Audit Report Year End 09/30/2015 D
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fi COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
AUDIT REPORT
For the Year Ended September 30, 2015
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COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Table of Contents
September 30, 2015
Page
Independent Auditor's Report 1-2
Management's Discussion and Analysis (MD&A) 3-10
BASIC FINANCIAL STATEMENTS
Statement of Net Position - Proprietary Fund Type 11
Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Fund Type 12
Statement of Cash Flows - Proprietary Fund Type 13
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Notes to Financial Statements 14-30
SUPPLEMENTAL INFORMATION
alCombining Schedule of Assets, Liabilities and Net Position 31
Combining Schedule of Revenues, Expenses and Changes in Fund Net Position 32
Farm Worker Subsidized Housing Program 33-36
Certificate of Borrower 37-38
SINGLE AUDIT SECTION
: 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 39-40
Independent Auditor's Report on Compliance for each Major Program and on
Internal Control over Compliance Required by OMB Circular A-133 41-43
Schedule of Findings and Questioned Costs 44-47
j, Summary Schedule of Prior Year Findings 48
Corrective Action Plan 49-51
ISCHEDULE OF EXPENDITURES OF FEDERAL AWARDS 52
MANAGEMENT LETTER 53-55
FINANCIAL DATA SCHEDULE 56-61
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Barton,
1111111111,-Fr 13137 66th Street,Largo,FL 33773
1 HOPI Gonzalez Phone:(727)344-1040 Fax: (727) 533 8483
& Myers, P.A. www.bartoncpas.co117
Certified Public Accountants
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Independent Auditor's Report
Board of Commissioners
Collier County Housing Authority
Immokalee, Florida
We have audited the accompanying financial statements of the Collier County Housing Authority("Authority")as
of and for the year ended September 30, 2015, and the related notes to the financial statements, which
collectively comprise the Authority's 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.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit.We conducted our
audit in accordance with auditing standards generally accepted in the United States of America and the standards
applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of
the United States.Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free from material misstatement.
j 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
Opinion
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In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of the Collier County Housing Authority,as of September 30,2015,and the changes in financial position
and cash flows for the year then ended in accordance with accounting principles generally accepted in the United
States of America.
Other Matters
Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management's
discussion and analysis on pages 3 through 10 be presented to supplement the basic financial statements.
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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 financial statements that collectively
comprise the Collier County Housing Authority's basic financial statements. The accompanying Financial Data
Schedule is presented for additional analysis and is not a required part of the financial statements.The schedule
of expenditures of federal awards is presented for purposes of additional analysis as required by U.S.Office of
Management and Budget Circular A-133,Audits of States,Local Governments,and Non-Profit Organizations,and
is also not a required part of the basic financial statements.
This other information is the responsibility of management and was derived from and relates 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 Financial Data Schedule and the schedule of expenditures of federal 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 15,2016,on our
consideration of the 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
I 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 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 Authority's internal control over financial reporting and compliance.
Aaiih. 4 ' i t 1/1"16/P4.
Barton, Gonzalez&My/. - .
Certified Public Accou an
March 15,2016
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COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Management Discussion and Analysis
September 30, 2015
As the management of the Collier County Housing Authority ("the Authority"), we offer the readers of the
Authority's basic financial statements this narrative overview and analysis of the financial activities of the
Authority for the fiscal year ended September 30, 2015. We encourage readers to consider the information
presented here in conjunction with the Authority's basic financial statements elsewhere in this report.
Financial Highlights
• The Authority's total net position decreased by $299,128 during fiscal year ended 2015. Total net
position was $8,754,635 and $9,053,763 for FYE 2015 and 2014 respectively.
• The total operating expenses of all Authority programs (including depreciation expense) decreased
by$344,936 during fiscal year ended 2015.
• At the close of fiscal year ended 2015, the Authority's assets exceeded its liabilities by $8,754,635.
Using This Annual Report
The Report includes three major sections, the "Management's Discussion and Analysis (MD&A)", "Basic
Financial Statements", and "Supplemental Information":
MD&A
- Management's Discussion and Analysis
Basic Financial Statements
- Basic Financial Statements
Statement of Net Position
Statement of Revenues, Expenses, and Changes in Net Position
Statement of Cash Flows
- Notes to Basic Financial Statements
Supplemental Information
-As listed in the Table of Contents
The primary focus of the Authority's basic financial statements is on both the Authority as a whole and the
major individual programs. Both perspectives allow the user to address relevant questions, broaden a basis
for comparison (year to year or Authority to Authority), and enhance the Authority's accountability.
The basic financial statements are designed to be corporate-like in that all business type activities are
consolidated into columns that add to a total for the entire Authority.
These Statements include a Statement of Net Position, which is similar to a balance sheet. The Statement
of Net Position reports all financial and capital resources for the Authority. The statement is presented in the
1 format where assets minus liabilities, equals"Net Position", formerly known as equity and net assets. Assets
j. and liabilities are presented in order of liquidity, and are classified as "current" (convertible into cash within
one year), and "non-current".
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COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Management Discussion and Analysis
September 30, 2015
Basic Financial Statements
The focus of the Statement of Net Position ("Unrestricted Net Position") is designed to represent the net
available liquid (non-capital) assets, net of liabilities, for the entire Authority. Net Position (formerly equity
and net assets) are 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 that have
constraints placed on the assets by creditors (such as debt covenants), grantors, contributors, laws,
regulations, etc.
Unrestricted Net Position: Consists of Net Position that does not meet the definition of"Net Investment
in Capital Assets", or"Restricted Net Position".
The basic financial statements also include a Statement of Revenues, Expenses and Changes in Net
Position: (similar to an Income Statement). This Statement includes operating revenues, such as rental
income, operating expenses such as administrative, utilities, maintenance, and depreciation, and non-
operating revenue and expenses such as capital grant revenue, investment 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, the Statement of Cash Flows is included, which discloses net cash provided by, or used for
operating activities, non-capital financing activities, and from capital and related financing activities.
The Authority consists of exclusively Enterprise Funds. Enterprise funds utilize the full accrual basis of
3 accounting. The Enterprise method of accounting is similar to accounting utilized by the private sector
accounting.
Many of the programs maintained by the Authority are required by the Department of Housing and Urban
Development. Others are segregated to enhance accountability and control.
The Authority's Programs
The Authority has many programs that are consolidated into a single enterprise fund. The major programs
consist of the following:
Farm Labor Housing - Under the Rural Development-Farm Labor Housing Program, the Authority rents
units that it owns to low income households. The Authority had 641 units of farm labor housing units which
provide assistance to very-low income families. The Authority worked with Rural Development to remove
j 276 units from the Farm Labor Housing Program. Rural Development is providing $4,000,000 in low interest
financing to demolish or convert 50 units and rehabilitate the remaining 315 units of Farm Labor Housing.
This construction project is scheduled to begin February 2016.
COLLIER COUNTY HOUSING AUTHORITY
[1 Immokalee, Florida
Management Discussion and Analysis
September 30, 2015
Section A&B - The 276 units removed from the farm labor program, will be rehabilitated. They are operated
as non-subsidized affordable housing units.
" Horizon Village - In addition, the Authority owns and operates a 192-bed dormitory style facility that houses
unaccompanied male farm workers. The Authority continues to experience significant shortfalls in rental
0 income. Efforts are being made to make property self-sustaining.
Tenant Based Rental Assistance Program (TBRA) - The Tenant Based Rental Assistance Program is a
HUD HOME Grant funded through Collier County Government to provide rental assistance to homeless and
disabled families.
Housing Choice Vouchers - Under the Housing Choice Voucher Program, the Authority administers
ii contracts with independent landlords that own the property. The Authority subsidizes the family's rent
LI through housing assistance payments made to the landlord. The program is administered under an Annual
Contributions Contract (ACC) with the U.S. Department of Housing and Urban Development (HUD). HUD
3 provides annual contributions funding to enable the Authority to structure a lease that sets the participants'
rent at approximately 30% of household income.
Florida Family Literacy Initiative — The jumpstart program which provides early childhood training,
parenting classes, English classes, and parent/child activities, stopped operating in May 2015 due to lack of
funding.
The Authority as a Whole
The Authority's net position decreased by $299,128 during the fiscal year as detailed below. The Authority's
J revenues under the Farm Labor Housing Program are primarily from rental income & subsidies. Under the
Housing Choice Voucher Program revenues are from subsidies and grants received from HUD. The
Authority receives subsidies each month based on a pre-approved amount by HUD. Grants are drawn down
j based on need against a pre-authorized funding level.
1 By far, the largest portion of the Authority's net position reflects its investment in capital assets (e.g. land,
building, equipment and construction in progress). The Authority uses these capital assets to provide
housing services to its tenants; consequently, these assets are not available as a source of funds for future
spending. The unrestricted net position of the Authority is available for the future use to provide program
1� services.
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COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Management Discussion and Analysis
September 30, 2015
E.,, Statement of Net Position
The following table reflects the condensed Statement of Net Position compared to prior year. The Authority
is engaged only in Business-Type Activities.
Table 1 —Statement of Net Position
Comparative Statement of Net Position
September 30,
2015 2014 Variance
Assets
. Unrestricted current assets $ 1,115,560 $ 880,066 $ 235,494
Restricted current assets 2,399,292 2,731,993 (332,701)
3 Non-current assets _ 7,877,448 8,343,737 (466,289)
Total assets 11,392,300 11,955,796 (563,496)
Liabilities
Current liabilities 508,876 548,669 (39,793)
Non-current liabilities 2,128,789 2,353,364 (224,575)
Total liabilities 2,637,665 2,902,033 (264,368)
Total Net Positon $8,754,635 $ 9,053,7.63 $ (299,128)
A.
Net position
Net investment in capital assets $ 6,259,448 $ 6,619,237 $ (359,789)
Restricted 2,224,257 2,631,282 (407,025)
Unrestricted _ 270,930
(196,756) 467,686
Total net position $8,754,635 $ 9,053,763 $ (299,128)
3 There was a decrease in total net position of$299,128 due mainly to depreciation, and the reduction in HUD
and USDA subsidies.
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COLLIER COUNTY HOUSING AUTHORITY
lmmokalee, Florida
Management Discussion and Analysis
September 30, 2015
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Table 2—Statement of Revenues, Expenses and Changes in Net Position
0 The following schedule compares the revenues and expenses for the current and previous fiscal year.
Statement of Revenues, Expenses and Changes in Net Position are as follows:
0 Comparative Statement of Revenues, Expenses and Changes in Net Position
September 30,
n2015 2014 Variance
Operating Revenues
Rental revenues $ 1,547,684 $ 1,335,922 $ 211,762
] HUD rants
g 3,184,746 3,243,424 (58,678)
Other governmental grants 684,895 828,595 (143,700)
Other revenues 419,614 388,285 31,329
': Total operating revenues 5,836,939 5,796,226 _ 40,713
Operating Expenses
Administrative 880,481 1,074,996 (194,515)
Tenant services 55,861 58,544 (2,683)
Utilities 104,111 108,578 (4,467)
Ordinary maintenance/operation 560,950 581,456 (20,506)
Protective services 88,381 87,406 975
General expense 360,306 372,014 (11,708)
Housing assistance payments 3,169,311 3,209,582 (40,271)
Depreciation 1,149,787 1,221,548 (71,761)
Total operating expenses 6,369,188 6,714,124 (344,936)
Operating income (loss) (532,249) (917,898) _ 385,649
Non-operating revenues/expenses
Interest revenue,unrestricted 10,008 27,287 (17,279)
Interest expense (33,849) (34,733) 884
Fraud recovery (14,258)
Gain (loss)on disposition 10,559 -_ 10,559
Non-operating revenues/expenses — (13,282) 6,812 _ (20,094)
Increase(decrease) net position (545,531) (911,086) 365,555
Contributions-capital grants 246,403 - 246,403
Net position,beginning of year 9,053,763 9,964,849 (911,086)
Net position,end of year $ 8,754,635 $ 9,053,763 $ (299,128
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COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Management Discussion and Analysis
_,' September 30, 2015
Major Factors Affecting the Statement of Revenues, Expenses and Changes in Net Position
Operating revenues had an increase in tenant revenue in the Section A&B (business activities) offset by a
decrease in subsidies and grants in the TBRA program, the USDA program, and the Housing Choice
Voucher Programs. Operating expenses decreased mainly due to the decrease in housing assistance
payments in the Housing Voucher Program and administrative expenses.
Budgetary Highlights
For the year ended September 30, 2015, individual program or grant budgets were prepared by the Authority
and were approved by the Board of Commissioners. The budgets were prepared in accordance with
accounting procedures prescribed by the applicable funding agency.
Capital Assets and Debt Administration
As of September 30, 2015, the Authority's investment in capital assets was $6,259,448 (net of accumulated
depreciation and long term debt). This investment in capital assets includes land, buildings, equipment, and
construction in progress.
The Authority had total long-term liabilities as of September 30, 2015 in the amount of $2,128,789. These
are in the USDA Farm Labor Program and the Horizon Village Program. These debts have been incurred to
meet its mission of providing low income rural housing in the Collier County area.
Additional information on the Authority's capital assets and debt administration can be found in the Notes to
Basic financial statements, which are included in this report.
Capital Assets
As of year-end, the Authority had $7,877,448 invested in a variety of capital assets as reflected in the
following schedule.
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COLLIER COUNTY HOUSING AUTHORITY
lmmokalee, Florida
Management Discussion and Analysis
September 30, 2015
Table 3—Capital Assets at Year End
Capital Assets at Year End (Net of Accumulated Depreciation)
September 30,
2015 2014 Variance
Non-depreciable:
Land $ 2,568,713. $ 2,568,713 $ -
I2,568,713 2,568,713 -
Depreciable:
Buildings 29,711,789 29,456,386 255 403
Construction in Progress 410,228 9,000 401,228
Equipment 2,048,749 2,021,382 27,367
32,170,766 31,486,768 683,998
Accumulated depreciation ._ (26,862,031) 125,712,244 _ (1,149,787,
1 Total 5,308,735 5,774,524
(465,789)
Capital assets, net $ 7,877,448 $ 8,343,237 $ (465,789)
Factors Affecting Next Year's Budget
It is uncertain of the impact the upcoming rules changes regarding housing assistance payments grants will
have on the Authority or the Section 8 Voucher Programs. It is anticipated that administrative fees and grant
subsidy may decrease in the Housing Choice Voucher Program due to continued federal budget constraints.
I Economic Factors
Significant economic factors affecting the Authority are as follows:
• Federal funding provide by Congress to 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
3 therefore the amount of rental income
• Inflationary pressure on utility rates, supplies and other costs
• Local development pressures affecting the market rents and demand for affordable housing
• Salary and benefits costs increases (e.g. health insurance cost increase).
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COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Management Discussion and Analysis
September 30, 2015
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Contacting the Authority's Financial Management
The financial report is designed to provide a general overview of the Authority's finances for all those with an
interest. If you have questions about this report or wish to request additional infornmedimn, please contact
�' Oscar Hentschel, Executive Director at Collier County Housing Authority, 1800 Farm Worker Way,
Immokalee, Florida, 34142, telephone number (239) 657-3048.
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Collier County Housing Authority
Immokalee, Florida
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Statement of Net Position- Proprietary Fund Type
September 30,2015
3 ASSETS AND DEFERRED OUTFLOWS OF RESOURCES
Current Assets:
Cash and cash equivalents $ 818,460
Cash and cash equivalents- restricted 2,399,292
Tenants receivable,net
of allowance for doubtful accounts of$40,516 60,772
Accounts receivable-government 86,071
Prepaid expenses 106,888
Supplies inventory, net
of allowance for obsolescence of$4,819 43,369
Total current assets 3,514,852
Noncurrent Assets:
Capital Assets
Nondepreciable capital assets 2,568,713
3 Depreciable capital assets,net 4,898,507
Construction in progress 410,228
Total capital assets 7,877,448
Total noncurrent assets 7,877,448
f Deferred Outflows of Resources
Total assets and deferred outflows of resources $ 11,392,300
LIABILITIES,DEFERRED INFLOWS OF RESOURCES,AND NET POSITION
Current Liabilities:
Accounts payable and accrued liabilities $ 143,517
Tenant security deposits 139,122
Accrued compensated absences 16,066
Accrued interest payable 4,499
Unearned revenue 38,076
Current maturities of notes payable 61,596
Current maturities of bonds payable 106,000
Total current liabilities 508,876
Noncurrent Liabilities:
Accrued compensated absences 16,069
Other liabilities(FSS escrow) 35,913
Notes payable 564,807
Bonds payable 1,512,000
Total noncurrent liabilities 2,128,789
Total liabilities 2,637,665
Deferred Inflows of Resources
Net Position:
Net investment in capital assets 6,259,448
Restricted net position 2,224,257
Unrestricted net position 270,930
Total net position 8,754,635
Total liabilities,deferred inflows of resources, and net position $ 11,392,300
See auditor's report
The notes to the financial statements are an integral part of this statement.
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Collier County Housing Authority
Immokalee, Florida
Statement of Revenues, Expenses and Changes in Fund
Net Position - Proprietary Fund Type
For the Year Ended September 30, 2015
Operating revenues:
Tenant rental revenue (net) $ 1,547,684
HUD operating grants 3,184,746
Other government grants 684,895
Other revenue 419,614
Total operating revenues 5,836,939
Operating expenses:
Administration 880,481
Tenant services 55,861
Utilities 104,111
Ordinary maintenance 560,950
Protective services 88,381
General expenses 360,306
Housing assistance payments 3,169,311
Depreciation 1,149,787
Total operating expenses 6,369,188
Operating loss (532,249)
Nonoperating revenue and expense:
Interest expense (33,849)
Interest income 10,008
Gain on sale of capital assets 10,559
Net nonoperating expense (13,282)
Net loss (545,531)
Contributions - capital grants 246,403
Decrease in net position (299,128)
Net position, beginning of year 9,053,763
Net position, end of year $ 8,754,635
See auditor's report.
The notes to the financial statements are an integral part of this statement.
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Collier County Housing Authority
lmmokalee, Florida
Statement of Cash Flows- Proprietary Fund Type
aiFor the Year Ended September 30,2015
Cash flows provided from operating activities:
:I Cash received from tenants and others $ 1,959,577
Cash paid for goods and services (1,384,257)
Cash paid to employees for services (762,565)
Cash paid for housing assistance payments (3,169,311)
HUD PHA grants received 3,184,746
Other government grants 670,655
Net cash provided from operating activities 498,845
5 Cash flows used by capital and related financing activities:
Proceeds from capital grants 246,403
Acquisition of capital assets (683,998
Proceeds from disposal of capital assets 10,559)
Payments of interest on notes and bonds (34,149)
Payments of principal on notes and bonds (387,194)
Proceeds from notes and bonds payable 219,150
Net cash used by capital and related financing activities (629,220)
Cash flows provided from investing activities:
Interest on investments 10,491
Sales of investments, net 78,850
Net cash flows provided from investing activities 89,341
r Net decrease in cash and cash equivalents (41,043)
k, Cash and cash equivalents, beginning of year 3,258,795
Cash and cash equivalents, end of year $ 3,217,752
Reconciliation of operating loss to net
cash provided from operating activities:
Operating loss: $ (532,249)
Adjustments to reconcile operating loss to
net cash provided from operating activities:
Depreciation 1,149,787
Increase in tenants, accounts receivable-government,
accounts receivable-other (21,442)
Decrease in prepaid expenses 34,943
Increase in supplies inventory (36,670)
Decrease in other assets 500
Decrease in accrued compensated absences (28,297)
Increase in unearned revenue 4,007
Decrease in accounts payable, accrued liabilities
and security deposits 48,227
Decrease in other liabilities (23, 507)
Total adjustments 1,031,094
Net cash provided from operating activities $ 498,845
ISee auditor's report
The notes to the financial statements are an integral part of this statement.
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COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Notes to Financial Statements
September 30, 2015
NOTE 1: Summary of Significant Accounting Policies and Organization:
A. Organization:Collier County Housing Authority(°'the Authority")is a ublic body corporate P y orat p e and politic
pursuant to Chapter 421 Laws of the State of Florida which was organized to provide low rent
2 housing for qualified individuals in accordance with the rules and regulations prescribed by the U.S.
Department of Housing and Urban Development(HUD) and other federal agencies.
The Authority has been a recipient of several loans and grants from Rural Housing Services (RHS)
since 1971 under Project No 09-011-05914055 pursuant to Sections 514 and 516 of the Housing Act
of 1949, as amended. The Rural Housing Services programs are designed to provide decent, safe
3 and sanitary low-rent housing and related facilities for domestic farm laborers.
Effective July 1, 1992, the Board of Commissioners of Collier County transferred all of its HUD
Housing Assistance Payments programs to the Authority,pursuant to an Assumption and Inter-local
agreement.The transfer was approved by the U.S.Department of Housing and Urban Development
pursuant to a Contract of Novation between the Authority, the County and HUD.
The Authority has agreed to undertake the development and operation of certain low rent housing
projects and to provide decent,safe and sanitary housing for eligible families pursuant to Section 8 of
the Housing Assistance Act by means of Housing Assistance Payments to owners through Annual
Contributions Contract number A-3402V(Housing Choice Vouchers,Housing Assistance Program).
B. Reporting Entity: In determining how to define the reporting entity,management has considered all
I potential component units.The decision to include a component unit in the reporting entity was made
by applying the criteria set forth in Section 2100 and 2600 of the Codification of Governmental
Accounting and Financial Reporting Standards and Statement No. 14, (amended) of the
I Governmental Accounting Standards Board: The Financial Reporting Entity. These criteria include
manifestation of oversight responsibility including financial accountability, appointment of a voting
majority, imposition of will, financial benefit to or burden on a primary organization, financial
accountability as a result of fiscal dependency, potential for dual inclusion, and organizations
included in the reporting entity although the primary organization is not financially accountable. Based
upon the application of these criteria, the reporting entity has the following component units.
Blended Component Unit:
CCHA Land Development Corporation - this component unit has been blended for financial
statement presentation.
CHA Management Consulting Corporation - This component unit has been blended for financial
statement presentation.
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IICOLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Notes to Financial Statements
September 30, 2015
NOTE 1: Summary of Significant Accounting Policies: (Continued)
9 Reporting Entity: (Continued)
Blended Component Unit: (Continued)
The basic financial statements of the Collier County Housing Authority include Farm Labor Housing
Loans and Grants (Rural Housing Service Capital Projects Program),Section 8 Housing Assistance
Programs under Annual Contributions Contract A-3402, Horizon Village (a business activity) which
provides affordable housing to low to moderate income families, local grants(Homeless Prevention
Rapid Re-housing Program), and the CCHA Land Development Corporation,which is a non-profit
corporation organized, incorporated and controlled, by the Collier County Housing Authority for the
advancement of affordable housing.
C. Basis of Presentation and Accounting: In accordance with uniform financial reporting standards
for HUD housing programs, the basic financial statements are prepared in accordance with U.S.
generally accepted accounting principles (GAAP).
Based upon compelling reasons offered by HUD,the Authority reports its basic financial statements
as a special purpose government engaged solely in business-type activities,which is similar to the
governmental proprietary fund type(enterprise fund),which uses the accrual basis of accounting and
the flow of economic resources measurement focus. Revenues are recorded when earned and
expenses are recorded at the time the liabilities are incurred. Pursuant to GASB Statement No. 62,
Codification of Accounting and Financial Reporting Guidance Contained in Pre-November 30, 1989
FASB and A/CPA Pronouncements, certain accounting and financial reporting guidance is applied in
the preparation of the basic financial statements, unless those pronouncements conflict with or
contradict GASB pronouncements.
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Generally accepted accounting principles for state and local governments requires that re
classified for accounting and reporting q resources be
9 p g purposes into the following three net position categories:
Net Investment in Capital Assets - Capital assets, net of accumulated depreciation and
outstanding principal balances of debt attributable to the acquisition, construction or
improvement of those assets.
Restricted - Net position whose use by the Authority is subject to externally imposed
stipulations that can be fulfilled by actions of the Authority pursuant to those stipulations or
that expire by the passage of time. Such assets include assets restricted for capital
acquisitions and debt service.
Unrestricted-Net position that is not subject to externally imposed stipulations.Unrestricted
net position may be designated for specific purposes by action of management or the
Authority Board or may otherwise be limited by contractual agreements with outside parties.
D. Budgets:Budgets are prepared on an annual basis for each major operating program and are used
as a management tool throughout the accounting cycle. The capital fund budgets are adopted on a
"project length" basis. Budgets are not, however, legally adopted nor legally required for basic
financial statement presentation.
15
El
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
[I Notes to Financial Statements
September 30, 2015
NOTE 1: Summary of Significant Accounting Policies: (Continued)
E. Cash and Cash Equivalents:For purposes of the Statement of Cash Flows,the Authority considers
all highly liquid investments(including restricted assets)with a maturity of three months or less when
purchased and non-negotiable certificates of deposit to be cash equivalents.
F. Interprogram Receivables and Payables:Interprogram receivables/payables,when present,are all
current, and are the result of the use of the Rural Housing Services Program as the common
paymaster for shared costs of the Authority. Cash settlements are made periodically, and all
interprogram balances net zero. Offsetting due to/due from balances are eliminated for the basic
financial statement presentation.
ElG. Investments: Investments,when present,are recorded at fair value.Investment instruments consist
only of items specifically approved for public housing agencies by HUD and the U.S Department of
: Agriculture. Investments are either insured or collateralized using the dedicated method. Under the
dedicated method of collateralization, all deposits and investments over the federal depository
insurance coverage are collateralized with securities held by the Authority's agent in the Authority's
name. It is the Authority's policy that all funds on deposit are collateralized in accordance with both
y'. HUD requirements and requirements of the State of Florida.
H. Inventories: Inventories (consisting of materials and supplies) are valued at cost using the first in,
first out(FIFO) method. If inventory falls below cost due to damage,deterioration or obsolescence,
the Authority establishes an allowance for obsolete inventory. In accordance with the consumption
method, inventory is expensed when items are actually placed in service.
1 t-
I. Prepaid Items: Payments made to vendors for goods or services that will benefit periods beyond the
fiscal year end are recorded as prepaid items.
J. Use of Estimates: The preparation of basic financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the
basic financial statements and reported amounts of revenues and expenditures during the reporting
period.Actual results could differ from those estimates.
K. Fair Value of Financial Instruments:The carrying amount of the Authority's financial instruments at
September 30,2015 including cash,investments,accounts receivable,and accounts payable closely
f
approximates fair value.
I
I
16
T:
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Notes to Financial Statements
September 30,2015
NOTE 1: Summary of Significant Accounting Policies: (Continued)
1 L. Capital Assets:
1. Book Value: All purchased fixed assets are valued at cost when historical records are
available. When no historical records are available, fixed assets are valued at estimated
historical cost.
Land values were derived from development closeout documentation. Donated fixed assets
are recorded at their fair value at the time they are received. Donor imposed restrictions are
deemed to expire as the asset depreciates. All normal expenditures of preparing an asset for
use are capitalized when they meet or exceed the capitalization threshold.
2. Depreciation:The cost of buildings and equipment is depreciated over the estimated useful
i. lives of the related assets on a composite basis using the straight-line method. Depreciation
commences on modernization and development additions in the year following completion.
The useful lives of buildings and equipment for purposes of computing depreciation are as
follows:
Buildings 20-30 years
Modernization 15 years
Office and other furniture 3-5 years
I] 3. Maintenance and Repairs Expenditures: Maintenance and repairs expenditures are
charged to operations when incurred. Betterments in excess of$500 are capitalized.When
buildings and equipment are sold or otherwise disposed of, the asset account and related
accumulated depreciation account are relieved, and any gain or loss is included in
operations.
M. Compensated Absences:Compensated absences are those absences for which employees will be
paid, such as vacation and sick leave computed in accordance with GASB Statement No 16. A
liability for compensated absences that is attributable to services already rendered and that are not
contingent on a specific event that is outside the control of the Authority and its employees, is
accrued as employees earn the rights to the benefits. Compensated absences that relate to future
services or that are contingent on a specific event that is outside the control of the Authority and its
employees are accounted for in the period in which such services are rendered or in which such
events take place.
N. Other Post Employment Benefits (OPEB): In relation to its employee benefit programs, the
Authority does not provide any Other Post Employment Benefits, as outlined under GASB 45.
1
17
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Notes to Financial Statements
September 30, 2015
n ......4 wa.a....M.M.....*scmaxempz,n. , . _
NOTE 1: Summary of Significant Accounting Policies: (Continued)
O. Litigation Losses: The Authority recognizes estimated losses related to litigation in the period in
which the occasion giving rise to the loss occurred, the loss is probable and the loss is reasonably
I"
estimable.
P. Annual Contribution Contracts: Annual Contribution contracts provide that HUD shall have the
authority to audit and examine the records of public housing authorities. Accordingly, final
determination of the Authority's financing and contribution status for the Annual Contribution
Contracts is the responsibility of HUD based upon financial reports submitted by the Authority.
Q. 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;injuries to employees;and natural disasters.The
Authority carries commercial insurance for all risks of loss, including workers' compensation and
- employee health and accident insurance.Settled claims resulting from these risks have not exceeded
commercial insurance coverage in any of the past three fiscal years.Additionally,there have been no
significant reductions in insurance coverage from the prior year.
R. Use of Restricted Assets: It is the Authority's policy to first apply restricted resources when an
expense is incurred for purposes for which both restricted and unrestricted net positions are
available.
S. Operating Revenues and Expenses:The principal operating revenues of the Authority's enterprise
fund are charges to customers for rents and services. Operating expenses for the Authority's
enterprise fund include the cost of providing housing and services, administrative expenses and
depreciation on capital assets. Revenues and expenses not meeting this definition are reported as
nonoperating revenues and expenses.
NOTE 2: Deposits and Investments:
For purposes of the Statement of Cash Flows, the Authority considers all highly liquid investments
(including restricted assets)with a maturity of three months or less when purchased and non-negotiable
certificates of deposit to be cash equivalents. There were no noncash investing, capital and financing
activities during the year
A. HUD Deposit and Investment Restrictions - HUD requires authorities to invest excess HUD
program funds in obligations of the United States,certificates of deposit or any other federally insured
instruments.
HUD also requires that deposits of HUD program funds be fully insured or collateralized at all times.
Acceptable security includes FDIC/FSLIC insurance and the market value of securities purchased
and pledged to the political subdivision. Pursuant to HUD restrictions,obligations of the United States
are allowed as security for deposits. Obligations furnished as security must be held by the Authority
5-.,, or with an unaffiliated bank or trust company for the account of the Authority.
18
1
0
a. COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
flNotes to Financial Statements
September 30,2015
0 ..„,_,_
NOTE 2: Deposits and Investments: (Continued)
B. Risk Disclosures
0 1. Interest Rate Risk:As a means of limiting its exposure to fair value losses arising from rising
interest rates, the Authority's investment policy limits the Authority's investment portfolio to
maturities not to exceed two years at time of purchase.
At September 30, 2015,the Authority's deposits and investments were not limited and all of
which are either available on demand or have maturities of less than two years.
2. Credit Risk: This is risk that a security or a portfolio will lose some or all of its value due to a
real or perceived change in the ability of the issuer to repay its debt. The Authority's
investment policy is that none of its total portfolio may be invested in securities of any single
issuer, other than the US Government, its agencies and instrumentalities.
C. Deposit and Investment Risks
3 The Authority held the following deposits and investments (there are no investments)at September
30, 2015.
Carrying
Deposits: Value
Demand deposits $3,017,752
Time deposits 200,000
$3,217,752
1 Custodial Credit Risk: Exposure to custodial credit related to deposits exists when the Authority
holds deposits that are uninsured and uncollateralized; collateralized with securities held by the
pledging financial institution, or by its trust department or agent but not in the Authority's name; or
collateralized without a written or approved collateral agreement. Exposure to custodial credit risk
related to investments exists when the Authority holds investment that are uninsured and
unregistered,with securities held by the counterparty or by its trust department or agent but not in the
1 Authority's name.
The Authority's policy as it relates to custodial credit risk is to secure its uninsured deposits with
collateral,valued at no more than market value,at least at a level of 100%of the uninsured deposits
and accrued interest thereon.The investment policy also limits acceptable collateral to U.S.Treasury
securities obligation of federal agencies, securities of government-sponsored agencies, and other
instruments which may be approved by the U.S.Department of HUD.As required by Federal 12 U.S.
C.A.,Section 1823(e),all financial institutions pledging collateral to the Authority must have a written
collateral agreement approved by the board of directors or loan committee.
At September 30, 2015, the Authority was not exposed to custodial credit as defined above,
19
COLLIER COUNTY HOUSING AUTHORITY
4. Immokalee, Florida
:I Notes to Financial Statements
September 30, 2015
g ___ ,________, _
NOTE 2: Deposits and Investments: (Continued)
D. Deposit and Investment Risks(Continued)
rj Investment Credit Risk:The Authority's investment policy limits investments to those allowed by the
U.S. Department of HUD.These investment limitations are described in Note 1.Credit risk is the risk
that an issuer or other counterparty to an investment will not fulfill its obligations.The Authority has no
formal policy limiting investments based on credit rating,but discloses any such credit risk associated
with their investments by reporting the credit quality ratings of investments in debt securities as
determined by nationally recognized statistical rating organizations-rating agencies-as of the year
end. Unless there is information to the contrary, obligations of the U. S. government or obligations
explicitly guaranteed by the U. S. government are not considered to have credit risk and do not
require disclosure of credit quality.
There are no investments as of September 30, 2015.
Concentration of Investment Credit Risk: Exposure to concentration of credit risk is considered to
exist when investments in anyone issuer represent a significant percent of total investments of the
Authority. Investments issued or explicitly guaranteed by HUD-approved instruments are excluded
from this consideration.
At September 30, 2015, the Authority had no concentration of credit risk as defined above.
NOTE 3: Receivables
Tenant Receivables
Dwelling rents (net of allowance for doubtful accounts of$29,085) $43,626
Fraud receivables (net of allowance for doubtful accounts of$11,431) 17.146
1 $60,772
Due from Other Governments
Rural Rental Assistance (September 30, 2015 allocation) $55,543
HCV program 889
ROSS program 4,099
CDBG receivable 25.540
$86,071
20
i
COLLIER COUNTY HOUSING AUTHORITY
lmmokalee, Florida
Notes to Financial Statements
September 30,2015
NOTE 4: Interprogram Receivables and Payables
Business
USDA Activities HCV ROSS Total
AIR- USDA $ $ 1,761,291 $ (28,600) $ (1,371) $1,731,320
A/R Business Activities (1,761,291) - (4,475) - (1,765,766)
A/R- HCV 28,600 4,475 - 4,099 37,174
A/R- Ross 1,371 - (4,099) - (2,728)
•
11,731,320) $1,765,766 $9261.7=41 $ 2,728 $ -
0 Intercompany Receivable $ 1,776,406 $ 15,115 $ 37,174 $ 1,371 $1,830,066 1
Intercompany Payable (45,086) (1,780,881) - (4,099) (1,830,066)
$ 1,731,320 $(1,765,766} $ 37,174 $ (2,728) $ -
All interprogram receivables and payables have been eliminated on the financial statements.
NOTE 5: Prepaid Expense
Prepaid insurance at September 30, 2015 was 106,888.
NOTE 6: Capital Assets
The capital assets (at cost)of the Collier County Housing Authority at September 30, 2015 consisted of
the following:
Balance at Balance at
Sept.30,2014 Additions Deletions Transfers Sept.30,2015
Nondepreciable capital assets:
Land $ 2,568,713 $ $ - $ - $ 2,568,713
Construction in progress 9,000 401,228 - - 410,228
2,577,713 401,228 - - 2,978,941
Depreciable capital assets:
Buildings and improvements 29,456,367 255,403 - 19 29,711,789
Furniture,equipment,vehicles 2,021,402 27,366 - (19) 2,048,749
31,477,769 282,769 - - 31,760,538
Accumulated Depreciation:
Buildings and improvements (23,869,442) (1,143,495) (25,012,937)
Furniture,equipment,vehicles (1,842,803) (6,292) 1 (1,849,094)
(25,712,245) (1,149,787) - 1 (26,862,031)
Total Capital Assets,net $ 8,343,237 $ (465790) $ - $ 1 $ 7,877.448
21
a
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Notes to Financial Statements
September 30, 2015
NOTE 7: Long-Term Debt—Line of Credit:
A. The outstanding balance of Line of Credit Notes in the Business Activities (Horizon Village) at
September 30, 2015 was$299,961.
.tA]. Interest and principal shall be paid as follows:
a. Annual principal payments of$20,000 each plus accrued interest shall be payable in arrears
on the 15th day of November 2005, and on the 15th day in the month of November in each
subsequent year of the loan term;
b. If the due date for any payment hereunder would fall on a day that is not a business day(i.e.
a day that is a Saturday, Sunday or banking holiday),then the payment shall instead be due
on the next succeeding business day; and
c. Interest shall cease to accrue on any amount of principal paid in advance of its due date.
•
Interest Rate- The unpaid principal balance of the Note, shall bear interest, while current, at the
Applicable Interest Rate. As used in this Note, the term "Applicable Interest Rate" means:
• Since the interest paid in connection with this Loan is exempt from income taxation by the United
States of America and by the State of Florida,the Applicable Interest Rate shall be an annual rate
of interest equal to one percent(1 %) less than the "highest prime rate" of interest published in
the Wall Street Journal, but not less than three percent (3%) per annum.
The outstanding balance of Notes Payable at September 30, 2015 was $299,961. The notes are
payable each year in the amounts listed below:
September 30, Principal Interest Total 1
'- 2016 20,000 8,999 28,999
2017 20,000 8,399 28,399
2018 20,000 7,798 27,798
1 2019 20,000 7,198 27,198
2020 20,000 6,599 26,599
2021-2025 100,000 23,995 123,995
,
2026-2030 99,961 8,995 108,956
$ 299,961 $ 71,983 $ 371,944
Interest expense for the year ended September 30, 2015 was $9,241, There was no capitalized
interest expense for the year ended September 30, 2015. The debt is secured by the property
purchased in conjunction with the above financing as reported above
1
22
0
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Notes to Financial Statements
September 30, 2015
0 _
NOTE 7: Lonq-term debt—Line of Credit: (Continued)
jB. The outstanding balance of Line of Credit Notes in the Farmers Home Program at September 30,
2015 was$0 and the Line of Credit Notes in the Component Unit(CCHA Land Inc.)at September 30,
2015 was$0. The notes were transferred to Business Activities and paid off during the year from the
proceeds from new debt as follows:
Promissory note to bank in the amount of$219,150 (dated September 29,2015)at an interest rate of
3.5%. Payable in 84 monthly installments of interest and principal of$2,950. Final payment due by
September 29, 2022. Unsecured.
The outstanding balance of the notes payable at September 30, 2015 was$219,150. The notes is
payable each year in the amounts listed below:
p9 September 30, Principal Interest Total
2016
28,184 7,221 35,405
2017 29,186 6,219 35,405
n 201 30,224 5,180 35,404
II 2019 31,299 4,106 35,405
2020 32,413 2,992 35,405
2021-2025 67,844 2,484 70,328
$ 219,150 $ 28,202 $ 247,352
NOTE 8: Lona Term Debt:
Revenue Bonds Payable:Capital facilities are financed by debt which is guaranteed and subsidized by
U. S. Department of Agriculture, Rural Housing Services (RHS). The Authority presently has bonds
payable on its farm laborer housing projects which are due annually in installments of varying principal
and interest amounts. Revenue bonds payable at September 30, 2015 are as follows:
Collier County Housing Authority Revenue Bonds, Series D, 1%, due
annually on September 1 in principal amounts of$24,380 to$33,000 with
interest to September 1, 2023 $ 252,000
Collier County Housing Authority Revenue Bonds, Series E, 1%, due
annually on September 1 in principal amounts $27,000 to$36,000 with
interest to September 1, 2031 537,000
Collier County Housing Authority Revenue Bonds, Series F, 1%, due
annually on September 1 in principal amounts of$39,072 to$52,000 with
interest to September 1, 2032 829.000
Total long-term debt $1,618,000
23
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Notes to Financial Statements
September 30, 2015
,,,,,, z.....
9
NOTE 8: Long Term Debt: (Continued)
0 The revenues of the project are pledged to the payment of principal and interest on the revenue bonds.
The bonds are redeemable before maturity, at the option of the Authority, in inverse numerical and
maturity order, on any interest payment date upon giving 40 days written notice to Rural Housing
Services. Maturities of long-term debt for each of the five succeeding years and in the aggregate are as
follows at September 30, 2015:
Bond Principal
Series D Series E Series F Total
2016 30,000 31,000 45,000 106,000
2017 31,000 32,000 46,000 109,000
2018 31,000 32,000 46,000 109,000
2019 31,000 32,000 46,000 109,000
0 2020 32,000 32,000 47,000 111,000
2021-2025 97,000 167,000 241,000 505,000
20262030 0 175,000 254,000 429,000
2031-2035 0 36,000 104,000 140,000
$ 252,000 $ 537,000 $ 829,000 $ 1,618,000a
Bond interest
Series D Series E Series F Total
2016 2,520 5,370 8,290 16,180
2017 2,220 5,060 7,840 15,120
2018 1,910 4,740 7,380 14,030
2019 1,600 4,420 6,920 12,940
2020 1,290 4,100 6,450 11,840
2021-2025 1,920 15,590 25,180 42,690
20262030 0 7,090 12,940 20,030
2031-2035 0 360 1,560 1,920
$ 76,560 $ 134,750
Sinking Fund Debt Service Account: Under the terms of the revenue bonds,a sinking fund has been
established to provide debt service funding.After operation and maintenance requirements are met,the
Authority transfers to the sinking fund debt service account such amounts as may be due of interest and
principal on the bonds. The amount required to be transferred during the year ended September 30,
2015 in order to meet debt service requirements was $123,240 which was accomplished. The cash
balance in the sinking fund debt service account at September 30, 2015 was$1,760.
Sinking Fund Reserve Account: Immediately after each transfer to the sinking fund debt service
account, any excess funds are deposited in the sinking fund reserve account. Funds in the reserve
account are only withdrawn upon written prior approval of Rural Housing Services:
24
i
tl
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
0 Notes to Financial Statements
September 30,2015
a _
NOTE 8: Long Term Debt: (Continued)
Sinking Fund Reserve Account: (Continued)
The Authority is required to make monthly reserve deposits in the amount of$33,333 plus the amount of
any deficiency in prior deposits to the reserve account until funds and investments in the reserve account
shall equal $2,514,900. There were no deposits made (other than interest) into the account during the
year as the reserve account balance exceeded the$2,514,900 requirement(prior to the approved usage
of funds in July 2015 for capital improvements as noted below). The aggregate deposits to the reserve
account and interest earned for the year ended September 30, 2015 were $2,189,963 (after the
0 approved usage of funds for capital improvements as noted below)which was under the required annual
aggregate deposits.
rj
Withdrawals from the sinking fund reserve account are authorized for the following purposes:
a. To meet principal and interest payments due on the bonds in the event the sinking fund debt
service account balance is not sufficient for that purpose.
b. To pay costs of extraordinary repairs or replacements to the project which is not considered
current expenses.
c. To make improvements or extensions to the project.
d. For other purposes desired by the Authority which will promote its purpose without jeopardizing
the collectability of the bonds or underlying security.
e. To the extent the reserve account exceeds$2,514,900,to purchase bonds before maturity in the
prescribed manner.
Supplemental Information: (Schedule of Funding Reserve)
a. Investment Reserve Funds
Sinking Fund Debt Service Account (Principal and Interest)
r Beginning balance $ 0
Transfers to Debt Service Account including interest earned 125,000
Withdrawals for payment of principal and interest (123,240)
Ending balance 1,760
Sinking Fund Reserve Replacement Account
Beginning balance- less transfers to replacements and operations 2,513,445
Transfers to reserves including interest earned—net 6,675
Use of reserves for capital improvements ( 330,166)
IEnding balance 2,188 963
Total Investment Reserve Fund 2,189,963
Fully Funded Balance per Loan Agreement 2,514.900
1 Excess/(Deficiency) of Reserves on Hand S(324.93/1
25
ti
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Notes to Financial Statements
September 30, 2015
NOTE 8: Long Term Debt: (Continued)
:. b. Compliance with Bond Indentures Requirements:The Collier County Housing Authority,Farm
Worker Village,has met and exceeded the bond indenture and reserve requirements outlined in
r
this report, as reported in this note, when considering approved withdrawals from Rural
Development for long-term improvements.All interest earnings on invested funds are deposited
monthly by the Bank directly into the Housing Authority's cash account and transferred to the
reserve account.
Construction Fund The construction fund is used to account for grant and loan funds received from
Rural Housing Services and other sources and to record construction activities. During the year ended
September 30,2015,there were no expenditures from the Construction Fund for authorized construction
activity.
In the Rural Housing Services enterprise fund, reservations of unrestricted net position have been
established in conjunction with debt issuance requirements or policy directives as stipulated by the
respective aforementioned funds.
NOTE 9: State Housing Initiatives Partnership Business Activities (Horizon Village) Loan:
The outstanding balance of the SHIP Loan Payable at September 30, 2015 was$107,292.The loan is
payable each year in the amounts and at the interest(at 0% interest) listed below:
9 September 30, Principal Interest Total
2016 13,412 0 13,412
2017 13,412 0 13,412
2018 13,412 0 13,412
2019 13,412 0 13,412
2020 13,412 0 13,412
2021-2025 40,232 0 40,232
$ 107,292 $ 0 $ 107,292
I Interest expense for the year ended September 30, 2015 was $0. There was no capitalized interest
expense for the year ended September 30, 2015.
Interest: Interest on this Note shall be zero percent(0%) per annum; except that if the Authority fails to
pay this Note as required,the interest rate shall be twelve percent(12%)per annum from the date when
payment of this Note is due until the Authority pays it in full.The Authority did not fail to pay the principal
payment for FY 2015 and is therefore not required to pay future payments at 12% interest as of FY2015.
26
it
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Notes to Financial Statements
September 30,2015
NOTE 9:State Housing Initiatives Partnership Business Activities(Horizon Village)Loan:,(Continued)
-` Payments: Principal payments shall be deferred for a period of three years from date disbursed with
seventeen equal yearly payments of$13,412 due beginning on September 1, 2007 and continuing for
seventeen years thereafter until payment in full of $228,000 is received on August 1, 2024. The
Authority's total payment shall be $228,000.
NOTE 10: Schedule of Changes in Noncurrent Liabilities:
September 30,2014 September 30,2015
Long-Term Current Long-Term
Portion Portion Additions Payments Current Portion
Compensated Absences $
30216 $ 30216 $ - $ (28,297) $ Portion
$ 16,066
Other Liabilities(FSS Escrow) 59,420 - (23,507) 35,913
Notes Payable 645,728 42.719 219,150 (281,194) 564,807 61,596
Bonds Payable 1,618,000 106,000 (106,000) 1,512,000 106,000
$ 2,353,364 $ 178,935 $ 219,150 $ (438,998) $ 2,128,789 5 183,662
9 NOTE 11: Schedule of Changes in Net Position:
Net Investment Restricted Unrestricted
In Capital Assets Net Position Net Position Total
Balance,beginning of year $ 6,619,237 $ 2,631,282 $ (196,756) $ 9,053,763
Changes in net position - - (299,128) (299,128)
Changes in net investment in capital assets (359,789) - 359,789 -
Changes in restricted net position - (407,025) 407,025 -
/ Balance,end of year $ 6,259,448 $ 2,224,257 $ 270,930 $ 8,754,635
NOTE 12: Annual Contributions from HUD:
Annual Contributions Contract A-3402—Section 8 programs provide for housing assistance payments to
private owners of residential units on behalf of eligible low or very low-existing and moderately
rehabilitated housing covering the difference between the maximum rentals on a dwelling unit,and the
amount of rent contribution by a participating family and related administrative expense.The Authority is
also eligible to receive reimbursement for preliminary expenses prior to lease up. HUD contributions for
the Section 8 Housing Choice Voucher program for the year ended September 30, 2015 were
$3,133,390.
1
1
27
COLLIER COUNTY HOUSING AUTHORITY
3 immokalee, Florida
Notes to Financial Statements
September 30, 2015
8
NOTE 13: Economic Dependency
The Authority receives approximately 68%of its revenues from the U.S. Department of Agriculture and
the U.S. Department of Housing and Urban Development (HUD). If the amount of revenues received
from these federal agencies falls below critical levels, the Authority's reserves could be adversely
, affected.
0 NOTE 14: Commitments and Contingencies
Commitments
0 As of September 30, 2015, the Authority has a purchase commitment with a general contractor in the
amount of$9,488,000 related to rehabilitation of USDA Farm Labor Housing units. The construction
project will be funded with $9.2 million in USDA bond and grant funds as discussed in Note 18,
"Subsequent Events.
Contingencies
The Authority is subject to possible examinations made by Federal and State authorities who determine
compliance with terms,conditions,laws and regulations governing other grants given to the Authority in
the current and prior years.There were no such examinations for the year ended September 30, 2015.
However,the Authority was notified by the United States Department of A "USDA"
concerns over certain aspects of the operations of the USDA program. One of the concerns rased was
that the Authority was in excess of$430,000 above what was budgeted for operating and maintenance
for the 2014 fiscal year In addition, the USDA stated that there is an indication that project funds have
been utilized for purposes unrelated to Rural Development's housing project. The USDA asserts that
allowable expenses include those expenses that are directly attributable to housing project operations
and are necessary to carry out successful operations and that housing project funds may not be used for
"purposes unrelated to the housing project." As a result of the notification, the Authority engaged a
forensic auditor to determine the extent of co-mingling of funds and the amount of project funds that were
utilized for unallowable expenses. See "Note 18" for the results of the forensic audit. The amounts
determined to have been expensed by the USDA program have been adjusted and recorded as a
receivable from the respective other programs and recorded in the financial statements.
I
I
i
28
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
g
Notes to Financial Statements
September 30, 2015
NOTE 14: Commitments and Contingencies (Continued)
'fi
Litigation
As of September 30,2015,the Authority was involved with various litigations arising from operation of its
rural development housing program. In the opinion of the Authority's legal counsel such losses, if any
resulting from litigation would be adequately covered by insurance, except for the following:
The former Executive Director brought suit against the Authority and alleges a breach of contract and
wrongful termination and is seeking severance pay and payment of attorney fees from the Authority. The
A. Authority asserts that the former Executive Director was terminated for just cause and is not entitled to
severance pay. The Authority is contesting the lawsuit. It is not possible to predict the likelihood of an
unfavorable outcome. As the outcome is uncertain,there are no adjustments recorded in the financial
statements regarding this uncertainty.
NOTE 15: Related Party Transactions
There were no related party transactions for the year ended September 30, 2015.
NOTE 16: Leasing Activities (as Lessor):
The Authority is the lessor of dwelling units mainly to low-income residents.The rents under the leases
are determined generally by the resident's income as adjusted for eligible deductions regulated by HUD
and Rural Development. Leases may be cancelled by the lessee at any time.The Authority may cancel
the lease only for cause.
Revenues associated with these leases are recorded in the basic financial statements and schedules as
"Rental Revenue". Rental Revenue per dwelling unit generally remains consistent from year to year,but
is affected by general economic conditions which impact personal income and local job availability.
NOTE 17: Operating Leases:
The Authority is committed under a continuing non-cancelable lease for office space. This lease has
been accounted for as operating leases in the accompanying basic financial statements.The office lease
is not subject to an annual escalation clause. Future minimum lease payments required under these
leases are as follows:
Future minimum lease payments required under these leases are as follows:
September 30, Office Space
2015-2016 $ 7,725
P
29
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Notes to Financial Statements
September 30,2015
NOTE 18: Subsequent Events
n' Events that occur after the balance sheet date but before the financial statements were available to
be issued must be evaluated for recognition or disclosure. The effects of subsequent events that
II provide evidence about conditions that existed at the balance sheet date are recognized in the
accompanying financial statements.
The following subsequent event was recognized in the financial statement.
f The Authority underwent a forensic audit(see Note 14"Contingencies")to determine the amount of
funds expended in the USDA program related to other programs. As a result of the forensic audit
report issued In February 2016, the following intercompany receivable was recorded in the Rural
Housing program and is due from the Business Activities program:
j' 2013 business activity expenses paid by the USDA program $ 227,300
2014 business activity expenses paid by the USDA program 438,987
2015 business activity expenses paid by the USDA program 511,985
Total $ 1,178,272
Subsequent events, which provide evidence about conditions that existed after the balance sheet
date, require disclosure in the accompanying notes.
Management evaluated the activity of the Authority through March 15, 2016 and concluded that
nothing occurred subsequent to the balance sheet date that would require disclosure in the Notes to
the Financial Statements, except for the following:
Effective December 10,2015 the Authority entered into a Labor Housing Grant Agreement with the
United States Department of Agriculture(USDA). The Agreement provides for a grant in the amount
of$5,263,246. An additional$4,000,000 will be provided by the USDA in the form of a loan to the
Authority(via issuance of Revenue Bonds to the United States Department of Agriculture—Rural
Development) repaid over the term of 33 years at 1% interest. The purpose of the grant and bond
issue (total of$9,263,246) is to finance the rehabilitation of 315 units of Farm Labor Housing.
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0 Z U .E A
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Farm Worker Subsidized Housing Program
Supplemental Information
September 30,2015
The following is supplemental information requested by the U.S. Department of Agriculture—Rural Housing
Services (formerly Farmers Home Administration).
1. Schedule of Insurance Coverages
At September 30, 2015, the Authority had the following insurance coverage in effect:
Insurance Carrier Type of Coverage Amount of Coverage Term
Fidelity bond/Employee Dishonesty
Hartford Insurance Company $100,000 Deductible $2,000,000 07/12/15-07/12/16
Opticom Insurance
P Workers'Compensation Statutory 10/01/14-10/01/15
Florida PH Authority Insurance Automobile liability $500,000 05/01/15-05/01/16
ri
Li Florida PH Authority Insurance Property,Office Building&Personal $49,076,795 05/01/15-05/01/16
Property.Fire&Extended Coverage
(90%coinsurance)
Florida PH Authority Insurance General Liability Personal Injury, $2,000,000 05/01/15-05/01/16
products,advertising,property damage
US Liability Insurance Directors&Officers Liability $1,000,000 05/22/15-05/22/16
Fidelity&Deposit Company Employee dishonesty $100,000 07/12/15-07/12/16
ITT Harford Insurance Company Employee dishonesty(ERISA Bond) $100,000 07/12/15-07/12/16
2. Exemption from Real Estate and Income Taxes-The Authority is a public body corporate and
1 politic pursuant to Chapter 421, Laws of the State of Florida, which is subsidized by the federal
government.The Authority is not subject to federal,state income taxes,or local property taxes,nor is
it required to file federal and state income tax returns as a public body corporate and politic pursuant
to Chapter 423, Laws of the State of Florida Laws of the State of Florida.
3. Reserves-The Housing Authority has maintained adequate reserves for operations and Bond debt
service at September 30, 2015. See also notes to basic financial statements.
1 4. Accounting Records and Fixed Asset Control-The accounting records maintained are adequate
to facilitate budgetary reporting and analytical purposes. The fixed assets are also adequately
safeguarded by the Authority personnel.
5. Financial Reports-The financial reports included in this audit are in agreement with the accounting
records of the Authority after audit adjustments have been made.
I
33
1
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
1 Farm Worker Subsidized Housing Program
Supplemental Information
September 30,2015
6. Deposit Funds - We noted that deposit funds are adequately insured by the FDIC and properly
collateralized and are at or exceed the required reserve levels required under the Loan and Grant
Agreement as of September 30, 2015.
fl 7. Comments on Compliance and Administrative Internal Control - We have audited the basic
financial statements of the Collier County Housing Authority and have issued our report thereon
dated March 15, 2016.
We have also issued a report dated March 15, 2016,on our consideration of the 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 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 Authority's internal control over financial reporting and
compliance.
Finally, we have also issued a report on the Authority's compliance with the types of compliance
requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct
and material effect on each of the Authority's major federal programs for the year ended September
30, 2015. The Authority's major federal programs are identified in the summary of auditor's results
section of the accompanying schedule of findings and questioned costs.
8. Other Findings or Recommendations for the Period Ended September 30, 2015 — See the
schedule of findings and questioned cost as well as the management letter dated March 15,2016 for
findings and management comments.
9. The Required Schedule of Expenditures of Federal Awards along with required reports on
Internal Controls and Federal Compliance as outlined under Office of Management and Budget
(OMB) Circular A-133 were issued to the Authority as one report, as mandated by the Amended
Single Audit Act of 1996 Amendment(Public Law 104-156).
10. Accounts Receivable-Tenants - Tenants accounts receivable at September 30, 2015 totaling
1 $67,201 were accounts aged at ninety days (90) or less.
11.Accounts Payable consists of$44,382 at September 30, 2015. This balance which is payable to
reoccurring vendors is for services or purchases of ninety days (90) or less.
12. Management Fees - The Collier County Housing Authority is the owner of the Farm Worker
Subsidized Housing Program,and does not charge any management fees to administer this project.
1
34
{
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Farm Worker Subsidized Housing Program
Supplemental Information
September 30, 2015
13. Schedule of Financial Institutions Where the Housing Authority Maintains Its Bank Accounts
Name of Financial Institution Account Name Account Balance Classification
Florida Community Bank Certificates of Deposit $ 100,000 USDA Restricted
1255 Tamiami Trail CCHA Land,Inc. 6,596
Port Charlotte, FL 33953 106,596
0 Bank of America Section 8 Operation 206,782
PO Box 31590 Payroll Account 12 561
0 Tampa. Florida 33631-3590 Operational Maintenance-RD 9,036
TBRA Operating 295
228,674
First 1 Bank USDA Reserve Account 1,989,963 USDA Restricted
1300 N. 15 St Suite 2 COCC Payroll Account 90,000
Immokalee,FL 34142 CCHA Land,Inc. 34,221
Horizon Village Operating 15,410
AB Revenue Account 255,803
AB Security Deposit Fund 47,853
2,433,250
First Florida Integrity Bank Security Deposit Fund RD 128,130
PO Box 10910 Certificates of Deposit 100,000 USDA Restricted
Naples, FL 341 01-091 0 Bond&Sinking Fund 1,760
Revenue Account USDA 115,364
TBRA HOME Operating 42,642
Section 8-Admin Funds 53,473
1 Section 8-Escrow 7,475
Construction Account
-
448,844
Petty Cash&Return Check Fund 388
$ 3,217,752
IThe above amounts were confirmed with the institutions listed at September 30, 2015.
14. Schedule and Computation of Current Return to Owners Allowed-Not applicable, because the
Authority is a legal public Authority and not a private enterprise.
I
35
1
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Farm Worker Subsidized Housing Program
Supplemental Information
September 30, 2015
0 Weaa...MM
15. Schedule of Changes in Owners and Board of Commissioners-This is a local Public Authority
aand can never change its owners. The following is a list of the current Board of Commissioners.
Commissioner Expiration of Term Address
'2 Z Floyd Crews October 27, 2015 Immokalee, Florida
David B. Denson November 7, 2018 Naples, Florida
Bill McDaniel October 17, 2018 Naples, Florida
Rebecca M. Vaccariello November 7, 2017 Naples, Florida
Cynthia Buckley November 4, 2016 Naples, Florida
16.Schedule of Rental Information
1 Number of Gross Potential
Unit Size Units Rental Rate Months Rent
One bedroom unit 33 $ 425 12 $ 168,300
rj Two bedroom unit 111 451 12 600,732
Three bedroom unit 102 477 12 583,848
Four bedroom unit 69 499 12 413,172
315
i
�$ 1,766,052
The Authority is planning to demolish/convert 50 units and rehabilitate the
remaining 315 units. The rehabilitation project started in early 2016.
Actual Rental Revenue Percentage Amount
Tenants 55.44% $ 851,991
RHA rental assistance subsidy 44.56% 684,895
$1,536 886
Note 1- Rental rates were effective October 1, 2008. Management provides
for the monthly collection of rent.
17. Real Estate Taxes-The Authority is a local public body corporate and politic and is tax exempt by
State of Florida, Section 423.
36
0
g4 •t . ."?.< <4 •
llviufr 1iIx
0 4,----40,*------,
March 15, 2016
USDA Rural Development Office
420 South State Road 7
0 Suite#166
Royal Palm Beach, FL 33414
In accordance with the criteria specified in Section 5; Paragraph 4.32 C. of the USDA Rural Development
Handbook(HB-2-3560)for the year ended September 30, 2015,the borrower must self-certify that Collier
County Housing Authority (the Authority) is in compliance with the nine performance standards. The
following
is a summary of our compliance with the performance standards.
1. The required accounts are properly maintained and tracked separately.The accounts we maintain
are marked below:
0 X Operating Account(s) X Security Deposit Account
X Tax and Insurance Account X Reserve Account
X Other Accounts-. Debt Service
2. The payments from operating account(s) are disclosed and accurately represented.
1_ 3 The reserve account(s):
I a. is on schedule with the Agency required minimum funding requirements;
b. is maintained in a supervised bank account that requires the Agency's countersignature on
all withdrawals;
c. is on .schedule with contributions to the reserve account for the current year with the
Agency required minimum funding; and
d. has no encumbrances on the reserve funds.
4. The tenant security deposits accounts are fully funded and are maintained in separate accounts.
5. The payment of owner return was: Not Applicable(owner is a government entity)
N/A paid in the amount of$-0-for the 2015 fiscal year and was in accordance with the Agency's
requirements OR
N/A not paid during the reporting year OR
N/A not allowable due to our nonprofit status OR
N/A not allowable due to our nonprofit status. An asset management fee in the amount of$-0
was paid for 2015 fiscal year.
37
I
ll 6. The borrower has maintained proper insurance in accordance with the requirements in 7CFR
3560.105. Coverage maintained for the Authority is as follows:
X Liability Insurance - Flood Insurance
0 X Property Insurance _ Earthquake Insurance
X Fidelity Bond X Other: Public Officials Liability
7. All financial records are adequate and suitable for examination.
8. There have been no changes in the ownership of the Farm Worker Subsidized Housing Program,
other than those approved by the Agency and identified in the certification. The Board of
0
Commissioners is active and maintains oversight responsibilities for the project.
9. Exemptions from Real Estate and Income Taxes: The Authority is a public body corporate and
politic pursuant to Chapter 421, Laws of the State of Florida, which is subsidized by the Federal
eri
Government. The Authority is not subject to Federal, State income taxes, or Local property taxes,
nor is it required to file Federal and State income tax returns as a public body corporate and politic
pursuant to Chapter 423, Laws of the State of Florida.
I certify that the above is true, accurate and is properly supported by documentation kept in our files
6/14.____,_ ___Irtivisirms.
Oscar = c el,
Executive Director
Collier County Housing Authority
I
I
38
A,
Barton, 13137- 66th Street,Largo,FL 33773
Gonzalez Phone:(727)344-1040 Fax: (727)533 8483
& Myers, P.A. www.bartoncpas.com
1
a Certified Public Accountants
Li
REPORT ON INTERNAL CONTROL OVER FINANCIAL
REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
.. ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
Board of Commissioners
4} Collier County Housing Authority
Immokalee, Florida
n
We have audited, in accordance with the auditing standards generally accepted in the United States of
_1 America and the standards applicable to financial audits contained in Government Auditing Standard issued
.i by the Comptroller General of the United States, the financial statements of the Collier County Housing
Authority(the"Authority"), as of and for the year ended September 30, 2015, and the related notes to the
financial statements,which collectively comprise the Authority's basic financial statements,and have issued
our report thereon dated March 15, 2016.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Authority's internal
control over financial reporting (internal control)to determine the audit procedures that are appropriate in the
circumstances for the purpose of expressing our opinions on the financial statements,but not for the purpose
of expressing an opinion on the effectiveness of the Authority's internal control. Accordingly, we do not
express an opinion on the effectiveness of the Authority's internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management
or employees, in the normal course of performing their assigned functions,to prevent, or detect and correct,
misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in
internal control, such that there is a reasonable possibility that a material misstatement of the entity's
financial statements will not be prevented, or detected and corrected on a timely basis. A significant
deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a
material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this
section and was not designed to identify all deficiencies in internal control that might be material weaknesses
or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in
internal control that we consider to be material weaknesses. However,material weaknesses may exist that
have not been identified.
i
-i
1
i
39
I
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Authority's financial statements are free from
material misstatement, we performed tests of its compliance with certain provisions of laws, regulations,
contracts,and grant agreements, noncompliance with which could have a direct and material effect on the
determination of financial statement amounts. However, providing an opinion on compliance with those
provisions was not an objective of our audit,and accordingly,we do not express such an opinion.The results
of our tests disclosed no instances of noncompliance or other matters that are required to be reported under
Government Auditing Standards.
We noted certain matters that we reported to management of the Authority in a separate letter dated March
15, 2016.
0 Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance
and the results of that testing, and not to provide an opinion on the effectiveness of the entity's internal
control or on compliance. This report is an integral part of an audit performed in accordance with
Government Auditing Standards in considering the entity's internal control and compliance.Accordingly,this
y.
communication is not suitable for any other purpose.
I AfAi■ i . / P .
Barton, Gonzalez& 414'e ' .A.
Certified Public Accountants
,, March 15, 2016
I
I
I]
1
Barton, 13137 -66th Street,Largo,FL 33773
lappor
Gonzalez Phone:(727)344-1040 Fax: (727)533 8483
& Myers, P.A. www.bartoncpas.com
ACertified Public Accountants
Li
INDEPENDENT AUDITOR'S REPORT ON COMPLIANCE FOR EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE
REQUIRED BY OMB CIRCULAR A-133
r.
Board of Commissioners
Collier County Housing Authority
Immokalee, Florida
Report on Compliance for Each Major Federal Program
11
We have audited the Collier County Housing Authority's(the"Authority")compliance with the types of compliance
requirements described in the OMB Circular A-133 Compliance Supplement that could have a direct and material
effect on each of the Authority's major federal programs for the year ended September 30,2015.The Authority's
major federal programs are identified in the summary of auditor's results section of the accompanying schedule of
findings and questioned costs.
' Management's Responsibility
Li
Management is responsible for compliance with the requirements of laws, regulations, contracts, and grants
applicable to its federal programs.
Auditor's Responsibility
Our responsibility is to express an opinion on compliance for each of the Authority's major federal programs based
on our audit of the types of compliance requirements referred to above.We conducted our audit of compliance in
accordance with auditing standards generally accepted in the United States of America;the standards applicable
to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United
States; and OMB Circular A-133,Audits of States, Local Governments, and Non-Profit Organizations. Those
standards and OMB Circular A-133 require that we plan and perform the audit to obtain reasonable assurance
about whether noncompliance with the types of compliance requirements referred to above that could have a direct
and material effect on a major federal program occurred.An audit includes examining,on a test basis,evidence
about the Authority's compliance with those requirements and performing such other procedures as we considered
necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each major federal
program. However, our audit does not provide a legal determination of the Authority's compliance.
Basis for Qualified Opinion on Rural Rental Assistance Payments Program
As described in the accompanying schedule of findings and questioned costs,the Collier County Housing Authority
did not comply with requirements regarding CFDA 10.427 Rural Rental Assistance Payments Program as
described in finding number 2015-001 for allowable costs and finding number 2015-002 for eligibility.Compliance
with such requirements is necessary, in our opinion,for the Collier County Housing Authority to comply with the
requirements applicable to that program.
41
• Qualified Opinion on Rural Rental Assistance Payments Program
In our opinion, except for the noncompliance described in the Basis for Qualified Opinion on Rural Rental
Assistance Payments Program paragraph, the Authority, complied, in all material respects, with the types of
compliance requirements referred to above that could have a direct and material effect on the Rural Rental
Assistance Payments Program for the year ended September 30,2015.
Basis for Qualified Opinion on Housing Choice Voucher Program
As described in the accompanying schedule of findings and questioned costs,the Collier County Housing Authority
did not comply with requirements regarding CFDA 14.871 Housing Choice Voucher Program as described in
finding number 2015-003 for eligibility. Compliance with such requirement is necessary, in our opinion, for the
Collier County Housing Authority to comply with the requirements applicable to that program.
Qualified Opinion on Housing Choice Voucher Program
0 In our opinion, except for the noncompliance described in the Basis for Qualified Opinion on Housing Choice
Voucher Program paragraph, the Authority, complied, in all material respects, with the types of compliance
requirements referred to above that could have a direct and material effect on the Housing Choice Voucher
Program for the year ended September 30, 2015.
ElOther Matters
The Collier County Housing Authority's response to the noncompliance findings identified in our audit is described
in the accompanying corrective action plan.The Collier County Housing Authority's response was not subjected to
the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the
response.
rjReport on Internal Control Over Compliance
Management of the Authority is responsible for establishing and maintaining effective internal control over
compliance with the types of compliance requirements referred to above.In planning and performing our audit of
compliance, we considered the Authority's internal control over compliance with the types of requirements that
could have a direct and material effect on each major federal program to determine the auditing procedures that
are appropriate in the circumstances for the purpose of expressing an opinion on compliance for each major
4 federal program and to test and report on internal control over compliance in accordance with OMB Circular A-133,
but not for the purpose of expressing an opinion on the effectiveness of internal control over compliance.
j Accordingly,we do not express an opinion on the effectiveness of the Authority's internal control over compliance.
Our consideration of internal control over compliance was for the limited purpose described in the preceding
paragraph and was not designed to identify all deficiencies in internal control over compliance that might be
material weaknesses or significant deficiencies and therefore,material weaknesses or significant deficiencies may
exist that were not identified. However, as discussed below, we identified certain deficiencies in internal control
over compliance that we consider to be material weaknesses.
A deficiency in internal control over compliance exists when the design or operation of a control over compliance
does not allow management or employees,in the normal course of performing their assigned functions,to prevent,
or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely
basis.A material weakness in internal control over compliance is a deficiency,or combination of deficiencies, in
internal control over compliance,such that there is a reasonable possibility that material noncompliance with a type
of compliance requirement of a federal program will not be prevented,or detected and corrected,on a timely basis.
We consider the deficiencies in internal control over compliance described in the accompanying schedule of
findings and questioned costs as items 2015-001, 2015-002, and 2015-003 to be material weaknesses.
42
I
I
A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in
internal control over compliance with a type of compliance requirement of a federal program that is less severe
than a material weakness in internal control over compliance, yet important enough to merit attention by those
charged with governance.
The purpose of this report on internal control over compliance is solely to describe the scope of our testing of
internal control over compliance and the results of that testing based on the requirements of OMB Circular A-133.
Accordingly,this report is not suitable for any other purpose.
0 6(A- --•/. it PI gt ".4.
Barton, Gonzalez&M/ P. .
Certified Public Accou an
March 15, 2016
1
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43
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Schedule of Findings and Questioned Costs
September 30, 2015
Section I - Summary of Auditor's Results:
Financial Statements
Type of report issued on the financial statements: Unmodified
Internal control over financial reporting:
Material weakness(es) identified? No
Significant deficiencies identified not considered
to be material weaknesses? None Reported
Noncompliance material to the financial statements noted? No
Federal Awards
Internal controls over major program:
Material weakness(es) identified? Yes
Significant deficiencies identified not considered
to be material weaknesses? No
Type of reports issued on the compliance for major programs:
14.871 Section 8—Housing Choice Voucher Qualified
10.427 Rural Rental Assistance Payments Qualified
Any audit findings disclosed that are required to be reported
in accordance with Circular A-133, Section .510(a)? Yes
Identification of major program: 14.871 Section 8—Housing Choice Voucher
10.427 Rural Rental Assistance Payments
10.415 Rural Rental Housing Loans
Dollar threshold used to distinguish between
Type A and Type B programs: $300,000
Did the Authority qualify as a low-risk auditee? Yes
44
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Schedule of Findings and Questioned Costs
September 30, 2015
_ .,... n
Section II - Financial Statement Findings:
There were no findings relating to this area for the year ended September 30, 2015.
Section III - Federal Awards:
The following findings were disclosed relating to this area for the year ended September 30, 2015:
1 2015-001 Inadequate Controls Over Disbursements and Expenses
Program: U.S. Department of Agriculture: Rural Rental Assistance Payments (CFDA 10.427)
Type of Finding: Internal Control—Material Weakness, Compliance—Allowable Costs
1 Statement of Condition
The Authority should have the necessary controls over disbursements and expenses to assure
I that the program is only charged reasonable and necessary expenses of the USDA program.
The Authority improperly allocated expenses to the USDA program that belonged to other
programs. As a result,and after correction,other programs (mostly business activities) owe the
Rural Housing program $1,776,406.
Criteria
1 The Authority should have the necessary controls over disbursements and expenses to assure
that each program is only charged reasonable and necessary expenses of the program. 7 CFR
3560.303(b) states "expenses charged to project operations, whether for management agent
services or other expenses, must be reasonable,typical, necessary and show a clear benefit to
the residents of the property. Services and expenses charged to the property must show value
added and be for authorized purposes." In addition,7 CFR 3560.303(b) (1)states the following:
"allowable expenses include those expenses that are directly attributable to housing project
operations and are necessary to carry out successful operations."Also, 7 CFR 3560.303(b) (2)
(ii) specifically states that housing project funds may not be used for"purposes unrelated to the
housing project."
Questioned Costs $1,776,406
Effect
The Authority retained a forensic auditor to determine the amount of expenses charged to the
USDA program that should have been charged to other programs.
As a result of the outside forensic audit and the financial audit, the Authority recorded the
following adjustments to each program:
2013 business activity expenses paid by the USDA program $ 227,300
u 2014 business activity expenses paid by the USDA program 438,987
2015 business activity expenses paid by the USDA program 511,985
Other 2015 audit adjustments: 36,903
Prior and current year amount due from business activities: 561.231
Total $ 1,776,406
45
ICOLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Schedule of Findings and Questioned Costs
September 30, 2015
2015-001 Inadequate Controls Over Disbursements and Expenses (Continued)
Cause
The USDA released certain units back to the Authority in 2013. However,the Authority continued
to account for the units as if they were still in the USDA program and as such, expenses that
should have been charged to business activities continued to be charged to the USDA program.
Recommendation
The Authority should establish controls to ensure that only reasonable, necessary and
appropriate expenses are charged to each fund. We recommend that a study be performed to
determine a reasonable allocation of expenses. In addition,we recommend only direct costs be
I paid out of each program and indirect costs be allocated (whenever possible) from the COCC
using a reasonable basis for the allocation of costs.
2015-002 USDA Tenant Files
Program: U.S. Department of Agriculture: Rural Rental Assistance Payments (CFDA 10.427)
Type of Finding: Internal Control— Material Weakness, Compliance—Eligibility
Statement of Condition
The Authority did not have adequate controls over tenant files to assure it is maintaining
adequate documentation,that income and deductions are calculated properly,and that units are
inspected annually. In 25 USDA files tested, we noted the following errors:
• 1 error noted where the lease agreement did not show the correct rent (should have been
$499 for 3 bedroom, but the lease agreement showed$477 for a 3 bedroom)
• 3 errors noted in income calculations which affected the tenant and Rental Assistance
portions of the rent
• 3 errors (2 files)were noted where 2 children had incorrect birth dates(in one unit)listed and
a separate tenant (in another unit) also had an incorrect birth date listed.
• We also noted 8 unit inspections not completed during the year for A/B units used for USDA
rental assistance. These units should be inspected annually and any repairs needed
corrected.
Criteria
Regulations require that the Authority perform certain prescribed verification procedures and
obtain the required documentation to assure that tenants qualify for the USDA program and that
amounts submitted to the USDA for rental assistance are calculated according to USDA rules. In
addition, units should be inspected annually.
Questioned Costs None
Effect
The Housing Authority is not in compliance with applicable USDA regulations.
46
I COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Schedule of Findings and Questioned Costs
September 30, 2015
2015-002 USDA Tenant Files (Continued)
Cause
The Authority did not maintain adequate controls over required documentation in tenant files and
did not perform unit inspections on certain properties.
Recommendation
The Authority should improve review procedures and increase training to employees and
reviewers to insure that the Authority is in compliance with USDA rules for verification of tenant
information and calculation of tenant rents and that units are annually inspected.
. 2015-003 HCV Enterprise Income Verification (EIV)
Program: U.S. Department of HUD: Section 8—Housing Choice Voucher (CFDA 14.871)
Type of Finding: Internal Control—Material Weakness, Compliance— Eligibility
Statement of Condition
The Authority did not have adequate controls over tenant files to include the required Enterprise
Income Verification ("Ely") documentation. The majority of the tenant files (20 out of 25 files)
tested in the Housing Choice Voucher program did not show evidence of using the EIV system.
Criteria
HUD's EIV regulation at 24 CFR 5.233 (See Notice PIH 2010-19) requires the use of the EIV
system in its entirety to verify tenant employment and income during mandatory recertifications of
3
family composition and income and to reduce administrative and subsidy payment errors.
Questioned Costs None
3 Effect
The Authority did not document the use of the EIV tool for some tenants to verify tenant
employment and income during reexaminations. Not using the EIV system could lead to subsidy
payment errors.
Cause
I The Authority had some employee turnover in the HCV program and the person conducting the
certifications and recertifications was not aware of the requirement to document that the EIV
system was being used.
Recommendation
The Authority should establish controls to ensure that the EIV system is being used to verify
tenant employment and income during recertifications.
47
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COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
3 Summary Schedule of Prior Year Findings
September 30, 2015
3 A',MX e...... ,,MS*1.9.97.4.970.. ,
The prior audit report for the year ended September 30, 2014 contained no findings.
3
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48
I
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Corrective Action Plan
September 30, 2015
The following is the corrective action planned by the Authority regarding the current findings:
Finding
No.
2015-001 Inadequate Controls Over Disbursements and Expenses
Federal Award Finding
I Program: U.S. Department of Agriculture: Rural Rental Assistance Payments (CFDA 10.427)
Type of Finding: Internal Control—Material Weakness, Compliance—Allowable Costs
Statement of Condition
The Authority should have the necessary controls over disbursements and expenses to assure
that the program is only charged reasonable and necessary expenses of the USDA program.
The Authority improperly allocated expenses to the USDA program that belonged to other
programs. As a result,and after correction,other programs(mostly business activities)owe the
Rural Housing program $1,776,406.
IRecommendation
The Authority should establish controls to ensure that only reasonable, necessary and
appropriate expenses are charged to each fund. We recommend that a study be performed to
determine a reasonable allocation of expenses. In addition,we recommend only direct costs be
paid out of each program and indirect costs be allocated (whenever possible) from the COCC
using a reasonable basis for the allocation of costs.
3 Action Taken
We concur with the recommendation and are in the process of establishing controls to ensure
I that only direct costs are paid by programs. For all expenses, whenever possible, the
purchase/work orders are being placed by project, and request that each project be invoiced
separately.
IWe have established separate bank accounts for each project and only project's income and
expenses are posted to these accounts;to prevent comingling of funds.
I We started operation as of October 1st, 2015 of the COCC (Central Office Cost Center). The
Central Office Cost Center will operate like a property management company, it is a Business
unit within the CCHA that earns income from fees and/or by overseeing other business activity.
The general finance/administrative expenses are charged to the COCC. This provides greater
flexibility to support the mission of CCHA,this system enhancements will allow CCHA to operate
more efficiently.
49
COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
9 Corrective Action Plan
September 30, 2015
] ... _ _
2015-002 USDA Tenant Files
_;! Federal Award Finding
Program: U.S. Department of Agriculture: Rural Rental Assistance Payments (CFDA 10.427)
Type of Finding: Internal Control—Material Weakness, Compliance—Eligibility
Statement of Condition
13 The Authority did not have adequate controls over tenant files to assure it is maintaining
adequate documentation,that income and deductions are calculated properly,and that units are
inspected annually. In 25 USDA files tested, we noted the following errors:
• 1 error noted where the lease agreement did not show the correct rent (should have been
$499 for 3 bedroom, but the lease agreement showed $477 for a 3 bedroom)
• 3 errors noted in income calculations which affected the tenant and Rental Assistance
portions of the rent
• 3 errors(2 files)were noted where 2 children had incorrect birth dates(in one unit) listed and
a separate tenant (in another unit) also had an incorrect birth date listed.
s • We also noted 8 unit inspections not completed during the year for A/B units used for USDA
rental assistance. These units should be inspected annually and any repairs needed
corrected.
Recommendation
Regulations require that the Authority perform certain prescribed verification procedures and
obtain the required documentation to assure that tenants qualify for the USDA program and that
amounts submitted to the USDA for rental assistance are calculated according to USDA rules. In
addition, units should be inspected annually.
Action Taken
We concur with the recommendation and are in the process of establishing controls (including
review procedures) to ensure that USDA program requirements are being followed.
• Even though the lease agreement showed incorrect rent of $477 (a typo) the tenant was
charged the correct rent of$499.00. Previous lease agreements showed correct rent charge
of$499.
• For the income calculation errors,there was one error in which the pass-rate that was used
was 2% (it had changed to 0.6% in February 2015) in the calculation of assets that affected
the tenant's RA;the other 2 files were corrected.
• The errors on birth dates were corrected. There was no change in RA.
• Unit inspections for USDA tenants in A&B were not done, because we were expecting for
these tenants to be moved to the USDA side at any moment.All repairs reported by tenants
were corrected via work-order.
We are doing 100% file reviews to ensure a second set of eyes assess the file for correct and
complete information, and catch and resolve any discrepancies as soon as possible.
50
1 COLLIER COUNTY HOUSING AUTHORITY
Immokalee, Florida
Corrective Action Plan
September 30, 2015
a; -
2015-003 HCV Enterprise Income Verification (EIV)
Federal Award Finding
Program: U.S. Department of HUD: Section 8—Housing Choice Voucher (CFDA 14.871)
Type of Finding: Internal Control— Material Weakness, Compliance—Eligibility
Statement of Condition
The Authority did not have adequate controls over tenant files to include the required Enterprise
Income Verification ("EIV") documentation. The majority of the tenant files (20 out of 25 files)
tested in the Housing Choice Voucher program did not show evidence of using the EIV system.
Recommendation
The Authority should establish controls to ensure that the EIV system is being used to verify
tenant employment and income during recertifications.
a
Action Taken
We concur with the recommendation and are in the process of establishing controls (including
review procedures) to ensure that the EIV system use is properly documented.
1
Even-though files did not show proof of EIV(Enterprise Income Verification),the CCHA had been
utilizing the EIV system, but due to changes in staffing,reports were not printed from September
2014 to August 2015.Evidence was shown that the EIV reports were printed prior to September
2014 and after August 2015.
To avoid these issues, we will revise the checklist to include all policies and procedures.
Effective Date: March 15, 2016
Contact Information
Oscar Hentschel, Executive Director
Collier County Housing Authority
1800 Farm Worker Way
Immokalee, FL 34142
(239) 657-3649
51
I]
Collier County Housing Authority
' Immokalee,Florida
],-- Schedule of Expenditures of Federal Awards
For the Year Ended September 30,2015
Federal Program or Disbursements
CFDA Award or
FEDERAL GRANTOR Number Amount Expenditures
U.S.Department of Agriculture
Rural Rental Housing Debt(Loan) ' + 10.415 $ 1,618,000 $ 1,618,000
Rural Rental Assistance Payments * + 10.427 684,895 684,895
Total U.S.Department of Agriculture 2,302,895 2,302,895
U.S.Department of HUD
Section 8 Housing Assistance Payments
Housing Choice Voucher Program * + 14.871 3,133,390 3,133,390
3
Home Partnership-TBRA '* 14.239 27,597 27,597
Community Development Block Grant *" 14.218 246,403 246,403
3
Resident Opportunity&Supporting Services "' 14.870 23,759 23,759
f.
Total U.S.Department of HUD 3,431,149 3,431,149
TOTAL $ 5,734,044 $ 5,734,044
Notes to the Schedule of Expenditures of Federal Awards
A. Basis of Accounting and Presentation
This schedule includes the federal grant activity of the Collier County Housing Authority and is presented on the full accrual basis
of accounting. The Information In this schedule is presented In accordance with the requirements of OMB Circular A-133,Audits
of States,Local Governments,and Non-Profit Organizations. Therefore,some amounts presented In this schedule may differ
Y
from amounts presented in,or used in the preparation of the basic fanancial statements.
i.
B. Reconciliation of Total Federal Awards Expenditures to Financial Data Schedule
FDS Lne 70600 HUD PHA Grants $ 3,184,746
FOS Line 70610 Capital Grants 246,403
FDS Line 70800 Other Government Grants 684,895
FDS Une 343&351 Rural Rental Loan Debt 1,618,000
II $ 5,734,044
C. Other Considerations in Determining Major and Non-major Program Requirements
The Authority Is administering housing under the U.S.Department of Agriculture's Rural Housing Services Program,The financing
for construction of this housing project was provided by the Agency for Farm labor Housing Loans&Grants(Federal CFDA#10.415).
At September 30,2015,the balance of the long-term debt due to the U .Department of Agriculture's Rural Housing Services was
$1,618,000.This loan balance has been considered as a part of the computation to determine the major and non-major program
requirement under OMB Circular A-133.
D. Program Type
' Type A Program
**Type B Program
+ Major Program
See auditor's report
52
Barton,
N �� 13137 - 66th Street,Largo,FL 33773
r. Gonzalez Phone:(727)344-1040 Fax:(727) 533 8483
& Myers, P.A. www.bartoncpas.com
1 A Ccrtificd Public Accountants
n
March 15, 2016
Mr. Oscar Hentschel, Executive Director
and Board of Commissioners
I Collier County Housing Authority
Immokalee, Florida
Dear Mr. Hentschel and Board of Commissioners:
In planning and performing our audit of the financial statements of the Collier County Housing Authority for
the year ended September 30, 2015, in accordance with auditing standards generally accepted in the
-' United States of America, we considered the Authority's internal control over financial reporting (internal
_3 control) as a basis for designing our auditing procedures for the purpose of expressing our opinion on the
financial statements, but not for the purpose of expressing an opinion on the effectiveness of the
organization's internal control. Accordingly, we do not express an opinion on the effectiveness of the
Authority's internal control.
However, during our audit we became aware of certain matters that are an opportunity for strengthening
internal controls and operating efficiency.This letter does not affect our report dated March 15,2016,on the
financial statements of the Collier County Housing Authority.
-1 We will review the status of these comments during our next audit engagement.We have already discussed
.i these comments and suggestions with various Authority personnel, and we will be pleased to discuss it in
further detail at your convenience, to perform any additional study of these matters, or to assist you in
implementing the recommendations. Our comments are summarized as follows:
.I
Current year management comments:
"1
Rental Registers for Business Activities
,
We noted that business activities (Horizon Village and AB Units)are using manual tenant registers to track
tenant activity. We recommend the Authority use the registers provided by the Lindsey software to limit the
amount of possible errors as a result of manual calculations.
Rural Housing Budget
We noted in budget to actual testing for the USDA program that some areas were significantly over budget
(i.e.insurance,salaries,etc.). This issue was also identified by the USDA and relates to USDA funds being
used in business activities and which resulted in the forensic audit(see Finding 2015-001). We recommend
that future budgets include only the activity related to the USDA units (315 units).
53
']
]
HCV FSS Escrow Liability
The Authority did not seem to be maintaining the FSS escrow liability schedule properly. We noted that the
�:�` ending balance for the FSS escrow liability declined significantly and it was later determined that the
C%^`. schedule was incorrect(and was subsequently corrected for financial statement purposes). Care should be
taken to monitor and record the activity for the FSS escrow account to assure that the balances are correct.
Other Intercompany Program Issues.
See below for other issues noted (in addition to Finding 2015-001). Care should be taken to assure that all
activity is reported in the proper program.
•t
We noted that the activity(and assets)for the AB units were recorded under the blended component
unit. However, the AB units are owned by the Authority (as title rests with the Authority) and
therefore should not have been recorded in the blended component unit. All of the activity (and
assets)recorded in the blended component unit for the AB units for the fiscal year was reclassified
y
to business activities.
• The assets related to the AB units should have been transferred in March/April 2013 when the
USDA released these properties back to the Authority. However, the actual book transfer of the
assets did not occur until March/April 2015. As a result,the financials were adjusted for the effect of
the depreciation expensed in Rural Housing, but that should have been expensed in Business
Activities in the amount of$710,903.
• The HCV program performs unit inspections for other entities and is paid a fee for those inspections.
However,the income($4,475)for these inspections was recorded in business activities and should
have been recorded in the HCV program. An adjustment was recorded in the HCV program to
reflect a receivable from Business Activities for these funds.
• We noted the Authority recorded construction in progress through the CDBG program. However,
j the construction was completed as of September 30, 2015 and should have been recorded under
buildings and improvements under Business Activities. As a result,$255,403 was transferred from
the CDBG program to Business Activities.
• The Authority paid off its existing debt with Bank of America (originally recorded in the USDA
3 program)with new debt and recorded the new debt in the COCC. However,the debt should have
been recorded in business activities. As a result, $209,843 of debt recorded in the COCC was
transferred to Business Activities.
• As noted above the Bank of America debt was originally recorded in the USDA program and should
have been recorded in Business Activities (the debt related to an old pension liability payoff). As a
result,the general ledger was adjusted to show$36,903 owed to the USDA program from business
activities for current year principal and interest payments paid out of the USDA program, but should
have been Business Activities.
54
1
• Allocations for benefits were incorrectly allocated between programs due to an error in recording the
allocations. We corrected the allocation error between programs. However,care should be taken to
assure that benefits are allocated properly to all programs. The benefit allocations should mirror the
allocation of payroll costs as all employees participate in health insurance benefits (which is the
largest employee benefit).
This report is intended solely for the information and use of management, Board of Commissioners,others
within the Authority,and the Department of Housing and Urban Development(HUD),and is not intended to
be and should not be used by anyone other than these specified parties.
Sincerely,
/ • A4
Barton, Gonzalez& 41,e . •.A.
Certified Public Accountants
55
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