017 Project Total PIH Family Self-Sufficiency Program Section Housing Moderate Choice Vouchers Rehabilitation Single Room Occupancy 6.2 Component Unit- Blended Auditing Fees $750 $6,800 $1, Management Fee $3, Book-keeping Fee Advertising and Marketing Employee Benefit contributions -Administrative $33,752 $12,670 $161,448 $6, Office Expenses $22,803 $99, Legal Expense Travel $2,840 $40, Allocated Overhead Other Total Operating- Administrative $151,959 $39,593 $797,803 $23,102 $2,250 $1,147 $59,202 $13,416 $225 $4,010 $206, Asset Management Fee Tenant Services- Salaries Relocation Costs Employee Benefit Contributions- Tenant Services Tenant Services- Other Total Tenant Services $0 $0 $0 $0 $2,959 $2, Water $21,027 $1, Electricity $9,372 $4, Gas $ Fuel Labor Sewer $11,993 $ Employee Benefit Contributions - Utilities $31,437 $10,753 $295 $15,515

37 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Revenue and Expense Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/2017 Project Total PIH Family Self-Sufficiency Program Section Housing Moderate Choice Vouchers Rehabilitation Single Room Occupancy 6.2 Component Unit- Blended Other Utilities Expense Total Utilities $43,009 $0 $5,734 $0 $58, Ordinary Maintenance and Operations - Labor $50,515 $4, Ordinary Maintenance and Operations - Materials and $29,297 $7, Ordinary Maintenance and Operations Contracts $48,517 $10, Employee Benefit Contributions - Ordinary Maintenance Total Maintenance $128,329 $0 $23,741 $0 $57,601 $31,182 $75,512 $164, Protective Services - Labor Proiective Services - Other Contract Costs Protective Services - Other Employee Benefit Contributions - Protective Services t olaf Protective Services $0 $0 $0 $0 $ Property Insurance $20,340 $8, Liability Insurance $ Workmen's Compensation $2,053 $9, All Other Insurance Total insurance Premiums $22,647 $0 $18,355 $0 $18,512 $2,573 $21, Other General Expenses Compensated Absences $29, Payments in Lieu of Taxes $5, Bad debt - Tenant Rents Bad debt- Mortgages $12,037 $1,811

38 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Revenue and Expense Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/2017 Project Total PIH Family Self-Sufficiency Program Section Housing Moderate Choice Vouchers Rehabilitation Single Room Occupancy 6.2 Component Unit - Blended Bad debt- Other Severance Expense Total Other General Expenses $5,813 $0 $29,353 $0 $13, Interest of Mortgage (or Bonds) Payable Interest on Notes Payable (Short and Long Term) Amortization of Bond Issue Costs Total Interest Expense and Amortization Cost $0 $0 $0 $0 $ Total Operating Expenses $351,757 $39,593 $874,986 $23,102 $466, Excess of Operating Revenue over Operating Expenses $162,815 $0 $5,668,031 $31,318 $60, Extraordinary Maintenance Casualty Losses- Non-capitalized Housing Assistance Payments $90,615 $5,613,773 $31, HAP Portability-1 n Depreciation Expense $147,277 $28, Fraud Losses Capital Outlays - Governmental Funds Debt Principal Payment- Governmental Funds Dwelling Units Rent Expense Total Expenses $589,649 $39,593 $6,517,341 $54,420 $158,934 $625, Operating Transfer In $68, Operating transfer Out -$68,145

39 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Revenue and Expense Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/2017 Project Total PIH Family Self-Sufficiency Program Section Housing Moderate Choice Vouchers Rehabilitation Single Room Occupancy 6.2 Component Unit- Blended "' CD Operating Transfers from/to Primary Government Operating Transfers from/to Component Unit Proceeds from Notes, Loans and Bonds Proceeds from Property Sales Extraordinary Items, Net Gain/Loss Special Items (Net Gain/Loss) -$2,219, Inter Project Excess Cash Transfer In Inter Project Excess Cash Transfer Out Transfers between Program and Project- In Transfers between Project and Program - Out Total Other financing Sources (Uses) -$2,219,796 $0 $0 $0 $2,219,796 $2,219, Excess (Deficiency) of Total Revenue Over (Under) Total -$2,294,873 $0 $25,676 $0 $2,121, Required Annual Debt Principal Payments $0 $0 $0 $ Beginning Equity $2,294,873 $0 $683,825 $ Prior Period Adjustments, Equity Transfers and Correction $ Changes in Compensated Absence Balance Changes in Contingent Liability Balance Changes in Unrecognized Pension Transition Liability Changes in Special Term/Severance Benefits Liability Changes in Allowance for Doubtful Accounts - Dwelling Changes in Allowance for Doubtful Accounts - Other Administrative Fee Equity $656,637 $1,747 $1,757, Housing Assistance Payments Equity $52,864

40 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Revenue and Expense Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/2017 Project Total PIH Family Self-Sufficiency Program Section Housing Moderate Choice Vouchers Rehabilitation Single Room Occupancy 6.2 Component Unit- Blended Unit Months Available Number of Unit Months Leased Excess Cash -$28,842 Land Purchases $0 Building Purchases $1,529 Furniture & Equipment- Dwelling Purchases $30,238 Furniture & Equipment- Administrative Purchases $0 Leasehold Improvements Purchases $0 Infrastructure Purchases $0 CFFP Debt Service Payments $0 Replacement Housing Factor Funds $

41 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Revenue and Expense Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/ HOME Investment Partnerships Program 1 Business Activities Subtotal ELIM Total Net Tenant Rental Revenue $ Tenant Revenue - Other $16, Total Tenant Revenue $0 $0 $336,396 $0 $ $16,178 $336, HUD PHA Operating Grants $200,452 $7,381, Capital Grants $22, Management Fee Asset Management Fee Book Keeping Fee Front Line Service Fee Other Fees Total Fee Revenue $0 $0 $7,381,889 $22,383 $ other Government Grants $124,143 -$82, Investment Income- Unrestricted $14,857 $15, Mortgage Interest Income Proceeds from Disposition of Assets Held for Sale Cost of Sale of Assets Fraud Recovery $5, other Revenue $361,580 $370,882 -$55, Gain or Loss on Sale of Capital Assets Investment Income- Restricted $ Total Revenue $200,452 $376,437 $8,255,963 -$137,395 $41,883 $15,238 $5,030 $315,747 $2 $8,118, Administrative Salaries $13,110 $323,367 $1,081,767 -$39, Auditing Fees $11,700 $1,042,753 $11,700

42 White River Regional Housing AUthority (AR197) MELBOURNE, AR Entity Wide Revenue and Expense Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/ HOME Investment Partnerships Program 1 Business Activities Subtotal ELIM Total ManagementFee $3, Book-keeping Fee Advertising and Marketing $1, Employee Benefit contributions -Administrative $6,170 $81,938 $361,964 -$13, Office Expenses $21,488 $157,375 -$3, Legal Expense $ Travel $47, Allocated Overhead Other Total Operating- Administrative $19,280 $426,793 $1,664,960 -$55,135 $3,496 $1 '147 $348,843 $154,375 $225 $47,286 $1,609, Asset Management Fee Tenant Services- Salaries Relocalion Costs Employee Benefit Contributions- Tenant Services Tenant Services- Other $2, Total Tenant Services $0 $0 $2,959 $0 $2,959 $2, Water $470 $53, Electricity $2,122 $26, Gas $ Fuel Labor Sewer $105 $27, Employee Benefit Contributions - Utilities Other Utilities Expense $53,934 $26,757 $912 $27,837

43 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Revenue and Expense Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/ HOME Investment Partnerships Program 1 Business Activities Subtotal ELIM Total Total Utilities $0 $2,697 $109,440 $0 $109, Ordinary Maintenance and Operations - Labor $2,301 $115, Ordinary Maintenance and Operations - Materials and $2,087 $70, Ordinary Maintenance and Operations Contracts $4,379 $139, Employee Benefit Contributions - Ordinary Maintenance Total Maintenance $0 $8,767 $325,132 $0 $115,306 $70,453 $139,373 $325, Protective Services - Labor Protective Services - Other Contract Costs Protective Services - Other Employee Benefit Contributions - Protective Services Total Protective Services $0 $0 $0 $0 $ Property Insurance $16 $47, Liability Insurance $ Workmen's Compensation $4,584 $18, All Other Insurance Total insurance Premiums $0 $4,600 $66,687 $0 $47,482 $254 $18,951 $66, other General Expenses Compensated Absences $13,813 $55, Payments in Lieu of Taxes $5, Bad debt- Tenant Rents $1, Bad debt - Mortgages Bad debt- Other $55,203 $5,813 $1,811

44 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Revenue and Expense Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/ HOME Investment Partnerships Program 1 Business Activities Subtotal ELIM Total Severance Expense Total Other General Expenses $0 $13,813 $62,827 $0 $62, Interest of Mortgage (or Bonds) Payable Interest on Notes Payable (Short and Long Term) Amortization of Bond Issue Costs Total Interest Expense and Amortization Cost $0 $0 $0 $0 $ Total Operating Expenses $19,280 $456,670 $2,232,005 -$55,135 $2,176, Excess of Operating Revenue over Operating Expenses $181,172 -$80,233 $6,023,958 -$82,260 $5,941, Extraordinary Maintenance Casualty Losses - Non-capitalized Housing Assistance Payments $181,172 $5,916,878 -$82, HAP Portability-In Depreciation Expense $334, Fraud Losses Capital Outlays - Governmental Funds Debt Principal Payment- Governmental Funds Dwelling Units Rent Expense T oial Expenses $200,452 $456,670 $8,483,676 -$137,395 $5,834,618 $334,793 $8,346, Operating Transfer In $68, Operating transfer Out -$68, Operating Transfers from/to Primary Government $68,145 -$68,145

45 White River Regional Housing Authority (AR197) MELBOURNE, AR Entity Wide Revenue and Expense Summary Submission Type: Audited/Single Audit Fiscal Year End: 06/30/ HOME Investment Partnerships Program 1 Business Activities Subtotal ELIM Total... en Operating Transfers from/to Component Unit Proceeds from Notes, Loans and Bonds Proceeds from Property Sales Extraordinary Items, Net Gain/Loss Special Items (Net Gain/Loss) $ Inter Project Excess Cash Transfer In Inter Project Excess Cash Transfer Out Transfers between Program and Project- In Transfers between Project and Program - Out Total Other financing Sources (Uses) $0 $0 $0 $0 $0 $ Excess (Deficiency) of Total Revenue Over (Under) Total $0 -$80,233 -$227,713 $0 -$227, Required Annual Debt Principal Payments $0 $0 $1, Beginning Equity $0 $2,142,323 $6, Prior Period Adjustments, Equity Transfers and Correction $ Changes in Compensated Absence Balance Changes in Contingent Liability Balance Changes in Unrecognized Pension Transition Liability Changes in Special Term/Severance Benefits Liability Changes in Allowance for Doubtful Accounts- Dwelling Changes in Allowance for Doubtful Accounts - Other Administrative Fee Equity $656,637 $1.747 $6,878,288 $0 $656, Housing Assistance Payments Equity $ Unit Months Available $52,