DESIRE COMMUNITY HOUSING CORPORATION NEW ORLEANS, LOUISLVNA. Reviewed Fmancial Statements December 31, 2007

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1 Page 1 of 14 SAMUEL W, STEVENS, III Certified Public Accountant in^ DESIRE COMMUNITY HOUSING CORPORATION NEW ORLEANS, LOUISLVNA Reviewed Fmancial Statements December 31, 2007 Under provisions of state law this report is a public document Acopy of the report has been submitted to the entity and other appropnate public officials. The report is available for public inspection at the Baton Rouge office of the LegislativeAuditor and, where appropriate, at the office ofthe parish clerk of court Release Date w of

2 Page 2 ol 14 DESIRE COMMUNITY HOUSING CORPORATION NEW ORLEANS, LOUISIANA Financial Statements and Independent Accountant's Report For the Year ended December 31, 2007 TABLE OF CONTENTS Page(s) Review Report 1 Statement of Financial Position 2 Statement of Activities 3 Statement of Functional Expenses 4 Statement of Cash Flows 5 Noles to Financial Statements 6 Independent Accountant's Report on Applying Agreed-Upon Procedures 8 Schedule Of Findings 11 Louisiana Attestation Questionnaire

3 Page 3 ol 14 SAMUEL W. STEVENS, III CPA P.O. Box Shreveport, LA (318) Fax (318) INDEPENDENT ACCOUNTANT'S REVIEW REPORT To the Board of Directors Desire Community Housing Corporation New Orleans, Louisiana I have reviewed the accompanying statement of financial position of Desire Community Housing Corporation as of December 31, 2007, and the related statements of activities and cash flows for the year then ended. These financial statements are the responsibility of the management of Desire Communit)' Housing Corporation My review was conducted in accordance with Statements on Standards for Accounting and Review Services issued by the American Institute of Certified Public Accountants and applicable standards of Government Auditing Standards issued by the Comptroller General ofthe United States of America. A review consists principally of inquires of entity personnel and analytical procedures applied to financial data. It is substantially less in scope than an audit in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the fmancial statements taken as a whole. Accordingly, we do not express such an opinion. Based on my review, I am not aware of any material modifications that should be made to the accompanying financial statements in order for them to be inconformity with generally accepted accounting principles. In accordance with the Louisiana Govemmental Audit Guide and the provisions of state law, I have issued a report, dated Febmary 24, 2009, on the results of our agreed-upon procedures. /Q^i/rfi^J nj^^^ rf' February 24, 2009

4 Page 4 ol 14 DESIRE COMMUNITY HOUSING CORPORATION Statement of Financial Position December 31, 2007 Current Assets: Cash Property Held for Resale Assets Total Current Assets $ 142, , ,352 Property and Equipment: Buildings and Land Less: Accumulated Depreciation Total Property and Equipment 602,439 (80,398) 522,041 Total Assets $ 1,021,393 Current Liabilities: Due to Gordon Plaza Accounts Payable Wages Payable Deposits - Tenants Liabilities and Net Assets Total Liabilities 298, , ,439 Net Assets: Unrestricted Total Net Assets 709, ,954 Total Liabilities and Net Assets 1,021,393 The accompanying notes are an integral part ofthe financial statements 2

5 Pages of 14 DESIRE COMMUNITY HOUSING CORPORATION Statement of Activities For the Year Ended December 31, 2007 Unrestricted Revenue and Support Grants: $ 267,088 Contracts - State 43,269 Miscellaneous Income 62 Program Income 11,694 Reimbursement 4,000 Housing Counseling Training 2,572 Total Revenue and Support 328,685 Expenses Program Services: Cleanup Program 22,860 Community Response Initiative 38,138 Housing Counseling 47,921 Unity 8,302 Total Program Services 117,221 Supporting Services: Management And General 162,691 Total Supporting Services 162,691 Total Expenses 279,912 Change in Net Assets 48,773 Net Assets Beginning of Year 661,181 End of Year S 709,954 The accompanying notes are an integral part ofthe fmancial statements 3

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7 Page 7 of 14 DESIRE COMMUNITY HOUSING CORPORATION Statement of Cash Flows December 31,2007 Cash Flows from Operating Activities: Change in Net Assets 48,773 Adjustments to Reconcile Change in Net Assets to Depreciation Increase in Payables Total Adjustments 6,415 54,118 60,533 Net Cash Provided by Operating Activities 109,306 Net Increase in Cash 109,306 Cash, Beginning of Year 33,450 Cash, End of Year 142,756 The accompanying notes are an integral part ofthe financial statements 5

8 Pages of 14 DESIRE COMMUNITY HOUSING CORPORATION Notes lo the Financial Statements 1. Nature of Operations The Desire Community Housing Corporation (a non-profit corporation) (DCHC) was established in The organization's primary purpose is to provide quality affordable housing, revitalize communities within its estabhshed boundaries and create a viable community for residents. For almost forty years, the members of the Desire/Florida community have worked together in an effort to improve housing conditions, as well as the improvement of the Upper Ninth Ward neighborhood. DCHC operates the following programs: Community Response Initiative: This program began in October 2002 and is funded by the State of Louisiana, passed through the Office of Family Support. Additionally, the program provides participants complete comprehensive housing counseling regime to prevent homelessness, rental/mortgage assistance and or initial housing deposits, written information for other appropriate support services (i.e. child care, health (mental and medical), jobs, skills, parenting and life skills and education), and housing education sessions. Gordon Plaza Apartments: Gordon Plaza Apartments is a 128 unit residential complex with five adjacent commercial rental units. The development operates under the management of DCHC, for which it receives a management fee. The development has a section 8 Housing Assistance Payment Contract (HAP Contract) for all of the units. The financial statements of Gordon Plaza Apartments are audited separately, by another auditor, in accordance with HUD requirements. Family Resource and Referrals - provide an operations office and comprehensive family resource center that provides information, referrals, workshops, and peer support for families of individuals with developmental disabilities or special needs. Stipends to individuals with disabilities or their parents may also be provided, to enable them to attend certain workshops and conferences. 2. Summary of Significant Policies A. Basis of Presentation DCHC has adopted Statement of Financial Accounting Standard (SFAS) No. 117,"Financial Statement of Not-for-Profit Organizations." Under SFAS No. 117, DCHC is required to report information regarding its fmancial position according to three classes of net assets (unrestricted net assets) based upon the existence or absence of donor-imposed restrictions. Unrestricted Net Assets: only limited by the board limits resulting from the nature of the organization, the enviroimient in which it operates, and the purposes specified in the articles of incorporation or bylaws and limits resulting from contractual agreements with supphers, creditors and others entered into by the organization in the course of its business. Temporarily Restricted Net Assets: assets whose restrictions lapse with the passage of time. Permanently Restricted Net Assets: assets whose restrictions do not lapse with the passage of time.

9 Page 9 of 14 DESIRE COMMUNITY HOUSING CORPORATION Notes to the Financial Statements B. Program Funding The Corporation request funds from the Department of Health and Human Services (DHHS) and the Department of Housing and Urban Development (HUD) through the State of Louisiana and directly in accordance with the appropriate grant agreements. According to DHHS and HUD pohcies, requke that funds disbursed should comply with the specific terms of the grant as defined. These agencies may at its discretion; request reimbursements for expenses paid or retum of unexpended funds, or both, as a result of noncompuance by the DCHC with the terms of the agreement. In addition, if DCHC terminates its activities, all unexpended funds are to be retumed to granting organizations. C. Property and Equipment Property and equipment acquired with HUD and DHHS funds are owned by those organizations while used in the program or in future authorized programs. Accordingly, the DCHC may not transfer, mortgage, assign, lease or in any other way encumber the property and equipment without prior approval of those organizations. Property and equipment is carried at cost. Depreciation is computed using the straight-line method. The cost of maintenance and repairs is charged to expense as incurred; significant renewals or betterments are capitalized. Various properties have donor restrictions with regard to disposal. D. Accrual Accounting These fmancial statements are presented on the accrual basis of accounting. Therefore, revenue is recorded when earned and expenses are recorded incurred. E. Income Taxes The Corporation is exempt from income tax under section 501 (c) (3) of the- U.S. Intemal Revenue Code as described in section 501 and comparable state law. F. Leases Residential and commercial leases with tenants are for a period of one year. There is a 20-year contract for the Gordon Plaza apartments with HUD under Section 8, whereby HUD pays a portion of each quahfied G. Uses of Estimates The preparation of fmancial statements in conformity with generally accepted accounting principles requkes management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. H. Board Compensation The board of directors is a voluntary board; therefore, compensation was not paid to any board members during the year ended December 31, I. Contributions and Donations The organization receives funds from sponsors for the annual Christmas Toy Distribution. 3. Grants Desire Community Housing Corporation has various grant/contract agreements fi'om state and nonprofit funded programs. State funds are received on a cost reimbursement basis. As of December 31, 2007 there were no imreimbursed funds.

10 Page 10of 14 SAMUEL W. STEVENS, III CPA P.O. Box Shreveport, LA (318) Fax (318) INDEPENDENT ACCOUNTANT'S REPORT ON APPLYING AGREED-UPON PROCEDURES To the Board of Directors Desire Community Housing Corporation Shreveport, Louisiana I have performed the procedures included in the Louisiana Govemmental Audit Guide and enumerated below, which were agreed to by the management of Desire Community Housing Corporation and the Legislative Auditor, State of Louisiana, solely to assist the users in evaluatmg management's assertions about Desire Community Housing Corporation's compliance with certain laws and regulations during the year ended December 31, 2007 included in the accompanying Louisiana Attestation Questionnaire. This agreed-upon procedures engagement was performed in accordance with standards established by the American Institute of Certified Public Accountants and applicable standards of Govemment Auditing Standards. The sufficiency of these procedures is solely the responsibility of the specified users of the report. Consequently, I make no representation regarding the sufficiency of the procedures described below either for the purpose for which this report has been requested or for any other purpose. Federal, State, and Local Awards 1. Determine the amount of federal, state, and local award expenditures for the fiscal year, by grant and grant year. Desire Community Housing Corporation federal, state, and local award expenditures for au programs for the fiscal year follow: Louisiana Department of Social Services $ 143,268 Total Expenditures $ 143, For each award, I randomly selected six disbursements administered during the period under examination. 3. For the items selected in Procedure 2, I traced the six disbursements to supporting documentation as to proper amount and payee. I examined supporting documentation for each of the six selected disbursements and found that payment was for the proper amount and made to the correct payee. 4. For the items selected in Procedure 2, I determined if the six disbursements were properly coded to the correct fiind and general ledger account All payments were properly coded to the correct fund and general ledger account.

11 Page 11 of For the items selected in Procedure 2, I determined whether the six disbursements received approval from proper authorities. All items were properly approved by the executive director 6. For the six items selected in procedure 2: For federal awards, I determined whether the disbursements complied with the apphcable specific program compliance requirements summarized in the Comphance Supplement (or contained m the grant agreement, if the program is not included in the Comphance Supplement) and for state and local awards, I detennined whether the disbursements complied with the grant agreement, relating to: Activities allowed or unallowed: I reviewed the previously listed disbursements for types of services allowed or not allowed. No exceptions were noted. Ehgibility I reviewed the previously listed disbursements for eligibility requirements. No exceptions were noted. Reporting I reviewed the previously listed disbursements for reporting requirements. No exceptions were noted. 7. For the programs selected for testing in Procedure 2 that had been closed out during the period under review, I compared the close-out report, when required, with the entity's financial records to determine whether the amounts agreed. Meetings The disbursements selected did not include any close out reports. 8. I examined evidence indicating that agendas for meetings recorded m the minute book were posted as required by LSA-RS 42:1 through 42:12. Although no notice is physically posted at its office. Desire Community Housing Corporation notifies each board member by , posted mail, and telephone of its scheduled meetings. Comprehensive Budget 9. For au grants/contracts exceeding five thousand dollars, I determined that each applicable federal, state, or local grantor agency/agency was provided with a comprehensive budget of those grants that included the purpose and duration. Desire Community Housing Corporation provided comprehensive budgets to the apphcable state grantor/contract agency for the programs mentioned previously. These budgets specified the anticipated uses of the funds, estimates of the duration of the projects, and plans showing specific goals and objectives that included measures of performance. Prior Year Comments and Recommendations

12 Page12of I reviewed any prior-year suggestions, recommendations, and/or comments to determine the extent to which such matters have been resolved. There were no suggestions, recommendations, and/or comments. I was not engaged to, and did not perform an examination, the objective of which would be the expression ofan opinion on management's assertions. Accordingly, I do not express such an opinion. Had I performed additional procedures, other matters might have come to my attention that would have been reported to you. This report is intended solely for the use of management of The Desire Community Housing Corporation, the Legislative Auditor (State of Louisiana), and the applicable state grantor agency/agencies and should not be used by those who have not agreed to the procedures and taken responsibility for the sufficiency ofthe procedures for their purposes. However, this report is a matter of public record and its distribution is not limited. /Q^i/rf^ul f&^, IT' February 24,

13 Page13of 14 DESIRE COMMUNITY HOUSING CORPORATION, INC, Schedule Of Findings December 31, 2007 Finding The review of Desire Community Housing Corporation, Inc. was not timely completed as required by the State of Louisiana's Legislative Auditor. CAUSE: The Corporation reued on outside counsel to procure professional services. EFFECT: Desire Community Housing Corporation is noncompuant with state law, which requires a nonprofit organization to submit its audit within six months of year-end. CRITERIA: The Louisiana Revised Statutes require all govenunental and quasi-pubhc entities to complete the audit process and submit required reports to the Legislative Auditor of the State of Louisiana within six months ofthe entity's year-end. RECOMMENDATION: I recommend that professional services be procured within a reasonable and timely manner, as required by the State of Louisiana Legislative Auditor. MANAGEMENT'S RESPONSE: Management will monitor it's reporting deadlines and ensure that a qualified CPA is engaged timely to complete the assurance engagement by June 30 and the financial records and statements are ready for the assurance engagement no later than March 31^ following the end of its fiscal year. Finding Desire Community Housing Corporation, Inc. did not provide evidence that it posted a copy of a notice at its principal office or other meeting office advising the public of it's board meetmgs. CAUSE: The Corporation believed notification of to the board only was sufficient. EFFECT: Desire Community Housing Corporation is noncompliant with state law, which requires a nonprofit organization to post a written notice of it's board meetings at it's principal office, or if no such office exists, at the building in which the meeting is to be held; or by pubucation of the notice in an official joumal of the public body no less than twenty-four hours before the meeting. CRITERIA: The Louisiana Revised Statutes require posting a copy a written notice of if s board meetings at the principal office of the pubhc body holding the meeting, or if no such office exists, at the building in which the meeting is to be held; or by publication ofthe notice in an official joumal of the public body no less than twenty-four hours before the meeting n

14 Page 14of 14 RECOMMENDATION: I recommend review of LSA-RS 42:7 and that written notice of all board meetings are posted in plain view ofthe pubhc at the place of meeting as required by the State of Louisiana. MANAGEMENT'S RESPONSE: Management wiu review of LSA-RS 42:7 and post written notice of au board meetings in plain view ofthe public at the place of meeting as required by the State of Louisiana. 12