Oakman Village Manor Senior Housing Development Corp. d/b/a …financials.pvm.org/files/Oakman 0612 Final-20121005... · 2012. 10. 5. · Oakman Village Manor Senior Housing Development

Oakman Village Manor Senior HousingDevelopment Corp.

d/b/a The Village of Oakman Manor(a not-for-profit corporation)

HUD Project No. 044-EE087

Financial Report

with Supplemental Information

June 30, 2012

Oakman Village Manor Senior HousingDevelopment Corp.d/b/a The Village of Oakman ManorHUD Project No. 044-EE087

Certificate of Officers

We certify that we have examined the attached financial statements and supplementalinformation of HUD Project No. 044-EE087, Oakman Village Manor Senior HousingDevelopment Corp. d/b/a The Village of Oakman Manor, and to the best of our knowledge andbelief, the same is a true statement of the financial condition as of June 30, 2012.

______________________________Harold EllisChair

September 11, 2012

Date

______________________________Maynard L. TimmVice-Chair

September 11, 2012

Date

ID# 56-2438797

Employer Identification Number


Management Agent's Certification

We certify that we have examined the attached financial statements and supplementalinformation of HUD Project No. 044-EE087, Oakman Village Manor Senior HousingDevelopment Corp. d/b/a The Village of Oakman Manor, and to the best of our knowledge andbelief, the same is a true statement of the financial condition as of June 30, 2012.

______________________________Cheryl CarneyManagement Agent Representative

September 11, 2012

Date

(248) 281-2020

Telephone Number

ID# 38-1387145

Management Company EmployerIdentification Number

Deborah Beard

Property Manager


Contents

Report Letter 1

Financial Statements

Balance Sheet 2-3

Statement of Activities 4-6

Statement of Changes in Deficiency in Net Assets 7

Statement of Cash Flows 8-9

Notes to Financial Statements 10-14

Supplemental Information 15

Report Letter 16

Balance Sheet Data 17-18

Statement of Activities Data 19-21

Statement of Changes in Net Deficiency in Assets Data 22

Statement of Cash Flows Data 23-24

Supplemental Information 25-26

Schedule of Changes in Fixed Asset Accounts 27

Schedule of Expenditures of Federal Awards 28

Computation of Surplus Cash 29

Report on Internal Control Over Financial Reporting and on Compliance andOther Matters Based on an Audit of Financial Statements Performed inAccordance with Government Auditing Standards 30-32

Report on Compliance with Requirements That Could Have a Direct andMaterial Effect on Each Major Program and on Internal Control OverCompliance in Accordance with OMB Circular A-133 33-35

Schedule of Findings and Questioned Costs 36-38

Independent Auditor's Report

To the Board of TrusteesOakman Village Manor Senior Housing Development Corp.

d/b/a The Village of Oakman Manor

We have audited the accompanying balance sheet of HUD Project No. 044-EE087, Oakman VillageManor Senior Housing Development Corp. d/b/a The Village of Oakman Manor (the "Organization"), asof June 30, 2012 and 2011 and the related statements of activities, changes in deficiency in net assets, andcash flows for the years then ended. These financial statements are the responsibility of theOrganization's management. Our responsibility is to express an opinion on these financial statementsbased on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United Statesof 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 andperform the audits to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amountsand disclosures in the financial statements. An audit also includes assessing the accounting principles usedand significant estimates made by management, as well as evaluating the overall financial statementpresentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, thefinancial position of HUD Project No. 044-EE087, Oakman Village Manor Senior Housing DevelopmentCorp. d/b/a The Village of Oakman Manor, as of June 30, 2012 and 2011 and the changes in deficiency innet assets and cash flows for the years then ended, in conformity with accounting principles generallyaccepted in the United States of America.

In accordance with Government Auditing Standards, we have also issued a report dated September 11,2012 on our consideration of Oakman Village Manor Senior Housing Development Corp. d/b/aThe Village of Oakman Manor's internal control over financial reporting and on our tests of itscompliance with certain provisions of laws, regulations, contracts, grant agreements, and other matters.The purpose of that report is to describe the scope of our testing of internal control over financialreporting and compliance and the results of that testing, and not to provide an opinion on theeffectiveness of internal control over financial reporting or on compliance. That report is an integral partof an audit performed in accordance with Government Auditing Standards and should be considered inassessing the results of our audits.

September 11, 2012

By: Robert F. Long, CPA

Engagement Partner27400 Northwestern Highway

Southfield, MI 48037-0307

Federal ID Number: 38-1357951

Phone Number: (248) 352-2500

1

Amanda.OMalley

Southfield West

Amanda.OMalley

Praxity


Balance Sheet

June 30, 2012 June 30, 2011

Assets

Current AssetsCash - Operations $ 28,921 $ 12,728Tenant accounts receivable - 147

Prepaid expenses 5,929 6,216

Total current assets 34,850 19,091

Deposits - Held in TrustTenant deposits held in trust 15,932 16,176

Deposits - FundedEscrow deposits 5,284 3,961Replacement reserve 116,878 105,261

Residual receipts reserve 34,214 26,750

Total deposits - Funded 156,376 135,972

Fixed Assets

Land and land improvements 42,092 42,092

Buildings and building improvements 6,042,646 6,027,886

Building equipment (portable) 1,831 -

Furniture for project/tenant use 63,654 63,654

Furnishings 109,421 109,421

Maintenance equipment 3,910 3,910

Miscellaneous fixed assets 29,804 29,804

Total fixed assets 6,293,358 6,276,767

Accumulated depreciation (976,049) (799,058)

Net fixed assets 5,317,309 5,477,709

Total assets $ 5,524,467 $ 5,648,948

See Notes to Financial Statements. 2


Balance Sheet (Continued)

June 30, 2012 June 30, 2011

Liabilities and Deficiency in Net Assets

Current LiabilitiesAccounts payable - Operations (Note 4) $ 6,980 $ 4,853Accrued wages payable 3,168 2,315Accrued payroll taxes payable 230 177

Prepaid revenue 239 -

Total current liabilities 10,617 7,345

Tenant deposits held in trust (contra) 14,507 14,095

Long-term Liabilities

Capital advance (Note 2) 4,778,700 4,778,700

HOME loans (Note 3) 872,000 872,000

Total long-term liabilities 5,650,700 5,650,700

Total liabilities 5,675,824 5,672,140

Deficiency in Net Assets

Deficiency in unrestricted net assets (151,357) (23,192)

Total deficiency in net assets (151,357) (23,192)

Total liabilities and deficiency in net assets $ 5,524,467 $ 5,648,948



Statement of Activities

Year Ended

June 30, 2012 June 30, 2011

Rent RevenueRent revenue - Gross potential $ 198,069 $ 202,441Tenant assistance payments 207,999 183,539

Miscellaneous rent revenue 287 350

Total rent revenue (potential at 100%occupancy) 406,355 386,330

Vacancies

Apartments (5,823) (16,270)

Total vacancies (5,823) (16,270)

Net rent revenue (rent revenue lessvacancies) 400,532 370,060

Financial RevenueProject operations 9 155Investments - Residual receipts - 7

Investments - Replacement reserve 189 245

Total financial revenue 198 407

Other RevenueLaundry and vending revenue 3,114 3,037Tenant charges 703 1,495Gifts (Note 4) 6,046 10,407

Miscellaneous revenue 41 2,685

Total other revenue 9,904 17,624

Total revenue 410,634 388,091



Statement of Activities (Continued)

Year Ended

June 30, 2012 June 30, 2011

Administrative ExpensesConventions and meetings $ 1,385 $ 355Management consultants 22,051 19,015Advertising and marketing 620 1,032Other renting expenses 1,038 1,432Office salaries 14,168 15,531Office expenses 2,765 6,743Management fee (Note 4) 25,740 25,740Manager or superintendent salaries 46,286 36,283Legal expenses 9,646 1,962Auditing expenses 6,400 7,400Bookkeeping fees/Accounting services (Note 4) 6,600 6,600Bad debts 1,498 3,501

Miscellaneous administrative expenses 2,798 1,545

Total administrative expenses 140,995 127,139

Utilities ExpenseElectricity 30,849 29,424Water 11,493 11,000

Gas 10,737 18,883

Total utilities expense 53,079 59,307

Operating and Maintenance ExpensesPayroll 25,503 22,375Supplies 5,306 8,045Contracts 64,622 66,395Garbage and trash removal 2,083 1,509Heating/Cooling repairs and maintenance 1,815 -Snow removal 1,155 4,953

Miscellaneous operating and maintenance expenses 34,769 33,319

Total operating and maintenance expenses 135,253 136,596

Taxes and InsurancePayroll taxes (FICA) 6,310 5,488Property and liability insurance (hazard) 15,913 16,993Workers' compensation 1,021 907

Health insurance and other employee benefits (Note 5) 9,205 7,577

Total taxes and insurance 32,449 30,965



Statement of Activities (Continued)

Year Ended

June 30, 2012 June 30, 2011

Financial Expenses

Miscellaneous financial expenses $ 32 $ 85

Total financial expenses 32 85

Total Costs of Operations BeforeDepreciation 361,808 354,092

Change in Net Assets BeforeDepreciation 48,826 33,999

Depreciation Expense 176,991 182,823

Change in Total Net Assets fromOperations $ (128,165) $ (148,824)



Statement of Changes in Deficiency in Net Assets

Net Assets - July 1, 2010 $ 125,632

Decrease in net assets (148,824)

Deficiency in Net Assets - June 30, 2011 (23,192)

Decrease in net assets (128,165)

Deficiency in Net Assets - June 30, 2012 $ (151,357)



Statement of Cash Flows

Year Ended

June 30, 2012 June 30, 2011

Cash Flows from Operating ActivitiesReceipts:

Rental $ 400,918 $ 373,127Interest 198 407Gifts 6,046 10,407

Other cash receipts 3,858 7,217

Total receipts 411,020 391,158

Disbursements:Administrative (43,197) (56,343)Management fee (27,885) (27,885)Utilities (53,079) (59,307)Salaries and wages (92,383) (102,053)Operating and maintenance (109,750) (114,221)Property insurance (15,913) (16,993)Miscellaneous taxes and insurance (16,249) (15,501)Tenant security deposits 656 2,888

Miscellaneous financial (32) (85)

Total disbursements (357,832) (389,500)

Net cash provided by operating activities 53,188 1,658

Cash Flows from Investing ActivitiesNet (deposit to) withdrawal from the mortgage escrow

account (1,323) 11,342Net deposit to the reserve for replacement account (11,617) (15,056)Net deposit to other reserve - (1,320)Net deposit to the residual receipts account (7,464) (12,278)

Net purchase of fixed assets (16,591) (11,367)

Net cash used in investing activities (36,995) (28,679)

Net Increase (Decrease) in Cash 16,193 (27,021)

Cash - Beginning of year 12,728 39,749

Cash - End of year $ 28,921 $ 12,728



Statement of Cash Flows (Continued)

A reconciliation of change in net assets to net cash from operating activities is as follows:

Year Ended

June 30, 2012 June 30, 2011

Change in net assets $ (128,165) $ (148,824)Adjustments to reconcile change in net assets to net cash from

operating activities:Depreciation 176,991 182,823Decrease (increase) in assets:

Tenant accounts receivable 147 3,067Prepaid expenses 287 (1,529)Cash restricted for tenant security deposits 244 2,951

Increase (decrease) in liabilities:Accounts payable - Operations 2,127 (36,897)Accrued liabilities 906 130Tenant security deposits held in trust 412 (63)

Prepaid revenue 239 -

Net cash provided by operating activities $ 53,188 $ 1,658


Oakman Village Manor Senior HousingDevelopment Corp.d/b/a The Village of Oakman Manor

Notes to Financial StatementsJune 30, 2012 and 2011

Note 1 - Nature of Business and Significant Accounting Policies

Nature of Business - Oakman Village Manor Senior Housing Development Corp. d/b/aThe Village of Oakman Manor (the "Organization") is a not-for-profit organization thatowns and operates a 55-unit housing facility project for elderly persons (the "Project").The Project, located in Detroit, Michigan, is operated under HUD Section 202 of theNational Housing Act and is regulated by the U.S. Department of Housing and UrbanDevelopment (HUD) with respect to rental charges and operating methods.

The Organization is sponsored by Presbyterian Villages of Michigan (PVM). PVM is acomprehensive, diverse, and faith-based organization serving seniors in multiple settingssince 1945. Its mission, guided by its Christian heritage, is to serve seniors of all faithsand to create new possibilities for quality living. PVM's tradition of social accountabilityand servant leadership are further reflected in its statements of beliefs and values and itsvarious operational philosophies and practices.

Significant accounting policies are as follows:

Basis of Accounting - The Organization maintains its accounting records and preparesits financial statements on an accrual basis, which is in accordance with accountingprinciples generally accepted in the United States of America.

The accompanying schedule of expenditures of federal awards includes the federal grantactivity of Oakman Village Manor Senior Housing Development Corp. d/b/a The Villageof Oakman Manor and is presented on the same basis of accounting as the basic financialstatements. The information in this schedule is presented in accordance with therequirements of OMB Circular A-133, Audits of States, Local Governments, and Non-ProfitOrganizations. Therefore, some amounts presented in this schedule may differ fromamounts presented in, or used in the preparation of, the basic financial statements.

Deposits Held in Trust - In accordance with the Regulatory Agreement with HUD,the Organization is required to maintain a tenant security deposit trust account. Theamount of the trust account must at all times be equal to or exceed the aggregate of alloutstanding obligations to tenants for refundable security deposits. The tenant securitydeposits fund consists of cash.

Tenant Accounts Receivable and Allowance for Bad Debts - Accounts receivablerepresents amounts due from tenants. Tenant accounts generally are collectible as longas the tenant is occupying the unit. When the tenant vacates the unit, any unpaidbalance remaining after application of the security deposit is charged to bad debtexpense. There was no allowance for bad debts at June 30, 2012 and 2011.

10



Note 1 - Nature of Business and Significant Accounting Policies(Continued)

Deposits - Funded - The funds held by the mortgagee represent a replacementreserve, a residual receipts reserve, and an insurance escrow. The replacement reserveconsists of deposits by the Organization to offset specific expenses and to replacestructural elements and mechanical equipment upon the consent of HUD. Futuremonthly commitments for the funding of the replacement reserve total $2,183. Theresidual receipts reserve consists of surplus funds calculated based on a HUD-prescribed formula and can be disbursed only at HUD's discretion. The insuranceescrow represents funds set aside by the Organization to offset insurance expenses.

Fixed Assets - Land, buildings, furnishings, and furniture and equipment are recordedat cost when purchased or appraised value if donated. Depreciation is computed on astraight-line basis over the estimated useful lives of the assets, which range from 5 yearsto 40 years.

Maintenance, repairs, and renewals that do not involve any substantial betterments arecharged to expense when incurred. Expenditures that increase the useful life of theproperty are capitalized.

Impairment of Assets - The Organization recognizes impairment of long-lived assetsused in operations when indicators of impairment are present and the undiscountedcash flows estimated to be generated by those assets are less than the assets' carryingamount. No impairment of the Organization's rental property has occurred.

Classification of Net Assets - Net assets of the Organization are classified aspermanently restricted, temporarily restricted, or unrestricted depending on thepresence and characteristics of donor-imposed restrictions limiting the Organization'sability to use or dispose of contributed assets or the economic benefits embodied inthose assets. All net assets of the Organization at June 30, 2012 and 2011 areconsidered unrestricted.

Federal Income Taxes - No provision has been included in the financial statementssince the Organization is exempt from federal income taxes under Section 501(c)(3) ofthe Internal Revenue Code.

11



Note 1 - Nature of Business and Significant Accounting Policies(Continued)

Accounting principles generally accepted in the United States of America requiremanagement to evaluate tax positions taken by the Organization and recognize a taxliability if the Organization has taken an uncertain tax position that more likely than notwould not be sustained upon examination by the Internal Revenue Service or otherapplicable taxing authorities. Management has analyzed the tax positions taken by theOrganization and has concluded that as of June 30, 2012 and 2011, there are nouncertain positions taken or expected to be taken that would require recognition of aliability or disclosure in the financial statements. The Organization is subject to routineaudits by taxing jurisdictions; however, there are currently no audits for any tax periodsin progress. Management believes it is no longer subject to income tax examinations forfiscal years prior to 2009.

Rental Income - Units are designated for occupancy by eligible low-income tenantsunder an annual HUD Section 202 project rental assistance contract (PRAC) expiring onJanuary 8, 2013. These tenants contribute a portion of the contract rent based onformulas prescribed by the U.S. Department of Housing and Urban Development.Housing assistance payments are received for the balance of contract rent from HUD.

Regulatory Agreement - A Regulatory Agreement with HUD was signed inconnection with the mortgage note. There were no violations of this agreement notedfor the years ended June 30, 2012 and 2011.

Use of Estimates - The preparation of financial statements in conformity withaccounting principles generally accepted in the United States of America requiresmanagement to make estimates and assumptions that affect the reported amounts ofassets and liabilities and disclosure of contingent assets and liabilities at the date of thefinancial statements and the reported amounts of revenue and expenses during thereporting period. Actual results could differ from those estimates.

Subsequent Events - The financial statements and related disclosures includeevaluation of events up through and including September 11, 2012, which is the date thefinancial statements were issued.

12



Note 2 - Capital Advance

The Organization obtained a capital advance from HUD which was used to assist infinancing the construction of the Project in accordance with the provisions of Section202 of the Housing Act of 1959. The capital advance at June 30, 2012 and 2011 is$4,778,700, bears no interest, and is not required to be repaid as long as the housingremains available to very low-income households and the aged and/or handicapped for aperiod of 40 years, ending August 2045. In addition, the Organization is subject to theadditional requirements of the HUD Section 202 program. If default occurs, then HUD,at its option, may accelerate the entire principal balance and charge interest. It is theOrganization's intent to comply with the program requirements. Based on the time andprovision requirements, the advance is recorded as a long-term liability. The capitaladvance is collateralized by the land and building of the Organization.

Note 3 - HOME Loans Funds

The Organization received a HOME loan from the City of Detroit under the HomeInvestments Partnership Act for a maximum amount of $222,000. The proceeds of theloan were used in connection with construction of the Project. The loan bears nointerest and will be deemed satisfied over 20 years if the Organization complies with theaffordable housing restrictions, in accordance with the HOME program. It is theOrganization's intent to comply with these restrictions ending January 2025. At June 30,2012 and 2011, the balance of the loan is the maximum amount of $222,000.

The Organization also received a HOME loan from Wayne County under the HomeInvestments Partnership Act for a maximum amount of $250,000. The proceeds of theloan were used in connection with construction of the Project. The loan bears nointerest and will be deemed satisfied over 20 years if the Organization complies with theaffordable housing restrictions, in accordance with the HOME program. It is theOrganization's intent to comply with these restrictions ending December 2025. At June30, 2012 and 2011, the balance of the loan is the maximum amount of $250,000.

In addition, the Organization received a HOME loan from the Michigan State HousingDevelopment Authority (MSHDA) under the Home Investments Partnership Act for amaximum amount of $400,000. The proceeds of the loan were used in connection withconstruction of the Project. The loan bears no interest over its 30-year term and is notrequired to be repaid as long as the property is not sold, transferred, or otherwiseconveyed voluntarily or involuntarily through foreclosure and as long as the Organizationcomplies with the affordable housing restriction agreement, which restricts the use andoccupancy of the Project and the Project's rental rates. It is the Organization's intent tocomply with these restrictions ending October 2035. At June 30, 2012 and 2011, thebalance of the loan is the maximum amount of $400,000.

13



Note 4 - Related Party Transactions

Trustee appointments are approved by Presbyterian Villages of Michigan (PVM), arelated not-for-profit organization that is also the HUD-approved management agent.

As of June 30, 2012 and 2011, $6,980 and $4,928, respectively, is due to PVM foradvance payment of operating expenditures and is included in accounts payable.

In addition, during 2012 and 2011, the PVM Foundation provided the Organization with$6,046 and $10,407, respectively, in contribution support through the allocation of fundsraised by the Organization and matching grants from the PVM Foundation.

The property management agreement provides that a management fee in the amount of6.67 percent of gross rents collected be paid to PVM, limited to $39 per unit per month.In addition, the Organization pays accounting service fees to PVM, which are included inthe annual budget. The Organization paid management fees of $25,740 for the yearsended June 30, 2012 and 2011 to PVM. Also, the Organization paid accounting fees of$6,600 for the years ended June 30, 2012 and 2011 to PVM.

Note 5 - Retirement Plans

PVM and its affiliates maintain a tax-sheltered retirement plan qualified under InternalRevenue Code Section 403(b). Under this plan, qualified nonunion participants whocontribute may receive an employer discretionary match subject to sponsor boardapproval. The Organization's contributions to the plan for the years ended June 30,2012 and 2011 totaled $923 and $883, respectively.

Note 6 - Current Vulnerability Due to Certain Concentrations

The Organization's sole asset is Oakman Village Manor Senior Housing DevelopmentCorp. d/b/a The Village of Oakman Manor. The Organization's operations areconcentrated in the senior housing market. In addition, the Organization operates in aheavily regulated environment. The operations of the Organization are subject to theadministrative directives, rules, and regulations of federal, state, and local regulatoryagencies, including, but not limited to, HUD. Such administrative directives, rules, andregulations are subject to change by an Act of Congress or an administrative changemandated by HUD. Such changes may occur with little notice or inadequate funding topay for the related cost, including additional administrative burden, to comply with achange.

14

Supplemental Information

15

Independent Auditor's Report on Supplemental Information

To the Board of TrusteesOakman Village Manor Senior Housing Development Corp. d/b/a The Village of Oakman Manor

We have audited the financial statements of HUD Project No. 044-EE087, Oakman VillageManor Senior Housing Development Corp. d/b/a The Village of Oakman Manor (the"Organization"), as of and for the year ended June 30, 2012. Our audit was performed for thepurpose of forming an opinion on the financial statements taken as a whole. The accompanyingsupplemental information, including the schedule of expenditures of federal awards, is presentedfor the purpose of additional analysis as required by HUD and the U.S. Office of Managementand Budget Circular A-133, Audits of States, Local Governments, and Non-Profit Organizations, andis not a required part of the financial statements. For the purpose of electronic submission tothe U.S. Department of Housing and Urban Development, Real Estate Assessment Center(REAC), the supplemental information is also deemed to include the financial data templateinformation as presented in the balance sheet and the statements of activities, changes indeficiency in net assets, and cash flows. Such information is the responsibility of managementand was derived from and relates directly to the underlying accounting and other records usedto prepare the financial statements. The information has been subjected to the auditingprocedures applied in the audit of the financial statements and certain additional procedures,including comparing and reconciling such information directly to the underlying accounting andother 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 theUnited States of America. In our opinion, the information is fairly stated in all material respects inrelation to the financial statements as a whole.

September 11, 2012

16

Amanda.OMalley

Southfield West

Amanda.OMalley

Praxity


Balance Sheet DataJune 30, 2012

Assets

Current Assets1120 Cash - Operations $ 28,921

1200 Prepaid expenses 5,929

1100T Total current assets 34,850

Deposits - Held in Trust1191 Tenant deposits held in trust 15,932

Deposits - Funded1310 Escrow deposits 5,2841320 Replacement reserve 116,878

1340 Residual receipts reserve 34,214

1300T Total deposits - Funded 156,376

Fixed Assets

1410 Land and land improvements 42,092

1420 Buildings and building improvements 6,042,646

1440 Building equipment (portable) 1,831

1450 Furniture for project/tenant use 63,654

1460 Furnishings 109,421

1470 Maintenance equipment 3,910

1490 Miscellaneous fixed assets 29,804

1400T Total fixed assets 6,293,358

1495 Accumulated depreciation (976,049)

1400N Net fixed assets 5,317,309

1000T Total assets $ 5,524,467

17


Balance Sheet Data (Continued)June 30, 2012

Liabilities and Deficiency in Net Assets

Current Liabilities2110 Accounts payable - Operations $ 6,9802120 Accrued wages payable 3,1682121 Accrued payroll taxes payable 2302210 Prepaid revenue 239

2122T Total current liabilities 10,617

2191 Tenant deposits held in trust (contra) 14,507

Long-term Liabilities2310 Capital advance 4,778,7002322 HOME loans 872,000

2300T Total long-term liabilities 5,650,700

2000T Total liabilities 5,675,824

Deficiency in Net Assets3130 Deficiency in unrestricted net assets (151,357)

3130 Total deficiency in net assets (151,357)

2033T Total liabilities and deficiency in net assets $ 5,524,467

18


Statement of Activities DataYear Ended June 30, 2012

Rent Revenue5120 Rent revenue - Gross potential $ 198,0695121 Tenant assistance payments 207,9995190 Miscellaneous rent revenue 287

5100T Total rent revenue (potential at 100% occupancy) 406,355

Vacancies5220 Apartments (5,823)

5200T Total vacancies (5,823)

5152N Net rent revenue (rent revenue less vacancies) 400,532

Financial Revenue5410 Project operations 95440 Investments - Replacement reserve 189

5400T Total financial revenue 198

Other Revenue5910 Laundry and vending revenue 3,1145920 Tenant charges 7035970 Gifts 6,0465990 Miscellaneous revenue 41

5900T Total other revenue 9,904

5000T Total revenue 410,634

Administrative Expenses6203 Conventions and meetings 1,3856204 Management consultants 22,0516210 Advertising and marketing 6206250 Other renting expenses 1,0386310 Office salaries 14,1686311 Office expenses 2,7656320 Management fee 25,7406330 Manager or superintendent salaries 46,2866340 Legal expenses 9,6466350 Auditing expenses 6,4006351 Bookkeeping fees/Accounting services 6,6006370 Bad debts 1,4986390 Miscellaneous administrative expenses 2,798

6263T Total administrative expenses 140,995

19


Statement of Activities Data (Continued)Year Ended June 30, 2012

Utilities Expense6450 Electricity $ 30,8496451 Water 11,4936452 Gas 10,737

6400T Total utilities expense 53,079

Operating and Maintenance Expenses6510 Payroll 25,5036515 Supplies 5,3066520 Contracts 64,6226525 Garbage and trash removal 2,0836546 Heating/Cooling repairs and maintenance 1,8156548 Snow removal 1,1556590 Miscellaneous operating and maintenance expenses 34,769

6500T Total operating and maintenance expenses 135,253

Taxes and Insurance6711 Payroll taxes (FICA) 6,3106720 Property and liability insurance (hazard) 15,9136722 Workers' compensation 1,0216723 Health insurance and other employee benefits 9,205

6700T Total taxes and insurance 32,449

Financial Expenses6890 Miscellaneous financial expenses 32

6800T Total financial expenses 32

6000T Total Costs of Operations Before Depreciation 361,808

5060T Change in Net Assets Before Depreciation 48,826

6600 Depreciation Expense 176,991

3250 Change in Total Net Assets from Operations $ (128,165)

20


Statement of Activities Data (Continued)Supplemental InformationYear Ended June 30, 2012

S1000-010 1 Total principal required under the mortgage, even if payments undera workout agreement are less or more than those required under themortgage $ 0

S1000-020 2 Replacement reserve deposits required by the Regulatory Agreementor amendments thereto, even if payments may be temporarilysuspended or waived 26,192

S1000-030 3 Replacement reserve or residual receipt releases that are included asexpense items on this profit and loss statement 0

S1000-040 4 Project improvement reserve releases under the flexible subsidyprogram that are included as expense items on this profit and lossstatement 0

21


Statement of Changes in Net Deficiency in Assets DataYear Ended June 30, 2012

S1100-060 Deficiency in Net Assets - July 1, 2011 $ (23,192)

3250 Decrease in net assets (128,165)

3130 Deficiency in Net Assets - June 30, 2012 $ (151,357)

22


Statement of Cash Flows DataYear Ended June 30, 2012

Cash Flows from Operating ActivitiesReceipts:

S1200-010 Rental $ 400,918S1200-020 Interest 198S1200-025 Gifts 6,046

S1200-030 Other cash receipts 3,858

S1200-040 Total receipts 411,020

Disbursements:S1200-050 Administrative (43,197)S1200-070 Management fee (27,885)S1200-090 Utilities (53,079)S1200-100 Salaries and wages (92,383)S1200-110 Operating and maintenance (109,750)S1200-140 Property insurance (15,913)S1200-150 Miscellaneous taxes and insurance (16,249)S1200-160 Tenant security deposits 656

S1200-220 Miscellaneous financial (32)

S1200-230 Total disbursements (357,832)

S1200-240 Net cash provided by operating activities 53,188

Cash Flows from Investing ActivitiesS1200-245 Net deposit to the mortgage escrow account (1,323)S1200-250 Net deposit to the reserve for replacement account (11,617)S1200-260 Net deposit to the residual receipts account (7,464)

S1200-330 Net purchase of fixed assets (16,591)

S1200-350 Net cash used in investing activities (36,995)

S1200-470 Net Increase in Cash 16,193

S1200-480 Cash - Beginning of year 12,728

S1200T Cash - End of year $ 28,921

23


Statement of Cash Flows Data (Continued)Year Ended June 30, 2012

A reconciliation of change in net assets to net cash from operating activities is as follows:

3250 Change in net assets $ (128,165)Adjustments to reconcile change in net assets to net cash from

operating activities:6600 Depreciation 176,991

Decrease in assets:S1200-490 Tenant accounts receivable 147S1200-520 Prepaid expenses 287S1200-530 Cash restricted for tenant security deposits 244

Increase in liabilities:S1200-540 Accounts payable - Operations 2,127S1200-560 Accrued liabilities 906S1200-580 Tenant security deposits held in trust 412

S1200-590 Prepaid revenue 239

S1200-610 Net cash provided by operating activities $ 53,188

24


Supplemental InformationYear Ended June 30, 2012

1. Schedule of Reserve for Replacements - In accordance with the provisions of theRegulatory Agreement, restricted cash is held by Huntington Bank to be used for replacementof property with the approval of HUD as follows:

1320P Balance - July 1, 2011 $ 105,261

1320DT Monthly deposits ($2,182.66 x 12) 26,192

1320INT Interest 189

1320WT Approved withdrawals (14,760)

1320OWT Other withdrawals - Bank service charges (4)

1320 Balance - June 30, 2012 $ 116,878

2. Schedule of Residual Receipts - In accordance with the provisions of the RegulatoryAgreement, surplus cash is calculated per the HUD formula and deposited into the residualreceipts account. Restricted cash is held by Huntington Bank to be used for any projectpurpose with the approval of HUD as follows:

1340P Balance - July 1, 2011 $ 26,750

1340DT Deposit of surplus cash 7,464

1340 Balance - June 30, 2012 $ 34,214

3. Computation of Surplus Cash - Form HUD 93486 - See attached

4. Schedule of Changes in Fixed Asset Accounts - See attached

5. Schedule of 5300 Accounts - N/A

6. Schedule of 6900 Accounts - N/A

7. Nursing Home Data - N/A

25


Supplemental Information (Continued)Year Ended June 30, 2012

8. Detail of Accounts:

2322 HOME loan funds $ 872,000

6390 Dues and subscriptions $ 650Mileage 452Administrative supplies 77Bank charges 736Professional fees 500Miscellaneous 383

6390 Total $ 2,798

6590 Miscellaneous maintenance $ 5,337System maintenance and repair 15,336Connectivity 9,062Software 1,899Minor system purchases 198

Foundation reimbursable 2,937

6590 Total $ 34,769

26


Schedule of Changes in Fixed Asset AccountsYear Ended June 30, 2012

Assets Accumulated Depreciation

BalanceJuly 1, 2011 Additions Deductions

BalanceJune 30, 2012

BalanceJuly 1, 2011

Current

Provision DeductionsBalance

June 30, 2012

Net BookValue

June 30, 2012

1410 Land and land improvements $ 42,092 $ - $ - $ 42,092 $ 1,520 $ 608 $ - $ 2,128 $ 39,9641420 Buildings and building improvements 6,027,886 14,760 - 6,042,646 677,426 152,288 - 829,714 5,212,9321440 Building equipment (portable) - 1,831 - 1,831 - 183 - 183 1,6481450 Furniture for project/tenant use 63,654 - - 63,654 57,289 6,365 - 63,654 -1460 Furnishings 109,421 - - 109,421 48,692 11,195 - 59,887 49,5341470 Maintenance equipment 3,910 - - 3,910 3,519 391 - 3,910 -1490 Miscellaneous fixed assets 29,804 - - 29,804 10,612 5,961 - 16,573 13,231

Total $ 6,276,767 $ 16,591 $ - $ 6,293,358 $ 799,058 $ 176,991 $ - $ 976,049 $ 5,317,309

Fixed Asset Addition Detail:

Buildings and building improvements -Ramp $ 14,760

Building equipment (portable) -Paging system 1,831

Total $ 16,591

27


Schedule of Expenditures of Federal AwardsYear Ended June 30, 2012

Federal Agency/Pass-through Agency/Program TitleCFDA

NumberFederal

Expenditures

U.S. Department of Housing and Urban Development: Supportive Housing for the Elderly - Capital Advance 14.157 $ 4,778,700Supportive Housing for the Elderly - Project Rental Assistance

Contract 14.157 207,999

Total federal awards $ 4,986,699

28


Computation of Surplus CashYear Ended June 30, 2012

S1300-010 Cash $ 44,853

S1300-040 Total Cash 44,853

Current ObligationsS1300-075 Accounts Payable - 30 Days 6,980S1300-100 Accrued Expenses (Not Escrowed) 3,398

2210 Prepaid Revenue 239

2191 Tenant/Patient Deposits Held In Trust (Contra) 14,507

S1300-140 Total Current Obligations 25,124

S1300-150 Surplus Cash (Deficiency) $ 19,729

S1300-210 Deposit Due Residual Receipts $ 19,729

29

Report on Internal Control Over FinancialReporting and on Compliance and OtherMatters Based on an Audit of Financial

Statements Performed in Accordance withGovernment Auditing Standards

30

Report on Internal Control Over Financial Reporting and on Complianceand Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards




We have audited the financial statements of Oakman Village Manor Senior HousingDevelopment Corp. d/b/a The Village of Oakman Manor (the "Organization") as of and for theyear ended June 30, 2012 and have issued our report thereon dated September 11, 2012. Wehave conducted our audit in accordance with auditing standards generally accepted in the UnitedStates of America and the standards applicable to financial audits contained in GovernmentAuditing Standards, issued by the Comptroller General of the United States.

Internal Control Over Financial Reporting

Management of Oakman Village Manor Senior Housing Development Corp. d/b/a The Village ofOakman Manor is responsible for establishing and maintaining an effective internal control overfinancial reporting. In planning and performing our audit, we considered Oakman Village ManorSenior Housing Development Corp. d/b/a The Village of Oakman Manor's internal control overfinancial reporting as a basis for designing our auditing procedures for the purpose of expressingour opinion on the financial statements, but not for the purpose of expressing an opinion on theeffectiveness of the Organization's internal control over financial reporting. Accordingly, we donot express an opinion on the effectiveness of the Organization's internal control over financialreporting.

A deficiency in internal control exists when the design or operation of a control does not allowmanagement or employees, in the normal course of performing their assigned functions, toprevent or detect and correct misstatements on a timely basis. A material weakness is adeficiency, or a combination of deficiencies, in internal control such that there is a reasonablepossibility that a material misstatement of the Organization's financial statements will not beprevented or detected and corrected on a timely basis.

Our consideration of internal control over financial reporting was for the limited purposedescribed in the first paragraph of this section and was not designed to identify all deficiencies ininternal control over financial reporting that might be deficiencies, significant deficiencies, ormaterial weaknesses. We did not identify any deficiencies in internal control over financialreporting that we consider to be material weaknesses, as defined above.

31

Amanda.OMalley

Southfield West

Amanda.OMalley

Praxity



Compliance and Other Matters

As part of obtaining reasonable assurance about whether Oakman Village Manor Senior HousingDevelopment Corp. d/b/a The Village of Oakman Manor's financial statements are free ofmaterial misstatement, we performed tests of its compliance with certain provisions of laws,regulations, contracts, and grant agreements, noncompliance with which could have a direct andmaterial effect on the determination of financial statement amounts. However, providing anopinion 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 ofnoncompliance or other matters that are required to be reported under Government AuditingStandards.

This report is intended solely for the information and use of the board of directors, the auditcommittee, management, others within the Organization, and the U.S. Department of Housingand Urban Development and is not intended to be and should not be used by anyone other thanthese specified parties.

September 11, 2012

32

Report on Compliance with RequirementsThat Could Have a Direct and MaterialEffect on Each Major Program and onInternal Control Over Compliance in

Accordance with OMB Circular A-133

33

Report on Compliance with Requirements That Could Have a Direct and Material Effecton Each Major Program and on Internal Control Over Compliance

in Accordance with OMB Circular A-133




Compliance

We have audited Oakman Village Manor Senior Housing Development Corp. d/b/a The Villageof Oakman Manor's (the "Organization") compliance with the types of compliance requirementsdescribed in the U.S. Office of Management and Budget Circular A-133 Compliance Supplementthat could have a direct and material effect on each of its major federal programs for the yearended June 30, 2012. Oakman Village Manor Senior Housing Development Corp. d/b/a TheVillage of Oakman Manor's major federal programs are identified in the summary of auditor'sresults section of the accompanying schedule of findings and questioned costs. Compliance withthe requirements of laws, regulations, contracts, and grants applicable to its each of majorfederal programs is the responsibility of Oakman Village Manor Senior Housing DevelopmentCorp. d/b/a The Village of Oakman Manor's management. Our responsibility is to express anopinion on Oakman Village Manor Senior Housing Development Corp. d/b/a The Village ofOakman Manor's compliance based on our audit.

We conducted our audit of compliance in accordance with auditing standards generally acceptedin the United States of America; the standards applicable to financial audits contained inGovernment Auditing Standards, issued by the Comptroller General of the United States; andOMB Circular A-133. Those standards and OMB Circular A-133 require that we plan andperform the audit to obtain reasonable assurance about whether noncompliance with the typesof compliance requirements referred to above that could have a direct and material effect on amajor federal program occurred. An audit includes examining, on a test basis, evidence aboutOakman Village Manor Senior Housing Development Corp. d/b/a The Village of OakmanManor's compliance with those requirements and performing such other procedures as weconsidered necessary in the circumstances. We believe that our audit provides a reasonablebasis for our opinion. Our audit does not provide a legal determination on Oakman VillageManor Senior Housing Development Corp. d/b/a The Village of Oakman Manor's compliancewith those requirements.

In our opinion, Oakman Village Manor Senior Housing Development Corp. d/b/a The Village ofOakman Manor complied, in all material respects, with the requirements referred to above thatcould have a direct and material effect on each of its major federal programs for the year endedJune 30, 2012.

34

Amanda.OMalley

Southfield West

Amanda.OMalley

Praxity



Internal Control Over Compliance

Management of Oakman Village Manor Senior Housing Development Corp. d/b/a The Village ofOakman Manor is responsible for establishing and maintaining effective internal control overcompliance with requirements of laws, regulations, contracts, and grants applicable to federalprograms. In planning and performing our audit, we considered Oakman Village Manor SeniorHousing Development Corp. d/b/a The Village of Oakman Manor's internal control overcompliance with the requirements that could have a direct and material effect on a major federalprogram to determine the auditing procedures for the purpose of expressing our opinion oncompliance and to test and report on internal control over compliance in accordance with OMBCircular A-133, but not for the purpose of expressing an opinion on the effectiveness of internalcontrol over compliance. Accordingly, we do not express an opinion on the effectiveness of theOrganization's internal control over compliance.

A deficiency in internal control over compliance exists when the design or operation of a controldoes not allow management or employees, in the normal course of performing their assignedfunctions, to prevent or detect and correct noncompliance with a type of compliancerequirement of a federal program on a timely basis. A material weakness in internal control overcompliance is a deficiency, or a combination of deficiencies, in internal control over compliancesuch that there is a reasonable possibility that material noncompliance with a type of compliancerequirement of a federal program will not be prevented or detected and corrected on a timelybasis.

Our consideration of internal control over compliance was for the limited purpose described inthe first paragraph of this section and was not designed to identify all deficiencies in internalcontrol over compliance that might be deficiencies, significant deficiencies, or materialweaknesses. We did not identify any deficiencies in internal control over compliance that weconsider to be material weaknesses, as defined above.

This report is intended solely for the information and use of the board of directors, the auditcommittee, management, others within the Organization, and the U.S. Department of Housingand Urban Development and is not intended to be and should not be used by anyone other thanthese specified parties.

September 11, 2012

35

Schedule of Findings and Questioned Costs

36


Schedule of Findings and Questioned CostsYear Ended June 30, 2012

Section I - Summary of Auditor's Results

Financial Statements

Type of auditor's report issued: Unqualified

Internal control over financial reporting:

Material weakness(es) identified? Yes X No

Significant deficiency(ies) identified that arenot considered to be material weaknesses? Yes X No

Noncompliance material to financial statements noted? Yes X None reported

Federal Awards

Internal control over major programs:

Material weakness(es) identified? Yes X No

Significant deficiency(ies) identified that arenot considered to be material weaknesses? Yes X None reported

Type of auditor's report issued on compliance for major programs: Unqualified

Any audit findings disclosed that are required to be reported in accordance withSection 510(a) of Circular A-133? Yes X No

Identification of major programs:

CFDA Number Name of Federal Program or Cluster Opinion

14.157 Supportive Housing for the Elderly - Capital Advance Unqualified

14.157 Supportive Housing for the Elderly - Project RentalAssistance Contract Unqualified

Dollar threshold used to distinguish between type A and type B programs: $300,000

Auditee qualified as low-risk auditee? X Yes No

37


Schedule of Findings and Questioned Costs (Continued)Year Ended June 30, 2012

Section II - Financial Statement Audit Findings

ReferenceNumber Finding

QuestionedCosts

CurrentYear: None


QuestionedCosts

PriorYear: None

Section III - Federal Program Audit Findings


QuestionedCosts

CurrentYear: None


QuestionedCosts

PriorYear: None

38

Documents

Oakman Village Manor Senior Housing Development Corp. d/b/a …financials.pvm.org/files/Oakman 0612 Final-20121005... · 2012. 10. 5. · Oakman Village Manor Senior Housing Development