HomeMy WebLinkAbout2009 HA AuditWHEAT RIDGE HOUSING AUTHORITY
FINANCIAL STATEMENTS
December 31, 2009
TABLE OF CONTENTS
PAGE
Independent Auditors' Report
Basic Financial Statements
Statement of Net Assets
Statement of Revenues, Expenses and Changes in Net Assets
Statement of Cash Flows
4
Notes to Financial Statements 5 - 8
Swanhorst & Company yL.,..��,�.
Certified Public Ace t,
Hoard of Commissioners
Wheat Ridge Housing Authority
Wheat Ridge, Colorado
We have audited the accompanying basic financial statements of the Wheat Ridge Housing Authority as of and for
the year ended December 31, 2009. These financial statements are the responsibility of the Wheat Ridge Housing
Authority's management. Our responsibility is to express an opinion on these financial statements based on our audit.
The prior year comparative information has been derived from the Wheat Ridge Housing Authority's 2008 financial
statements and in our report dated March 24, 2009, we expressed an unqualified opinion on the basic financial
statements.
We conducted our audit in accordance with auditing standards generally accepted in the United States of America.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the
amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The Wheat Ridge Housing Authority has not presented management's discussion and analysis that the Governmental
Accounting Standards Board has determined is necessary to supplement, although not required to be part of, the basic
financial statements.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position
of the Wheat Ridge Housing Authority as of December 31, 2009, and the changes in financial position and cash flows
for the year then ended in conformity with accounting principles generally accepted in the United States of America.
June 11, 2010
8400 E. Crescent Parkway w Suite 600 - Greenwood Village, CO 80111 - (720) 528 -4306 Fax: (720) 525 -4307
BASIC FINANCIAL STATEMENTS
WHEAT RIDGE HOUSING AUTHORITY
STATEMENT OF NET ASSETS
December 31, 2009
ASSETS
Current Assets
Cash
Prepaid Expenses
Loans Receivable
Property Held for Resale
TOTAL ASSETS
LIABILITIES
Current Liabilities
Accounts Payable
TOTAL LIABILITIES
NET ASSETS
Unrestricted
TOTAL LIABILITIES AND NET ASSETS
$ 830,761
$
479,095
-
10
8,262
8,567
258,900
745,500
$ 1,097,923
$
1,233,172
$ 3,200
$
18,113
3,200
18,113.
1,094,723
1.,215,059
$ 1,097,923
$
1,233,172
The accompanying notes are an integral part of the financial statements.
2
WHEAT RIDGE HOUSING AUTHORITY
STATEMENT OF REVENUES, EXPENSES
AND CHANGES IN NET ASSETS
Year Ended December 31, 2009
NONOPERATING REVENUES (EXPENSES)
Interest Income
2009
2008
OPERATING REVENUES
-
(4,542)
Sales of Investment Property
$ 520,500 $
299,000
Cost of Sales
(535,500)
(309,401)
Rental
-
900
TOTAL OPERATING REVENUES
(15,000)
(9,501)
OPERATING EXPENSES
Closing Costs
36,528
19,926
General and Administrative
14,383
11,994
Repairs and Maintenance
6,191
23,858
Utilities
3,470
6,337
Homeowners Dues
250
932
City Reimbursement
-
4,258
Property Acquisition Costs.
-
22,030
Unrealized Loss on Property Held for Resale
52,656
147,728
TOTAL OPERATING EXPENSES
113,478
237,063
OPERATINGLOSS
(128,478)
(246,564)
NONOPERATING REVENUES (EXPENSES)
Interest Income
8,142
10,973
Interest Expense
-
(4,542)
TOTAL NONOPERATING REVENUES (EXPENSES)
8,142
6,431
CHANGE IN NET ASSETS
(120,336)
(240,133)
NET ASSETS, Beginning
1,215,059
1,455,192
NET ASSETS, Ending
$ 1,094,723 $
1,215,059
The accompanying notes are an integral part of the financial statements.
3
WHEAT RIDGE HOUSING AUTHORITY
STATEMENT OF CASH FLOWS
Increase (Decrease) in Cash
Year Ended December 31, 2009
CASH FLOWS FROM OPERATING ACTIVITIES
Proceeds from Sales of Investment Property
Purchase and Rehabilifiation of Investment Property
Cash Received from Tenants
Cash Payments to Vendors. and Suppliers.
2009
$ 520,500
(101,556)
(75,725)
343,219
305
01I1I:
Net Cash Provided by Operating Activities
CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Loan Repayments from Homeowners
Net Cash Provided by Noncapital Financing Activities
CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES
Loan Principal Payments
Loan Interest Payments
Net Cash Provided (Used) by Capital and Related Financing Activities
CASH FLOWS FROM INVESTING ACTIVITIES
Interest Income
Net Cash Provided by Investing Activities
NET INCREASE (DECREASE) IN CASH
CASH, Beginning
CASH, Ending
RECONCILIATION OF OPERATING LOSS TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
Operating Loss
Adjustments to Reconcile Operating Loss to
Net Cash Provided by Operating Activities
Changes in Assets and Liabilities Related to Operations
Prepaid Expenses
Property Held. for Resale
Accounts Payable
Accrued Liabilities
Retainage Payable
Net Cash Provided by Operating Activities
$ 299,000
(100,049)
900
(59,167)
140,684
318
(123,000)
(4,542)
(127,542)
8,142
10,973
8,142
10,973
351,666
24,433
479,095
454,662
$ 830,761 $
479,095
$ (128,478) $
(246,564)
10 340
486,600 380,100
(14,913) 10,834
(3,036)
- (990)
$ 343,219 $ 140,684
The accompanying notes are an integral part of the financial statements.
4
WHEAT RIDGE HOUSING AUTHORITY
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Wheat Ridge Housing Authority (the "Authority ") have been
prepared in conformity with generally accepted accounting principles (GAAP) as applied to
governmental entities. The Governmental Accounting Standards Board (GASH) is the accepted
standard - setting body for establishing governmental accounting and financial reporting principles.
Following is a summary of the more significant policies.
Reporting Entity
In accordancewith governmental accounting standards, the Authority has considered the possibility
of including additional entities in its financial statements. The definition of the reporting entity is
based primarily on financial accountability. The Authority is financially accountable for
organizations that make up its legal entity. It is also financially accountable for legally separate
organizations if Authority officials appoint a voting majority of the organization's governing body
and either it is able to impose its will on that organization or there is a potential for benefits to, or
to impose specific financial burdens on, the Authority. The Authority may also be financially
accountable for organizations that are fiscally dependent upon it
Based on the application of this criteria, the Authority does not include additional organizations
within its reporting entity.
Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The Authority uses an enterprise fund to account for its operations. Enterprise funds are used to
account for operations that are financed and operated in a manner similar to private business
enterprises, where the intent of the governing body is that costs of providing goods or services to the
general public on a continuing basis be financed or recovered primarily through user charges.
The financial statements are reported using the economic resources measurement focus and the
accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when
the liability is incurred, regardless of the timing of related cash flows. Grants and similar items are
recognized as revenue as soon as all eligibility requirements imposed by the provider have been met
Private - sector standards of accounting and financial reporting issued prior to December 1, 1989,
generally are followed in the financial statements to the extent that those standards do not conflict
with or contradict guidance of the GASH. Governments also have the option of following
subsequent private - sector guidance for their enterprise funds, subject to this same limitation. The
Authority has elected not to follow subsequent private - sector guidance.
Enterprise funds distinguish operating revenues and expenses from nonoperating items. Operating
revenues and expenses generally result from providing services and producing and delivering goods
in connection with the fund's principal ongoing operations. Operating expenses include the cost of
sales and services, administrative expenses, and depreciation on capital assets. All revenues and
expenses not meeting this definition are reported as nonoperating revenues and expenses.
WHEAT RIDGE HOUSING AUTHORITY
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Measurement Focus, Basis of Accounting, and Financial Statement Presentation (Continued)
When both restricted and unrestricted resources are available for use, it is the Authority's practice
to use restricted resources first, then unrestricted resources as they are needed.
Property Held For Resale
Propertyheld for resale includes the acquisition and rehabilitation costs of investment property, and
is reported at the lower of cost or market value.
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. The Authority carries commercial insurance
for these risks of loss.
Comparative Data
Comparative data for the prior year has been presented in the accompanying financial statements in
order to provide an understanding of changes in the Authority's financial position and operations.
However, complete comparative data in accordance with generally accepted accounting principles
has not been presented since its inclusion would make the financial statements unduly complex and
difficult to read.
NOTE 2: STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
Budgetary Information
A budget is adopted for the Authority as a management control devise, but is not legally required.
Therefore, budgetary information is not presented in the financial statements.
NOTE 3: DEVELOPMENT PROJECTS
The Authority previously purchased and rehabilitated a condominium complex on Quail Street, a
ten -unit condominium complex know as Carnation Square, an eight -unit townhome complex know
as Parkside, a duplex on Parfet Street, and a duplex on Allison Court
During 2007, the Authority purchased a duplex on 41s` Avenue. The Authority obtained grant
funding and loan financing to purchase and rehabilitate the property. At December 31, 2009, the
property, including rehabilitation costs, was held for resale.
WHEAT RIDGE HOUSING AUTHORITY
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
NOTE 4: CASH
Deposits
The Colorado Public Deposit Protection Act (PDPA) requires that all local government entities
deposit cash ineligible public depositories. Eligibility is determined by State regulations. Amounts
on deposit in excess of federal insurance levels must be collateralized by eligible collateral as
determined by the PDPA. The PDPA allows the financial institution to create a single collateral pool
for all public funds held. The pool is to be maintained by another institution, or held in trust for all
uninsured public deposits as a group. The market value of the collateral must be at least equal to
102% of the uninsured deposits. At December 31, 2009, the Authority had bank deposits of
$580,873 collateralized with securities held by the financial institution's agent but not in the
Authority's name.
Investments
The Authority is required to comply with State statutes which specify investment instruments
meeting defined rating, maturity, custodial and concentration risk criteria in which local
governments may invest, which include the following:
• Obligations of the United States and certain U.S. Agency securities
• Certain international agency securities
• General obligation and revenue bonds of U.S. local government entities
• Bankers' acceptances of certain banks
• Commercial paper
• Written repurchase agreements collateralized by certain authorized securities
• Certain money market funds
• Guaranteed investment contracts
• Local government investment pools
Interest Rate Risk - State statutes generally limit investments to an original maturity of five years
unless the governing board authorizes the investment for a period in excess of five years.
Credit Risk - State statutes limit investments to those with specified ratings, as provided by
nationally recognized statistical rating organizations, depending on the investment type.
NOTE 5: LOANS RECEIVABLE
During 2002, the Authority approved a loan, totaling $10,250, to assist a homeowner with closing
costs related to a condominium purchase. The loan requires monthly payments of $50, including
interest at 3.5% per annum, through September, 2012. This loan is secured by the condominium
unit. During 2009, the homeowner paid principal on the loan totaling $305, leaving an outstanding
balance of $8,262 at December 31, 2009.
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WHEAT RIDGE HOUSING AUTHORITY
NOTES TO FINANCIAL STATEMENTS
December 31, 2009
NOTE 6:
PROPERTY HELD FOR RESALE
Following is a summary of transactions for the property held forresale for the year ended December
31, 2009.
Balance Balance
12/31/08 Additions Deletions 12/31/09
Acquisition and Rehabilitation
Costs of Investment Property $ 745,500 $ 101,556 $ 588,156 $ 258900
At December 31, 2009, management determined that the carrying value of property held for resale
exceeded the estimated market value. Accordingly, the carrying value was reduced by $52,656.
NOTE 7: COMMITMENTS AND CONTINGENCIES
Cooperation Agreement
The Authority has entered into an agreement with the City of Wheat Ridge for contracted services.
Under the terms of this agreement, the City will provide legal, planning, engineering services, etc.,
as deemed necessary by the Authority. Under the terms of this agreement, the City Manager or his
designee will act as the Executive Director of the Authority.
Claims and Judgements
The Authority participates in federal programs that are fully or partially funded by grants received
from other governmental entities. Expenses financed by grants are subject to audit by the
appropriate grantor government. If expenses are disallowed due to noncompliance with grant
program regulations, the Authority may be required to reimburse the grantor government. At
December 31, 2009, significant amounts of grant expenses have not been audited but the Authority
believes that subsequent audits will not have amaterial effect on the overall financial position of the
Authority.
Tabor Amendment
Colorado voters passed an amendment to the State Constitution, Article X, Section 20, which has
several limitations, including revenue raising, spending abilities, and other specific requirements of
state and local government. The Amendment is complex and subject to judicial interpretation.
Management believes the Authority is exempt from the provisions of the Amendment