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FY10/11 Audit January 25, 2012 RECEIVED Dwight E. Brock FEB 0 2 2012 Clerk of the Circuit Court Finance Department FINANCE 3301 E. Tamiami Trail Naples, Fl. 34112 Dear Mr. Brock: It is our understanding the following information should be reported to the County Clerk of Courts: 1. Any changes in the registered agent or office. 2. The housing authority's public meeting schedule (quarterly, semiannually or annually). 3. Public facilities report, if applicable (initial, annual notice of any changes and updated reports). No Changes in Public Facilities Report—Not Attached. 4. Upon request, the housing authority's budget. 5. Copy of audit for September 30, 2011. Therefore, we are providing you with a copy of our annual filing notice for the registered agent or office and a copy of the housing authority's meeting schedule for fiscal year 2011-2012. There has been no change in public facilities. I hope this satisfies our reporting requirements to Collier County Clerk of Courts. If you have any questions, please'contact me directly at(239) 657-3649. Sincerely, Akiiik(4 Esmeralda Serrata, PHM Executive Director Enclosures. P r G z. 44 I -11)Ilnme' HolIshigAlltlxJrity Collier County Housing Authority • 1800 Farm Worker Way • Immokalee,Florida'34142 ♦ (239)657-3649 • FAX(239)657-7232 COLLIER COUNTY HOUSING AUTHORITY SCHEDULE OF BOARD MEETING 2011-2012 August 23, 2011 (annual) November 22, 2011 . February 28, 2012 May 22, 2012 August 28, 2012 (annual) November 27, 2012 P r_ E G Apr HortsingA itliority ----Nor-, Collier County Housing Authority • 1800 Farm Worker Way • Immokalee,Florida 34142 • (239)657-3649 • FAX(239)657-7232 �ARTMENT OF ECONOMIC OPPORTUNITY Invoice No.: 25292 Date Invoiced: 10/27/2011 ,.,,11012 SPECIAL DISTRICT FEE INVOICE AND UPDATE FORM DEO use only:Post to:Special District information Program nstructions:In accordance with Sections 189.412 and 189.427, F.S.,and Chapter 9B-50, F.A.C.,please remit the fee due payable to the 3epartment of Economic Opportunity OR complete the Zero Annual Fee Certification Section,as appropriate. In addition, review the nformation below about the district and update as necessary. Provide backup documentation if the districts name or status has changed. By the postmarked due date,mail the payment and this signed form to the Department of Economic Opportunity,Office of Financial Mgmt., 107 E.Madison Street, MSC 120,Tallahassee, Florida 32399-4124. Direct questions to(850)717-8430. ANNUAL FEE:$175.00 I- LATE FEE: $0.00 I RECEIVED: $0.00 I FEE DUE, POSTMARKED BY 1212812011: $175.00 District's Name,Registered Agent&Office*: Collier County Housing Authority Telephone: (239)657-3649 Ms.Esmeralda Serrate Fax: (239)657-7232 1800 Farm Worker Way Status*: Independent Immokalee,Fl 34142 Creation Document On File Map: On File Last Update:10/05/2010 Website: E-mail: cchafi aol.com County(ies): P Collier Local Governing Authority': Collier County Functions)*: Housing Authority Date Established: 07/12/1966 Creation Documents*: County Resolution Dated 7/12/66 Statutory Authority*: Chapter 421, Part I,Florida Statutes Board Selection*: Governor Appoints Authority to Issue Bonds*: Yes Revenue Source*: Federal `Explanations Registered Agent The person designated by the special district to accept due process on behalf of the special district Status: Independent or Dependent-see Section 189.403,F.S. Local Governing Authority: The governing body of a unit of local general-purpose government 1 Functions: The function/purpose of the special district creation Documents: Ordinance,Resolution,Statute,Special Act,Court Decree, Interlocal Agreement,etc. Statutory Authority: The Florida Statute governing the function of the special district Board Selection: Appointed,Appointed/Elected, Elected,Governor Appoints, Local Governing Authority Appoints,Same as Local Governing Authority,Similar to Local Governing Authority,Other Authority to Issue Bonds: Yes or No tevenue Sources: Ad Valorem,Agreement,Assessments, Bond Issuer Fees,Co., Donations,Fed, Fees,Other, Investments, Grants,Municipality,Non-Ad Valorem,P v.Enterprise,Sales Surtax,Sales/Leases,State,TIF,Tolls, None :ERTIFICATION: I,the undersi.40 •istered agent, •o hereb • that the inf• -tion above is accurate and complete as of � his date. It does or ••_ 4,„...y . need to, 9:• / /� tegistered Agent's Signature: ///1�, ., i„.,„/K, �� i./A'', Date: / 7 / g:11116ai�� NUAL FEE CERTIFICATION SECTION-If eligible,the special district may request a zero annual fee instead of making a ving the registered agent certify to the following: dis trict is not a component unit of a general purpose local government as defined in the Governmental Accounting Board's Statement No. 14,issued in June 1991 effective after December 15, 1992,as amended. special district is in compliance with the reporting requirements of the Department of Financial Services. 3. This special district reported$3,000.00 or less in annual revenues to the Department of Financial Services on its Annual Financial Report for Fiscal Year 2009/2010(special districts created after that fiscal year must attach a current income statement verifying $3,900.00 or less in revenues for the current fiscal year). 4. .7 this certification will be returned to the Department at the address above postmarked by 12/28/2011 and, A. This special district understands that if the Department determines any of these items to be inaccurate,this special district must 4 !;aroptiete fee when invoiced. The Department will verify these statements within 30 days of receiving this form. the undersigned registered agent,do hereby certify that to the best of my knowledge and belief,ALL of the above statements contained areict and oa any attachments hereto are true,correct,complete,and made in good faith as of this date. I understand that any .;i!Z ':.4l,,. .1.!, _141lVeetigated and verified with the Department of Financial Services and the Auditor General. ++ ` ,. :TING A.ZERO ANNUAL FEE k 1 t ,� It • . r r. rG ' � b• j • Y � . { MALCOLM JOHNSON & COMPANY, P.A. Ii I I COLLIER COUNTY HOUSING AUTHORITY Immokalee, Florida REPORT ON AUDIT OF BASIC FINANCIAL STATEMENTS, SUPPLEMENTAL INFORMATION AND SINGLE AUDIT I FOR THE YEAR ENDED SEPTEMBER 30, 2011 1 1 1 1 I 1 I TABLE OF CONTENTS PAGE Independent Auditor's Report on Basic Financial Statements and Other Supplemental Information Management's Discussion and Analysis i-vii Basic Financial Statements Statement of Net Assets 2 Statement of Revenues, Expenses and Changes in Net Assets 3 Statement of Cash Flows 4-5 Notes to Basic Financial Statements 6-20 ' Supplemental Information ' Combining Schedule of Assets,Liabilities and Net Assets 21 Combining Schedule of Revenue, Expenses and Changes in Net Assets 22 Farm Worker Subsidized Housing Program 23-29 Schedule of Expenditures of Federal Awards 30 Single Audit Section Report on Internal Control Over Financial Reporting and On Compliance and Other Matters Based On An Audit of Basic Financial Statements Performed in Accordance With Government Auditing Standards 31 Report on Compliance With Requirements Applicable to Each Major Program and Internal Control Over Compliance in Accordance With OMB Circular A-133 32-33 Schedule of Findings and Questioned Costs 34-35 Summary Schedule Of Prior Audit 36 1 1 1 1 1 I I MALCOLM JOHNSON & COMPANY, P.A. CERTIFIED PUBLIC ACCOUNTANTS P.O.Box 530848 210 N.Highway 17-92 DeBary,Florida 32753-0848 Phone(386)668-6464 Fax(386)668-6463 INDEPENDENT AUDITOR'S REPORT I Board of Commissioners HUD,Miami Area Office Collier County Housing Authority Office of Public Housing Immokalee,Florida 909 S.E.First Avenue,Room 500 I Miami,Florida 33131-3028 We have audited the basic financial statements of the Collier County Housing Authority ("the Authority") as of and for the year ended September 30, 2011, as listed in the table of contents. These basic financial statements are the responsibility of the Authority's management. Our responsibility is to express an opinion on these basic 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 I 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 basic financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the basic financial statements. An audit also includes assessing the accounting principles used and i significant estimates made by management, as well as evaluating the overall basic financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. I In our opinion, the basic financial statements referred to above present fairly, in all material respects, the financial position of the Authority as of September 30, 2011, and the changes in financial position and cash flows for the year then ended in conformity with accounting principles generally accepted in the United States of America. I In accordance with Government Auditing Standards, we have also issued our report dated December 21, 2011, 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 I testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards,and should be considered in assessing the results of our audit. I The Management's Discussion and Analysis as detailed in this Report,is not a required part of the basic financial statements but is supplementary information required by accounting principles generally accepted in the United States of America. We have applied certain limited procedures, which consisted principally of inquiries made of management regarding the methods of I measurement and presentation of the required supplementary information. However,we did not audit the information and express no opinion on it. Our audit was conducted for the purpose of forming an opinion on the basic financial statements of the Authority. The Schedule I of Expenditures of Federal Awards and state financial assistance, and the other supplemental information as listed in the table of contents are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information has been subjected to the auditing procedures applied in the audit of the basic financial statements and, in our opinion, Iis fairly stated, in all material respects,in relation to the basic financial statements taken as a whole. I NIChp A M lm Johnson & o pany,P.A. Certified Public Accountants IDeBary,Florida December 21,2011 I I COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida I MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30,2011 As the management of the Collier County Housing Authority ("the Authority"), we offer the readers of the 1 Authority's basic financial statements this narrative overview and analysis of the fmancial activities of the Authority for the fiscal year ended September 30, 2011. We encourage readers to consider the information presented here in conjunction with the Authority's basic financial statements elsewhere in this report. IFinancial Highlights I • The Authority's total net assets decreased by $594,526 during fiscal year ended 2011. Total net assets were $12,635,998 and$13,230,524 for FYE 2011 and 2010 respectively. • The total expenses of all Authority programs (excluding depreciation expense) decreased by $642,127 I during fiscal year ended 2011. • At the close of fiscal year ended 2011,the Authority's assets exceeded its liabilities by $12,635,998. IUsing This Annual Report I 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 I Basic Financial Statements Basic Financial Statements Statement of Net Assets Statement of Revenues, Expenses, and Changes in Net Assets IStatement of Cash Flows Notes to Basic Financial Statements ISupplemental Information As listed in the Table of Contents IThe 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 Icomparison(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 Iconsolidated into columns that add to a total for the entire Authority. These Statements include a Statement of Net Assets, which is similar to a balance sheet. The Statement of Net Assets reports all financial and capital resources for the Authority. The statement is presented in the format I where assets minus liabilities, equals "Net Assets", formerly known as equity. Assets and liabilities are presented in order of liquidity, and are classified as"current" (convertible into cash within one year), and "non- current". Ii I COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida I MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30,2011 1 (Continued) Basic Financial Statements ' The focus of the Statement of Net Assets (the "Unrestricted Net Assets") is designed to represent the net available liquid (non-capital) assets, net of liabilities, for the entire Authority. Net Assets (formerly equity) are reported in three broad categories: Net Assets, Invested in Capital Assets, Net of Related Debt: This component of Net Assets 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 Assets: This component of Net Assets consists of restricted assets that have constraints placed on the assets by creditors(such as debt covenants),grantors, contributors, laws,regulations, etc. Unrestricted Net Assets: Consists of Net Assets that do not meet the definition of"Net Assets Invested in Capital Assets,Net of Related Debt",or"Restricted Net Assets". The basic financial statements also include a Statement of Revenues, Expenses and Changes in Net Assets (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 Assets is the"Change in Net Assets", which is similar to net income or loss. I 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. I j The Authority consists of exclusively Enterprise Funds. Enterprise funds utilize the full accrual basis of 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 has 642 units of farm labor housing units which provide assistance to very-low income families. In addition, the Authority owns and operates a 192-bed dormitory style facility that houses unaccompanied male farm workers. 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. ii I 1 ' COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida ' MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30,2011 (Continued) Housin g Choice Vouchers - Under the Housing Choice Voucher Program, the Authority administers contracts with independent landlords that own the property. The Authority subsidizes the family's rent through the Housing Assistance Payment made to the landlord. The program is administered under an Annual Contributions Contract(ACC)with HUD. HUD provides Annual Contributions Funding to enable the Authority to structure a lease that sets the participants' rent at approximately 30%of household income. ' Florida Family Literacy Initiative — This is a jumpstart program which provides early childhood training, parenting classes,English classes and parent/child activities. 1 The Authority as a Whole The Authority's net assets decreased by $594,526 during the fiscal year as detailed below. The Authority's revenues under the Farm Labor Housing Program are primarily from rental income and under the Housing ' Choice Voucher Program revenues are from subsidies and grants received from HUD. The Authority received subsidies each month based on a pre-approved amount by HUD. Grants are drawn down based on need against a pre-authorized funding level. The Authority's revenue was not sufficient to cover all expenses, including depreciation during the fiscal year in the Farm Labor Housing Program. ' By far, the largest portion of the Authority's net assets 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 assets of the Authority are available for the future use to provide program service. 1 ' iii I COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida I MANAGEMENT'S DISCUSSION AND ANALYSIS SEPTEMBER 30,2011 (Continued) I Statement of Net Assets The following table reflects the condensed Statement of Net Assets compared to prior year. The Authority is engaged only in Business-Type Activities. Table 1 —Statement of Net Assets 2011 2010 Assets Unrestricted current Assets $ 837,275 $ 1,008,346 Restricted current assets 3,587,411 3,227,322 Noncurrent assets 11,700,587 12,698,640 Total assets 16,125,273 16,934,308 1 Liabilities Current liabilities 580,647 909,188 Noncurrent liabilities 2,908,628 2,794,596 Total liabilities 3,489,275 3,703,784 • , Net Assets $ 12 635,998 $ 13,230,524 Net Assets Investment in capital assets,net of related debt $ 9,466,587 $ 10,296,440 Restricted 3,557,154 3,131,468 Unrestricted (387,743) (197,384) 1 Total net assets $ 12,635,998 S 13,230,524 I There was a decrease in total net assets of$594,526 due mainly to depreciation and due from the reduction in tenant revenues in the rural assistance program. Items to note: (1) Depreciation is treated as an expense and reduces the results of operations but does not have an impact on Unrestricted Net Assets. (2) Capital expenditures represent an outflow of unrestricted net assets, but are not treated as an expense against Results of Operations, and therefore must be deducted. I iv I I I COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida I MANAGEMENT'S DISCUSSION AND ANALYSIS September 30,2011 (Continued) Table 2—Statement of Revenues,Expenses and Changes in Net Assets The following schedule compares the revenues and expenses for the current and previous fiscal year. I Statement of Revenues,Expenses and Changes in Net Assets are as follows: P g I2011 2010 Operating revenues and expenses I Operating revenues $ 1,595,496 $ 2,530,933 Depreciation expenses ( 1,074,308) ( 1,264,646) Other operating expenses (5,472,255) ( 6,524,258) IOperating income ( 4,951,067) (5,257,971) I Nonoperating revenues and expenses Governmental non operating revenues 4,404,560 4,443,991 Interest revenue 10,324 30,453 IInterest expense ( 58,343) ( 48,601) Total non operating revenues and expenses 4,356,541 4,425,843 IDecrease in net assets ( 594,526) ( 832,128) Net assets,beginning of year 13,230,524 14,062,652 IPrior year adjustments and correction of errors - 0 IAdjusted net asset—beginning of year 13,230524 14,062,652 Net assets,end of year $ 12,635,998 $ 13,230,524 IIMajor Factors Affecting the Statement of Revenues,Expenses and Changes in Net Assets IOperating revenues had a decrease due to a reduction in tenant rental revenue caused by high vacancies. Government operating revenue decreased in Rural Development and Housing Choice Voucher Programs. IBudgetary Highlights I For the year ended September 30, 2011, 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. I v I 1 COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida I MANAGEMENT'S DISCUSSION AND ANALYSIS September 30,2011 1 (Continued) Capital Assets and Debt Administration I As of September 30, 2011 the Authority's investment in capital assets was $11,700,587 (net of accumulated depreciation). This investment in capital assets includes land, buildings, equipment, and construction in progress. The Authority has total long term debt as of September 30, 2011 in the amount of$2,852,623. These are in the Farm Labor Programs. These debts have been incurred to meet its mission of constructing 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 I As of year end, the Authority had$11,700,587 invested in a variety of capital assets as reflected in the following schedule. I Table 3—Capital Assets at Year End Business-type Activities September 30,2011 Nondepreciable: Land $ 2,568,713 Infrastructure 3,493,485 Depreciable: Buildings 25,907,482 Equipment—Dwellings 449,807 Equipment—Administration 1,547,571 33,967,058 Accumulated Depreciation (22,266,471) Capital Assets, net S 11,700,587 I 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 recent federal budget constraints. vi I I 1 ' COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida 1 MANAGEMENT'S DISCUSSION AND ANALYSIS September 30,2011 (Continued) ' 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 1 • Local inflationary, recessionary and employment trends, which can affect resident incomes and therefore the amount of rental income • Inflationary pressure on utility rates, supplies and other costs • Local development pressures affecting the market rents and demand for affordable housing • Salary and benefits costs increases(e.g.health insurance cost increase). Contacting the Authority's Financial Management 1 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 information, please contact Esmeralda Serrata, Executive Director at Collier County Housing Authority, 1800 Farm Worker Way, Immokalee, Florida 34142,telephone number(239) 657-3649. 1 1 1 i 1 vii 1 1 1 1 COLLIER COUNTY HOUSING AUTHORITY I Immokalee,Florida STATEMENT OF NET ASSETS SEPTEMBER 30,2011 ASSETS I Current assets Cash and cash equivalents,unrestricted $ 539,041 Cash and cash equivalents,restricted 3,354,135 Investments,restricted 233,279 Accrued interest receivable 810 Accounts receivable, net of allowance 75,686 Due from other governments 89,383 Inventories,net of obsolescence 10,716 Prepaid insurance 121,636 Total current assets 4,424,686 Noncurrent assets I/ Capital assets Not being depreciated 2,568,713 Depreciable,net 9,131,874 Total capital assets,net 11,700,587 Total assets 16,125,273 LIABILITIES Current liabilities Vendors and contractors payable 69,814 Accrued wages/taxes payable 6,344 Accrued compensated absences 25,747 Accrued interest payable 9,500 Due to other governments 6,650 Deferred revenue 26,927 Notes and bonds payable 341,719 Total current liabilities 486,701 Current liabilities payable from restricted assets Resident security deposits 93,946 I Noncurrent liabilities Notes and bonds payable 2,852,623 II Accrued compensated absences 25,748 Other accrued liabilities 30,257 Total noncurrent liabilities 2,908,628 Total liabilities 3,489,275 NET ASSETS Invested in capital assets, net of related debt 9,466,587 Restricted 3,557,154 Unrestricted (387,743) Total net assets $ 12,635,998 The accompanying notes are an integral part of these basic financial statements. 2 COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida 1 STATEMENT OF REVENUES,EXPENSES AND CHANGES IN NET ASSETS FOR THE YEAR ENDED SEPTEMBER 30,2011 IOperating revenues Rental revenue $ 1,246,863 ' HUD grants 3,269,471 Other governmental grants 1,135,089 Other revenue 307,097 ' Total operating revenues 5,958,520 Operating expenses Administrative 954,693 I Tenant services 38,249 Utilities 119,175 Ordinary maintenance&operation 639,013 I Protective services 70,991 Insurance 354,509 General expenses 175,269 I Housing assistance payments 2,980,378 Depreciation 1,074,308 Total operating expenses 6,406,585 IOperating income(loss) (448,065) Nonoperating revenues(expenses) Interest revenue,unrestricted 1,493 I Interest revenue,restricted 8,831 Interest expense (58,343) Fraud recovery 41,536 IOther expense (139,978) Total nonoperating revenues (146,461) Increase(decrease)in net assets (594,526) III Net assets,beginning of year 13,230,524 Net assets,end of year $ 12,635,998 I 1 I 1 The accompanying notes are an integral part of these basic financial statements. 1 3 COLLIER COUNTY HOUSING AUTHORITY 1 Immokalee,Florida STATEMENT OF CASH FLOWS 1 FOR THE YEAR ENDED SEPTEMBER 30,2011 1 Cash Flows From Operating Activities Receipts from dwelling rentals $ 1,239,998 111 Operating grants 4,385,677 Other receipts 350,484 Payments to employees and suppliers (2,073,357) 1 Payments to landlords and resident benefits (3,229,418) Net cash provided (used) by operating activities 673,384 I Cash Flows From Noncapital Financing Activities Principal paid on operating debt (52,005) I Interest paid on operating debt 1,831 Net cash provided (used) by noncapital financing activitiews (50,174) Cash Flows From Capital and Related Financing Activities Purchases of capital assets (77,455) Principal paid on capital debt (167,000) Interest paid on capital debt (58,343) Net cash provided (used) by capital and related financing activities (302,798) I Cash Flows From Investing Activities Purchase/sale of investments 55,727 Interest 10,400 Net cash provided (used) by investing activities 66,127 Net increase (decrease) in cash and cash equivalents 386,539 Balance- beginning of the year 3,506,637 Balance-end of the year $ 3,893,176 Reconciliation of Cash Flows to Statement of Net Assets Cash and cash equivalents,unrestricted $ 539,041 Cash and cash equivalents, restricted 3,354,135 $ 3,893,176 I I There are no non-cash transactions. 4 IIICOLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida ISTATEMENT OF CASH FLOWS FOR THE YEAR ENDED SEPTEMBER 30,2011 I (Continued) I Reconciliation of Net Operating Income(Loss) to Net Cash Provided (Used)By Operating Activities IOperating income/(loss) $ (448,065) IAdjustments to reconcile net operating income(loss)to net cash provided(used)by operating activities: Depreciation elimination 1,074,308 Decrease in accounts receivable 30,672 Decrease in due to/from other governments 64,762 IDecrease in inventory 9,089 Decrease in prepaid expenses 43,845 Decrease in other assets 1,200 I Decrease in security deposits (1,908) Decrease in accounts payable (26,892) Increase in accrued wages 2,461 I Increase in compensated absences 6,088 Decrease in accrued liabilities (18,883) Increase in deferred credits 35,149 IOther revenue and expense reported as nonoperating (98,442) $ 673,384 I I I I I I The accompanying notes are an integral part of these basic financial statements. 1 5 COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2011 1 A- Summary of Significant Accounting Policies and Organization: 1. Organization: Collier County Housing Authority ("the Authority") is a public body corporate and I politic pursuant to the Chapter 421 Laws of the State of Florida which was organized to provide low rent 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, 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). 2. Reporting Entity: In determining how to define the reporting entity, management has considered all 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 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 the following component unit: CCHA Land Development Corporation — this component unit has been blended for financial statement presentation. The basic financial statements of the Collier County Housing Authority include Farm Labor Housing Loans and Grants (Rural Housing Services 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. 3. 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). 6 I ' COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2011 (Continued) A - Summary of Significant Accounting Policies and Organization: (Continued) 3. Basis of Presentation and Accounting: (Continued) 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 the election option made ' available by GASB Statement No. 20, Pronouncements of the Financial Accounting Standards Board (FASB) pronouncements issued after November 30, 1989 are applied in the preparation of the basic financial statements,unless those pronouncements conflict with or contradict GASB pronouncements. Generally accepted accounting principles for state and local governments requires that resources be classified for accounting and reporting purposes into the following three net asset categories: Invested in Capital Assets, Net of Related Debt — Capital assets, net of accumulated depreciation and outstanding principal balances of debt attributable to the acquisition, ' construction or improvement of those assets. Restricted - Net assets 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 the expire by the ' passage of time. Such assets include assets restricted for capital acquisitions and debt service. Unrestricted—Net assets that are not subject to externally imposed stipulations. Unrestricted net ' assets 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. 4. 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. 5. 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. ' 6. Interprogram Receivables and Payables: Interprogram receivables/payables, when present, are all current, and are the result of the use of the Public Housing 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. 7 COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2011 (Continued) A - Summary of Significant Accounting Policies and Organization: (Continued) I 7. 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 HUD requirements and requirements of the State of Florida. 8. 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. I 9. Prepaid Items: Payments made to vendors for goods or services that will benefit periods beyond the fiscal year end are recorded as prepaid items. 10. 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. 11. Fair Value of Financial Instruments: The carrying amount of the Authority's financial instruments at September 30, 2011 including cash, investments, accounts receivable, and accounts payable closely approximates fair value. 12. Capital Assets: a. 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. b. Depreciation: The cost of buildings and equipment is depreciated over the estimated useful 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. 8 1 , ' COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2011 (Continued) A- Summary of Significant Accounting Policies and Organization: (Continued) ' 12. Capital Assets: (Continued) b. Depreciation: (Continued) 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 c. 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. 13. 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. 14. 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. 15. 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 estimable. 1 16. 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. 17. 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. 18. Use of Restricted Net 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 assets are available. 9 I I COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida I NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2011 (Continued) A- Summary of Significant Accounting Policies and Organization: (Continued) 19. 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. B- 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. 1. 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 or with an unaffiliated bank or trust company for the account of the Authority. 2. Risk Disclosures a. 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, 2011, 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. b. 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 U.S. Government,its agencies and instrumentalities and state and local government. 3. Deposit and Investment Risks The Authority held the following deposits and investments at September 30, 2011: Carrying Value Deposits: Demand deposits $ 539,041 Restricted deposits 3,354,135 $3,893,176 10 1 I I I COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida NOTES TO BASIC FINANCIAL STATEMENTS I SEPTEMBER 30,2011 (Continued) IB- Deposits and Investments: (Continued) 3. Deposit and Investment Risks: (Continued) IFair Credit Maturity Value Rating Date Callable I Investments: Pinellas County Sewer Bonds $ 25,128 AAA 10/01/2025 No Miami Dade FL Aviation 73,516 AAA 10/01/2014 No I Nassau County Utility Bonds 64,635 AAA 09/01/2013 Yes Lee County School Board 35,000 AAA 08/01/2022 No Florida State Education Bonds 10,000 AAA 05/01/2034 Yes Lee County Transportation Bonds 25,000 AAA 10/01/2011 No ITotal Investments $ 233,279 1 Total Deposits and Investments $4,126,455 Custodial Credit Risk: Exposure to custodial credit related to deposits exists when the Authority holds I 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 I 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 Authority's name. The Authority's policy as it relates to custodial credit risk is to secure its uninsured deposits with Icollateral, 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 I 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. IAt September 30, 2011,the Authority was not exposed to custodial credit as defined above. I 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 A. Credit risk is the risk that an issuer or other counterparty to an investment will not fulfill its obligations. The Authority has no I 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. I 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. I11 I 1 COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida I NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2011 (Continued) B - Deposits and Investments: (Continued) 3. Deposit and Investment Risks (Continued) Custodial Credit Risk: (Continued) ' As noted in the schedule of deposits and investment above, at September 30, 2011, the investments held by the Authority mature October, 2011, through May, 2034. The Authority may sell these investments at fair value at any time. Concentration of Investment Credit Risk: Exposure to concentration of credit risk is considered to exist when investments in any one 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 30,2011,the Authority had no concentration of credit risk as defined above. C - Accounts Receivable: Dwelling rents(net of allowance for doubtful accounts of$5,632) $41,302 Portability 17,235 Fraud Receivables(Net of allowance for doubtful accounts of$10,000) 17,149 $ 75,68( 1 D- Due From Other Governments: Rural Rental Assistance—September 30, 2011 allocation $ 66,538 County of Collier County-HPRP Program 22,845 89,383 1 1 1 1 12 1 I I I COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida I NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2011 (Continued) 1 E - Land,Buildings and Equipment: Balance Balance ISeptember 30, September 30, 2010 Additions 2011 I Not being depreciated: Land $ 2,568,713 $ - $ 2,568,713 Construction in progress - - - ITotal not being depreciated 2,568,713 - 2,568,713 Depreciable: Buildings&improvements 29,323,512 77,455 29,400,967 IAccumulated depreciation (19,653,641) (1,058,044) (20,711,685) Net buildings& improvements 9,669,871 (980,589) 8,689,282 111 Equipment 1,997,378 - 1,997,378 Accumulated depreciation (1,538,522) (16,264) (1,554,786) Net equipment 458,856 (16,264) 442,592 INet depreciable assets 10,128,727 (996,853) 9,131,874 TOTAL $ 12,697,440 $ (996,853) $ 11,700,587 IF- Long-Term Debt—Line of Credit: I 1) The outstanding balance of Line of Credit Notes in the Business Activities (Horizon Village) at September 30, 2011,was$379,960. Interest and principal shall be paid as follows: I (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 I 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 I succeeding business day; and (c) Interest shall cease to accrue on any amount of principal paid in advance of its due date. I 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: I • 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 I Street Journal,but not less than three percent(3%)per annum. 13 I I COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2011 1 (Continued) F- Long-Term Debt—Line of Credit: (Continued) ' The outstanding balance of Notes Payable at September 30, 2011 was $379,960. The notes are payable each year in the amounts and at the interest rate listed below: September 30, Principal Interest 2012 $ 20,000 $ 11,400 2013 20,000 10,800 2014 20,000 10,200 2015 20,000 9,600 2016 20,000 2017-2021 100,000 39,000 2022-2026 100,000 20,000 2027-2031 79,960 9,000 1 379,960 S110,001 Less Current Portion 20,000 $359,960 ' Interest expense for the year ended September 30, 2011 was $11,316. There was no capitalized interest expense for the year ended September 30, 2011. The debt is secured by the property purchased in conjunction with the above financing as reported above. 2) The outstanding balance of Line of Credit Notes in the Farmers Home Program at September 30, 2011, was $280,134. Interest and principal shall be paid as follows: (a) The principal amount of the loan is due at maturity on November 25, 2011 The line of credit is for $300,000 entered into on November 25, 2010. The Authority may take multiple advances up to a maximum of$300,000. (b) The interest rate may change daily and is equal to the rate published in the Wall Street Journal. (c) Monthly payments cover the accrued interest only. 3) The outstanding balance of Line of Credit Notes in the Component Unit (CCHA Land, Inc.) at September 30, 2011, was $139,307. I 1 14 1 I COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2011 (Continued) F- Long-Term Debt—Line of Credit: (Continued) t Interest and principal shall be paid as follows: (a) The principal amount of the loan is due at maturity on November 24, 2011. The line of credit is for $200,000 entered into on November 24, 2010. The Authority may take multiple advances up to a maximum of$200,000. (b) The interest rate may change daily and is equal to the rate published in the Wall Street Journal. (c) Monthly payments cover the accrued interest only. G - Long 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, 2011, are as follows: Collier County Housing Authority Revenue Bonds, Series C. 1%, due annually on September 1 in principal amounts of$54,000 to$68,000 with interest to September 1, 2014 $ 200,000 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 370,000 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 659,000 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 1,005,000 Total long-term debt $2,234,000 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. 15 I 1 COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida I NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2011 (Continued) G - Long Term Debt: (Continued) Maturities of long-term debt for each of the five succeeding years and in the aggregate are as follows at September 30, 2011: Fiscal Year Ending September 30, Principal Interest 2012 $ 169,000 $ 22,330 2013 168,000 20,650 2014 168,000 18,970 2015 168,000 17,290 2016 168,000 15,610 2017-2021 840,000 28,350 2022-2025 553,000 27,650 2,234,000 $ 150,850 ' Less current portion 169,000 I $2,065,000 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, 2010 in order to meet debt service requirements was $238,022 which was accomplished. The cash balance in the sinking fund debt service account at September 30, 2010 was $3,676. 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: 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. The aggregate deposits to the reserve account and interest earned for the year ended September 30, 2011 were$237,109, which exceeded the required annual aggregate deposits. I 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. 16 I 1 ' COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida NOTES TO BASIC FINANCIAL STATEMENTS ' SEPTEMBER 30,2011 (Continued) G - Long Term Debt: (Continued) Sinking Fund Reserve Account: (Continued) ' c) To make improvements or extensions to the project. d) For other purposes desired by the Authority which will promote it's 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) Beginning balance $ 3,676 ' Transfers to Debt Service Account including interest earned 187,362 Withdrawals for payment of principal and interest ( 191,010) Ending balance 28 Sinking Fund Reserve Replacement Account ' Beginning balance— less transfers to replacements and operations 1,984,525 Transfers to reserves including interest earned 237,109 Ending balance 2,221,634 Total Investment Reserve Fund 2,221,662 Fully Funded Balance per Loan Agreement 2,514,900 Excess/(Deficiency)of Reserves on Hand S( 293.235) 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 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, 2011, there were no expenditures from the Construction Fund for authorized construction activity. At September 30, 2011, the balance of the construction fund was transferred to the operating fund. 17 I 1 COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2011 (Continued) G - Long Term Debt: (Continued) Construction Fund (Continued) In the Rural Housing Services enterprise fund, reservations of unrestricted net assets have been , established in conjunction with debt issuance requirements or policy directives as stipulated by the respective aforementioned funds. H- State Housing Initiatives Partnership (SHIP Program) Loan: The outstanding balance of the SHIP Loan Payable at September 30, 2011 was $160,940. The loan is payable each year in the amounts and at the interest rate listed below: September 30, Amount Interest 2012 13,412 0% 2013 13,412 0% 2014 13,412 0% 2015 13,412 0% 2016 13,412 0% 2017-2021 67,060 0% 2022-2025 26,820 0% 160,940 0% 1 Less current portion 13,412 147,528 1 Interest expense for the year ended September 30, 2011 was $0. There was no capitalized interest expense for the year ended September 30, 2011. 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. 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. I 18 1 I I I COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida NOTES TO BASIC FINANCIAL STATEMENTS ISEPTEMBER 30,2011 (Continued) II - Schedule of Changes in Noncurrent Liabilities: Year ended 1 September 30,2010 September 30,2011 September 30,2011 Long-term Current Current Long-term I Portion Portion Additions Payments Portion Portion Notes and bonds payable $ 2,774,940 $ 638,407 $ $ (219,005) $ 341,719 $ 2,852,623 Accrued compensated I absences 19,656 19,659 33,456 (21,276) 25,747 25,748 Family self-sufficiency liability - - 30,257 - - 30,257 $ 2,794,596 $ 658,066 $ 63,713 $ (240,281) $ 367,466 $ 2,908,628 IJ- Annual Contributions by 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 rental on a swelling 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 Ithe year ended September 30,2011,were as follows: Housing Choice Vouchers $3,269,457 IK- Economic Dependency: The Authority receives approximately 70% of its revenues from the U.S. Department of Agriculture and the U.S. Department of Housing and Urban Development (HUD). If the I amount of revenues received from these federal agencies falls below critical levels, the Authority's reserves could be adversely affected. I L - 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 ISeptember 30, 2011. M- Litigation: As of September 30, 2011, the Authority was involved with various litigations arising from I operation of its rural development housing program. In the opinion of the Authority's legal council, such losses, if any, resulting from litigation would be adequately covered by insurance. N- Leasing Activities (as Lessor): The Authority is the lessor of dwelling units mainly to low-income I 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. I19 I 1 COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida NOTES TO BASIC FINANCIAL STATEMENTS SEPTEMBER 30,2011 (Continued) N- Leasing Activities (as Lessor): (Continued) ' 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. 0- Operating Leases: The Authority is committed under a 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: September 30, Office Space 2011-2012 $ 18,400 2012-2013 18,952 2013-2014 19,521 $56,873 1 P- Decrease in Net Assets: The decrease in net assets is expected to be absorbed through operations in subsequent fiscal years, assisted by transfers from the Rural Rental Program. No fund deficit is expected as a result of the current year loss. I 1 1 I I I I 20 I 1 1 ' SUPPLEMENTAL INFORMATION 1 1 1 1 COLLIER COUNTY HOUSING AUTHORITY • Immokalee,Florida COMBINING SCHEDULE OF NET ASSETS SEPTEMBER 30,2011 Community 14.871 Rural HOME Development Housing Rental Investment Block Grants/ Choice Component State and Business Assistance Partnerships Entitlement Vouchers Units Local Activities Payments Program Grants Total 2011 ASSETS Current assets Cash and cash equivalents,unrestricted $ 207,433 $ 13,458 $ 53,465 $ 10,949 $ 253,736 $ - $ - $ 539,041 Cash and cash equivalents,restricted 1,271,806 - - - 2,082,329 - - 3,354,135 I Investments,restricted - - - - 233,279 - - 233,279 Accrued interest receivable - - - - 810 - - 810 Accounts receivable,net of allowance 34,384 - - - 41,302 - - 75,686 Due from other governments - - 22,845 - 66,538 - - 89,383 Due from/to other programs (3,244) 162,638 (70,130) (284,558) 177,949 17,345 - Inventories,net of obsolescence - - - - 10,716 - - 10,716 Prepaid insurance 123 - - 6,948 114,565 - - 121,636 Total current assets 1,510,502 176,096 6,180 (266,661) 2,981,224 17,345 - 4,424,686 Noncurrent assets Capital assets Not being depreciated - - 115,000 2,453,713 - - 2,568,713 Depreciable,net 11,664 - - 3,140,550 5,979,660 - - 9,131,874 Total capital assets,net 11,664 - - 3,255,550 8,433,373 - - 11,700,587 Total assets 1,522,166 176,096 6,180 2,988,889 11,414,597 17,345 - 16,125,273 LIABILITIES Current liabilities Vendors and contractors payable 9,146 2,010 58,658 - 69,814 Accrued wages/taxes payable 1,485 - - 841 4,018 - - 6,344 Accrued compensated absences 5,397 - - 2,667 17,683 - - 25,747 Accrued interest payable - - - 9,500 - - - 9,500 Due to other governments 240 6,410 - 6,650 Deferred revenue - - - - 26,927 - - 26 927 Notes and bonds payable - 139,307 - 33,412 169,000 - - 341,719 Total current liabilities 16,028 139,307 - 48,670 282,696 - - 486,701 Current liabilities payable from III restricted assets Resident security deposits - - - - 93,946 - - 93,946 Noncurrent liabilities , Notes and bonds payable - - - 507,489 2,345,134 - - 2,852,623 Accrued compensated absences 5,398 - - 2,667 17,683 - - 25,748 Other accrued liabilities 30,257 - - - - - - 30,257 Total noncurrent liabilities 35,655 - - 510,156 2,362,817 - - 2,908,628 Total liabilities 51,683 139,307 - 558,826 2,739,459 - - 3,489,275 NET ASSETS Invested in capital assets,net of related debt 11,664 - - 3,255,550 6,199,373 - - 9,466,587 Restricted 1,241,546 - - - 2,315,608 - - 3,557,154 Unrestricted 217,273 36,789 6,180 (825,487) 160)57 17,345 - (387,743) Total net assets S 1,470,483 S 36,789 $ 6,180 $ 2,430,063 $ 8,675,138 $ 17,345 $ - $ 12,635,998 I I 21 COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida I COMBINING SCHEDULE OF REVENUES,EXPENSES AND CHANGES IN NET ASSETS FOR THE YEAR ENDED SEPTEMBER 30,2011 I Community 14.871 Rural HOME Development Housing Rental Investment Block Grants/ Choice Component State and Business Assistance Partnerships Entitlement Vouchers Units Local Activities Payments Program Grants Total 2011 Operating revenues Rental revenue $ - $ - $ - $ 173,231 $ 1,073,632 S - $ - $ 1,246,863 I HUD grants 3,269,471 - - - - - 3,269,471 Other governmental grants 162,310 824,779 148,000 1,135,089 Other revenue 164,226 55,138- 1,624 86 109 307,097 Total operating revenues 3,433,697 55,138 162,310 174,855 1,984,520 - 148,000 5,958,520 I Operating expenses Administrative 319,247 21,571 17,188 91,793 504,894 954,693 Tenant services - 2,536 22,942 - 12,771 - - 38,249 Utilities 2,362 - - 48,476 68,337 - - 119,175 I Ordinary maintenance&operation Protective services 13,518 17,849 41,840 565,806 - 639,013 40,531 30,460 70,991 Insurance 14,129 - - 51,715 288,665 - - 354,509 General expenses 3,741 401 - 240 170,758 129 - 175,269 ' Housing assistance payments 2,847,884 132,494 2,980,378 Depreciation 12,149 226 552 835,607 1,074,308 Total operating expenses 3,213,030 42,357 172,624 501,147 2,477, 98 129 - 6,406,585 IOperating income(loss) 220,667 12,781 (10,314) (326,292) (492,778) (129) 148,000 (448,065) Nonoperating revenues(expenses) Interest revenue,unrestricted 11 8 - 276 1,198 - - 1,493 Interest revenue,restricted 49 - - - 8,782 - - 8,831 I Interest expense Fraud recovery 40,936 (672) (13,800) (43,871) - - (58,343) - 600 41,536 Other expense (139,978) - - - - - - (139,978) Total nonoperating revenues (98,982) (664) - (13,524)_ (33,291) - - (146,461) IIncome(loss)before transfers 121,685 12,117 (10,314) (339,816) (526,069) (129) 148,000 (594,526) Transfers from(to)other programs or entities - - - - 148,000 - (148,000) - IIncrease(decrease)in net assets 121,685 12,117 (10,314) (339,816) (378,069) (129) - (594,526) Net assets,beginning of year 1,348,798 24,672 16,494 2,769,879 9,053,207 17,474 - 13,230,524 Net assets,end of year S 1,470,483 S 36,789 S 6,180 S 2430,063 S 8,675,138 S 17,345 S S 12,635,998 I I I I I I22 I COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida FARM WORKER SUBSIDIZED HOUSING PROGRAM SUPPLEMENTAL INFORMATION SEPTEMBER 30,2011 The following is supplemental information requested by the U.S. Department of Agriculture - Rural Housing 1 Services(formerly Farmers Home Administration). 1. Schedule of Insurance Coverages At September 30, 2011,the Authority had the following insurance coverage in effect: Amount of Insurance Carrier Type of Coverage Coverage Term Fidelity bond/Employee Dishonesty ITT Hartford Insurance Company $100,000 Deductible $2,000,000 7/12/11-7/12/12 Opticom Insurance Workers'Compensation Statutory 10/1/11-10/1/12 Philadelphia Insurance Automobile liability $500,000 10/1/11-10/1/12 Property,Office Building&Personal Property Fire&Extended Coverage(90% Florida PH Authority Insurance coinsurance) $38,237,400 5/8/11-5/8/12 General Liability Personal Injury,products, Praetorian Insurance Co. advertising $500,000 10/1/11-10/1/12 Property damage $300,000 US Liability Insurance Directors&officers liability $1,000,000 5/22/11-5/22/12 Fidelity&Deposit Co. Employee dishonest $100,000 7/12/11-7/12/12 ITT Hartford Insurance Company Employee dishonesty(ERISA Bond) $100,000 7/11/11-7/11/12 Praetorian Insurance Co. Garbage Truck $500,000 10/1/11-10/1/12 2. Exemption 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 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. 3. Reserves - The Housing Authority has maintained adequate reserves for operations and Bond debt I service at September 30, 2011. See also Note B to basic financial statements. 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 i records of the Authority after audit adjustments have been made. 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, 2011. 23 I 1 COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida ' FARM WORKER SUBSIDIZED HOUSING PROGRAM SUPPLEMENTAL INFORMATION ' SEPTEMBER 30,2011 (Continued) 7. Comments on Compliance and Administrative Internal Control - We have audited the basic financial statements of the Collier County Housing Authority - Farm Worker Subsidized Housing Program for the year ended September 30, 2011, and have issued our report thereon dated January 28, 2011. Based on our tests of transactions and examination of records as required by the Audit Guide,we ' believe that Collier County Housing Authority - Farm Worker Subsidized Housing Program has complied with the financial terms and conditions of the contract with the regulations, policies and procedures prescribed by the U.S. Department of Agriculture, Rural Housing Services (formerly ' Farmers Home Administration), loan agreement, and the financial regulations and procedures prescribed by management and those of its governing board. ' As a part of our audit,we reviewed and tested the Authority's system of internal control to the extent we considered it necessary to evacuate the system as required by generally accepted auditing standards. Under these standards,the purposes of such evaluations are to establish a basis of reliance on the system ' of internal accounting control in determining the nature, timing and extent of other auditing procedures that are necessary for expressing an opinion on the basic financial statements and to assist the auditor in planning and performing the audit of the basic financial statements. ' Additionally, our audit included procedures necessary in our judgment to determine compliance with contractual terms and conditions and regulations, policies and procedures prescribed by the Rural Housing Services (formerly Farmers Home Administration) and by management and the governing board of the Authority. The objective of internal accounting control is to provide reasonable, but not absolute, assurance as to the safeguarding of assets against loss from unauthorized use or disposition, and the reliability of financial records for preparing basic financial statements and maintaining accountability for assets. The concept of reasonable assurance recognizes that the cost of a system of internal accounting control should not exceed the benefits derived and also recognizes that the evaluation of these factors necessarily requires estimates and judgments by management. There are inherent limitations that should be recognized in considering the potential effectiveness of any system of internal accounting control. In the performance of most control procedures, errors can result from misunderstanding of instructions, mistakes of judgment, carelessness, or other personal factors. ' Control procedures whose effectiveness depends upon segregation of duties can be circumvented by collusion. Similarly, control procedures can be circumvented intentionally by management with respect to the estimates and judgments required in the preparation of basic financial statements. Further, ' projection of any evaluation of internal accounting control to future periods is subject to the risk that the procedures may become inadequate because of changes in conditions, and that the degree of compliance with the procedures may deteriorate. 1 1 24 I I COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida FARM WORKER SUBSIDIZED HOUSING PROGRAM SUPPLEMENTAL INFORMATION SEPTEMBER 30,2011 (Continued) , 7. Comments on Compliance and Administrative Internal Control (Continued) Our audit of the basic financial statements made in accordance with generally accepted auditing standards, including the study and evaluation of the Authority's system of internal control for the period ended September 30, 2010, that was made for the purposes set forth in the first paragraph of this report, 111 would not necessarily disclose all weaknesses in the system because it was based on selective tests of accounting records and related data. However, such study and evaluation disclosed no conditions that we believe to be material weaknesses 1 or evidence of noncompliance. These conditions were considered in determining the nature, timing, and extent of audit tests to be applied to our audit of the basic financial statements and this report of such conditions does not modify our report dated December 21,2011 on such basic financial statements. I 8. Other Findings or Recommendations For the Period Ended September 30, 2011 - There were no reportable findings. I 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 I 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, 2011 totaling $41,302, were accounts aged at ninety days(90)or less. 11. Accounts Payable consists of $58,658 at September 30, 2011. 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. I I I 1 25 I 1 , COLLIER-COUNTY HOUSING AUTHORITY I Immokalee,Florida . FARM.WORKER SUBSIDIZED HOUSING PROGRAM SUPPLEMENTAL INFORMATION SEPTEMBER 30,2011 , (Continued) 13. Schedule of Financial Institutions Where the Housing Authority Maintains its Bank Accounts IAccount Name of Financial Institution Account Name Balance Classification I Florida Community Bank Bond&Interest $56 Cash-Reserve Fund-Restricted 1400 North 15th Street Certificates of Deposit 200,000 Investments-Reserve Fund-Restricted Immokalee,Florida 33934 CCHA Land,Inc. 13,458 Cash-Unrestricted Fund Reserve 1,784,424 Reserve I1,997,938 Wachovia Bank I P.O.Box 2870 Jacksonville,Florida 32231 Sinking Fund Reserve 28 Cash-Reserve Fund-Restricted 28 IBank of America Section 8 Operation 1,400,711 Cash-Unrestricted P.O.Box 31590 Payroll Account 32,955 Cash-Unrestricted Fund Tampa,Florida 33631-3590 Special Events Account 1,848 Cash-Unrestricted Fund I Cash Construction Fund Section 8 Admin Funds 3,931 Cash-Reserve Fund 53,361 Operational Maintenance-RD 62,306 I Revenue Fund 144,294 Security Deposit Fund 105,923 Horizon Village 10,849 Section 8-Escrow 25,166 IHPRP-Operating 53,465 1,894,809 I Independent Bankers'Bank Pinellas County Sewer Revenue 25,128 Investments-Reserve Fund-Restricted of Florida Bond Lee County Florida School Board 35,000 Investments-Reserve Fund-Restricted Nassau County Florida Water&Sewer I P.O.Box 4998 System • 64,635 Investments-Reserve Fund-Restricted Orlando,Florida 32802 4998 Florida State Educational System 10,000 Investments-Reserve Fund-Restricted Miami-Dade FL Aviation 73,516 Investments-Reserve Fund-Restricted Lee County Florida Transportation I Facility 25,000 233,279 IPetty Cash&Return Check Fund 400 $4,126,454 I I26 I I COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida I FARM WORKER SUBSIDIZED HOUSING PROGRAM SUPPLEMENTAL INFORMATION I SEPTEMBER 30,2011 (Continued) I 13. Schedule of Financial Institutions Where the Housing Authority Maintains its Bank Accounts (Continued) I The above amounts were confirmed with the institution listed at September 30, 2011 14. Schedule and Computation of Current Return to Owners Allowed - Not applicable, because the I Authority, is a legal public Authority and not a private enterprise. 15. Schedule of Changes in Owners and Board of Commissioners - This is a local Public Authority and can never change its owners. The following is a list of the current Board of Commissioners. Commissioner Expiration of Term Address I Bernado Barnhart October 17,2010 Immokalee, Florida Brian L. Goguen October 17,2010 Naples, Florida Susan M. Golden October 27, 2011 Naples, Florida I Catherine H. Pink November 4, 2012 Naples, Florida Kenneth Kelly November 7, 2013 Naples, Florida 16. Schedule of Rental Information 1 Number of Gross Potential Unit Size Units Rental Rate Months Rent One bedroom unit 66 $425 12 $336,600 Two bedroom unit 252 451 12 1,363,824 1 Three bedroom unit 187 477 12 1,070,388 Four bedroom unit 136 499 12 814,368 641 $3,585,180 Actual Rental Revenue Percentage Amount I Tenants 43.54% $1,073,632 RHA rental assistance subsidy 24.51% 824,779 68.05% 1,898,411 Vacancy Losses 31.95% 1,809,967 Total Gross Potential Rent 100.00% $3,708,378 I I 27 I 1 COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida FARM WORKER SUBSIDIZED HOUSING PROGRAM SUPPLEMENTAL INFORMATION SEPTEMBER 30,2011 (Continued) 16. Schedule of Rental Information (Continued) Note 1-Rental rates were effective October 1, 2008. Management provides for the monthly collection of rent. Delinquent accounts receivable, if any, do not exceed 30 days in most instances. 17. Real Estate Taxes - The Housing Authority is a local public body corporate and politic and is tax exempt by State of Florida, Section 423. 1 i 1 1 1 1 1 1 1 1 28 COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida FARM WORKER SUBSIDIZED HOUSING PROGRAM RHS PROJECT NAME: COLLIER COUNTY HOUSING PROGRAM PROJECT NUMBER: 09-011-0591 4055 CERTIFICATE OF BORROWER The information provided by the Collier County Housing Authority to Malcolm Johnson & Company, P.A., Certified Public Accountants, for the preparation of the September 30, 2011, annual audit to which this certification is attached, is hereby certified to be true and correct, and it is further certified that the handling of the reserve account, the operation and maintenance account, and rental receipts of the Collier County Housing Authority was in accordance with the USDA Rural Housing Services Regulations. Done this 7 of 2011 ?Lazy BY: 124 Executive Director 1 I 1 1 1 29 I COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida I SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS IFOR THE YEAR ENDED SEPTEMBER 30,2011 Federal Grantor: Pass Through Federal CFDA Number Program Title Entity Expenditures I U.S. Department of Agriculture Farm Labor Cluster 14.427 Rural Rental Assistance Payments NA $ 824,779 I 10.415 Rural Rental Housing Debt NA 2,234,000 Total Farm Labor Cluster 3,058,779 Total U.S.Department of Agriculture 3,058,779 U.S.Department of Housing and Urban Development I14.218 Community Development Block Grant County of Collier,Florida 148,000 j14.871 Housing Choice Voucher Program NA 3,269,471 Total U.S.Department of HUD 3,417,471 1 Total Federal Awards Expenditures S 6,476,250 Notes to the Schedule of Expenditures of Federal Awards A. Basis of Accounting 1 This schedule is prepared on the accrual basis of accounting. B. 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". I C. Reconciliation of Total Federal Awards Expenditures to Financial Data Schedule FDS line 706 HUD PHA Grants $ 3,269,471 FDS line 708 Other government grants 1,135,089 I Less: nonfederal portion (162,310) 2 FDS line 343 & 351 Rural rental loan debt 2,234,000 $ 6,476,250 I D. U. S. Department of Agriculture's Rural Housing Services Program: The Authority is administering 641 units of housing under the Rural Housing Services Program. The financing for construction of this housing project was provided by this Agency for Rural Housing Loans and Grants(Federal CFDA Number 10.415). At September 30,2011,the balance of the long term debt due to the U.S. Department of IAgriculture's Rural Housing Services was $2,234,000. This loan balance has been considered as a part of the computation to determine the major and non-major program requirements under OMB Circular A-133. I30 e I I I I I I 1 SINGLE AUDIT SECTION I I I I I I I I I I MALCOLM JOHNSON & OMPANY C , P.A. CERTIFIED PUBLIC ACCOUNTANTS P.O.Box 530848 210 N.Highway 17-92 DeBary,Florida 32753-0848 Phone(386)668-6464 Fax(386)668-6463 I REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF BASIC FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS I Board of Commissioners HUD,Miami Area Office Collier County Housing Authority Office of Public Housing Immokalee, Florida 909 S. E.First Avenue,Room 500 IMiami,Florida 33131-3028 We have audited the financial statements of the Collier County Housing Authority("the Authority") as of and for the year ended September 30, 2011, and have issued our report thereon dated December 21, 2011. We conducted our audit in accordance with I 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. IInternal Control Over Financial Reporting In planning and performing our audit, we considered the Authority's internal control over financial reporting 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 i expressing an opinion on the effectiveness of the Authority's internal control over financial reporting. Accordingly, we do not express an opinion on the effectiveness of the Authority's internal control over financial reporting. I 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 combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Authority's financial statements will not be prevented,or detected and corrected on a timely basis. IIIOur consideration of internal control over financial reporting was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over fmancial reporting that might be deficiencies, I significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over financial reporting that we consider to be material weaknesses,as defined above. I Compliance and Other Matters As part of obtaining reasonable assurance about whether the Authority's financial statements are free of material misstatement, we performed tests of its compliance with certain provisions of laws,regulations,contracts and grant agreements,noncompliance with I 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. IThis report is intended solely for the information and use of management,the Authority's Board of Commissioners, others within the entity, and the U.S. Department of HUD and is not intended to be and should not be used by anyone other than these specified I parties. Ltoty.......4647 e•A• Malcolm Johnson&Company,P.A. Certified Public Accountants 1 DeBary,Florida December 21,2011 31 I MALCOLM JOHNSON & COMPANY, P.A. I CERTIFIED PUBLIC ACCOUNTANTS P.O. Box 530848 210 N. Highway 17-92 iDeBary,Florida 32753-0848 Phone(386)668-6464 Fax(386)668-6463 1 REPORT ON COMPLIANCE WITH REQUIREMENTS APPLICABLE TO ITS MAJOR PROGRAMS AND ON IINTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH OMB CIRCULAR A-133 Board of Commissioners HUD,Miami Area Office I Collier County Housing Authority Office of Public Housing Immokalee, Florida 909 S.E. First Avenue, Room 500 Miami,Florida 33131-3028 ICompliance We have audited the compliance of the Collier County Housing Authority ("the Authority") with the types of compliance I requirements described in the U.S. Office of Management and Budget(OMB)Circular A-133 Compliance Supplement that are applicable to each of its major federal programs for the year ended September 30, 2011. The Authority's major federal programs are identified in the summary of auditor's results section of the accompanying Schedule of Findings and g Questioned Costs. Compliance with the requirements of laws, regulations, contracts and grants applicable to each of its major federal programs is the responsibility of the Authority's management. Our responsibility is to express an opinion on the Authority's compliance based on our audit. I 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. I 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 I 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. Our audit does not provide a legal determination of the Authority's compliance with those requirements. 1 In our opinion, the Authority complied, in all material respects,with the requirements referred to above that are applicable to each of its major federal programs for the year ended September 30,2011. Internal Control Over Compliance Management of the Authority is responsible for establishing and maintaining effective internal control over compliance with I the requirements of laws, regulations, contracts, and grants applicable to federal programs. In planning and performing our audit, we considered the Authority's internal control over compliance with the requirements that could have a direct and material effect on a major federal program in order to determine our auditing procedures for the purpose of expressing our opinion on compliance 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. Accordingly, we do not express an opinion on the effectiveness of the Authority's internal control over compliance. I 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 I 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. I32 Our consideration of internal control over compliance was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control over compliance that might be deficiencies, significant deficiencies or material weaknesses. We did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. IThis report is intended solely for the information and use of management, the Board of Commissioners, others within the entity, the U.S. Department of HUD, federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties. I 'ItAA./......46747,XA. IMalcolm Johnson & Company,P.A. Certified Public Accountants 1 DeBary, Florida December 21,2011 I I i I I I I I I I I I 33 1 COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida SCHEDULE OF FINDINGS AND QUESTIONED COSTS FOR THE YEAR ENDED SEPTEMBER 30,2011 SECTION I-SUMMARY OF AUDITORS' RESULTS Basic Financial Statements Type of auditors'report issued: Unqualified Internal control over financial reporting: - Material weakness(es) identified? No ' - Significant deficiency(s)identified that are not considered to be material weaknesses? None reported ' Noncompliance material to basic financial statements noted? No Federal Awards Internal control over major programs: Material weakness(es) identified? No Significant deficiency(s)identified that are not considered to be material weakness(es)? None reported Type of auditors'report issued on compliance for major programs: Unqualified 1 Any audit findings disclosed that are required to be reported in accordance with section 510(a)of OMB Circular A-133? No Identification of major programs: CFDA Number Name of Federal Program or Cluster ' 14.871 Section 8 Housing Choice Vouchers Dollar threshold used to distinguish between type A and type B programs: $300,000 Auditee qualified as low-risk auditee? No 1 34 1 1 COLLIER COUNTY HOUSING AUTHORITY Immokalee,Florida SUMMARY SCHEDULE OF PRIOR AUDIT FOR THE YEAR ENDED SEPTEMBER 30,2011 There were no Prior Audit Findings. 1 1 a I I 1 1 1 1 36 1 1 1 sE 1 1 1 1 1 1 1 1 1 1 1 mop pauopsanO pus s5u!pu!d pI My Ielapad ou aJam angi SISOD QaNOI.LS3fIO QNIV SONIIQNII,I 411IVMV'II/11IIQU-III NIOI,LDIS 1 •s2u!pu!3 Iuatualsls Isiausu13 ou an At magi S9NIIQNII3 ZN aWasINIS'IVIDNIVNIIJ DISVa-II 1140I133S ' (panuquoa) I IOZ`0£2I381Ala LdaS Q2QNI311daA 1H.L 1103 SISOD Q3NOI.LSaa0 QNIY S9NIIQNII3 1O II111113HDS BpIaou'aate,owwl A LRIOH LII�'ONIISfIOH AINIf1OD HIII1103 1