Upload
others
View
1
Download
0
Embed Size (px)
Citation preview
ALPHA HOMES, INC. HUD PROJECT NO.
085-HD020-NP-WDD-PRAC
INDEPENDENT AUDITOR’S REPORT
For the Year Ended March 31, 2021
TABLE OF CONTENTS
PAGE
INDEPENDENT AUDITOR'S REPORT 1 – 2
FINANCIAL STATEMENTS:
Statement of Financial Position 3
Statement of Activities 4
Statement of Functional Expenses 5
Statement of Cash Flows 6
NOTES TO THE FINANCIAL STATEMENTS 7 – 12
SUPPLEMENTARY INFORMATION:
Federal Compliance Section
Schedule of Expenditures of Federal Awards 13
Independent Auditor's Report on Compliance for
Each Major Program and on Internal Control over
Compliance Required by The Uniform Guidance
14 – 15
Independent Auditor's Report on Internal Control
over Financial Reporting and on Compliance and
Other Matters Based on an Audit of Financial
Statements Performed in Accordance with
Government Auditing Standards
16 – 17
Schedule of Findings 2 CFR Section 200.515 18 – 19
Summary Schedule of Prior Audit Findings 20
OTHER INFORMATION:
Independent Accountant's Report On Applying
Agreed-Upon Procedure
21 – 22
SUPPLEMENTARY DATA REQUIRED BY HUD 23 – 24
CERTIFICATION OF PROJECT OWNER 25
MANAGEMENT AGENT'S CERTIFICATION 26
INDEPENDENT AUDITOR’S REPORT
To the Board of Directors of
Alpha Homes, Inc.
Jefferson City, Missouri:
Report on the Financial Statements
We have audited the accompanying financial statements of Alpha Homes, Inc. (the “Project”) (a
nonprofit corporation), which comprise the Statement of Financial Position as of March 31, 2021,
and the related Statements of Activities, Functional Expenses, and Cash Flows for the year then
ended, and the related notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in
accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the preparation
and fair presentation of financial statements that are free from material misstatement, whether due
to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with auditing standards generally accepted in the United States
of America and the standards applicable to financial audits contained in Government Auditing
Standards, issued by the Comptroller General of the United States. Those standards require that we
plan and perform the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditor’s judgment,
including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation and fair presentation of the financial statements in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. Accordingly, we express
no such opinion. An audit also includes evaluating the appropriateness of accounting policies used
and the reasonableness of significant accounting estimates made by management, as well as
evaluating the overall presentation of the financial statements.
1
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Opinion
In our opinion the financial statements referred to above present fairly, in all material respects, the
financial position of the Project as of March 31, 2021, and the changes in its net assets and its cash
flows for the year then ended in accordance with accounting principles generally accepted in the
United States of America.
Other Matters
Supplementary Information
Our audit was conducted for the purpose of forming an opinion on the financial statements as a
whole. The accompanying Schedule of Expenditures of Federal Awards, as required by Title 2 U.S.
Code of Federal Regulations (CFR) Part 200, Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards, is presented for purposes of additional
analysis and is not a required part of the financial statements. Such information is the responsibility
of management and was derived from and relates directly to the underlying accounting and other
records used to prepare the financial statements. The information has been subjected to the auditing
procedures applied in the audit of the financial statements and certain additional procedures,
including comparing and reconciling such information directly to the underlying accounting and
other records used to prepare the financial statements or to the financial statements themselves, and
other additional procedures in accordance with auditing standards generally accepted in the United
States of America. In our opinion, the information is fairly stated, in all material respects, in relation
to the financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards, we have also issued our report dated June 7,
2021, on our consideration of the Project’s internal control over financial reporting and on our
tests of its compliance with certain provisions of laws, regulations, contracts, and grant
agreements and other matters. The purpose of that report is to describe the scope of our testing of
internal control over financial reporting and compliance and the results of that testing, and not to
provide an opinion on internal control over financial reporting or on compliance. That report is
an integral part of an audit performed in accordance with Government Auditing Standards in
considering the Project’s internal control over financial reporting and compliance.
GRAVES AND ASSOCIATES, CPAs, LLC
Jefferson City, Missouri
June 7, 2021
2
ALPHA HOMES, INC.
HUD PROJECT NO. 085-HD020-NP-WDD-PRAC
STATEMENT OF FINANCIAL POSITION
MARCH 31, 2021
Account ASSETS
No.
CURRENT ASSETS:
1120 Cash 18,104$
1200 Miscellaneous Prepaid Expenses 2,388
Total Current Assets 20,492
1191 Tenant Deposits Held in Trust 4,004
RESTRICTED DEPOSITS:
1320 Replacement Reserve 27,488
1340 Residual Receipts Reserve 4,005
Total Restricted Deposits 31,493
PROPERTY AND EQUIPMENT:
1410 Land 52,398
1420 Buildings 1,102,540
1440 Building Equipment (Portable) 3,792
1460 Donated Furnishings 12,554
1465 Computer Equipment 1,734
Total Property and Equipment 1,173,018
ACCUMULATED DEPRECIATION:
1495 Accumulated Depreciation-Buildings (816,865)
1495 Accumulated Depreciation-Building Equipment (Portable) (3,033)
1495 Accumulated Depreciation-Furniture and Fixtures (12,554)
1495 Accumulated Depreciation-Computer (1,734)
Total Accumulated Depreciation (834,186)
Net Property and Equipment 338,832
Total Assets 394,821$
LIABILITIES AND NET ASSETS
CURRENT LIABILITIES:
2110 Accounts Payable 15,799$
2210 Prepaid Revenue 4,284
Total Current Liabilities 20,083
2191 Tenant Deposits Held in Trust (CONTRA) 3,952
Total Liabilities 24,035
NET ASSETS
Without Grantor Restrictions
3131 Undesignated (1,035,539)
Invested in Property and Equipment, Net 338,832
(696,707)
With Grantor Restrictions
Purpose Restriction 31,493
Time Restriction 1,036,000
1,067,493
Total Net Assets 370,786
Total Liabilities and Net Assets 394,821$
The accompanying notes are an integral part of these financial statements.
3
ALPHA HOMES, INC.
HUD PROJECT NO. 085-HD020-NP-WDD-PRAC
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED MARCH 31, 2021
Account REVENUES
No.
5120 Rent-Revenue-Gross Potential 75,054$
5121 Tenant Assistance Payments 25,554
5191 Excess Rent 1,978
Total Rent Revenue 102,586
5220 Vacancies-Apartments (2,625)
Net Rent Revenue 99,961
5430 Revenue from Investments-Residual Receipts 2
5440 Revenue from Investments-Reserve for Replacements 12
5490 Revenue from Investments-Other 2
Total Financial Revenue 16
Total Revenue 99,977
EXPENSES
Program 79,561
Management and General 34,098
Total Cost of Operations 113,659
7190 Gain (Loss) on Disposal of Property and Equipment (833)
Total Gain(Loss) on Disposal of Property and Equipment (833)
Change in Net Assets without Grantor Restrictions (18,896)
Change in Net Assets with Grantor Restrictions 4,381
NET ASSETS, BEGINNING OF YEAR 385,301
NET ASSETS, END OF YEAR 370,786$
The accompanying notes are an integral part of these financial statements.
4
ALPHA HOMES, INC.
HUD PROJECT NO. 085-HD020-NP-WDD-PRAC
STATEMENT OF FUNCTIONAL EXPENSES
FOR THE YEAR ENDED MARCH 31, 2021
Account
No. Program
Management
and General Total
6310 Office Salaries 1,903$ 816$ 2,719$
6311 Office Expense 1,735 744 2,479
6320 Management Fees 5,697 2,441 8,138
6330 Manager Salaries 847 363 1,210
6350 Audit Expense 2,744 1,176 3,920
6390 Miscellaneous Administrative Expenses 179 77 255
Total Administrative Expenses 13,105 5,616 18,721
6450 Electricity 8,401 3,600 12,001
6451 Water 910 390 1,300
6452 Gas 4,080 1,749 5,829
6453 Sewer 1,735 743 2,478
Total Utilities Expenses 15,126 6,482 21,608
6510 Janitorial Payroll 3,081 1,320 4,401
6515 Supplies 2,962 1,269 4,231
6520 Contracts 2,295 983 3,278
6525 Garbage and Trash Removal 676 290 966
6530 Security Payroll/Contract 498 214 712
6546 Heating/Cooling Repair and Maintenance 1,929 827 2,756
6548 Snow Removal 2,139 917 3,056
6590 Miscellaneous Operating and Maintenance Expenses 46 20 66
Total Operating and Maintenance Expenses 13,626 5,840 19,466
6711 Payroll Taxes 284 122 406
6720 Insurance Expense 4,540 1,946 6,486
6723 Health Insurance and Other Employee Benefits 1,649 707 2,356
Total Taxes and Insurance 6,474 2,774 9,248
Total Cost of Operations Before Depreciation 48,330 20,713 69,043
6600 Depreciation-Buildings 30,966 13,271 44,237
6660 Depreciation-Buildings Equipment-Portable 265 114 379
Total Depreciation Expense 31,231 13,385 44,616
Total Cost of Operations 79,561$ 34,098$ 113,659$
The accompanying notes are an integral part of these financial statements.
5
ALPHA HOMES, INC.
HUD PROJECT NO. 085-HD020-NP-WDD-PRAC
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED MARCH 31, 2021
S1200-010 Rental Receipts 100,111$
S1200-020 Interest Receipts 16
S1200-040 100,127
S1200-050 Administrative (15,749)
S1200-070 Management Fees (8,138)
S1200-090 Utilities (21,608)
S1200-100 Salaries and Wages (7,520)
S1200-110 Operating and Maintenance (15,065)
S1200-140 Property Insurance (1,622)
S1200-150 Miscellaneous Taxes and Insurance (7,626)
S1200-160 Tenant Deposit Activity (52)
S1200-230 Total Disbursements (77,380)
S1200-240 Net Cash Provided by Operating Activities 22,747
(5,496)
Withdrawals from Account 1,128
(12)
S1200-250 Net Deposits to the Reserve for Replacement Account (4,380)
(2)
S1200-260 Net Deposits to the Residual Receipts Account (2)
S1200-330 Purchase of Property and Equipment (6,215)
S1200-350 Net cash used in investing activities (10,597)
S1200-470 Net (decrease) in cash and cash equivalents 12,150
S1200-480 Cash - Beginning of Year 5,954
S1200-T Cash - End of Year 18,104$
3250 Decrease in net assets (14,515)$
6600 Depreciation 44,616
S1200-600 (Gain)Loss on Disposal of Property and Equipment 833
Increase or Decrease in:
S1200-520 Prepaid Expenses (544)
S1200-530 Tenant Deposits Held in Trust (99)
S1200-540 Accounts Payable (6,235)
S1200-560 Accrued Expenses (1,506)
S1200-580 Tenant Deposits Held in Trust (contra) 47
S1200-590 Prepaid Revenue 150
S1200-610 Net Cash Provided by Operating Activities 22,747$
Reconciliation of change in net assets to net cash provided by operating activities:
Adjustments to Reconcile Change in Net Assets to Cash Provided by Operating
Activities:
Cash Flows From Operating Activities:
Cash Flows From Investing Activities:
Deposits to Reserve for Replacement Retained in Account
Interest Earned But Retained in Reserve for Replacements
Interest Earned But Retained in Residual Receipts Account
The accompanying notes are an integral part of these financial statements.
6
ALPHA HOMES, INC.
HUD PROJECT NO. 085-HD020-NP-WDD-PRAC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2021
7
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
Nature of Organization
Alpha Homes, Inc. (the “Project”) is a not-for-profit corporation organized under the laws of the
State of Missouri, for the purpose of developing and operating the Lewella Estes Apartments, a 16-
unit project located in Jefferson City, Missouri. The Project operates under two provisions of
Section 221(d)(4) of the National Housing Act, with mortgage insurance provided by the Federal
Housing Administration (“FHA”) and the Department of Housing and Urban Development
(“HUD”). The Project’s major program is its Section 811 Capital Advance.
As further discussed in Note 9, the responsibility for management of the affairs of the Project is
vested with Cole County Residential Services, Inc. (“CCRSI”).
The Project also is subject to Section 8 Housing Assistance Payment agreements with the HUD, and
a portion of the Project’s rental income is received from HUD.
Basis of Accounting
The financial statements have been prepared on the accrual basis of accounting. Accordingly,
revenue is recognized when earned and expenses are recognized when incurred.
Basis of Presentation
The Project is required to report information regarding its financial position and activities according
to two classes of net assets: without grantor restrictions and with grantor restrictions.
Depreciation
Property and equipment are recorded at cost, if purchased, or fair market value, if donated, and
depreciated over the estimated useful lives of the respective assets on a straight-line basis as
follows:
Buildings and improvements 10 to 30 years
Furnishings and equipment 5 to 7 years
Major repairs which increase the assets value are capitalized. The capitalization threshold of $2,500
is used to report and depreciate capital assets.
Income Taxes
The Project is a not-for-profit entity exempt from income taxes under Internal Revenue Code
Section 501(c)(3).
ALPHA HOMES, INC.
HUD PROJECT NO. 085-HD020-NP-WDD-PRAC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2021
8
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued)
Prepaid Revenue
Rental income received in advance is deferred and recognized over the periods to which the rent
relates.
Distributions
The Project’s regulatory agreement with HUD stipulates, among other things, that the Project will
not make distributions of assets or income to any of its officers or directors.
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Project considers all unrestricted, highly liquid
investments with an initial maturity of three months or less to be cash equivalents. Excluded from
this definition of cash equivalents are amounts representing funds that have been designated by
the Board of Directors (the “Board”) or grantor restricted.
Net Assets Without Grantor Restrictions
Net assets available for use in general operations and not subject to grantor restrictions.
Net Assets With Grantor Restrictions
Net assets subject to grantor imposed restrictions. Some grantor-imposed restrictions are temporary
in nature, such as those that will be met by the passage of time or other events specified by the
grantor. Other grantor-imposed restrictions are perpetual in nature, where the grantor stipulates that
resources be maintained in perpetuity. Grantor-imposed restrictions are released when a restriction
expires, that is, when the stipulated time has elapsed, when the stipulated purpose for which the
resource was restricted has been fulfilled, or both.
Revenue Recognition
The Project has adopted ASU 2014-09 Revenue from Contracts with Customers and all subsequent
amendments to the ASU (collectively, “ASC 606”), as management believes the standard improves
the usefulness and understandability of the Project’s financial reporting.
Analysis of various provisions of this standard resulted in no significant changes in the way the
Project recognizes revenue and, therefore, no changes to the previously issued audited financial
statements were required on a retrospective basis. The presentation and disclosures of revenue
have been enhanced in accordance with the standard.
ALPHA HOMES, INC.
HUD PROJECT NO. 085-HD020-NP-WDD-PRAC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2021
9
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES: (Continued)
Functional Allocation of Expenses
The costs of program and supporting activities have been summarized on a functional basis in the
Statement of Activities. The Statement of Functional Expenses presents the natural classification
detail of expenses by function. Accordingly, certain costs have been allocated among the programs
and supporting services benefitted.
NOTE 2 – LIQUIDITY AND AVAILABILITY:
Financial assets available for general expenditure that is, without grantor or other restrictions
limiting their use, within one year of the balance sheet date are as follows:
Cash and Cash Equivalents $ 18,104
The tenant security deposits represent the balance in the restricted cash account in excess of
outstanding deposit liability. Total financial assets available for general expenditure are
approximately 3.16 months of operating expenses.
NOTE 3 – COMMITMENTS AND CONTINGENCIES:
In 2000, HUD made a capital advance to the Project in the amount of one million thirty six
thousand and no/100 dollars ($1,036,000.00). The amount of the capital advance was not to exceed
the total estimated development of the Project (as determined by HUD), less the incremental
development cost associated with excess amenities and design features to be paid for by the
Sponsor. The capital advance shall bear no interest and is not required to be repaid as long as the
housing: 1) remains available to eligible, very low-income persons with disabilities for a period of
40 years and 2) is operated in accordance with Section 811. The capital advance is secured by a
Deed of Trust (hereinafter called “Mortgage”) on the property. The Mortgage constitutes a valid
first lien on said property and the improvements to be erected thereon and the only lien thereon,
except for liens for taxes and assessments not yet payable and other liens acceptable to HUD. The
Project executed a Use Agreement restricting use of the project to rental housing for eligible
households as approved by HUD for a 40-year period. Failure to comply with the Use Agreement
would require the Project to repay the capital advance in full along with any interest earned since
the date of the first advance.
ALPHA HOMES, INC.
HUD PROJECT NO. 085-HD020-NP-WDD-PRAC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2021
10
NOTE 4 – RESTRICTED DEPOSITS:
The Project requires cash deposits from tenants to protect the Project at least in part from the
default of tenants. These restricted funds, which approximate $3,952, are not available for
general operations.
NOTE 5 – RENT INCREASES:
Under the Regulatory Agreement, the Project may not increase the contract rent without HUD
approval. For the year ended, the Project submitted to HUD a 2% rent increase effectively
increasing rent $10 per month per unit.
NOTE 6 – MANAGEMENT AGREEMENT:
Under an agreement with the Housing Authority of the City of Jefferson (the “Housing Authority”),
the Housing Authority acts as the managing agent for the operations of the Project. In addition, the
Project’s routine expenses are paid by the Housing Authority’s Revolving Fund, with
reimbursements made weekly. The Housing Authority is to be compensated based on 9% of gross
collections received during the preceding month for rents from the Project. The agreement is
automatically renewable each year unless either party gives 60 days’ notice prior to the date of
expiration. Management fees paid to the Housing Authority for the year ended were $8,138.
NOTE 7 – FINANCIAL INSTRUMENTS:
Financial instruments that potentially subject the Project to a concentration of credit risk consist of
cash. Their cash accounts are invested with one creditworthy, high-quality financial institution. The
Project’s cash balances did not exceed FDIC insurance limits as of the year ended.
NOTE 8 – CURRENT VULNERABILITY DUE TO CERTAIN CONCENTRATIONS:
The Project’s sole asset is a 16-unit apartment project. The Project’s operations are concentrated in
the multifamily real estate market. In addition, the Project operates in a heavily regulated
environment. The operations of the Project are subject to the administrative directives, rules and
regulations of the federal, state and local regulatory agencies, including, but not limited to, HUD.
Such administrative directives, rules and regulations are subject to change by an act of congress or
an administrative change mandated by HUD. Such changes may occur with little notice or
inadequate funding to pay for the related cost, including the additional administrative burden, to
comply with a change.
ALPHA HOMES, INC.
HUD PROJECT NO. 085-HD020-NP-WDD-PRAC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2021
11
NOTE 9 – SPONSORING ORGANIZATION:
The Project is specifically organized in support of Cole County Residential Services, Inc.
(“CCRSI”), a Missouri nonprofit corporation exempt from federal income tax under Section
501(c)(3) of the Internal Revenue Code. The Directors of the Project are limited to individuals who
are members of CCRSI. The financial statements of the Project are combined with the financial
statements of CCRSI. The combined financial statements are included in the annual financial
statements of Cole County Special Services (“CCSS”). In accordance with Governmental
Accounting Standards Board Statement 39, CCRSI and the Project, as component units, are an
integral part of CCSS, as a reporting entity, for financial reporting and treated as blended.
NOTE 10 – NET ASSETS WITHOUT GRANTOR RESTRICTONS:
The Project balance in Net Assets (Deficit) Without Grantor Restrictions is comprised of the
following, as of the year ended:
Net Assets (Deficit) Without Grantor Restrictions:
Undesignated $ (1,035,539)
Invested in Rental Property, Net 338,832
$ (696,707)
NOTE 11 – NET ASSETS WITH GRANTOR RESTRICTIONS:
Under the terms of the Regulatory Agreement, the Project is required to set aside specified
amounts for the replacement of property and other project expenses as approved by HUD.
Purpose restricted deposits, which were $31,493, at year end are held in separate accounts and
generally are not available for operating purposes.
Use of the residual receipts account is contingent upon HUD’s prior written approval.
See Note 3 for further information regarding the time restrictions of net assets with grantor
restrictions.
NOTE 12 – RELATED PARTY TRANSACTIONS:
As discussed in Note 9, the Project is a blended component unit of CCSS. A blended component
unit is a separate legal entity that meets the component unit criteria whereby the blended component
unit’s governing body is the same or substantially the same as the Project or the component unit
provides services entirely to the Project. The Project had payments of $50,337 to CCRSI for the
year ended. CCRSI is also a blended component unit of CCSS.
ALPHA HOMES, INC.
HUD PROJECT NO. 085-HD020-NP-WDD-PRAC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED MARCH 31, 2021
12
NOTE 13 – UNCERTAIN TAX POSITIONS:
The Project is exempt from federal and state income taxes under Section 501(c)(3) of the Internal
Revenue Code and applicable state law. The accounting standard on accounting for uncertainty
in income taxes addresses the determination of whether tax benefits claimed or expected to be
claimed on a tax return should be recorded in the financial statements. Under that guidance, the
Project may recognize the tax benefit from an uncertain tax position only if it is more likely than
not that the tax position will be sustained on examination by taxing authorities based on the
technical merits of the position. Examples of tax positions include the tax-exempt status of the
Project and various positions related to the potential sources of unrelated business taxable
income (UBIT). The Project was not subject to UBIT for the year ended.
The Project files a Form 990 in the U.S. federal jurisdiction. The Project is generally no longer
subject to examination by the Internal Revenue Service three years after the forms were filed.
NOTE 14 – EVALUATION OF SUBSEQUENT EVENTS:
The Project has evaluated subsequent events through June 7, 2021, the date which the financial
statements were available to be issued.
On March 11, 2020, Coronavirus (“COVID-19”) was declared a pandemic by the World Health
Organization. As of the date of this report, any potential effects of COVID-19, whether operational
or financial, for the Project are unknown. An estimate of the actual effects, whether operational or
financial, cannot be reasonably determined as of the date of this report.
SUPPLEMENTARY INFORMATION
FEDERAL COMPLIANCE SECTION
Federal Grantor/Program or Cluster Title
Federal CFDA
Number
Federal Expenditures($)
U.S. Department of Housing and Urban Development
Supportive Housing for Persons with Disabilities 14.181
Capital Advance $ 1,036,000
Rent Assistance 25,554
Total Expenditures of Federal Awards $ 1,061,554
There were no subrecipients.
Basis of Presentation:
Summary of Significant Accounting Policies:
Capital Advance:
In 2000, HUD issued a capital advance to the project owner totaling $1,036,000. This amount is included in
the federal expenditures presented in the Schedule and is included in total net assets with donor restrictions in
the financial statements. The capital advance agreement requires the owner to maintain the project for 40
years.
Alpha Homes, Inc.
Schedule of Expenditures of Federal Awards
For the Year Ended March 31, 2021
The accompanying notes are an integral part of this schedule.
Notes to the Schedule of Expenditures of Federal Awards
The Schedule of Expenditures of Federal Awards (the "Schedule") includes the federal award activity of the
Project under programs of the federal government for the year ended. The information in this Schedule is
presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200,
Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
(Uniform Guidance) . Because the Schedule presents only a selected portion of the operations of the Project
it is not intended to, and does not, present the financial position, changes in net position, or cash flows of the
Project.
Expenditures reported on the Schedule are reported on the basis of accounting generally accepted in the
United States of America (U.S. GAAP). Such expenditures are recognized following the costs principles
contained in the Uniform Guidance , wherein certain types of expenditures are not allowable or are limited as
to reimbursement. Negative amounts shown on the Schedule represent adjustments or credits made in the
normal course of business to amounts reported as expenditures in prior years. The Project was subject to Part
3.1 of the Uniform Guidance .
13
INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR EACH MAJOR
PROGRAM AND ON INTERNAL CONTROL OVER COMPLIANCE REQUIRED BY
THE UNIFORM GUIDANCE
To the Board of Directors of
Alpha Homes, Inc.
Jefferson City, Missouri:
Report on Compliance for Each Major Federal Program
We have audited Alpha Home, Inc.’s (the “Project”) compliance with the types of compliance
requirements described in the OMB Compliance Supplement that could have a direct and material
effect on each of the Project’s major federal programs for the year ended March 31, 2021. The
Project’s major federal programs are identified in the Summary of Auditor’s Results section of
the accompanying Schedule of Findings.
Management’s Responsibility
Management is responsible for compliance with federal statutes, regulations, and the terms and
conditions of its federal awards applicable to its federal programs.
Auditor’s Responsibility
Our responsibility is to express an opinion on compliance for each of the Project’s major federal
programs based on our audit of the types of compliance requirements referred to above. We
conducted our audit of compliance in accordance with auditing standards generally accepted in
the United States of America; the standards applicable to financial audits contained in
Government Auditing Standards, issued by the Comptroller General of the United States; and the
audit requirements of Title 2 U.S. Code of Federal Regulations (CFR) Part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards
(Uniform Guidance). Those standards and the Uniform Guidance 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
Project’s compliance with those requirements and performing such other procedures as we
considered necessary in the circumstances.
We believe that our audit provides a reasonable basis for our opinion on compliance for each
major federal program. However, our audit does not provide a legal determination of the
Project’s compliance.
14
Opinion on Each Major Federal Program
In our opinion, the Project complied, in all material respects, with the types of compliance
requirements referred to above that could have a direct and material effect on each of its major
federal programs for the year ended March 31, 2021.
Report on Internal Control Over Compliance
Management of the Project is responsible for establishing and maintaining effective internal
control over compliance with the types of compliance requirements referred to above. In
planning and performing our audit of compliance, we considered the Project’s internal control
over compliance with the types of requirements that could have a direct and material effect on
each major federal program to determine the auditing procedures that are appropriate in the
circumstances for the purpose of expressing an opinion on compliance for each major federal
program and to test and report on internal control over compliance in accordance with the
Uniform Guidance, 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 Project’s internal control over compliance.
A deficiency in internal control over compliance exists when the design or operation of a control
over compliance does not allow management or employees, in the normal course of performing
their assigned functions, to prevent, or detect and correct, noncompliance with a type of
compliance requirement of a federal program on a timely basis. A material weakness in internal
control over compliance is a deficiency, or combination of deficiencies, in internal control over
compliance, such that there is a reasonable possibility that material noncompliance with a type of
compliance requirement of a federal program will not be prevented, or detected and corrected, on
a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a
combination of deficiencies, in internal control over compliance with a type of compliance
requirement of a federal program that is less severe than a material weakness in internal control
over compliance, yet important enough to merit attention by those charged with governance.
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 material weaknesses or significant deficiencies. We did
not identify any deficiencies in internal control over compliance that we consider to be material
weaknesses. However, material weaknesses may exist that have not been identified.
The purpose of this report on internal control over compliance is solely to describe the scope of
our testing of internal control over compliance and the results of that testing based on the
requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other
purpose.
GRAVES AND ASSOCIATES, CPAs, LLC
Jefferson City, Missouri
June 7, 2021
15
INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER
FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS
BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN
ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors of
Alpha Homes, Inc.
Jefferson City, Missouri:
We have audited, in accordance with the 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, the financial
statements of Alpha Homes, Inc. (the “Project”), which comprise the Statement of Financial
Position as of March 31, 2021, and the related Statements of Activities, Functional Expenses,
and Cash Flows for the year then ended, and the related notes to the financial statements, and
have issued our report thereon dated June 7, 2021.
Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Project’s
internal control over financial reporting (internal control) to determine the audit procedures that
are appropriate in the circumstances for the purpose of expressing our opinion on the financial
statements, but not for the purpose of expressing an opinion on the effectiveness of the Project’s
internal control. Accordingly, we do not express an opinion on the effectiveness of the Project’s
internal control.
A deficiency in internal control exists when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to
prevent, or detect and correct, misstatements on a timely basis. A material weakness is a
deficiency, or a combination of deficiencies, in internal control such that there is a reasonable
possibility that a material misstatement of the entity’s financial statements will not be prevented,
or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a
combination of deficiencies, in internal control that is less severe than a material weakness, yet
important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph
of this section and was not designed to identify all deficiencies in internal control that might be
material weaknesses or significant deficiencies. Given these limitations, during our audit we did
not identify any deficiencies in internal control that we consider to be material weaknesses.
However, material weaknesses may exist that have not been identified.
16
Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Project’s financial statements are
free from material misstatement, we performed tests of its compliance with certain provisions of
laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct
and material effect on the determination of financial statement amounts. However, providing an
opinion on compliance with those provisions was not an objective of our audit, and accordingly,
we do not express such an opinion. The results of our tests disclosed no instances of
noncompliance or other matters that are required to be reported under Government Auditing
Standards.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and
compliance and the results of that testing, and not to provide an opinion on the effectiveness of
the entity’s internal control or on compliance. This report is an integral part of an audit
performed in accordance with Government Auditing Standards in considering the entity’s
internal control and compliance. Accordingly, this communication is not suitable for any other
purpose.
GRAVES AND ASSOCIATES, CPAs, LLC
Jefferson City, Missouri
June 7, 2021
17
ALPHA HOMES, INC.
SCHEDULE OF FINDINGS 2 CFR SECTION 200.515
FOR THE YEAR ENDED MARCH 31, 2021
SECTION I – SUMMARY OF AUDITOR’S RESULTS:
Financial Statements:
Type of Financial Statement Opinion: Unmodified
Internal Control Over Financial Reporting (GAGAS):
- Material weakness(es) reported? No
- Significant deficiency(ies) reported? No
- Noncompliance material to financial statements
noted (GAGAS)? No
Federal Awards:
Internal Control Over Major Programs:
- Material weakness(es) reported? No
- Significant deficiency(ies) reported? No
Type of Opinion on Compliance
for Major Programs: Unmodified
Are there any reportable findings under
2 CFR Section 200.516(a)? No
18
ALPHA HOMES, INC.
SCHEDULE OF FINDINGS 2 CFR SECTION 200.515
FOR THE YEAR ENDED MARCH 31, 2021
SECTION I – SUMMARY OF AUDITOR’S RESULTS: (Continued)
Identification of Major Programs:
CFDA Number (s) Name of Federal Program or Cluster
14.181 Supportive Housing for Persons with Disabilities
Dollar Threshold: Type A/B Programs Type A: >$750,000
Type B: All Others
Low Risk Auditee under
2 CFR Section 200.520? Yes
SECTION II – FINANCIAL STATEMENTS FINDINGS:
No matters were reported.
SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS:
No matters were reported.
19
ALPHA HOMES, INC.
SUMMARY SCHEDULE OF PRIOR AUDIT FINDINGS
FOR THE YEAR ENDED MARCH 31, 2021
No matters were reported.
20
OTHER INFORMATION
INDEPENDENT ACCOUNTANT’S REPORT
ON APPLYING AGREED-UPON PROCEDURE
To the Board of Directors of
Alpha Homes, Inc.
Jefferson City, Missouri:
We have performed the procedure described in the second paragraph of this report, which was
agreed to by Alpha Homes, Inc. (the “Project”) and the U.S. Department of Housing and Urban
Development, Public Indian Housing – Real Estate Assessment Center (PIH-REAC), on whether
the electronic submission of certain information agrees with the related hard copy documents within
the audit reporting package. The Project is responsible for the accuracy and completeness of the
electronic submission. The sufficiency of the procedure is solely the responsibility of the Project
and the U.S. Department of Housing and Urban Development, PIH-REAC. Consequently, we
make no representation regarding the sufficiency of the procedure described below either for the
purpose for which this report has been requested or for any other purpose.
We compared the electronic submission of the items listed in the “UFRS Rule Information” column
with the corresponding printed documents listed in the “Hard Copy Documents” column. The
associated finding from the performance of our agreed-upon procedure indicate agreement or non-
agreement of the electronically submitted information and hard copy documents as show in the
chart below.
This agreed-upon procedure engagement was conducted in accordance with attestation standards
established by the American Institute of Certified Public Accountants and the standards applicable
to attestation engagements contained in Government Auditing Standards issued by the Comptroller
General of the United States. We were not engaged to and did not conduct an examination or
review, the objective of which would be the expression of an opinion or conclusion, respectively,
on whether the electronic submission of the items listed in the “UFRS Rule Information” column
agrees with the related hard copy documents within the audit reporting package. Accordingly, we
do not express such an opinion or conclusion. Had we performed additional procedures; other
matters might have come to our attention that would have been reported to you.
We were engaged to perform an audit in accordance with the Consolidated Audit Guide for Audits
of HUD Programs as of and for the year ended March 31, 2021, and have issued our reports
thereon dated June 7, 2021. The information in the “Hard Copy Documents” column was included
within the scope, or was a by-product of that audit. Further, our opinion on the fair presentation of
the Project’s Financial Data Templates dated June 7, 2021, was expressed in relation to the basic
financial statements of the Project taken as a whole.
21
A copy of the reporting package required by the Consolidated Audit Guide for Audits of HUD
Programs, which includes the auditors’ reports, is available in its entirety from the Project. We
have not performed any additional auditing procedures since the date of the aforementioned audit
reports. Further, we take no responsibility for the security of the information transmitted
electronically to the U.S. Department of Housing and Urban Development, PIH-REAC.
The purpose of this report on applying the agreed-upon procedure is solely to describe the
procedure performed on the electronic submission of the items listed in the “UFRS Rule
Information” column and the associated findings, and not to provide an opinion or conclusion.
Accordingly, this report is not suitable for any other purpose.
UFRS Rule Information Hard Copy Documents Findings
Balance Sheet, Revenue and Expense
and Cash Flow Data (account numbers
1120 to 7100T and the S1200 series)
Financial Data Templates (i.e.,
Supplemental Schedules)
Agrees
Surplus Cash (S1300 series of
accounts)
Financial Data Templates [(i.e.,
Computation of Surplus Cash,
Distributions and Residual Receipts
(Annual)]
Agrees
Footnotes (S3100 series of accounts) Footnotes to Audited Basic
Financial Statements
Agrees
Type of opinion on the Financial
Statement and Compliance (account
number S2100-020, S2300-020)
Auditor’s Reports on the Financial
Statements and Compliance
Agrees
Type of opinion on Financial Data
Templates (i.e., Supplemental Data)
(account S2100-100)
Auditor’s Supplemental Report on
Financial Data Templates
Agrees
Audit findings narrative (S2700 series
of accounts)
Schedule of Findings and
Questioned Costs
Agrees
GRAVES AND ASSOCIATES, CPAs, LLC
Jefferson City, Missouri
June 7, 2021
22
ALPHA HOMES, INC.
HUD PROJECT NO. 085-HD020-NP-WDD-PRAC
SUPPLEMENTARY DATA REQUIRED BY HUD
FOR THE YEAR ENDED MARCH 31, 2021
23
Cash – Replacement Reserve, Cash – Residual Receipts, Tenant Deposits Held in Trust:
In accordance with the provisions of the Regulatory Agreement, restricted cash is held to be used
for replacement of property and various other uses with the approval of HUD as follows:
Cash-
Replacement
Reserve
Balance, April 1, 2020 $ 23,108
Monthly Deposits
(6 x $453) 2,718
(6 x $463) 2,778
Interest Earned 12
Withdrawals (1,128)
Balance, March 31, 2021 $ 27,488
Tenant
Cash-
Deposits
Residual
Held in
Receipts
Trust
Total
Balance, April 1, 2020 $ 4,003
$ 3,955
$ 7,958
Deposits - 407 407
Interest Earned 2
2
4
Other Withdrawals - - -
Approved Withdrawals -
(360)
(360)
Balance, March 31, 2021 $ 4,005
$ 4,004
$ 8,009
Less: Current Obligations
Security Deposit Liability -
(3,952)
(3,952)
Surplus Cash $ 4,005
$ 52
$ 4,057
The above accounts are held at Central Bank in Jefferson City, Missouri and were confirmed by the
Depository.
ALPHA HOMES, INC.
HUD PROJECT NO. 085-HD020-NP-WDD-PRAC
SUPPLEMENTARY DATA REQUIRED BY HUD
FOR THE YEAR ENDED MARCH 31, 2021
24
Supplementary Data:
S1000-010 Total mortgage principal payments required during the year $ -
S1000-020 Total of 12 monthly deposits during the year into the Cash - Replacement 5,496
Reserve Account, as required by the Regulatory Agreement
S1000-030 Cash - Replacement Reserve or Cash - Residual Receipts releases which 1,128
are included as Expense Items on the Statement of Activities
S1000-040 Project improvement reserve releases under the Flexible
-
Subsidy Program that are included as Expense Items on the
Statement of Activities
Schedule of Changes in Property and Equipment Accounts:
Beginning
Ending
Balance
Additions
Dispositions
Balance
Land $ 52,398
$ -
$ -
$ 52,398
Buildings 1,099,410
6,215
(3,085)
1,102,540
Equipment 5,526
-
-
5,526
Furniture and Fixtures 12,554
-
-
12,554
Total $ 1,169,888
$ 6,215
$ (3,085)
$ 1,173,018
Accumulated Depreciation $ 791,822
$ 44,616
$ (2,252)
$ 834,186
Computation of Surplus Cash – Annual:
Cash
$ 22,108
Current Obligations:
Accounts Payable due within 30 days $(15,799)
Prepaid Revenue
(4,284)
Tenant Security Deposits
(3,952)
Total Current Obligations
(24,035)
Surplus Cash (Deficiency)
$ (1,927)