financial audit_part1 pdf

HOUSING AUTHORITY OF THE COUNTY OF SAN JOAQUIN TABLE OF CONTENTS Page Numbers INDEPENDENT AUDITOR'S REPORTc.occccccc ve niernererreeneeenen bơ up hà Kế ren co cà VN KG SH RE NA E BH

HOUSING AUTHORITY OF THE COUNTY OF SAN JOAQUIN

STOCKTON, CALIFORNIA FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

“2⁄2

®

“0222

52922090024

200i

12000004

HOUSING AUTHORITY OF THE COUNTY OF SAN JOAQUIN

TABLE OF CONTENTS

Page

Numbers

INDEPENDENT AUDITOR'S REPORT(c.occccccc ve niernererreeneeenen bơ up hà Kế ren co cà VN KG SH RE NA E BH 1-2

Statement of Net ASSeES,L eerrrrmrarrrmmamrnessioseF XHIBTT A 8-9

Statement of Revenues, Expenses and Changes

1n Fund Net ASSGESuuuvoccesssienrasernesseeerresneerseperrerssrurre si A HỆ TẾ E T B 10

Statement of Cash F1OWSccouseessecevseneuscrversesnersvenereususeersesserssrseeens EXHIBIT c -

11

SUPPLEMENTARY INFORMATION Housing Authority of the County of San Joaquin Financial Data Schedule 23-26

| Balance Sheet and Schedule of Revenues ANd Expenses csscscsvssvscssesussessenretsaneenreee 2O"29 OVERALL COMPLIANCE, INTERNAL CONTROLS AND

FEDERAL AWARDS SECTION

Report on Internal Control over Financial Reporting and on

_ Compliance and Other Matters Based on an Audit of

Financial Statements Performed in Accordance with

Government Auditing Stamdards cccssseesnecseersssserssoenenssuenssesressnssservsvcananensensones 30-31 Report on Compliance with Requirements Applicable to

Schedule of Expenditures of Federal AWardS ccrssssserenereenseersenerseenenescerneces core TP

Schedule of Findings and Responses BRREEED seenrungcrrensetanncazerspeyequccunsrsaunaunapazsaveveueucenssstncpstoe

Summary Schedule of Prior AUdit FINGINGS ccccrescssesssusssessnstentecssesnvesesonussuras ere O

š Sys VO PSP AD |S LFA FOE Y SVN

VỀ YY VV » GAS LAS PLIERS S gs WAS ELE

INDEPENDENT AUDITOR’S REPORT

Board of Commissioners Housing Authority of the County of San Joaquin Stockton, California

I have audited the accompanying basic financial statements of the Housing Authority of the

‘Authority’s management My responsibility is to express an opinion on these financial statements based on my audit

I conducted my audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States

Those standards require that I plan and perform the audit to obtain reasonable assurance

about whether the financial statements are free of material misstatement An audit includes

examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation | believe that my audit provides a reasonable basis for my opinion

respects, the respective financial position of the Housing Authority of the County of San Joaquin, as of September 30, 2009, and the respective changes in financial position and cash flows for the year then ended in conformity with accounting principles generally

Ao? @

wnt tn,

Fax (559) 924-9078

by x

4 # it

OS‘

© nu

f ‘ean nines

for g

ManagernentS Discussion and Analysis on pages 3 through 7 are not a required part of the

basic financial statements but are supplementary information required by the Governmental

Accounting Standards Board I have applied certain limited procedures, which consisted principally of inquiries of management regarding the methods of measurement and

“presentation of the supplementary information However, I did not audit the information, and accordingly, express no opinion on it

In accordance with Government Auditing Standards, 1 have also issued a report dated June

18, 2010 on my consideration of the Housing Authority's internal control over financial reporting and my tests of its compliance with certain provisions of laws, regulations, contracts and grants That report is an integral part of an audit performed in accordance with Government Auditing Standards and should be read in conjunction with this report in

My audit was performed for the purpose of forming an opinion on the basic financial

statements of the Housing Authority taken as a whole The accompanying schedule of expenditures of federal awards required by the U.5 Office of Management and Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, and the financial data schedule required by the Department of Housing and Urban Development

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 my opinion, is fairly stated, in all material respects, in relation to the basic financial statements

taken as a whole

Michael L Oxenreider Certified Public Accountant

June 18, 2010

V PVT KR TROT MLNS YER OVS

MANAGEMENT’S DISCUSSION

AND ANALYSIS (MD&A)

®

HOUSING AUTHORITY OF THE COUNTY OF SAN JOAQUIN

" MANAGEMENT DISCUSSION AND ANALSIS YEAR ENDED SEPTEMBER 30, 2009

As management of the Housing Authority of the County of San Joaquin (the Authority), we offer readers of the Authority’s financial statements this narrative overview and analysis of the financial activities of the Authority for the year ended September 30, 2009

FINANCIAL HIGHLIGHTS

" Net assets of the Authority increased $2,037,880 as of September 30, 2009, over the prior year

* Total revenues for the Authority increased by $2,770,240 from prior year results

" The Authority’s debt outstanding of $15,619,102 as of September 30, 2009, decreased $645,755 from the prior year Principal payments on bonds and notes outstanding were $874,762 during the year New loans and refinanced prior loans were $268,050

« Receipts from Grants and Subsidies increased $2,414,235 over the prior year

* Total expenses increased by $1,180,936

OVERVIEW OF THE AUTHORITY The Authority was created in March 1942 to provide and advocate for affordable, attractive, safe living environments and opportunities to become self-sufficient for persons of very low to moderate income residing in San Joaquin County, California The Authority is a corporation located in Stockton, California, and was established under United States Housing Authorities Law of 1938, Deering’s General Law, Act

3483 when the San Joaquin County Board of Supervisors adopted a resolution declaring a need for a Housing Authority in the county

A seven-member Board of Commissioners is appointed by the San Joaquin County Board of Supervisors and governs the Authority

OVERVIEW OF THE FINANCIAL STATEMENTS The Authority’s financial statements consist of two parts - management's discussion and analysis (this

section) and the basic financial statements The basic financial statements include the Authority-wide

financial statements and notes to the financial statements

"The Authority-wide financial statements provide information about the Authority’s overall financial position and results of operations, These statements, which are presented on the accrual

basis, consist of the Statement of Net Assets, the Statement of Revenues, Expenses and Changes

in Fund Net Assets and the Statement of Cash Flows

* The Basic financial statements also include a “Notes to Financial Statements” section that provides additional information that is essential to a full understanding of the data provided in the Authority-wide statements

The remainder of this overview section of management’s discussion and analysis explains the structure and contents of each of these statements

HOUSING AUTHORITY OF THE COUNTY OF SAN JOAQUIN MANAGEMENT DISCUSSION AND ANALSIS

YEAR ENDED SEPTEMBER 30, 2009

The Authority-wide statements report information about the Authority as a whole using accounting methods similar to those used by private sector companies The Statement of Net Assets includes ail of the Authority’s assets and liabilities All of the current year’s revenues and expenses are accounted for in the Statement of Revenues, Expenses and Changes in Fund Net Assets regardless of when cash is received or paid

Additional Information —- Combining Financial Statements The combining financial statements provide more detailed information about the Authority’s most significant activities and not the Authority as a whole These statements are divided into groupings of related accounts that are used to maintain control over resources that have been segregated for specific activities or objectives

AN OVERVIEW OF THE AUTHORITY-WIDE FINANCIAL POSITION AND OPERATIONS The Authority’s overall financial position and operations for the past two years are summarized below

based on the information included in the current and prior financial statements

Housing Authority of the Countyof San Joaquin Statements of Net Assets

Total

Percentage

ASSETS

Current Assets $ 25,322,923 $ 24,099,639 5.1%

Capital Assets, Net of Depreciation $ 31,025,861 30,777,756 — 0.8%

Other $ 1,090,255 1,169,519 (6.8%)

Non-Current Liabilities 11,277,230 12,004,042 (6.8%) Total Liabilities 15,619,102 16,264,857 (4.0%) NET ASSETS

HOUSING AUTHORITY OF THE COUNTY OF SAN JOAQUIN

MANAGEMENT DISCUSSION AND ANALSIS

YEAR ENDED SEPTEMBER 390, 2009

The Authority’s total assets at September 30, 2009 were $57,439,039, an increase of $1,392,125 from September 30, 2008 The change in assets consisted primarily of an increase in cash from the collection of accounts receivables Net fixed assets increased by $248,106 as improvements exceeded depreciation expense

Cash & Investments

Total cash and investments increased by $2,258,91 1, or 10.4% as of September 30, 2009, when compared

to September 30, 2008 The primary sources of the increases were in Public Housing and Housing Choice Voucher Programs as program expenditures were managed at levels below allowed subsidies

‘The Authority’s investments are carried at actual cash value

Accounts Receivable

Net accounts receivable decreased $778,526 as receivables from HUD for the Public Housing Program

were paid to the Authority

‘Notes Receivable

Total notes receivables, net, decreased $156,858 in 2009, as the Authority received payments from debtors

Fixed Assets

The Authority acquired capital assets in the net amount of $2,418,864 while depreciation expenses were

$2,170,759

Accounts Payable

Total accounts payable increased by $34,368 compared to September 30, 2008, balance

Notes and Bonds Payable

During the year the Authority repaid notes payable in the amount of $754,762, and bonds payable in the amount of $120,000, representing all long term liability payments due from the Authority during the year New loans totaling $268,050, mostly to finance improvements to the Sartini Manor, were added during the year A note for $376,567 due Federal Finance Bank and secured by HUD was written off

Net Assets

The Authority’s financial position improved as net assets increased by $2,037,880 or 5 1%, during 2009

HOUSING AUTHORITY OF THE COUNTY OF SAN JOAQUIN MANAGEMENT DISCUSSION AND ANALSIS

YEAR ENDED SEPTEMBER 30, 2009

The results of operations for the Authority are presented below:

Housing Authority of the County of San Joaquin Statement of Revenues, Expenses and Changes in Net Assets

Operating Revenue Tenant Revenue — Rents and Other $ 5,286,083 $ 4,775,555 _ 19.7% Grants and Subsidies 41,921,166 39,506,931 6.1% Investment Income 153,672 605,524 (74.6%) Other 468,250 170,921 174.0% Total Operating Revenues $47,829,171 $45,058,931 6.2%

Operating Expenses

Housing Assistance Payments $31,464,492 $31,474,808 0.0% Administration 5,888,969 5,048,209 16.7%

Utilities 1,357,667 1,434,320 (5.3%) Maintenance 3,349,773 3,250,746 3.1%

General 934,014 878,709 6.3% Interest 819,709 _ 652241 25.7%

Depreciation and Amortization 2,170,759 2,177,869 (0.3%)

Extraordinary Maintenance & Casualty Loss 124,219 - - Total Operating Expenses $46,178,873 $44,997,937 2.6% Increase (Decrease) of Revenues over Expenses — $1,650,298 $60,994 - Prior Period Adjustments $387,582 0

Increase /(Decrease) in Net Assets from

Operations $2,037,880 $60,994 -

The Details of the changes are explained in the Results of Operations section

RESULTS OF OPERATIONS |

increase of 5,1%

Operating revenues of the Authority’s activities are generated principally from HUD operating subsidies and housing assistance payments In 2009 the Authority’s revenues for its activities totaled $47,829,171 of

this total, $41,921,166, or 88% is from HUD and other government grants and subsidies

VN TR VS SVS LI SHEL ISVS

SX AANA ALY VASES Ộ Yo SS SAS SS

WY PUY FUE, © “Ae le eg ll ane

HOUSING AUTHORITY OF THE COUNTY OF SAN JOAQUIN MANAGEMENT DISCUSSION AND ANALSIS

YEAR ENDED SEPTEMBER 30, 2009

The Authority’s expense activities consist primarily of housing assistance payments The total expenses were $46,178,874 of which $31,464,492, or 68%, was housing assistance payments

Change in net assets for the year ended September 30, 2009, increased $2,037,880 compared to an increase

of $60,994 for the year ended September 30, 2008, Significant factors contributing to these results

included:

® ~ Increase in Operating Subsidy and Capital Funds in Public Housing and funding for Housing Choice Voucher Program

« Decrease in interest income as interest rates fell

" Increase in tenant rent revenue -

«Increase in administrative salaries as open positions in the prior year were filled in the current year

FINANCIAL CONTACT The individual to be contacted regarding this report is Mr Clifford Hatanaka, Director of Finance, of the Housing Authority of the County of San Joaquin, at (209) 460-5000, Specific requests may be submitted to the Housing Authority of the County of San Joaquin at 448 S Center Street, Stockton, CA 95203