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HomeMy WebLinkAbout2013 HA AuditC rK t3��1 z k.t�t3 � 1.0 +asaereis9s July 30, 2014 Board of Commissioners Wheat Ridge Housing Authority Wheat Midge, Colorado We have audited the financial statements of the Wheat Ridge Housing Authority (tile `Authority *) as of and for the year ended December 31,'2013, and have issued our report thereon dated July 30, 2014. Professional standards require that we provide you with the following information related to our audit, Our Responsibility sander Generally Accepted Auditing Standards As communicated in our engagement latter, our responsibility, as described by professional standards, is to express opinions about whether the financial statements prepared by management with your oversight are fairly presented, in all material respects, in conformity with accounting; principles generally accepted in tine United States of America. Because of the inherent limitations of in audit, combined with the inherent limitations of internal control, and because we dirt not perform a detailed examination of all transactions, there is as risk that material misstatements due to error or fraud may exist and not be detected by us, even though the audit is properly planned and performed. In addition, all audit is not designed to detect immaterial misstatements or violations of lawns or regulations that do not have a direct and material effect oil the financial statements, As part of ouraudit, we considered the Authority internal control over financial nciaal r•eportin and compliance as a basis for designing our audit procedures, but not for the purpose of expressing; an opinion on the effectiveness of the internal control or on compli {ance. We are responsible for communicating significant matters related to the audit that are, in our professional judgment, relevant to your responsibilities in overseeing; tine financial reporting process. However, we are not required to design procedures specifically to identify such matters. Significant Accounting Policies Management is responsible forthe selection and useof;appropriate accounting policies. In accordance with the terns of our engagement letter, we will advise management about the azppropriaateness of accountings policies and their application. No new accountings policies were adopted and the application ofexisting policies was not changed during the year. We noted no transactions entered into by the Authority during; the year for which there is a lack of authoritative guidance or consensus, 8400 E . Crescent Parkway - Suite 600 - Greenwood Village, CO 80111 - ( 71-0) 528 -4306 Fax: (7 0) a? -4307 Accounting Estimates Accounting estimates are all integral part of the financial statements prepared by management and are based on management's knowledge and experience about past and currentevents and assumptions about future events, Certain C� accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting there may differ significantly from management's current,judgments. We evaluated the key factors and assumptions used to develop the significant estimates in determining that they are reasonable in relation to the financial statements taken as a whole, Corrected and Uncorrected Misstatements Professional standards require LIS t0aCCUrall late all known and likely misstatements identified durin g the audit, other than those that are clearly trivial, and communicate thern to the appropriate level of manag ement. We proposed reel ass i fication adjustments to the Authority's financial statements as a result of our audit procedures. In our judgment, none of the adjustments we proposed, either individually or in the aggregate, indicate matters that could have a significant effect oil the Authority's financial reporting process. Disagreements with Management For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditors' report. We are pleased to report that no such disagreements arose during the course ofour audit. Difficulties Encountered in Performing the Audit We encountered no difficulties dealing with management during the audit process. We have requested certain representations frorn management that are included in the management representation letter, Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a "second opinion" on certain situations, If a consultation involves the application of an accounting principle to the Authority's financial statements or a determination of the type of auditors' opinion that may be expressed on those statements, our professional standards require the Consulting accountant to contact LIS to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants, Other Audit Issues We generally discuss a variety ofmatters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Authority's auditors, However, these discussions occurred ill the normal course of our professional relationship and the responses were not as condition to our retention. Other Information Debit Cards We identified two debit card purchases that did not have supporting documentation on file. We recommend that the Authority either discontinue using the debit cards or establish better monitoring procedures to prevent errors and fraud, N 3 WHEAT RIDGE HOUSING AUTHORITY FINANCIAL STATEMENTS December 31, 2013 , rABLE OF CONTENTS PAGE FINANCIAL SECTION Independent Auditors'Repon Basic Financial Statements Statement of Net Position Statement ot'Revenues, Expenses and (.,,hanges in Net Position Statement Cash Flows Notes to Financial Statements 4-7 Sit or & Company L i Pw+"A­ouwasl8' Board of Commissioners Wheat Ridge Housing Authority Wheat Ridge, Colorado INDEPEND'ENT AUDITORS'REPORT We have audited the accompanying financial statementsofthe Wheat Ridge Housing Authority as ofand for the year ended December 31, 2013, and the related notes to the financial statements, which collectively comprise the basic financial statements of the to Ridge Housing Authority, is listed in the table of contents, Management's Responsibility for the Financial Statenients Management is responsible for the preparation and fain- presentation of these flinancial statements in accordance with accounting principles generally accepted in the United States of America, this includes the design, implementation, I generally 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 all opinion on these financial statements based oil our audit, We conducted our audit in accordance with auditing standards generally accepted in the United States ofAmerica, Those standards require C� that we plan and perform the audit to obtain reasonable assurance about whether tile Financial statements are free frorn material misstatement. An audit involves performing procedures to obtain audit evidence about the anu and disclosures in the financial statements. The procedures selected depend on the auditors'Judgemcrit, 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 preparation and fair presentation of the financial statements in order to design audit procedures that arc appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control. Accordingly, we express no such opinion. Ali audit also includes evaluatingthe appropriateness of accounting policies used and the reasonableness of significant accountingestirnates made by management. as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence �ve have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In ouropinion, the financial statements reterred to above present fairly, in all material respects, the financial position of the Wheat Ridge Housing Authority as of'December 31, 2013, and the changes in fi nancial position and cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. 8400 L", Crescent Parkway - Siiite 600 - Greenwood Villaize., CO 80111 • (720) 5 Fax: (720) 528-4307 July 30, 2014 BASIC FINANCIAL STATEMEN,rs *HEAT RIDGE HOUSING ALITHOwe �j �rAr E M - �W() " N' � POS �rfl Q N Decern ber \, «o A SSA S Current Assets Ca Property Ifeld for Resale TOTAL ASSE"I'S LIABILITIES Current Liabilities Accounts Payable TOTAL LIABILITIES NETPOSITION Unrestrictcd , Ex ETi TOTAL LIABILITIFS AND NETPOSITION 720,800 241,849 12.553 12,553 -.-I-----.-I-"- -- -------- --" 95U96 962.649 The accompanying notes are an integral part wt! financial statements, WHI"ATRIDGE HOUSING AU'l'IIORI1'Y aIAMMENL!2��Jml A—N,U-C-1fAN( �,L4LNLN -"L L _VQ 0,�[ ar[L� Year Ended December 31, 2013 OPE"RATING REVENUES Rental OPERATING EXPENSES Selling Costs General and Administrative Repairs and Maintenance Utilities Contract Services Loss on Property Ifeld I'm Resale 1'0'1'A],,, OPERATING EAPENSES Nl LOSS NON01 REVE"NUES (EXI Interest Income Vrograrn Income Returned NIA' NONOVEIRATING REVFINUES (EXPENSI",S) NF, F LOSS BE 'FORE CAPITAL CONTRIBUTIONS CAPITAL CONTRIBUTIONS Grants CI [ANGE IN NET POSITION NI"I'POSITION, Beginning NETPOSITION, EInding The accompanying notes are an integral part ofthe financial statements, $ 1,602 65,722 6,903 5,825 2,092 6,798 65,6235 151025 -- . . ......... — (151,423) 1,638 (642,364) (640,726) ... . . .... ......... . ...... (792,149) 12,570 (779,579) 1,729,675 950,096 N WHEAT RIDGES I IOUSING AUTHORITY �S Increase (Decrease) in Cash Year Ended December 3 1 . 2013 CASI I FLOWS FROM OPERATING ACTIVITIES proceeds 1'rorn Sale of Property I leld for Resale Rebabilitiation of Investment Property Cash Payments to Vendors and Suppliers Net Cash Provided by Operating Activities CASI I FLOWS FROM NONCAPfTAL FINANCING ACTIVITIE'S Grants Received Program Income Returned Net Cash Used by Capital and Related Financing Activities CASH FLOWS FROM INVES'TING ACTIVITIES I increst Income Received NE "I'DECREASE, IN CASI I CASH. Beginning CASI I, EIndim RECONCILIATION OF NFIJ OPERATING; LOSS TO Nl-"1' (.',ASI I PROVIDED BY OPERATING ACTIVITIE"S Net Operating Loss AdJUStrueluS to Reconcile Net Operating Loss to Net Cash Provided by Operating Activities Uiangcs in Assets and Liabilities Related to Operations Property Held for Resale Accounts Payable Tenant Deposits Net Cash Provided by Operating Activities The accompanying notes are an integral part oftlic financial statements, 764,900 (237,788) (86,835) 440,277 12,570 (642364) (629,794) 1.638 (187�879) 908,679 720,800 S (15 1 ,4123) 627,734 (34,432) (1,602 440,277 I WHEAT RIDGE 00OSlN0AUTHORITY NO TO FINANCIAL STATEMENTS December 3l NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Wheat Ridge Housing Authority (the "Authudty") have been prepared in conformity with generally accepted accounting principles (GA'&f) as a0»liuuh|e to governmental entities. The Governmental Accounting Standards Board (G/\SB) ia the accepted standard-setting body for establishing governmental accounting and financial reporting principles. Following iom summary nf file more significant policies. Reporting Entity The financial reporting entity consists nf the Authority, organizations for which the Authority iu financially accountable, and organizations that raise and hold economic resources for the direct benefit of the Authority. All fluids, organizations, institutions, agencies, departments and offices that are not legally separate are part of the Authority. Legally separate organizations for which the Authority is financially accountable are considered part of the reporting entity. Financial accountability exists ifthe Authority appoints a voting majority o{<heorgunizatino`uguveroing board and is able ioirmpmmeits will un the organization, orifthe organization provides benefits to, or imposes financial burdens on, the Authority. Based ou the application of this criteria, the Authority does not include additional organizations within its reporting entity. Measurement Focus, Basis ofAccounting, and Financial Statement Presentation The Authority uses 4nenterprise fluid (o account for its operations. Enterprise funds are used tm account for operations that are Doumocd and ny#rztmd in a manner similar 1nprivate business enterprises, where a fee is charged to external users for goods or services. The financial statements are reported using the econondc resoitrcex rneasurenient and (lie accrual &u�iro/accmuudng. Revenues are recorded when carried 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. 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 ongoing operations, Operating expenses include the cost uf sales and services, administrative expenses, and depreciation oil capital assets. All revenues and expenses not meeting this definition are reported umnunupereViog revenues and expenses, 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 field For Result Property held for resale includes the acquisition and rehabilitation costs of investment property, and is reported ut the lower of000tor market value, M WHEAT RIDGE HOUSING AUTHORITY NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE 1: SUMMARY OF SIGNIFICANTACCOUNTING POLICIES (Continue(]) 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. NOTE 2: STEWARDSlill- ACCOUIN 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: CASH AND INVESTMENTS Deposits The Colorado public Deposit Protection Act (PDPA) requires local government entities to deposit cash in eligible 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, 2013, the Authority had bank deposits of $470,840 collateralized with securities held by the financial institution's agent but not in the Authority's name, "Fire Authority is required to comply with State statutes which specify investment instruments meeting defined rating, maturity, and concentration risk criteria in which local governments may invest, which include the following. State statutes do not address custodial risk, • 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 WHEAT RIDGE HOUSING AUTHORITY` NOTES TO FINANCIAL STAITMEWS December 31, 2013 RECUM CASH AND INVESTMENTS (Continued) Investments (Continued) 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 certain ratings established by the nationally recognized statistical rating organizations, depending on the type of investment. Concentration of Credit Risk - State statutes do not limit the amount the Authority may invest ill a single issuer, except for corporate securities. At December 31, 2013, the Authority had no investments. PROPERTY IIELD FOR RESALE During 201 the Authority received federal grants from Jefferson County in the amount of $900,000 to purchase and rehabilitate seven residential properties. At December 31, 2013, all properties had been sold, and the remaining program income of $642,364 was returned to Jefferson County. At December 31, 2013, Authority had one property held for resale. Following is a summary of transactions for the property held for resale for the year ended December 31, 2011 Balance mmm= 12/31/12 Additions Deletions 12/31/13 Acquisition kind Rehabilitation Costs ol'Investnient Property 869 583 179�040 06 4 L _. 74 21 49 7 COMMITMENTS AND CONTINGENCIES Cooperation Agreement The Authority has entered into ail agreement with the City of Wheat Ridge for contracted services. Under the terms of this agreement, the City will provide legal, planning and engineering set-vices, etc., as deemed necessary by the Authority. In addition, the City Manager or his designee will act as the Executive Director 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 governments. The Amendment is complex and subject to judicial interpretation, but management believes the Authority is exempt from the provisions of the Amendment. z WHEAT RIDGE HOUSING AUTHORITY NOTES TO FINANCIAL STATEMENTS December 31, 2013 NOTE 5: COMMITMENTS AND CONTINGENCIES (Continued) 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 Decernber 31, 2013, significant amounts of grant expenses have not, been audited but the Authority believes that subsequent audits will not have a material el'Iect on tile overall financial position of the Authority.